Q2 21/22

Oct 22, 2021

Good morning, ladies and gentlemen. Welcome to Mphasis Limited Q2 FY 2022 Earnings Conference Call. Please note the management would be showcasing a presentation that is available on the webcast link shared in the invite as well as on the emphasis website, www.emphasys.com. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Shiv Mathieu from CDR. Thank you and over to you, sir. Thank you, Lizam. Good morning, everyone, Thank you for joining us on Mphasis Q2 FY 'twenty two results conference call. We have with us today Mr. Nitin Rakesh, CEO Mr. Manish Durga, CFO and Mr. Viju George, Head, Investor Relations. Before we begin, I would like to state that some of the statements in today's discussion may be forward looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available on the Q2 FY 'twenty two results release that has been sent out to all of you earlier. I now invite Nitin to begin the proceedings of this call. Over to you, Nitin. Thank you, Sher. Good morning, everyone. Thank you for joining the call this morning. As we close on the first half of our financial year in the face of an unprecedented pandemic and personal tragedy, I'm thankful to our employees. We have demonstrated dedication and resilience. As a company, Mphasis has met challenges head on and powered through a year like no other that made it uniquely challenging. We are witnessing an accelerated recovery in contrast to the economic uncertainty that the world faced at this time last year. Mphasis has emerged as an even stronger company. In the next few slides, I will walk you through what we are seeing in the market and how Mphasis has performed. As the tech landscape fast evolves in the post COVID world, we see 3 engines driving sustainable growth for us. The first engine drives growth in global tech spending that has picked up compared to 2020 and is expected to stay at elevated levels visavis the pre COVID era. Within that, the overall offshore IT services growth is even higher and continues to drive expansion for the share of Indian IT services market, especially for the firms that are aligned to the digital transformation competencies. According to Gartner, worldwide IT spending is projected to grow at a rate of 8.6% in 2021. The IT Services segment is forecast to grow at 9.8% in 2021. The second engine relates to capturing additional discretionary spending opportunities as enterprises migrate away from a CapEx driven tech investment model, releasing more in the tech budget in year away from the past amortization due to tech debt reduction. This is spurring the consumption of as a service trend encompassing all aspects of tech consumption, a theme that emphasis back on starting 20 sixteen-twenty 17. In the ongoing dynamic of run versus change, the market for change is growing much faster as enterprises relentlessly rationalize run to fund change. In fact, we estimate that the addressable market for change will significantly expand over the next few years. Because we were able to recognize this trend early, we have aligned our offerings with the change paradigm using our Triton Sport driven competency model, which we have discussed with you in the past. The 3rd engine deals with the technology teams that are closely aligned with the business and play directly into the growth and transformation team. Increasingly, a much larger sustainable opportunities are also now emerging within the other parts of the plant organization outside of the traditional IT orgs. The blurring of boundaries due to the change dynamic that intersects both business and technology allows us to expand our total addressable market significantly faster than before. Our recently announced acquisition of Flink is a case in point, we believe, of boosting our credentials in digital research, strategy and design. We will significantly expand our TAM in the faster growing upstream phases of digital transformation journey of enterprises, moving to the very front of our front to back strategy. Our direct business growth is accelerating on a larger revenue base. In Q2 FY 2022, our overall gross revenue was $385,200,000 which represents a growth of 6.1 percent quarter over quarter 17.6 percent year over year and 6.6 percent QoQ and 17.2 percent YOY in constant currency terms. This is quarterly decade high annual growth. Direct business continues to power our growth growing 9.9% sequentially and 31.5% YOY in constant currency terms. The trajectory of our direct annual growth is consistently rising with YOY growth topping 30% and about 10% sequentially for the 2nd straight quarter. For first half, direct growth stands at 32% year over year in constant currency terms. In absolute terms, our sequential and annual incremental revenue added in our direct business is highest on record. The contribution of direct at 92% continues to rise. We continue to prioritize our growth and investment in this business. The strong showing here has helped us manage the declines in the DHC business, the contribution of which now is reduced to 6% of revenues. DHC revenue declined 25.5% sequentially and 53.3% y o y in constant currency terms. This is in line with our commentary of DxE dropping to mid single digit as a percentage of our revenue by the end of the year. Given the overall revenue contribution of direct to our business, which now exceeds 90%, we expect that our overall revenue growth going forward will start to converge with growth in the direct business. Geography wise, all our markets are paid well. In our core market of the U. S, we grew 27% year over year for direct. In Europe, our direct business has grown 44% year over year. Our pipeline in Europe is strong, especially with new clients and we expect this region to continue to be a growth driver for FY 2020 and beyond as well. From a service line perspective, application services, our largest service offering grew 39% year over year, buoyed by the theme of digitization and cloud power transformation of applications. Specifically, I would like to call out the sustained growth performance in the Direct segment. Market share gains to the top 10 clients and beyond has helped us drive growth here. Growth contribution from our key clients has been consistent, reflecting increasing their F2P relationship and share gains. While our top 10 client segment has grown at over 20% in FY 2020 2 YTD, what's equally heartening is the consistent growth coming from beyond top 10 customers, including new clients, a theme that we've highlighted in earlier calls and will double click on shortly. We believe that our broad based success with clients positions us well for industry leading growth in for direct for FY 2022 on top of industry leading direct growth in FY 2021, in line with our FY 2022 guidance articulated at the start of this year. With our tech layout positioning, we are replicating our performance in our flagship vertical now renamed to Banking and Financial Services as well as other verticals. BSS has grown 20% YOY in constant currency for the quarter, representing the 5th straight quarter of 20 plus percent growth. Our direct BFS grew 13.8 percent sequentially and 23.8 percent YOY in dollar terms. This growth is broad based across the segments of BFS. We continue to enjoy market share gains with our key BFS clients. This quarter has also seen robust growth in the now renamed DMT vertical and the logistics and transportation vertical within direct, with DMT growing 10.8% sequentially and 168% year over year and logistics and transportation growing 39% year over year. Our client stats reflect the strengthening position with several top clients post rental consolidation. We continue to believe that our wallet share gains emanate from our competency driven positioning. As our top clients prioritize and execute their spending plans, our preferred partner status places us well to capture additional market share, especially in new areas of tech spend as articulated in the earlier part of my remarks. Notably, we continue to see stronger growth for the lower half of our top 10 clients as well as robust growth beyond our top 10 clients. Our top 5 and top 10 clients has grown consistently, registering 22% and 28% growth respectively in 2nd quarter on a trailing 12 month basis. The average contribution of our top 5 clients exceeds $120,000,000 on a TTM basis. Our top 4 