Ladies and gentlemen, good day and welcome to Q4 FY22 earnings conference call of Coforge Limited. 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankur Agrawal, Head Investor Relations and M&A at Coforge Limited. Thank you, and over to you, Mr. Agrawal.
Thank you, Niro. Good morning, or good evening, everyone, and thank you for joining us today for the Q4 and full year FY 2022 earnings conference call of Coforge Limited. As you know, we announced our Q4 FY 2022 results today, which are already filed with the stock exchanges and also available on the investor section of our website, www.coforge.com. Present with me today is our CEO, Mr. Sudhir Singh, and our CFO, Mr. Ajay Kalra, for the call. As always, we'll start with the opening remarks from our CEO, post which we will open the floor for your comments and questions. Are we still assembling? If we are, then I would want to wait for 30 seconds and then, Sudhir, all yours, to begin.
All right. We wait for 20 seconds, and then I'm gonna start this off. I believe we are about 2 minutes over time, and I'm gonna kick this off. My name is Sudhir Singh, and a very good morning, good afternoon, and a very good evening to all of you across the world, folks. I hope all of you and your loved ones are keeping safe and healthy. Thank you for joining us for the conversation today as we share our full year fiscal year 2022 and quarter four FY 2022 results. Before I delve into the quarterly and the annual results, I want to preface my commentary with a set of quick reflections on the FY 2022 results. FY 2022 was a landmark year for the firm.
As I walk you through our results, you will recognize that in fiscal year 2022, our revenue has grown 38%. Our EBITDA has grown 42%, and our PAT, profit after tax, has grown 45% over fiscal year 2021. It was a landmark year. You will also notice that the Coforge growth story in fiscal year 2022 is not just one of the robust 38% growth that I talked about. It is equally importantly the story of how we have delivered this 38% annual revenue growth while simultaneously and significantly expanding our adjusted EBITDA margin by 90 basis points in what was a severely cost escalatory environment through FY 2022. In addition, this Coforge growth story in fiscal year 2022 has seen a set of other notable achievements as well.
These achievements include the fact that in FY 2022, the new order intake of the firm crossed $1.15 billion. Not only did we sign 11 large deals in fiscal year 2022, but more importantly, we've ensured that the median large deal size through this year went up appreciably. Of the 11 large deals we signed in fiscal year 2022, those deals have included a $105 million deal and $350 million plus TCV deals. In fiscal year 2022, our operating profile continued to be de-risked, with the top five clients contributing only 22.9% to our aggregate revenues. Yet, at the same time, that de-risked cohort of top five and top 10 clients grew 30.2% and 36% respectively through the year.
The other big structural change in the firm's profile over the year has centered around how the contribution of offshore revenues as a percentage of aggregate revenues has jumped by 8% from 39% to 47% of aggregate revenues over the last 4 quarters itself. Our ability to grow margins in a tough year like fiscal year 2022, and I talked about that growth 90 basis points, arose primarily from our ability to sign large deals, and those large deals in turn have allowed us to materially scale up our offshore operations factories. Finally, the Coforge story remains one of a firm that has powered very significant growth through changing almost every facet of its functioning over the last 5 years.
Yet, it continues to evoke one of the highest levels of employee commitment and hence one of the lowest employee attrition levels, even at times like this across the industry. With that preface, let me start with the quarter four performance analysis. The last quarter, Q4 FY 2022 of the year, was marked by another large $50 million+ TCV deal win. It was also marked, importantly, by the highest ever quarterly EBITDA margin recorded in the history of the firm. In Q4 FY 2022, the firm's revenues grew 5% sequentially in CC terms. In INR and USD terms, that sequential growth number was 5.1% and 4.9% respectively. The revenue recorded for the quarter was $232.4 million.
On a year-on-year basis, Q4 growth was 35% in US dollar terms and 38.2% in INR terms. The vertical wise revenue growth breakdown was as follows. The BFS vertical clocked 128% year-over-year growth and contributed 27.7% to the firm's aggregate revenue. The travel, transportation, hospitality vertical continued its very strong recovery and registered 46.8% year-on-year growth in the quarter. The insurance vertical experienced 13.9% year-over-year growth, while the other segment, which includes healthcare, high-tech, manufacturing, and government outside India, grew 10.5% Y-o-Y during the quarter. Our top five clients and our top 10 clients grew year-on-year by 25.8% and 32.4% respectively. Our top 10 clients contributed 35% to our overall revenue in quarter four.
The growth in our top clients is reflective of not only our preferred partnership status with them, but also our increasing wallet share and a very productive client mining engine at work. The continued and accelerating success of that client mining engine is also borne by the fact that over the last four quarters alone, the number of $10 million-plus client cohort has jumped from 11 to 18. At the same time, as noted earlier, from a client concentration perspective, we remain substantially de-risked. In quarter four, our offshore revenues were 47% of the total revenues, which is a substantial increase from over 39% just a year back. As you would recall from the color provided throughout the year, this has been one of the key drivers of sustainable margin expansion for us.
