Ladies and gentlemen, good day and welcome to LTIMindtree Q4 FY 2025 results call. 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 touch-tone phone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Vikas Jadhav, Head of Investor Relations, LTIMindtree. Thank you. Over to you, sir.
Thanks, Rutuja. Good evening , everyone. Welcome to LTIMindtree Quarter 4 FY 2025 Earnings Conference Call today. On the call we have with us Mr. Debashis Chatterjee, Chief Executive Officer and Managing Director, Mr. Venu Lambu, Chief Executive Officer Designate, Mr. Nachiket Deshpande, President, Global AI Services, Strategic Deals and Partnerships, and Mr. Vipul Chandra, Chief Financial Officer. We'll begin by providing a brief overview of the company's quarter four and FY 2025 performance, after which we'll open the floor for Q&A. During the call, we could make forward looking statements. These statements consider the environment as we see today and carry risks and uncertainties that could cause our actual results to differ materially from those expressed in today's call. We do not undertake to update any forward looking statements made on the call.
I now turn the call over to DC for his opening remarks.
Thank you, Vikas. Good evening and good morning to everyone and thank you for joining us today. To start with, I am pleased to mention that on the earnings call today we are joined by Venu Lambu who has rejoined us as CEO Designate on the 24th of January. Venu has worked closely with me for over a decade. In the past, since joining, he has gained deeper insights into the company's current operations and strategic planning. Venu will continue to focus on driving growth and enhancing stakeholder value while I cover the performance highlights for FY 2025. I would request Venu to provide his perspective on the business outlook later. In terms of yearly performance, FY 2025 was a period of consolidation characterized by growth in our key verticals, growth across top customers, large deals, traction and significant progress in AI -leveraged deals.
Despite robust revenue growth in the first half of the year, momentum slowed in the second half due to macro uncertainties. Nonetheless, as a strategic partner, we maintained close relationships with our customers and supported them in their cost initiative programs while further consolidating our position with them. Overall, we achieved constant currency revenue growth of 5% compared to 4.2% in FY 2024. Revenue totaled $4.5 billion, reflecting a growth of 4.8% in U.S. dollar terms. The strategic alignments with our customers have resulted in a robust order inflow t his year. We recorded a Q4 order inflow of $1.6 billion, marking the second consecutive quarter with over $1.5 billion in orders. The total order inflow for FY 2025 stood at $6 billion, representing a 6.1% year-on-year increase.
This exhibits our capability to continue to adjust our portfolio from a higher discretionary mix to longer term efficiency driven deals. Operating margins for the year stood at 14.5%, a decline of 120 basis points year-over-year. At the end of Q4 and FY 2025 our total headcount stands at 84,307 reflecting a net year-over-year addition of 2,657 employees. Attrition remains stable at 14.4%. Collaboration between academia and corporates is critical in times of technological transition. As a step towards this, we are excited to share that LTIMindtree has partnered with the Indian Institute of Management , Mumbai to introduce the postgraduate program for Executives in AI-led Experience Design this year. This year long program is designed to equip professionals with cutting edge skills in customer experience design by leveraging the transformative capabilities of artificial intelligence.
At LTIMindtree , we believe that true operational excellence is measured not only in metrics but also in the trust we build with our clients. I'm delighted to share that our CSAT score improved to 5.98 in FY 2025 f rom 5.85 in FY 2024, well above the industry average. I am glad to see LTIMindtree being included in the S&P Global Sustainability Yearbook 2025. This inclusion marks the first time we have been featured in the S&P Sustainability Yearbook and reflects our ongoing commitment to sustainability and transparent practices.
The ongoing AI-led technology transition is enabling us to capitalize on new opportunities across various industries. Let me take you through some of the key wins in Q4. A leading U.S. life insurance company has engaged us to enhance its quality processes using AI to improve the operating model, thereby advancing enterprise quality engineering maturity. This is a multi-year deal which will focus on enhancing quality engineering practices and leveraging AI to transform the operating model.
We have been chosen by a global reinsurance group to enhance efficiency through an AIOps model as part of its end-to-end outsourcing deal. A leading digital company in the Kingdom of Saudi Arabia region has entrusted us with providing end-to-end operations services for their hybrid cloud security platform. We have been selected by a global energy major to provide next-gen ERP support services across multiple functional and SaaS-based solutions. Our year-end deal pipeline continues to remain robust. Next, I will discuss our industry verticals performance. Our primary verticals, BFSI, Technology, and Manufacturing, which accounted for approximately 80% of FY 2025 revenues, experienced good growth this year. The Technology, Media, and Communications vertical contributed 24.5% to FY 2025 revenues and grew 8.7% year-over-year. In U.S. dollar terms, we see continued momentum in this sector.