clients are now $100,000,000 plus clients on a trailing 12 month basis and all our top 5 clients are $75,000,000 plus on a trailing 12 month basis as well And US100 $1,000,000 plus on a quarterly annualized basis, which we believe is unique for a company of our size. Clients 6 to 10 have grown at 49% trailing 12 months. This is much higher than the average TPM growth of segment, indicating strong growth diversification among our key clients. Our clients in the 11% to 20% bucket have grown at 14% on a TTM basis as well. Notably, all our seven $50,000,000 plus clients grew sequentially for the 2nd straight quarter. In a nutshell, our strong client performance across the board supports our industry leading growth in the direct business. Our new client revenue continues to grow rapidly as well, growing at 63% y o y in 2nd quarter. We will expand on that segment in a few minutes. We recorded TCV of $241,000,000 in Q2. This marks the 7th straight quarter of $200,000,000 plus net new TCV That is not including renewal deals. Our TCV is up 21% year to date. Despite strong TCVs racked up over the last few quarters, our pipeline is still up suggesting that our pipeline generation engine is firing as well. We generate a high percentage of our TCV through proactive lead pursuits where win rates are higher than in competitive RFP situations. As we report our TCV on a net new basis that is excluding renewals, we find the correlation between our direct TCV and revenue growth to be high exceeding 0.9. Coming to our client metrics, our track record in migrating clients from 1 revenue bucket to the next continues to be healthy. Specifically, our conversion ratio of clients from 1 tier to the next tier is solid and improving at well over 50%, representing one of the best rates in the industry. The count of 100,000,000 and 50,000,000 clients at 47, respectively, is stable on a sequential basis and is up by 23, respectively, on a Y o Y basis. As I mentioned before, on a quarterly run rate basis, we have added 1 more client to the 100,000,000 plus bucket this quarter. We win 1 to 2 large deals on an average every quarter, masked by an increasing deal size. As this slide indicates, the average large deal size on a trailing 12 month basis at $80,000,000 plus is 2.5 times what it was 2 years ago. Our large deals are increasingly multi year, multi tower, transformation based and longer term. The growing size affects this capability evolution. I'm pleased to report that we have signed our margin philosophy appoles us the flexibility to manage our profitability in an environment of rising cost of talent in a heated market. In this quarter, we were able to absorb higher cost of revenue and in fact raise gross margins 50 bps sequentially. This allowed us to operate in the stated EBIT margin range. Our reported metric included the M and A related charges of INR208,000,000 that is 70 bps for the quarter. Adjusted for M and A related charges, operating profit grew 6% sequentially and 15.4 percent YOY to INR 4,528,000 in Q2. Adjusted operating margin declined 10 bps QoQ and 30 bps YOY to 15.8% in Q2. This is in line with our stated operating margin band of 15.5 percent to 17%. Our adjusted EPS for the quarter at 19.09 percent grew 19% year over year and our EPS growth exceeds our operating profit growth. Our cash generation stood at $54,000,000 in Q4 2021, a 9 year high. Our operating cash flow generation as a percentage of EBITDA is 97%. Cash flow growth exceeds our profit growth. I'm pleased to report that we have signed 20 Fortune 500 firms since FY 2020 that are well distributed across verticals, plus we've added 10 more in the Fortune 500 category from our acquisition recently. This is not incidental as we have reinvigorated the program with dedicated leadership. We've carved out 5 specifically selected verticals to focus on our NCS, namely BFS and I, in which our positioning and track record is already solid. This vertical is large enough for us to continue to provide growth runway in the longer term. Logistics, P and P and Healthcare, each of these 5 verticals has its respective plan acquisition strategies, led by dedicated sales, delivery and domain leadership. We have an elaborate operating model in place to transition clients to a strategic status with client engagement structure and investment defined in the phases of transition. As our clients move to transition phase and become strategic clients, we progressively bring full force of our ticket costs and dedicated client resources and GTM motions in engaging with such accounts. Our continued strong growth in PMT over the past few quarters as a result of the NCA investment program is encouraging. Notably, our direct PMT revenue at well over $100,000,000 on a GTM basis is more than double YOL. More importantly, our tribes led pipeline addressing chain imperatives of client's tech programs is up 13% QoQ and 28% Y o Y despite pipeline to TCV conversion of 1,200,000,000 in the trailing 12 month basis. Our pipeline is well distributed amongst our 8 tribes indicating our traction across various digital tech stacks. In summary, I will leave you with 3 points. Our direct strong growth is consistent. For the 2nd successive quarter, we've grown 10% sequentially and over 30% year over year in constant currency. Financial year to date, direct growth is at 32% in constant currency terms. Direct performance has helped us mitigate the declines in DXC, the contribution of which is now reduced to 6% of revenue in Q2. 2nd, all our KPIs are moving in the right direction, namely our growth is getting broad based to Europe, DMT, Logistics and Transportation, hitting the growth in addition to our anchor verticals of BFS and anchor geography of U. S. We continue to drive market share gains with our key clients. Investments in the design and build out of our NC architecture, a critical leg of our future growth is bearing fruit with 20 Fortune 500 client wins in the past few quarters. Thus, we are winning a good share of high potential client for the future. Our client mining metrics across revenue buckets continues to trend in. As a reference, our average top 5 client contribution topped 120,000,000 Our top 6 to 10 clients are now growing well above our direct revenue growth with 49% growth on a trailing 12 month basis, while the top 11 to 20 clients have also grown strong double digit percentages. All our 750,000,000 plus clients have grown sequentially for the 2nd successive quarter. Our cash flow generation as a percentage of EBITDA is nicely trending up with operating cash flow of $54,000,000 at a 9 year high and represents 77% of our EBITDA. 3rd, investing for growth by using operating leverage and operating in a sustained target operating margin band. And we believe our margin stand ensures margin stability in an environment of supply headwinds. Thus, revenue growth translates into sustainable EPS and PAT growth and consistently rising free cash flow generation complemented by improving DSOs. Our growth strategy envisages us making sustained investments in line with our continuity and acceleration theme along 4 vectors: geography expansion, leadership breadth and depth, build up our digital capabilities, including M and A and NCA scale up. Together with the increasingly diversified nature of our client base and metrics, we believe this will help sustain the magnitude and drive consistency of our direct growth. Our strong performance in the first half of the year reinforces our confidence in reiterating our guidance for industry leading growth in direct in FY 2022 on top of industry leading performance in FY 2021. We also expect to see greater convergence of our overall revenue growth with the direct growth. On that note, I would request the operator to open up the line for questions, please. Thank you. Ladies and gentlemen, we will now begin with a question and answer session. The first question is from the line of Mukul Garg from Motilal Oswal. Please go ahead. Hey, thanks for taking the question. Hi, Leland. Leland, I think there's always any commentary on how the interactions with DxE has taken place over the last month or 2. Now that MRC is over, would you like to update us on regulatory how the future of the relationship is going to be? Mukul, I think the DxE relationship, Atak is I don't hear very clear. Yes, yes. Let's talk about the