It is closely tied to execution of our large deal wins and our expanding book of managed services contracts. Moving on now to the margin performance for Q4. The firm reported an adjusted EBITDA margin of 20.6% in CC terms and 20.4% on a reported basis during this quarter. As noted earlier, this is the highest ever quarterly EBITDA margin in the firm's history, and we all know times are tough. Adjusted EBITDA was $47.3 million for the quarter. The effective tax rate for Q4 was 13.2% of the PBT, while normalized tax rate was 21.4%. The current quarter reflects tax benefit on account of dividend received in India from foreign subsidiaries.
Our consolidated PAT for the quarter was an increase of 12.7% quarter-on-quarter and was an increase of 52.5% year-on-year. The quarterly PAT stood at $27.7 million. That brings me to the end of the quarterly analysis. I shall now move on to the annual results. In FY 2022, the consolidated revenue of the firm registered a growth of 38% in US dollar terms, 37.6% in constant currency terms, and 37.9% in INR terms. Consolidated FY 2022 revenue stood at $866.5 million in US dollar terms. On an organic basis, revenues in FY 2022 grew at 24.9% in US dollar terms and 24.1% in INR terms.
You will recall that at the beginning of fiscal year 2022, we had guided to an expected organic CC growth of 17%, and we had been revising the guidance upwards in every subsequent quarter. FY 2022 proved to be a stellar year for our BFS business, which clocked 102% growth on the back of multiple large deal wins, including the $105 million plus TCV contract won in Q1. BFS constituted 25.5% of FY 2022 revenue. The insurance vertical logged another strong performance after four years of continued strong performance and grew 20.2% and constituted 28.3% of the firm's revenue. The travel, transportation, hospitality vertical recovered smartly in FY 2022 to grow 36% over FY 2021.
We believe it is important to note that the TTH vertical revenue in FY 2022 was 5% higher than what was recorded pre-pandemic in FY 2020. It constituted 19% of the total FY 2022 revenue. Other businesses, including healthcare, retail, high tech, manufacturing and public sector outside India, collectively grew 21.6% year-on-year and represented 27.2% of the overall revenues. Looking at the geographic state of the revenues, the Americas grew 49.7%, EMEA grew 32.5%, and the rest of the world grew 14.6% during the year. Geo-wise revenue contribution for fiscal year 2022 stood at Americas 52%, EMEA 35%, and rest of the world 13%. We experienced strong growth across our entire offering spectrum during the year, and all our service lines are scaled businesses today.
Our digital portfolio, which comprises of product engineering, intelligent automation, data services, and integration service lines, made up 51.5% of aggregate technology revenue. Digital and cloud infra services combined is 71.3% of our tech revenue, and it grew at 24.5% in FY 2022. In addition to the remarkable top-line growth, we had also embarked on a journey to improve our profitability during the year under review. Adjusted EBITDA, before ESOP and acquisition-related costs, increased by 43.7% during the year, translating into an EBITDA margin of 18.9% in CC terms for the year. The ability of the firm to expand margins at a time when the industry has grappled with higher retention and hiring costs merits a quick comment.
Significant margin expansion during the quarter, and actually progressively through the year, has been driven by the following factors. One, a progressive and significant enhancement in offshore revenues. This came, as I said earlier, on the back of the large deals signed right through the year. Two, an expansion in gross margin as pricing power has increased. Three, operating leverage from the very strong growth that we witnessed. Four, from an induction of 6.7x the number of graduate trainee engineers compared to any previous year, thereby significantly flattening the delivery pyramid. Five, by a phased return towards normal pre-pandemic gross margins for our travel business. I will close these observations with the comment that our exit-adjusted EBITDA margin in Q4 last year was 18%, and as I've just shared, that number this year is 20.6%.
Finally, our net profits for the year came in at $89.1 million, and they reflected a 45% year-on-year growth. The effective tax rate for the year stood at 17% of the PBT. That, ladies and gentlemen, rounds off the revenue and the profit analysis for quarter four and for the full year. I shall move on to the order intake section next. In terms of order intake, fiscal year 2022 has been the best year in the history of the firm, once again, in terms of the size and the velocity of large deals won. In the first half of the year, we had already secured a $105 million TCV contract, which was for four years, eight months. We had also secured in the first half $250 million-plus contracts.
That momentum has continued in the second half, wherein we signed another $45 million+ TCV contract in Europe in quarter three. In the current quarter, in quarter four, we followed that by another $50 million+ deal in the BFS space. The order intake for quarter four was $301 million, including three large deals that were signed. Out of these three, as I referred to earlier, one was larger than $50 million in TCV terms. The order intake for the quarter comprised of $158 million that came from the Americas, $104 million that came from EMEA, and $40 million that came from the rest of the world.