Our largest vertical, BFSI, which contributed 36.1% to FY 2025 revenues, grew 4.6% year-over-year. Client priorities continue to revolve around regulatory commitment and data transformation for better reporting and decisions. During the year we closed several large deals in this vertical primarily focused on cost optimization, vendor consolidation, and technology modernization. The Manufacturing and Resources vertical, which contributed 19% of FY 2025 revenues, grew 7.2% year-over-year, aided by the large deals we signed earlier this year. Demand was driven by vendor consolidation, ERP transformation, and managed services deals. Our Consumer Business, which consists of Retail, CPG, Travel, Transportation, and Hospitality businesses, showed flat growth year-over-year in constant currency terms. Retail and CPG witnessed growth during the year while the TTH portfolio had a couple of client-specific slowdowns. Our Health, Life Sciences, and Public Services business, our smallest vertical, declined by 3% year-over-year.
The decline primarily came from the healthcare business. In terms of geographies, North America grew by 7.1%, Europe declined by 1.2%, and the rest of the world declined by 1.7% in FY 2025. I will now turn over the call to Vipul for the financial highlights.
Thank you , DC Hello everyone and thank you for joining the call. Let me take you through the financial highlights for the fourth quarter and financial year 2025. Starting with the revenue numbers, we ended the fiscal year 2025 with revenue of $4.5 billion, registering a growth of 4.8% in dollar terms and 5% in constant currency terms. The EBIT margin for FY 2025 was 14.5% compared to 15.7% in FY 2024. The PAT margin was 12.1% compared to 12.9% in FY 2024, while the absolute PAT for the full year was INR 4,602 crores, an increase of 0.4% over FY 2024. Cash generation for the year continued to drive the strength of our balance sheet with operating cash flow to PAT at 98.8% and free cash flow to PAT at 78.5% for the full year.
We closed the year with an all-time high cash and investment balance of $1.56 billion or INR 13,346 crores compared to INR 12,488 crores in quarter three. FY 2025 return on equity was at 21.5%. For the fourth quarter of FY 2025, our revenues stood at $1.13 billion, up 5.8% year-over-year in USD terms. The corresponding constant currency growth was 6.3% year-over-year. Sequentially, revenue declined by 0.7% in dollar terms and by 0.6% in constant currency. EBIT margins for Q4 were flat at 13.8% compared to Q3. Despite the sequential revenue decline, we were able to maintain margins due to improved operational efficiencies. PAT margin for the quarter was at 11.5% as compared to 11.2% in Q3 FY 2025. Basic EPS was 38.1 for the quarter as compared to 36.7 rupees in quarter three FY 2025. The effective tax rate for the quarter remained stable at 26.2%.
We remain committed to reducing our days sales outstanding as evidenced by the improvement in total DSO which reduced by one day bringing it to 79 days for Q4 versus Q3. As of March 31, 2025, our cash flow hedges stood at $3,618 million and hedges on the balance sheet were $259 million. Corresponding numbers for euro hedges stand at EUR 145 million and EUR 28 million respectively. Our utilization excluding trainees in the quarter came in at 85.8% compared to 85.4% last quarter. Our attrition continues to be stable. For the quarter our TTM attrition was 14.4% compared to 14.3% last quarter. We onboarded over 4,700 freshers during the year which is another step on our pyramid correction journey. The Board of Directors has recommended a final dividend of INR 45 per share subject to shareholders approval, taking our overall dividend for the full financial year to INR 65 per share.
Our commitment to sustainability remains steadfast. Let me outline some of our accomplishments on this front. I'm pleased to announce that LTIMindtree received the India Green Award 2025 for demonstrating best practices and achievements in sustainability reporting. LTIMindtree was also awarded the prestigious Zero Waste to Landfill certification for two of our Mumbai offices in Powai and Mahape. We proudly stand as the only Platinum Award winner in the Sustainability Report category within the Technology IT Services sector. This achievement underscores our leadership and sustainable practices within our industry. LTIMindtree attained the Global Leadership League in CDP Climate Change 2024 for the fifth year in a row.
I'm also pleased to report that CRISIL has reaffirmed its rating on the company's bank facilities as CRISIL AAA/Stable and short term facilities at CRISIL A1+. I would now like to invite Venu to share his thoughts.