after the completion of the MRC, the relationship with DxE. So I think we've already updated you in the past that we already have 3 successive 2 year terms built into the renewal construct. So we've already kicked off into the 1st 2 year term of renewal. MRC is a construct that was done for a 5 year period. I think we have just finished the 5 year period of September 30, and we are engaged with Ory to make sure that we are able to find a situation where both of us can continue to build on the partnership and make sure that we have a sustainable revenue line coming through. So nothing more to call out of that at this point in time. Given that it's commercial discussion, we wouldn't want to talk anything more at this point in time. But when we have something that we need to share, we will definitely update the street. Sure. And just to probe a bit more into this relationship, and I know like there are definitely some sensitivities which are involved here, but your revenues from the DAC channel has come down by 2 thirds in last 8 quarters, now down to €25,000,000 So, A, is this something where you think you can defend your business given your relationship with clients who you are servicing via DXC or do you expect this to trend down further from here? And B, is there some direct win which is happening with those clients which were earlier part of DXC channel given that like in some cases like TMT your direct growth is much better and your DXC business obviously is declining at a very rapid pace. So if you can just help us are you able to convert some of those guys into direct relationship? Mukul, I think those are both items that obviously have a bearing on longer term relationships. I think the right thing to think about is that we are investing in building our direct business growth. We've been growing our business quite well in the direct side well before the DXD client started. All we've really done is taken the investment dollars that we could to speed the growth indirect. I think the guidance we gave was to think about the DxC business coming to the mid single digit mark. I think we are inching towards that as we expected to. The reality is that the direct business is really where the focus is and will continue to be. But we do expect a line of revenue that will continue to emerge from the DHT side of the house. I think that's probably the best color I can give you at this point in time without getting into the details of channel conflict or client confidentiality issues. Fair enough. Thanks for answering my questions. I'll get back into the queue. Thank you. Thank you. The next question is from the line of Karan Upal from Philip Capital. Please go ahead. Yes. Thanks for the opportunity. Nathan, two questions. First is on the offshore revenue. So offshore revenue has not increased materially for Mphasis as compared to some of our peers. So is that a conscious strategy to change more on-site business? And it's not currently a margin lever going ahead? And second question is on Europe. So you are investing in this geography aggressively in last couple of years. So any color on in terms of the sizes and in which vertical you are seeing traction? Yes. I think offshore revenue has actually grown this quarter quite nicely because we have a 1% swing between offshore and offshore revenue. So we guided for the fact that growth will actually be in favor of offshore and that's what it's playing out right now. So I don't think there is any change in stance or strategy from that perspective. Of course, the decline in DXU was a little bit more offshore centric this quarter, so that definitely is showing up in the headcount as well. But primarily, I don't think we expect that our onshoreoffshore ratio will move materially. If anything, it will actually be probably a little bit more skewed towards offshore growth. That's kind of, I think, the guidance I can give you. On the Europe question, I think it's fair to assume that our tip of the spear for opening a new market within Europe or a new geography in that market will always be leading with our strength, and our strength comes from BFSI. And that's kind of the strategy we have deployed in UK in the last 2 years, and we're taking that across the continent over the last 2 quarters as well. So typically, the BFSI segment, that is the tip of the spear, whether it is we have 5 out of the top 10 European banks that are customers today, we will continue to expand on that footprint. We've gone across from UK into the continent. We have a decent sized business in Charlotte in France. We started doing business with banks in the Nordics. So it's really I think that's going to be the tip of the spear because that's where our referenceability and our credibility is the highest. In terms of deal sizes, I think you've seen some really healthy deals. We announced the large transaction last quarter as well. So that's kind of the traction and the deal flow is fairly strong in that region. Okay. And thanks a lot and all the best for Thank you. The next question is from the line of Vimal Gohil from Union AMC. Please go ahead. Yes, thank you for the opportunity. Nitin and team congratulations for a quarter. Just two questions from my side. The sharp dip that we've seen in the BFT business over the last few quarters, I'm sure there is a lot of management and employee bandwidth and other resources that have gone behind the DxC revenue or our DxC business. How much of that bandwidth or how much of those resources are fungible and could be sort of used effectively to use for our growth in the direct piece? I just wanted to understand that aspect. And then I have one more balance sheet related question. Thanks. So I think just to give you an answer, definitely, there is an element of rotation and fulfillment that comes in through the declines. Of course, we are not I'm not saying that we have stopped investing in that segment because customer is a customer is a customer, and we will provide the best service and the capability to every customer, including that channel. However, when there is a decline and we have ramp downs, that definitely becomes a fuel for us to grow the direct business. Just to give you a sense, YTD basis in the last two quarters, the direct business growth has been our direct business billable headcount has been growing at 20%. And that number was about 38% for the last 4 quarters. But if you look at the net headcount add, that will not add up to that because we have this internal rotation in place. So very much part of the supply chain ecosystem for us to be able to rescale or really deploy folks that become available, including at a manager level or a leadership level as well. So I think it's again, we run the company as a portfolio of businesses and this rotation and migration of talent or deployment of talent across units is not uncommon for us. So this is definitely very much part of the equation. Right, right. I have one more question on the balance sheet. Just a clarification, The sharp increase that we are seeing in the other financial liabilities in the balance sheet of INR 1400 crores, that is related to our payables for the Blink acquisition, right? No, that's actually the provision for the dividend payout since the shareholder approval happened on the 29th September. We need to be provided in the books the payout has happened in the 1st week of October. Okay. Fair enough. Fair enough. Thank you for the clarification and all the very best. Thank you. Thank you. The next question is from the line of Nitin Padmanabhan from Investec. Please go ahead. Yes, hi, good morning. Thanks for taking my question. Two questions actually. One is on the G and A side, if you could just explain what's how we should think of the increase in cost on G and A, maybe excluding the M and A sort of expenses there on a going forward basis? And 2, your thoughts on attrition and which part of the employee base it's sort of hitting? And how we're sort of mitigating anything in terms of fresher hires for the year that you've done so far? And how you're looking at it overall? Thanks. Hi, Nitin. Yes. I can yes, let me take the second question, Manish, and then you can address the G and A issue. So Nitin, the issue on supply side, stress, technically an industry level issue, The lower down you go in the pyramid, the churn is a little bit