I would like to call out that the total order intake during fiscal year 2022 was $1.15 billion, crossing the billion-dollar mark for the first time in the firm's history. This was up 47.3% over the order intake of $781 million that was recorded in the previous fiscal, FY 2021. As a result of the strong order inflows, booked orders for the next twelve months now stand at $720 million. This number stood at $520 million at the same time last year.
This robust order book for the next 12 months, the order intake of $1.15 billion over the last 4 quarters, and the track record of repeat business from clients of over 93% now, excuse me, imparts a high degree of confidence in our plans to drive accelerated growth to the next key milestone of $2 billion in revenue that we have set for the firm. 12 new logos were signed during the quarter, taking the total count to 47 for the financial year. I shall move on very quickly through delivery, operations and capability build activities through the quarter. In line with our vision of engage with the emerging, we continue to strengthen our positioning across existing and new partner ecosystems such as AWS, Kong, and AppDynamics, to enhance our capabilities and to provide a differentiated offering to our clients.
During the quarter, Coforge became an AWS travel and hospitality competency partner, reflecting the firm's demonstrated experience of helping travel and hospitality clients transform their businesses, working in partnership with Amazon Web Services. We also announced a global partnership with Kong, which is a Gartner 2021 leader in full lifecycle API management. The firm also announced the extension of its partnership with the Cisco AppDynamics, which is a leading full-stack business-centric observability platform. This trending collaboration will see the launch of a new performance monitoring-as-a-service offering for business-critical applications by Coforge. As a testament to our delivery capability, Coforge also earned the Global Elite distinction in the new Pega Partners Program, where we are among the only nine elite partners globally. The Global Elite distinction is reserved for the top-performing partners with demonstrated capabilities in Pega technologies, engagement strategies or vertical markets.
In addition to the Global Elite status, Coforge also owns specialized distinctions in customer service, delivery, and manufacturing. The Coforge Salesforce business unit won the JAPAC Breakthrough Partner of the Year award from MuleSoft for its excellence in enabling clients to accelerate their digital transformation initiatives. We continue to execute seamlessly against the large banking mandate that we won in Q1. We are now also partnering with the client in addition to the original mandate to drive data-driven transformation and in developing their next gen data and analytics platforms. Our Salesforce delivery to the client has been identified by Salesforce as the largest European implementation of Salesforce Financial Services Cloud. The Coforge digital consulting services are now part of a steering committee at one of the major European Central Banks to lead a multi-year transformation and modernization program.
In this role, we work directly with the CEO and their core leadership team who are driving this agenda. During the quarter, we implemented the Life Data Foundation data ecosystem on a modern AWS platform for an American insurance and investment management organization. This was done to integrate the data from key functions. The initiative resulted in benefits valued over $10 million to the customer. Our MuleSoft integration delivery to the client was nominated for the one IT award for adaptability for future digital integrations by the same client. On the travel side of the house, we continue to grow our existing relationships, and I think our growth is the best evidence of that.
We are also focused on cross-selling our cybersecurity offerings to our travel clients, where our teams are already engaged in delivering security, vulnerability and incident management services across 80 airports around the world. For a large U.S.,-headquartered global enterprise information management services organization, Coforge has been providing artificial intelligence services for their customers across geographies using our own, the Coforge Quasar Artificial Intelligence Accelerator. Moving on to the people section and metrics around people. During the quarter under review, we added a net 722 people to our headcount in the IT business. For the overall firm, including the BPS business, our total headcount at the end of fiscal year 2022 stands at 22,500. Utilization, including trainees during the quarter, was 76.1%.
Excluding trainees, the utilization during the quarter was 80.1%, and the number of trainees added was 6.7 times compared to the number in fiscal year 2021. Attrition during the quarter increased marginally to 17.7%, but continues to remain one of the lowest across the industry. We continue to focus on this as a critical operating metric reflective of the Coforge culture and an engaged and committed workforce. Before moving on to the balance sheet and the outlook for the fiscal year 2023, I want to emphasize our strong belief that growth in an IT services business is largely predicated on a firm's ability to hire and retain the best talent. For us, this was a year for a firm our size, where we added nearly 10,000 net new members to the Coforge family despite the tough testing environment.
A couple of quick sentences around the balance sheet metrics that you would have seen from the fact sheet. Cash bank balances at the end of FY 2022 stood at $62.2 million after payouts towards an interim dividend declared in January. CapEx spend during the last quarter was $3.4 million. The debtors at the end of the quarter improved, and they stood at 62 days of sales outstanding. Finally, summing up an outlook for FY 2023. Over the past five years, Coforge has completely and successfully transformed itself through changes effected across several vectors. Key changes that have enabled our pivot to robust, sustained, and profitable growth have included a change in leadership. The change in the center of gravity of that changed leadership to the markets. A change in the performance ethic of the organization to a can-do attitude.