Thank you, Vipul. I'm very excited to rejoin LTIMindtree. The transition has proceeded smoothly and it has been a rewarding experience collaborating with DC once again. Over the past 90 days, since my rejoining, I have traveled extensively to various locations engaging with both employees and customers. I have participated in over 100 meetings involving customers, industry experts, partners, and investors. These engagements across stakeholders over the past 90 days have been quite reassuring and reinforce my commitment to value creation at LTIMindtree. The recent macro uncertainties will take their own course. Over the past two decades, we have faced various challenges and emerged stronger each time. We see the current phase of technological transition and macro issues as another opportunity and are confident in our ability to thrive. I would like to outline three key initiatives that we have prioritized as we move into FY 2026.
The first initiative is Sales Transformation. This centers around simplifying the service line sales structure, strengthening leadership in high potential businesses, reimagining value creation with our partners and customers, and exploring new sales models in the AI economy targeting a larger portion of clients' cost base than just IT. As we move into this AI -driven economy, clients are increasingly seeking multi -service, multi -delivery and multi -geographical solutions. This significant shift in demand necessitates the development of an innovative playbook, prompting us to revamp our large deal organization. The framework for this organization in the context of AI differs significantly from the traditional methods. It focuses on proactive integration of new age technologies into clients' IT systems as well as our own service delivery processes.
To boost our scalability in this evolving landscape, we have devised a robust go- to -market strategy spearheaded by Nachiket Deshpande, President of Global AI Services, Strategic Deals, and Partnerships. Nachiket will now be based in the U.S. and his experience across the value chain will help in delivering integrated solutions that resonate deeply with clients. While the first two initiatives focus on revenue maximization, the third initiative, Fit for Future, primarily aims at enhancing agility and profitability. It involves re-baselining of our operational cost, both direct and indirect. The goal is to relook at the existing team structures and alignment processes and reshape them towards reducing the extra layers where possible, leading to agility and operational efficiency.
With the innovative use of AI, the program will target productivity improvement in all areas like sales, delivery, and business enablement units, maintaining an optimal and efficient blend processes, and it's also optimizing span of control and et cetera. It should start yielding results through the margin improvements during the year. In conclusion, we are confident about navigating the macro challenges as we move into executing our growth plan for FY 2026, and we expect our Fit for Future program to help improve the margins from Q1 onwards. With that, let me now open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone 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. The first question is from the line of Sulabh Govila from Morgan Stanley. Please go ahead.
My perspective is from an organization point of view, the changes that you highlighted. Would you say that these changes have already been in place, especially with respect to people, or you think that that is something that will take some time to play out? Secondly, within that, the areas that you mentioned about Sales Transformation as well as targeting margins, what among these could be some of the quick wins that you will target in the first year and what could be some of the longer areas that you will pursue?
You know, Sulabh, I think on the first part , the organization structure is final. I think the organization that was in place, we're just strengthening that, improvising in the areas where we need to do it. The focus is actually to continue and accelerate the momentum. That's number one. The second thing, the areas that I spoke of with regard to the Fit for Future program, some of these initiatives are already running as I entered into the organization. It's just that I brought it under one overarching umbrella and overarching program and driving with that governance and focus. It's something which is already work in progress. It's not something that we started in fresh, it's just that it got extra focus and extra rigor.
It got expanded a bit in the last quarter.
Yes. Did I miss out another question? Okay, which ones will give results? With regard to the second part of the question on the Sales Transformation, our expectation is that both should start giving quick win results. Right. You know, again, Sales Transformation is not about overhauling this sales structure. It's about getting better on what we are doing. I think there is a chance to improvise our playbook as the client expectation changes and that's what we are focusing on. The word transformation may look like a big theme, but you should read it as an improvisation from the overall sales effectiveness standpoint and we're confident to start getting some quickened results on both these initiatives.
Understood. Thanks for that comprehensive answer. The second is the outlook on the top two clients that we have. Given that especially on the Hi-Tech client, should we expect the productivity benefit pass on phase over and one should expect that client to grow this year and in the banking client, given the changes that client is pursuing internally, what areas would you think are relatively protected and what could be at risk?
Look, I think on the first part, you know, on the productivity part, I think as DC would have briefed in the Q3, you know, that's been factored already in the Q3 and Q4 quarter. That's the end of the initiative we are driving and we are happy that we successfully delivered those benefits to our customers. That's, you know, sort of a closed topic in that regard. You know, look, it's a customer where we had a relationship over the many years and we'll continue to, you know, work with them in developing new capabilities and areas to grow. The second one is you asked a question with regard to the banking.