higher primarily because that's where the migration mobility is the highest, especially in an environment where people are working remote. The engagement is also the lowest. So I think the effort is not just hiring or backfilling, but also taking actions for a higher engagement, higher value proposition and making sure that we're able to provide that same level of growth opportunity across the pyramid. We have been very proactive in hiring across the pyramid. I think the issue isn't so much just hiring pressures because that's one part of the equation. I think we've talked about additional supply chain levers in terms of new locations. We've talked about using TalentNext to upscale. We've talked about rotation of people from within one unit to the next. And we will obviously also continue to hire across the pyramid, including pressures. But I think we don't disclose numbers for obvious reasons. But I can assure you that a pretty significant effort has continues to be made in strengthening and broadening the whole supply chain ecosystem and of course in making sure that we are able to retain and deploy the best talent we have. But definitely a supply constrained market, demand far outstrips supply for the industry as a whole, not just in India but globally. And we also think that that's an environment that we'll have to sustain in over the next two quarters. But all things being equal, I would rather take an environment with higher growth than supply than the other way around. So I think that's the perspective we are building that new skills and capability. Puneet, you can take the G and A question. Yes. So, Nitin, the G and A expenses, the trend for the last few quarters has been in the range of 5.4%, 5.5%. Last quarter was actually an aberration when it went down to 6.7%. If you take the base of 5.4% and you look at the reported G and A expense for this quarter, that's close to 0.7% increase. And almost all of that is because of the M and A expenses. As we have communicated, the M and A expense is close to 0.7% of the revenue. So if you look at from that perspective, 5.4% plus 0.7 is the 6.1 that we reported this quarter. Sure. That's helpful. Just one more follow-up, if I may. From an industry perspective, are you seeing on-site attrition also see a meaningful pickup? Just your thoughts from an industry perspective. Yes. I think it's definitely elevated. It is higher than the historical trends. But I think the real, I would say, bigger uptick really is offshore, just given the sudden surge in demand that the industry has seen in the last two quarters. So I think we do believe that the shortage will probably be more acute in certain key locations because not only is the industry actually hiring more, but there are other ecosystems from within the economy in India that are also very aggressively hiring from the tech market. So I think that demand supply situation is probably a little bit more acute than on-site. So very helpful. Thank you so much and all the best. Thank you. The next question is from the line of Sandeep Shah from Equidus Securities. Please go ahead. Yes. Thanks for the opportunity. Just wanted to understand, Nitin, about the Fortune 500 client addition slide. So that's very interesting. Just wanted to understand, is it broad based? Or is it more focused towards BCM as a whole? So if you can give some color on the same. Sure. Maybe we can have that slide up on the webcast, Timna. I think the key thing to note on this slide is the fact that it's a pretty consistent addition of between, I would say, 3 to 4 Fortune Private customers every quarter. It is very broad based. It is not just in BCM. And the part of the reason for that is that in BCM, we already have a pretty strong coverage. A lot of the recent additions, I would say, especially in the last four quarters, have been in non BCM. And they're also widespread across geographies. Remember, U. S. Actually constitutes the bulk of these additions. So again, very pleased with the fact that we've created a very strong foundation for the plant pyramid for us to continue to mine these through in converting them from the 1,000,000, 5,000,000, 45,000,000, 50,000,000, 75,000,000 buckets. Okay, okay, okay. And here, are we replacing the existing incumbent? Or is it the addition of 1 more strategic vendor like you? Yes. I think that's a great question. So I think every time there is a pretty significant pivot or there is a pivot in tech consumption, the pattern of consumption, tech debt reduction, for example, data center services are declining 10% year over year at an industry level. However, those there are other things that incumbent providers do. So I think we've also seen that the current environment, especially the last 4 to 6 quarters, I would say post March last year, the ability to actually open new logos, the ability to the willingness on the client side to actually give you an opportunity if you have the right value proposition, the right referenceability, the right disruptive construct, the ability to actually get them to be more agile and nimble, get them to launch product quicker, cut costs while applying transformation. I think the ability to open these open logos is the right competency. This is a great opportunity and a window will probably exist for a few quarters for us to be able to go in and expand on our customer base while taking the referenceability from other customers. In many cases, we are definitely replacing somebody. In many cases, they're adding a new product because we bring something unique. And of course, over a period of time, as we gain wallet share, we'll definitely eat into somebody else's pie. Okay. And just last question in terms of clarification on target of operating margin band of 15.5% to 17%. Is it also applicable for FY 2022? Because I believe full quarter consolidation of Blink may keep your margin at the 15% plus or minus for the maybe second half as of all. So in that scenario, for FY 2022, we may be close to 15%, 15.5% 15.5% kind of provided. So Sandeep, when we made the announcement of the acquisition, we talked about the fact that this transaction could have a potential impact of up to 1% for the 1st 8 quarters. However, as the scale up happens, as we are able to get the synergy benefits, some of those impacts will get normalized. So you would have seen that this quarter, the impact is 0.7% And we very work towards making sure that we accelerate the synergy. So worst case scenario, you're right that it will probably have an impact, but the range on operating basis continues to be 15.5% to 17% for the current year. When we get to the quarter 1 of next year, we will talk about what we believe would be the range for the future year. Having said that, the principle and the philosophy that we have articulated earlier that we will maintain margins in a narrow range with the Northwell buyers while investing for growth should continue. And hence, on an operating basis, you should look at the EBIT margins to be Northwell buyers. So Manish, just so on a reported basis, this ban is even applicable for FY 2022 as a whole. For the current year, yes. So banks and all the rest. Thank you. The next question is from the line of Apurva Prasad from Melara Capital. Please go ahead. Yes. Thanks for taking my question and congrats on the numbers. Nitin, any early indications on tech budgets for 2022 and your comments on the large deal pipeline? Apoorva, I think it's a little bit early in the cycle, but we do believe that the year will finish through the flourish from a tech spend perspective just as we've seen in the last two quarters. And we don't think that there is there are many choices for enterprises to actually cut back on tech spending. That's on the, I would say, the traditional way of thinking around discretionary budget versus non discretionary budgets. However, the key thing to note is the 2 remarks I called out earlier. 