A change in the strategy to focus on select core verticals where we have deep domain differentiated expertise. Last, but by no means the least, a complete recreation of the technology capability stack to engage with our clients across the emerging technologies continuum. These changes allied with an intensely execution-focused culture, and we pride ourselves on our ability to execute and to deliver on commitments, have driven our financial performance. Two weeks back, we concluded a leadership offsite, where we reaffirmed our commitment to robust, sustained, and profitable growth in the years to come. In the typical Coforge execution-focused operating style, we vetted once again our growth plans for FY 2023, and we've also created an aggressive time-bound plan to get to $2 billion revenue milestone. I shall share our outlook for FY 2023 based on our discussions in that offsite.
Given the $1.15 billion order intake over the last four quarters, given the already locked-in twelve-month executable order book of $720 million, and given the ground-up conversations that we are having with our clients, all of us, we are planning for around 20% constant currency revenue growth in FY 2023. On the margin front, we expect to maintain adjusted EBITDA between 18.5%-19% in FY 2023. Summing up, we are on track to deliver yet another year of strong operational and financial performance as the firm continues to enhance its capabilities, invest very strongly in them, and scales up its delivery resources to fulfill the very rapid pace of growth planned. With that, ladies and gentlemen, I wish to thank you for your attention and your consideration, and I conclude my prepared remarks.
I look forward hereon to hearing your comments and to addressing your questions.
Thank you very much.
Thank you. I look forward to questions.
We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Sandeep Agarwal from Edelweiss Financial Services. Please go ahead.
Yeah. Hi, good morning, and thanks for taking my question. Congrats on a good set of execution. Sudhir, when you say 20% constant currency number for FY 2023, is it at least or you think, you know, it is realistic or a conservative number one? Number two, when you talk about margins, you have taken into consideration a scenario which can further deteriorate from here on attrition or you think that you are guiding that range considering the current attrition situation. That is number one.
Number two question, which I would like to ask, is that given what you're seeing today and given the uncertainties on global macros and what, you know, most of the economists are talking about, what is your sense that how critical is our tech operations to the client and how much they are enabling the revenue growth and margins of that client, profitability of the clients that this will be the last cost to cut? What is your sense on that?
Thank you for the three questions, Sandeep. Let me take them in order. I mean, if you look at our records last year, at the beginning of last year, fiscal year 2022, we had offered a growth guidance of 17% in CC terms. We concluded between organic and the acquisition that we did during the year at 38%. This year, we're starting the year, we're not offering, at least this time, as you noted. We're offering around 20% organic CC, which we think is a realistic achievable number. We will of course, as we did last year, we started with 17, ended at 38, keep revising numbers basis change in market conditions or any changes or acquisitions that we might consummate whenever we do that. That's how I would put it.
At the current point in time, we believe it's realistic. Of course, we've always had a conservative bias, and that's fundamentally why we've always met, and in most cases exceeded, forecasts that we've shared. That's the answer to question one. Question two, the adjusted EBITDA guidance of 18.5%-19%. We feel confident around this, assuming. We've done most of the scenario modelings around worsening attrition, significantly worsening attrition, everything under the sun. We believe that if we are walking, if we have an exit EBITDA margin of 20.6%. When at the same time last year we had exited at 18%, there is a significant cushion available to us.
At this point in time, we're calling out a margin that is broadly in line with what we've already delivered, while our exit rate is significantly higher on the margin front than it was when FY 2022 started. The third piece, the third question around global macro conditions, the changes that we've been observing, all of us have been tracking and how critical is tech operations. I think the short answer is very. Tech operations continue to be critical and, over the past few years, not just the last year, we've seen increasingly that tech spend is no longer regarded as the first discretionary item or even the second or the third discretionary item that gets pulled off. A lot of our growth projections are also not based on macro conditions moving up or down on a sliding scale.
A lot of it is also based on the order executable that is already signed, and I talked about $720 million. A lot of it is also based on the fact that repeat business has climbed up to 93% from 89% last year because of the hits that we saw in travel. A lot of it is based on the fact that the travel industry, which is, as you know, a material industry for us, is seeing clear evidence of a bounce back, and we have a lot of tailwinds building up there. A lot of it comes from the fact that we've been really investing. If you look at our sales team, when last year ended, we had about 180 people. Today, we have 280. The pipeline that is getting built globally.
A lot of it is also coming from the fact that our growth, as you would have noticed, is broad-based. It's not one vertical, one tech service line that's driving it or one or two clients. Broad-based growth, low client concentration, a de-risk model. In just about every scenario that we could model two weeks back in our leadership offsite, these numbers feel extremely achievable to us. I'm gonna pause right there, Sandeep, and I wanna thank you again for the question.
Thank you. Thank you, Sudhir. That's very helpful and very strong comment. Thank you.
Thank you. The next question is from line of Vibhor Singhal from PhillipCapital. Please go ahead.
Yeah. Hi. Good morning, sir. Thanks for taking my questions. Congrats on a strong quarter yet again. Sudhir, just two questions from my side. I just wanted to check what the overall outlook on the insurance segment is. We've been doing really great in that segment. Some of our peers are not able to catch up. Overall, how is it looking, especially in the European market? How do you see insurance vertical playing out for FY 2023 specifically? My second question is, any timeline that you could probably provide for that $2 billion revenue target that you mentioned in the press release and the opening remarks, Sudhir?
Sure. Thank you for both the questions, Vibhor. Let me take them in order once again. On the insurance outlook, as you've noted, insurance as a vertical for us has been a very strong growth driver over the last four years. This year again, we've clocked a 20%+ growth. When we look at the market and we look at the industry, we see momentum continuing in insurance in fiscal year 2023 on the back of the strong economic recovery we've seen so far, the rising risk awareness and the accelerated digitalization that is now happening in insurance, which has been a laggard compared to other industries.
I mean, if you look at insurance as a composite, global insurance premiums are also expected to grow between 3%-4%, depending on who you speak to in 2023. The flip on the insurance side that we're monitoring is that high inflation and the significant catastrophic event, what they call the CAT losses, may impact insurer earnings and put pressure on their discretionary spend. I mean, if you weigh the pluses and the minus, we see very strong, significant demand for Coforge services, including digital experience, including accelerated underwriting, including claims optimization, call center transformation, core platform organization. Given what we've already built up, given the fact that insurance at the end of FY 2022 is still the largest vertical for us, we do expect outlook to be strong, positive, robust going forward as well, Vibhor.
That's the answer to question number one. Question number two, around the $2 billion plan that we created. As you can imagine, in the leadership offsite that we had, we've named the year internally when we expect or we want desperately to get to $2 billion. We're not gonna be sharing those numbers right now. At this point in time, the outlook that we are sharing, as we've always shared, is only for the next fiscal. We do understand that we should hopefully be materially north of $1 billion by the end of this year. Hence, the focus has pivoted to $2 billion and to getting there hopefully with accelerated speed.
Got it. Just one small bookkeeping question, if I may. What is the ESOP cost that we're expecting for FY 2023? ESOP slash RSU cost?
Vibhor, I'm gonna request Ajay to step in for that. Ajay, can you take that, please?
Sure. Thank you, Sudhir. Vibhor, we are expecting between 60-65 basis points of ESOP cost next year.
Sorry, I missed that. Sorry.
Vibhor, I'll repeat myself. It's 60-65 basis points of revenue for the next year, financial year 2023. That's the MIP program.
Got it. Thanks a lot, Ajay and Sudhir. Thank you, guys. Thank you so much, and wish you all the best.
Thank you, Vibhor.
Thank you. The next question is from the line of Dipesh Mehta from Emkay Global Financial Services. Please go ahead.
Yeah. Thanks for the opportunity. Couple of questions. First of all, so we just want to get your perspective how you think Q4 played out. In line with your expectation or there is some risk, if any, or some positive surprise, if you can highlight, considering so much macro uncertainty and across sector performance. Plus it seems some margin risk versus what you indicated. Second question is about the BPS headcount decline. This quarter it is Q/Q down, so is there any seasonality in SLK business or any other seasonality in BPS business? Third question is about WHISHWORKS. Typically, WHISHWORKS has very strong Q4 and then taper off in Q1. Do you expect that seasonality to weigh on our Q1 performance? Thank you.
Thank you for the three questions, Dipesh. I just want to reconfirm question number one. Question number one, as I understood it, was, you wanted us to opine on how the year has panned out versus our expectations. Is that correct?
More for quarter rather than year.
Understood. Quarter rather than year. Understood. Fantastic. Let me take all three questions once again in order. The quarter panned out, it was the last quarter we had stretched a stretch goal for ourselves. Clearly, the number that we were aiming at for the revenue side got exceeded given the tailwinds that we've seen, because the outlook that we'd offered for the full year was 37% at least growth in dollar terms, and we ended up at 38% for the year. Revenue has been slightly ahead of what we had called out.
On the margin side, we had indicated that we'd end the year between 18.9%-19% margin for the full year, and we've delivered on that, and we've delivered on that after taking margin to 20.6% for the quarter, which as I called out, was the highest ever. See, the interesting thing is last quarter three, was the highest ever when we hit 19.5%. This time we've exceeded the highest ever by a very significant 90 basis points more. And in today's environment, a firm our size hitting 20.6% CC, 20.4% reported quarterly margin obviously is something that we are very pleased about. So the quarters panned out in line, slightly ahead of our expectations. Second, as far as BPS headcount is concerned, we've been...