1, I think as this dynamic of CapEx versus OpEx gather space, as more applications move to the cloud, as more data centers get retired, as more applications get rationalized, you will actually see some sort of a suction effect where in year spending capability will actually be higher than what it used to be in the past years. So that's kind of the I would say in a way that will release a lot of tech spend capability for in year spend much more than what it used to be. 2nd trend you have to keep in mind that I also called out earlier was the fact that almost every part of the value chain in every enterprises businesses is getting digitized from contact center to customer service to marketing, product development, almost everything is going through a very massive digitization through buildup of software or platforms or data. Those are areas of spend that traditionally were not seen in the tech budgets, but have started to kind of creep up. And the marketing spend is now 70% digital marketing. And hence, there is a pretty significant software effort that is being done there to actually make it smart and so on. So I think those two trends will actually keep spending and the target market for us actually fairly elevated even if the traditional spending kind of tapers off after a big boost in 2021. So that's on the budget. Hopefully, that gives you more clarity. We'll get a better sense over the next couple of months as we get into the end of the year. On the large deal pipeline, I think by definition, large deals are lumpy. We called it out last quarter, but I think we are quite pleased with the fact that our pipeline for new gen deals is up 28% year over year. And I think that's the chart that we have in the deck as well. And that should give you a little bit of a sense on Slide 11 of the deck. The fact that it's fairly broad based, it's across multiple tribes, it is not led by any 1 or 2 service lines. So I think the ability to construct opportunities, be proactive, use the drive and squad competency model to actually generate early engagement with large deals is still very much in there. And the fact that despite having converted $1,800,000,000 in net new PCB in the last six quarters, we are still actually running a pipeline that is the 25%, 20 8% higher than this time last year. That's useful. My other question was on increased revenue productivity, and this is despite the bigger offshore shift. So is that really mix change from DXC to direct or perhaps higher growth in India? What's really driving this? I think some of it is, of course, the when we do a large term transformation deal, we call this out 2 quarters in a row that the early part of the deal will probably have some element of lift and shift, then you'll start optimizing it, then you'll start transforming it. So that's kind of what shows up in some of this revenue efficiency. Of course, the levers that we have on the managed services side of the business, the ability to actually grow revenue faster than headcount, all of that is part of the mix. And of course, there is a pricing element of that as well. Right. And just finally, on infra services, it seems to be a bit volatile over the past two quarters. I mean, again, is that DXC mix? Or from a going forward perspective, do you see more integrated deals and therefore more steady state between apps and Insta? Yes. If you look at the headline intra number, of course, that looks very muted. But if you strip out the DX impact, I think the intra business has actually grown very healthy. If you go back again to the deck of slides that we talked about, the intra business for direct the intra ITO fees for our direct business has actually grown at 46% y o y. So I think it's the impact of the volatility of the Dx book of business that is creating a headline volatility. But overall, the integrated deal increases is very much alive. Got it. Thank you and all the best. Thank you. Thank you. The next question is from the line of Dipesh Mehta from MK Global. Please go ahead. Yes. Thanks for the opportunity. A couple of questions. First about the seasonality. How do you expect net in seasonality to play out in Q3? Do you expect for lows in holiday kind of thing likely to have implication for Q3? Or you believe underlying demand trend will be good enough to have sustained growth even continuing in Q3? 2nd question is on insurance. Now we are seeing weakness in insurance revenue and margin growth. So if you can provide some perspective, how you expect insurance to play out for us over next few quarters? 3rd question is about DXC. I think you indicated we will be closer to mid single digit by year end. We are broadly clear. So do you expect now relatively stable performance in BXC? Thank you. So I think the let me take the first question. I will just remember the 3 questions that you asked me. The first one on the seasonality. The demand environment is pretty stable, but there will always be seasonality impact given the calendar Q4, whether it's billable hours, number of holidays and in some cases, there are certain client furloughs. Too early to call on the furloughs, but the fact that we are still calling for significant growth in the second half of the year purely based on the trends and the fact that we think our direct business growth will be able to sustain market leading growth rate should give you a sense that we do expect the growth the demand environment to be tailwinded. On insurance, I think there is obviously certain deal conversion, PCB to deal conversion activity that is causing a temporary dip in margin. We do believe that we've actually got a pretty decent order book right now, not just 500 order book in that business. And you will you should certainly see sequential growth continue to pick up. On a VYVA basis, it's already performing well given just the way we've built that pipeline and DTV book in that business. And thirdly, on DXC, I think the question of DXC stabilizing around a certain percentage of revenue is very much a reflection also of how much we continue to grow the direct business and at what rate that grows. So I think we are in the zip code, but we probably have I think the ability to continue to grow direct is something that will elevating on what where it stacks in the order back. It's not in the top 5 today. It was obviously the largest 6 quarters ago. So that should give that gives me confidence as a matter of fact that we have the ability to now start converging the growth rates between the rent and overall company. Of course, we do expect stability in that channel as well. But I think the question really is how much can we keep hitting the direct growth. Understand. Thank you. Thank you. The next question is from the line of Rahul Jain from Dollus Capital. Please go ahead. Yes. Hi. Thanks for the opportunity. Just one question, which is like TCV signings have been robust on a TTM basis, but not so strong in the quarter, which has also been the case in many more years. So is there any specific reason that you could identify here in terms of some small shift or spend towards physical side for some client instead of spending more and more towards building digital channel that some kind of trend you're witnessing? I think again, if you look at Slide 11, we're actually pretty pleased with the fact that we have a pretty strong pipeline that continues to give us both sequentially, we've actually added 13% in the pipe and y o y about 27%, 28% in the pipe. So I don't think there is anything to call out. This is definitely the lumpiness of a large deal that is giving you the sense. But I think on a sustained basis, we are well within the 2.25 to 2.50 mark that we've called out for now with successive Q2. We haven't seen any other shift or trend in spend. What we definitely have seen though is the fact that there is a certain sense of urgency with many of our clients, where instead of waiting to construct a 2 year or a 3 year transformation deal, they're happy to construct a 6 month, 9 month kind of a 1st sprint deal and hand it out so they can get started versus taking that additional 3 months time to go through the process and negotiation and all of that. So I think that sense of urgency and the fact that they are looking for agility and the fact that they want needle movement to happen much faster is definitely creating multiple smaller deals, but they're also giving more there is also much more in year revenue growth possibility with some of those deals, while of course, they continue to see large deals with longer tenure as well. But that's definitely a trend that I've seen emerging in the last 3 months or so, where instead of doing the whole transformation bundle as an SOW, they're actually breaking it down into 3 or 4 different phases. Right, right. So just so can you say that the same orders can now be consumed much faster? That is that's a clarification. And also just one remark that since we have this direct business now more than 90% of revenue, do we see any specific need for looking at the business into 3 pieces, direct dates, the others rather than looking at just looking at those to just as declined or deals rather than looking them as a separate segment per se? Sure. I think the first the answer to your first question is definitely there is faster TCV revenue conversion. So in a way, the ABR or the ACV up is very quick, and that's why you've seen in the last two quarters the growth has stacked up to 30 plus percent. We expect that trend to continue at least for the remainder of this financial year. I think as we get into the next year, we get a little more clarity on the budgets. And of course, the time line, I think we'll get a better sense of whether this trend will continue. But this is being borne out by many of our industry analysts who we've spoken to as well. And I think this is very much something that you should think about as you construct your models in terms of the conversion of TCV to immediate revenue. 