If you look at the BPS headcount progression over the last four quarters, Dipesh, we called out at the beginning of the year itself that we expected the acquisition to be margin accretive for us, and it's been significantly margin accretive because of the operating efficiencies and the synergies that we've been able to create, especially on the non-billable headcount front. Moving forward, we had talked about the fact that we expect the BPS business to grow in Q4 over Q3, and it has, and we expect that growth momentum to continue in the coming quarter as well. Third, as far as WHISHWORKS is concerned, there is no material seasonality within that business, Dipesh. As you're aware, the WHISHWORKS business is now fully integrated. It operates under the Coforge Salesforce business unit name.
We merged the MuleSoft capabilities with the Salesforce capabilities, and it's been a huge capability and force multiplier for the firm. Given the contours of the new business, there is no longer material seasonality in WHISHWORKS in Q4. We should not be seeing a material tapering off in Q1 in what was WHISHWORKS and is now the Coforge Salesforce business unit now.
Understood. Last data point from my side, can you give the SLK Global revenue for the quarter? Thank you.
Sorry, which global revenue, Dipesh?
SLK Global, the acquisition.
Yeah. We're not calling out all acquired entities which have been fully merged, and the SLK entity is now the Coforge BPS business. We have merged the earlier Coforge BPS business with the SLK business and put it all under the same leader who was running this unit for SLK earlier. We are calling out the BPS business revenues, product engineering revenues, but we're not calling out revenues on a go-forward basis for individual entities that are now fully merged. SLK is now fully merged with Coforge.
Understood. Thank you very much.
Thank you, Dipesh.
Thank you. Participants, remember star and one to ask a question. The next question is from the line of Manik Taneja from JM Financial Services. Please go ahead.
Hi. Good morning. Thank you for the opportunity, and congratulations for the steady performance. We just wanted to pick your brains on a couple of things. We've seen significant offshore shift for us happen over the last twelve months, and as you alluded, this is also being helped by the large deal momentum that we are seeing. If you could talk about how do we see this dynamic over the next twelve months? That's question number one. The second question was a clarification on the SG&A headcount. That number came off in 3Q and has reduced marginally in 4Q as well. If you could help us understand what's driving the optimization there. Thank you.
Sure. Let me take both the questions in order. We believe the offshore shift is largely structural. Of course, for the quarter, offshore revenue is at 47%. For the year, the overall offshore revenue is at 44%. We were fairly tentative about it and did not call it out, but given the continued offshore momentum, we believe the number is likely to sustain in FY 2023 at broadly the levels that we've seen in FY 2022. That's answer one to question one. Answer two to question two on the SG&A is we've actually very, very significantly enhanced numbers on the sales and marketing side. As I said, when FY 2021 closed, we had about 180 folks across sales and marketing. Now that FY 2022 has closed, we have somewhere close to 280.
I won't worry too much about whether the number has gone up by three or gone down by three as is the case over the last quarter. The broad direction is what was a 180-member team is a 280-member team. Our intent, and you can, I think, deduce this from the margin guidance also, especially given the exit margin rate, is to really very aggressively continue to invest in the S&M and the solutioning headcount going forward as well, because we are crystal clear. Growth is the primary imperative, and getting to $2 billion with speed is something that we're really fixated on.
Sure. Thank you. If I can ask one more. This was on our segmental margin performance. If you could help us understand why our margin profile in India essentially continues to be negative, and what drove the segmental margin improvement in case of European geography? Thank you.
Ajay, would you like to address that question?
Yeah, thanks. Thanks, Sudhir. In India, we continue to have a negative margin, but if you look at the India segment, it's a very small segment and it's a competitive segment. We continue to improve our margin there. Again, given the one-time impacts, it is negative in the current year and quarter.
Let me just add to that. While the margin is negative at the current point in time, the trend is it's been reversing. The intent is not even though India is a very small portion of our revenues, and you would have noted the rest of the world has been declining as a revenue contribution for us, the intent is not to keep it that way forever. One of the things that we take great pride in is the fact that we believe we execute very well, and our margins are a testament to that execution ability. You will over time find us turn India, which is the last bastion where margins have been under pressure and do a complete and an effective turnaround there as well. The other question that you had, I understood, was segmental margins.
Segmental margins continue to be strong, which is what is playing into the aggregate margins having increased during the year. Something that's helped us in FY 2022 and will likely help us even more on the margin front in FY 2023 has been the clawback on margin that we've been able to see on the travel industry side. Not only has travel expanded significantly as a vertical in revenue, gross margins there have also gone up. The one thing I do wanna point out is if you look at our gross margin progression, our gross margin has gone up 340 basis points between Q1- Q4 of FY 2022. A lot of it, at least a major chunk of it, has come because of the positive reversal that we've been seeing on the travel side as well.
Of course, insurance, BFS, the new deals that we've signed have all been solidly margin accretive, and that is the other nuance that is important to assess. A lot of times have come in at good rates and have been margin accretive for us. I'm gonna pause right there for any other follow-ups that you might have.
Sudhir, one last clarification. Is the travel rebound also helping with regards to Europe segmental margins?
Significant Europe bias, so it would be playing into the Europe turnaround as well. Of course, Europe as a geo outside the three verticals again is doing well. Also, if you recollect the large deal that we signed in BFS, the $105 million deal was with a European bank. That also, to the point I made earlier, that large deal is margin accretive, and that's also helping both Europe and the firm.
Sure. Thank you. All the best for the future.
Sudhir, just to add, the offshoring also is helping there in the European margin as well.
Thank you, Ajay.
Yeah.
Thank you. The next question is from the line of Abhishek from InCred Capital. Please go ahead.
Thank you for the opportunity, and congrats on a good quarter. Couple of questions. The first one is on the sales headcount growth that you alluded to. We are seeing a commensurate increase in the bookings number on a Y-o-Y basis. What I'm essentially trying to understand is the increase in the bookings number is a reflection of headcount or, you know, we are yet to see the efficiency benefits from increase in the sales number. The second is on large deals. You know, it seems like our commentary is contrary to the perception what we heard in Q4, that large deals are fewer in the market, but we have been able to kind of, you know, stitch them better.
Any color in terms of, you know, what we are doing differently, could be helpful. The third is on wage hikes. You know, when do we plan to give wage hikes? Any quantum, you know, for the same could be helpful. Thank you.
Thank you, Abhishek, for all three questions. Let me take them in order. Sales headcount growth and the tie-up that you did to booking numbers. From my experience, practical experience, when I started my life as a sales manager in Hindustan Lever more than two and a half decades back. It takes about a year for a person to come in, settle down and start producing. Most of this increase from 180- 280 comprises of folks who haven't finished that full year. A lot of that growth, the impact creation by that cohort, I suspect, is still awaited and hopefully will start playing out in FY 2023. I also would urge you not to conflate bookings with headcount numbers.
It's, I think, as all of us know, it's less the number, more the caliber of who we bring on board, and that plays into that piece, into the bookings and the headcount correlation. The second question around large deals and the fact that our commentary is different. My submission to you would be it's not just our commentary that is different. Our performance is different compared to what you're hearing. Our commentary is different, and we keep calling out large deals because our performance supports the fact that we are closing large deals. We closed 11 large deals through the year, and almost every quarter there's been roughly about three. There was a quarter where we had two. It's been very consistent. Also it's not just large deals where you're scraping through the threshold of what we call a $20 million TCV.
This has been a breakthrough year, not just in terms of numbers and velocity. It's basically been a breakthrough year in terms of the median size of those large deals having gone up. 100 million+ TCV large deals, 350 million+ TCV large deals, including one in quarter four itself, is why the commentary that we are offering, backed by facts on the ground, is working for us. To your question around what are we doing differently, I suspect not much. It's fundamentally execution. It's fundamentally the collective decision that was made at the beginning of the year when it was very clear to us that there was a lot of business, short cycle business for the asking.
We did step back and take a conscious call to continue to focus on large deals, because if hypothetically the market were to go south, short cycle deals go away almost immediately. Large deals do not. We've always had a bias about three things that you'll always hear me talk about: robust growth, sustained growth, and profitable growth. That sustainability largely comes if the deal velocity around large deals is consistent. That's the answer to question number two. Question number three, wage hikes. Quantum wage hikes have already been affected. In our case, they're affected effective the first of April, and that change has happened about a month and a half back.
Given what's happening in the market, wage hikes are substantially higher than what they were last year, and that cost escalation has already been built into the model basis which we've come out and talked about the margins that we are likely to deliver upon. As I said earlier, we're walking in with what we believe is material cushion because an exit rate of 20.6% makes it that much easier for us to absorb a lot more on cost in the worst case scenario and still deliver to the numbers at least that we've called about. I'm gonna pause right there, Abhishek, but those will be the three answers to your three questions.
Great thank you for taking my question and best wishes for 2023.
Thank you, Abhishek.
Thank you. The next question is from Shradha from Asian Market Securities. Please go ahead.
Yeah, hi. Thanks for taking my question and congratulations on a great guidance. Actually, one question. When I see your fresh order intake, that number for Europe has been lower in Q1 too. How are we looking at demand environment in Europe as such?
Shradha, Europe's been a very happy hunting ground for us. The largest deal that we closed, FY 2022, was in Europe with the bank, the $100 million+ deal. At this point in time, despite what's happening on the Eastern European side, Europe for us across the travel space, which, and for travel, Europe is a material market. Europe for us on the BFS side, where it has now become a material market, is doing extremely well. I won't even say doing well. It's actually doing extremely well for us. Fresh order intake number notwithstanding, the momentum in Europe continues to be strong as we see it for now.