2nd, I think on the segment breakup, I think it's a secondary segment for us. This is not the primary segment. So at some point, we may decide that it doesn't make sense for us to report it out separately. But for now, from a transparency standpoint and continuity of visibility standpoint, we're still breaking it out. Our primary segments continue to be the vertical breakdown that we give you. Okay. Thank you. That's it from my side. Thank you. The next question is from the line of Mohit Jain from Anandrati. Please go ahead. Hello, sir. One was on Blink. Like have you guys already integrated it for 10 days in the quarter? Actually, we announced the transaction only on the 21st September, so 22nd September. So I think there isn't there wasn't much to integrate from an operating standpoint. Of course, the financial reporting will include that 9 days of reporting, if I'm not mistaken. But from an overall business integration perspective, I think this is a well thought through execution that we are undertaking right now. We want to nurture the current business and the current client base and, of course, find ways to synergize both for our customers and more importantly to also take those logos that we acquired through Blink and convert them to broader emphasis competency areas as well. So I think that integration will play out over the next two quarters. And we have a very strong focus and plan in execution right now. But from a financial perspective, it will be only 9 days. And for the current quarter, which is Q3, we will see full integration of financials. Right. So Manisham, how much was the contribution in this quarter? Mohit couldn't hear you. Could you repeat that please? How much was the strategic contribution for 2Q FY 2022? So the total link revenue that we got in the quarter is $900,000 and the costs have already been called out to the extent are M and A related. Otherwise, the P and L has got consolidated and the balance sheet has been consolidated with the quarter end. Right. So the second question was related to the adjustments that you have shown in the release. When you say adjusted for M and A, are these one time expenses at 0.7% that you're referring to? Is it like one time to 2Q 2022? Or is it because Blink got integrated, so you got some costs and this gives you the true picture of margin of the console entity? No, like we discussed when we made the announcement for the transaction, there are charges that come in, which are upfront, for example, advisory costs, the costs that you incur for due diligence, etcetera, which are one time and those are not going to occur going forward. But at the same time, there is a certain portion of the goodwill that gets classified as intangibles, which gets amortized every quarter. And then there are some costs which are linked to retention of employees. So there is a retention bonus, which gets paid out as an outbound. A combination of those 2, we called out may have an impact of up to 1% for 8 quarters. And as the synergy benefits come in and as revenue scale up happens, it will keep getting lower and lower. So the 9 day equivalent of that would have come in, in the quarter and the balance would be all one time. So that 0.7%, we should consider it as one time and then see how the overall number of method for Q3, right? So there would be some impact of that point for the 9 day cost of retention and amortization, which will come for the full quarter going forward. So, 0.7 will the other costs which were there in the 0.7 will go away, but on the other this point, 9 day costs will go up to the whole 90 days for the quarter. Understood. And the last thing on the outlook that you have given 15.5% to 17% that is on organic emphasis basis and as per the previous phone call, we should continue to assume that on console you will operate at 14.5% to 16% kind of a margin range, right? I would say we are continuing with the operating guideline of 15.5% to 17%. And the impact of M and A, we will keep working on it and see reducing it. In that point in time, we will give a separate disclosure of how much that cost is. But in the second half, we should assume that you will be in the target trend of 15.5 to 17? Yes, from an operating perspective. Including Blink. Okay. Thank you very much. Thank you. The next question is from the line of Vibhor Singhal from Phillip Capital. Please go ahead. Yes. Hi. Good morning, sir. Thanks for taking my question. So, looking just one question from my side on the overall margin direction that we are looking at. So, just wanted to get your perspective on exactly I mean, if I exclude all the exceptional items and all, what are the kind of margin trajectory that we're looking for the company either in the near or medium term future? And last year, we saw many of our peers having the benefit of lower travel expenses and marketing costs. We decided to basically use that for investment into our business notes. This year, again, we've seen in this quarter, most of the companies reported very strong growth and that operating leverage helped them expand margins. But one of that seems to be happening with us. Most of our mid cap companies are comparable peers are now reporting EBIT margins in the 17% to 18% kind of a range. So far, will we basically continue to build this kind of or stick to this kind of a range of 15.5% to maybe 17% kind of range that you called out more towards it looks like more towards the lower end in terms of growth? Or do you think there is an uptick at some point of time that could play out in the numbers as well? So I think philosophically, we've actually been pretty consistent in maintaining the operating EBIT in the band that we talked about. We have probably the most stable margins with the least volatility, while the fastest growing direct revenue line. Even in FY 2021, we actually grew the direct business in mid double digits when many of our peers actually barely grew in single digits. So I think the focus on growth, the ability to actually prioritize growth above all else required us to take some of that operating leverage that we are generating and investing impact into the business and that's what we've been doing. I think there are many puts and takes as some of those expenses have come back. We've started to obviously balance out other investments, and we'll continue to do that. But I think at this point in time, it's fair to assume that our guidance plan for the margin will be that we will keep margins stable while prioritizing growth. And hence, we are very confidently focusing on the market leading growth of the direct business. Right. So, Bharat, just one small follow-up to that. The kind of strong growth that we reported in this quarter, almost 10% Q on Q for the direct core business, shouldn't that have led to some operating leverage coming to the numbers, even taking into account the acquisition and M and A cost, even taking into account the investments that we've put back into the businesses? Yes. And that's why if you see the gross margin is actually up by about 40 bps this quarter. But we've taken a lot of the investment back into the business. And I think again, that is the operating leverage that I was talking about, right? So if you look at sequentially, gross margin has expanded, which means we are able to actually generate efficiencies despite a very tight labor market. I think I would personally like to see a little bit more stability on the supply side before we can start thinking about expansion in the margin. I think we have said in the past that we have the ability and we have the visibility to an upward bias in the operating margin. But at what point to take it into the P and L versus investing it for growth or making sure that we are able to feed the growth, so it doesn't start hurting that is really the question that we need the debate that we have almost every day internally. And right now, I think our stance is what I articulated to you. Got it. Thanks a lot. Thanks for taking my questions and wish you all the best. Thank you. Thank you. The next question is from the line of Ashish Agarwal from Principal India. Please go ahead. Sir, most of my questions have been answered. Just wanted to understand. So when you said there are a lot of short cycle deals and this is likely to continue for another 2 quarter at least, so that should now support the growth in a seasonally weak quarters. Am I right? That's where your commentary is suggesting. Yes. And that's why we are still calling out for, I would say, pretty tailwinded growth environment for the next few quarters. Okay. Thanks a lot. Thank you. The next question is from the line of Ronak Voda from OHM Advisors. Please go ahead. Hello. Yes. Sir, can you please highlight on the attrition number? We don't disclose that number publicly and I think we're going to keep to that stance. Okay. So if you can just give a sense on the whole supply chain and how are we seeing in terms of new hireings, in terms of price, just give a sense about it. Yes. I think I addressed it earlier on that we are probably we have been very proactive in creating new levers of supply chain, excluding geography expansion. I think we talked about I think 2 quarters ago, we gave a full description of the fact that we now added some centers in Taiwan, Costa Rica, Mexico. We announced something in Canada that we are now building out. We've talked about new addition of a center in UK as well as recently in Dusseldorf in Germany. So that's one part of the expansion. 2nd part of the expansion is the fact that we are hiding across the pyramid. Yes, we have a pretty robust training intake program. We also have a very robust reskilling program using talent and expertise. The ability to add talent, while it's there a constrained environment, but I think the fact that we are able to showcase the growth rate that we are showcasing means that we have the ability to make sure we are able to overcome the supply chain. Issue. Of course, that also requires investment and that goes back to the point I was making on the previous question that in the current environment, the reason why we are still focused on prioritizing growth and holding the margin is because all of this work that we are doing on the supply side also requires investment. Okay. And secondly, on the demand front, so currently, are we to assume that DxE will be maintained at the same level of revenue going ahead And our direct business should continue at the same pace of growth or much faster going ahead? Yes. I think that's a difficult question for me to answer because you're asking for specific guidance for specific segments. I think I will just stay with the fact that the DHT business will continue to trend towards mid single digit and direct business will continue to grow at market leading growth rates. Okay. Thank you. Thank you. The next question is from the line of Abhishek Shindatkar from Incred Capital. Please go ahead. Yes, hi. Thanks for the opportunity and congrats on a great Three quick questions, if I may. First is, any color on the initial conversations on joint go to market and cross selling services with Blink? The second one is, how should we reconcile the 6% quarter on quarter decline in TMT revenue and a 600 basis points improvement in gross margins? Any color would be helpful. And the third is what is the target for utilization ex '20? And is that a lever for margins? Thank you for taking my questions. I think it's too early to give you a color on the Blink integration. It's only been 30 days today. We will potentially give you more update in the next call. But fair to say that we are very carefully and thoughtfully actually executing an integration plan that provides them a level of independence while giving us the ability to cross leverage. So we'll give you more color, very good progress in early 1st 30 days as per plan. On TMT, I think we've broken out TMT growth by direct versus consolidated. The decline that you're seeing really is coming out of that issue. And I think the large deals that we've had in that segment in the direct side are now starting to, of course, turn a quarter, and that's why you're seeing expansion in margin there as well. And I forgot what your first question was. Nitin, the last question was on the target gross margin. Just to add to what Nitin said, Abhishek, the PMT decline is also reflected in the revenue reduction in rest of the world and both of them are DXC revenue decline. And as we have talked about earlier, those in addition to the offshore revenue improvement gives us gross margin tailwinds, which has led to the 0.5% expansion in gross margin. And we work towards the EBIT margin range of 15.5% to 17%. We don't work towards a targeted margin percentage this week. Okay. If I can just do a follow-up. The last question was on utilization. And I completely understand the decline in the TNT business is coming from BXC. But what I'm trying to understand is, is that this significant contribution to gross margin? So in the remaining 6% of DXC, is that another lever for margins? So BHC is just in solution. Sorry, I didn't answer anything. Yes. No, I think the right way to think about it is that we've obviously always called out for the fact that the BHC business is actually margin dilutive. It's not the most optimal part of the business. So it's a combination of the two dynamics. The fact that we are growing the if you look at the TMT business ex DXC, I think it has grown the high-tech component has grown at 100 plus percent and combined with the fact that we are actually declining business that is not profitable. So I think it's amazing about those things. On the utilization front, I don't think we want to give a guidance on the band, but I think we feel quite comfortable with the current levels of utilization that gives us enough flexibility and room to maneuver for growth. And I think as we onboard, as we continue to work on the pyramid, we may have some movement up and down, but I don't think you can you should expect major shifts in the utilization stance. That's very helpful. Thank you for taking my question and best wishes for 2022. 2. Thank you. Thank you. The next question is from the line of Manik from GM Financial. Please go ahead. Hi. Thank you for the opportunity. Itin, I wanted to get it up thoughts on a couple of things. Number one thing is that we have seen the on-site offshore mix move in favor of offshore delivery in the last few quarters. But in your case, the mix change has been much lesser than what we've seen for the peers. So is that also being given by the decline in the DXC business? That's question number 1. And second thing is that given the sharp decline on the DXC side and given the restructuring or the orientation from our delivery side that should entail, is that also impacting our margins over the last few quarters? Thank you. So, Manik, I think the shift in offshore is very much I think there is tailwind towards offshore. We will see that mix shift continuously. I can't comment on peers, but I think for us, this is a reflection of how those large deals get executed, how they get rationalized, how they get normalized. I think we'll continue to have some movement up and down, but I think broadly the tailwinds for offshore is definitely there in the business. On supply chain, yes, you picked up a good point. It is not always feasible to have a one to 1 match, especially when you're when you have significant movement and people coming on the bench. So and you need