Right. Secondly, on our insurance platform, AdvantageGo, the license revenue number was not great in the first five months. How did the license revenue perform this quarter?
It's done well, Shradha. We've grown about, I don't remember the exact number, but more than 13% sequentially in Q4 over Q3.
Right. Any outlook on the travel hospitality sector that you would want to give out for FY 2023? What are the considerations for margin guidance for 2023? What are the key levers that will be available for us to defend the salary hike of which we have given, which is higher than what we have given in historical years? That's it. Thank you.
Sure, Shradha. Let me take both the questions in order. Travel outlook. Now, travel of course, given the bounce back, is a space where our travel leader, I personally have been meeting almost every client across the world, and we've literally been traveling to meet our travel clients. So if you look at the travel segment, particularly Europe, what's very clear now is that the global travel industry recovery is clearly happening, and it's on a significant upswing. We've seen this almost from January 2022. For most of the major airlines, and I've spoken to most of the leaders in airlines personally, in person, around the world are predicting double-digit profitability for the current quarter itself, April-June, and for the rest of 2022 as well.
What has been very interesting in a lot of my conversations is they don't seem to be demand-constrained. They're more supply-constrained around actually having the right number of pilots and cabin crew to staff airlines and airports. Europe is showing, to your question, very similar trends in travel of increased bookings now and, a significant upswing in travel, both domestic and international. International, of course, is important for Europe. So far there has been no noticeable impact from the war in Ukraine. European commercial flights, we keep monitoring that. They've increased by 150% in March 2022, for example, compared to March 2021. Across the conversations all of us have had, within Coforge with travel clients, this improved revenue and the profitability outlook is leading the travel industry to increase investments.
We see it and we sense it and we benefit from it significantly in cloud, in cybersecurity, and in digitization initiatives focused around touchless travel. Last quarter again, Shradha, the same question had come up, and I had cited a metric from SITA, who had spoken to almost every CEO and CIO in the travel industry. 85% of them expect IT spends in FY 2023, calendar year 2023, to be significantly and materially higher than FY 2022. That's a quick update around travel. On the margin side, your question was around what are the levers that give us comfort that despite the supply issues, despite the retention hiring costs, we will deliver at a minimum to what we've talked about. I think there are multiple levers.
The first one is, I've talked about this, we are on an exit adjusted EBITDA margin of 20.6%, right? Last year, the exit EBITDA margin was 18%. The margin in Q1 for Coforge adjusted EBITDA was 16.1%. Through the year, our ramp has been from 16.1%- 20.6%. That exit gives us a big cushion. That's lever one. Lever two is the fact that offshoring for the year is at 44%, but for the quarter four, we're exiting at 47%. Last year, compared to last year, that's 8% higher. We believe it's a structural shift in the cost structure and margin profile, so that will sustain.
Third lever around margin that we feel very good about is in FY 2022, and this has impacted our utilization in some ways, in FY 2022, we hired 1,680 graduate engineer trainees, which is 6.7x more than what we did in the previous years, any previous year. Now, a lot of them are not billing, but they will over time start billing, and that becomes a significant margin driver. Fourth, of course, margin driver, Shradha, is the natural operating leverage from what we think is robust growth ahead of us. Fifth is, AdvantageGo, which you talked about. That business had two quarters of sequential decline last year. We don't expect that to repeat in FY 2023. Finally, a big lever which I've talked about is a recovery in the travel business.
That's significant, not just from a revenue perspective, but also from a margin perspective and an upside perspective. Shradha, those would be the answers to the two questions that you have.
That's very helpful. Sudhir, if I can chip in. Any pricing increments that we can factor in for 2022, especially from the travel vertical?
Yes. I mean, I've been asked this question over the last 4-5 quarters, and I've always been shy about committing to margin being a material lever. While it may not be a very material lever, clearly pricing power is definitely back with partners like us, and we do expect it to be a well, if not a major lever, a clear minor lever on improving margins going forward now.
Great. That's great. Thanks, Sudhir.
Thank you, Shradha.
Thank you, Shradha. This is Ankur. Again, guys, I know there are a few more questions lined up. Again, we will be happy to take those questions on a one-off basis post the call. We'll need to wrap it up, operator. Please conclude with the closing remarks.
Thank you very much. I would now like to hand the conference to Mr. Sudhir Singh for closing comments.
I would like to thank everyone, ladies and gentlemen, all of you, for joining us at this early hour in India and for the folks in the States and in Europe for what is a very late hour in the US for now. Thank you very much as always for your interest, for your insights. I've always said this, and I've always meant it. We learn a lot from your questions, and we do try to bake in your insights and improve our performance, which has always been our intent and continues to be a very strong intent, our very strong intent going into the future as well. Thank you once again, and I look forward to speaking to you three months from now. Thank you. Good night. Bye-bye.
Thank you very much. On behalf of Coforge Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.