to reskill them. So that's definitely something that is a headwind or has been a headwind for the last 3 or 4 quarters on our business as we've tried to manage the decline in one part of the business and redeployment in the other side of the business. So the both of them are actually puts and takes that we have with balance on a quarterly basis. Any sense on how much would that be having a drag from a margin standpoint over the last 18, 24 months? I don't know if I want to call it out. Manish, do you think we have a delta number that we can give or we just leave it at the overall level? No, Arunathan, I think it is like we have mentioned earlier, these are centric of business and we work with a range of margin 15.5% to 17%. So whatever upsides we have to consume for managing this, we have. But the good news is most of the supply constraints because of the DxE ramp down has been used for growth in the direct side. Although it ends up becoming additional questions on why the headcount growth is not reflecting in the revenue growth. But we will not call that out separately in terms of the impact of that on the margin. Sure. Thank you and all the best for the future. Thank you. The next question is from the line of Vivek Kuntipalli from ICICI Securities. Please go ahead. Hi, Vadim. Thanks for taking my question. Just an industry perspective, I'd like to take from you. So most of the companies are essentially talking about demand that can last for several years to come by. It pre cursor to that sort of a visibility should have been higher share of large and mega deals, which might be standing over several years. But that has clearly not been the case over the last several quarters that we see. We have not really seen very large deals or mega deals barring the cases of some capping takeovers, so on and so forth. So how do we reconcile this paradox as to if we are talking about it might be a demand visibility and we are seeing a bigger share of small and medium sized deals in the mix, what essentially is giving that sort of a longer 10 year visibility? So I think the way to think about it is I think what you're trying to do is you're trying to apply Horizon 1 business model thinking to the digital transformation wave underplay. That's not going to fit. Your paradox doesn't come from visibility. Your paradox is coming from the ability to actually look at annuity revenue because that's what should give you revenue certainty. That is not going to happen in the current environment because the whole dynamic of moving away from run the business means that you're going to find harder and harder to construct 10 year deals, 7 year deals, 8 year deals that give you the ability to actually run those applications and such assets. The fact that we are looking at short cycle, quick burst project is very much aligned to the fact that while there is a lot of spending that is happening in digital, dev, platform build, application transformation, cloud adoption, not necessarily you will see the by definition, those cannot be constructed as 5 year projects because that's a waterfall way of thinking. So I think it's a little bit of the apples and oranges comparison that you're trying to do from a modeling perspective. My recommendation would be to start thinking about how much of the spend expansion has happened or or total addressable market expansion is happening, primarily based on the fact that there are large pockets of spend that are being opened up, given just the fact that there is more money to be spent even if the budget doesn't change, only because you don't have as you continue to apply this transformation towards as a service, you don't have pre committed amortization and spends that hit your balance sheet and your P and L at an operating level. Secondly, I talked about the fact that there are new pockets of spend. Those were traditionally functions that weren't seen as tech spend areas, but they are now being seen as tech spend areas very, very clearly, especially in the post COVID world. I think the I would kind of ask you to think a little bit differently about why visibility of growth is happening and it's happening because every part of the value chain of every enterprise is getting digitized. And hence, there is this tech investing super cycle that's playing out in the medium term. Could even be longer than 3 to 5 years. But right now, the fact that we have visibility into the next 2, 3 years will be enough for us. Got it. Thanks. That's it for me, sir. I'll bet. Thank you. The next question is from the line of Vibhav Shekani from B&K Securities. Please go ahead. Hello, sir. Congrats for the congratulations on a long set of numbers. Just one of the questions. Just to our logistics and transportation and industrialization, but we have seen a blip on the margin side on that front. So any color on that, that's why the margins have been pretty in those areas? We actually talked about the margins quite extensively in the last few minutes last 30, 60 minutes. So I think the issue isn't so much I think what you're looking at is the reported number. I think what I would ask you to look at is the adjusted number purely based on the transaction costs that we talked about. That's 1, 2. I think the band that we've given, very tight band, we probably will continue to operate in that band. The guidance for the year is pretty clear as well. So there is nothing to call out beyond that. Of course, this is a headwinded environment from a supply constraint perspective, and that obviously is going to continue to ask us and require us to keep making investment on the supply chain side and that's probably the reason why you're seeing pressure on that front. But having said that, we also have I think this is a good environment for pricing, and we have been able to continue to improve our pricing metrics. So that should mitigate some of the headwinds on supply. And I think the puts and takes will continue to have to be managed pretty proactively to stay in the band that we've talked about. Thank you so much. Understood. Thank you. The next question is from the line of Ashwin Mehta from Ambit Capital. Just one clarification. Most of the other questions have been answered. We saw very smart growth in India, almost 22% sequential. So what's the driver for that? And how sustainable is that? So growth in what, Ashwin, are you in cash and cashback? So, Nitin, I was talking about there's a 22% growth in India for us in this quarter. So what has been the driver for that? And how sustainable are the revenues here? Because India typically is more lumpy. Manish, where are we seeing that India growth called out separately? Actually, I think the India number, that should be somewhere in the MD and A because I think we are only calling out Americas, India and rest of the world. This is in your group overview MD and A Page 10, the CDN. The number is fairly small. So I'm trying to Yes. Because on an overall basis, that seems to be contributing almost 1% to our overall sequential growth. Yes. I think nothing to call out specifically in that. I don't think that's a lumpy issue for us. I think we have a good fair customers that are that have been with us for many number of years, and we are basically applying the same motion that we apply to other reps of our clients to that segment as well. So I wouldn't make too much of that, but it's definitely a growth business that we've continued to invest in and starting to kind of just give us some returns now. Okay. Fair enough. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Nizindraksha for his closing comments. Thank you, guys. I think we've had a 2nd straight strong quarter in FY 2022. Operating and planned metrics and KPIs are all operating at a higher level than before explaining our performance. We do believe that we have the visibility and the tailwinds in the business to continue the performance to continue to carry on for the remainder of the year. And we look forward talking to you next quarter. Thank you all for your continued interest. Take care and stay safe. Thank you. Ladies and gentlemen, on behalf of Enfys Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. If you have any further questions, please write to us at investor. Relationsemphasis.com. I repeat, investor. Relationsemphasis.com. You can now disconnect your lines. Thank you.