Look, I don't want to comment with client specific news that you're talking about, but I can only say that w e c ontinue to see increased opportunities in our clients across all the top clients that we're engaged with. I don't see any immediate risk on that.
Understood, understood. Last one from me with respect to the current demand environment and visibility that you have. The macro uncertainty that's been playing out over the past few weeks, would you say that that has had some impact in the month of March and that's continuing in April or you've not seen anything like that in the past few weeks?
Look, I'll comment on that. Anything extra on that? Sorry. Look, I think the uncertainty is that was there in Q4. I don't think it has disappeared as we step into the Q1. Right. I think it still persists in various forms and shapes. That's one part of the answer with regard to where the uncertainty lies. The second is where do we see the demand outlook coming from the client? I would say it's predominantly coming from the three areas, right?
Even the clients are navigating the same uncertainty that we are navigating. They are looking for opportunity to save cost. There are opportunities where we can help customers in cost saving opportunities. The second is this is also an opportunity for our clients to actually simplify their vendor landscape. There is a huge vendor consolidation demand out there. It is an opportunity for us to be competitive and get a bigger share of that. The third is that as most of our clients navigate to the AI economy, they need to modernize their tech as well. Right. Especially if you want to pivot it at scale at AI, it requires a tech modernization. These are the three sort of archetypes of demand that we see, which are pretty much contextual to the uncertainties that even our clients are navigating.
Understood. Thanks for taking my question and all the best for this financial year.
Thank you, sir.
Thank you. The next question is from the line of Abhishek Bhandari from Nomura. Please go ahead.
Yeah, thank you for the opportunity. I had a few questions. Venu, welcome back home. From the time you left LTI, the time you rejoined and the last three months you spent in the company, what are the areas you think has changed where there's a need for an aggregator? What are some of the areas where you think things have improved since the time you left? The background of this question is some of the expectations, what investors had in terms of growth being A+C after the merger has been clearly paid out.
Yeah. Firstly, Abhishek, thanks for welcoming me back. Look, on your question, to be honest, I do not think it is fair for me to analyze that way because I was there only one month after the merger. It is very difficult for me to have a reference point and do that. We also need to understand, I am sure you appreciate that the market we were talking two years or even three years back is completely different from the market that we talk today. The client expectations have changed and their spend areas have changed. Coupled with that, even the technology advancement, the kind of AI conversation we could have had two or three years back, which is today, has fundamentally changed. That is only how I look at it from an external standpoint. You know, from an internal standpoint, you know, it is the same organization.
You know, I have a very talented team and, you know, great leadership, you know, and we are all passionate and determined to deliver the growth. I, at least on that aspect, I can assure you there's nothing that I've seen a different change.
If not anything, p robably I would have seen more hunger and, you know, more passion to deliver growth. Thanks to DC for that. Did I answer your question, Abhishek?
Yeah, partly. I think maybe in coming quarters we'll have a little more clarity on the strategy and how it's turned out. I appreciate it just in a few months from you. The second question is on the headcount number. This quarter we had a very sharp headcount reduction. Maybe if you could guide us how one should think about the linkage between your expectation on growth and headcount addition going forward.
Yeah. This quarter, if you actually see t he reason for a sharp decline in the headcount was it sort of should b e seen in the context of Q2 and Q3 , where we had built aggressive h eadcount increase in the anticipation for the g rowth and we kind of worked on deploying that in Q4 and hence you see the net headcount reduction.
Going forward , as the AI-led p roductivity starts to play out, Abhishek, we would expect that the headcount growth may not be linear with the revenue growth that we seek. There would continue to be that play as we go along t he AI adoption increases across our services.
Got it, thank you for that. My last question is, should we expect the usual seasonality for you to play out even in FY 2026? This is the order book closure and the pipeline what you have or is it slightly different this time given the macro world?
Abhishek, we could not hear the first part of the question. Could you repeat that please?
Should one expect the usual seasonality of your business to play out in basis the order book closure, what you have and the pipeline you have, or you think the pattern could be different this year because of the uncertain macro?
The seasonality variation that you see in our quarters from the last year, I think in my view it will be more or less the same. Right. If at all, if there is anything that we can add on top of it is our ability to respond to the clients' new types of demands and helping them in all the three areas that I mentioned so that we need to see how that gets played out and also how long this uncertainty environment stays throughout the year. Those are the two sort of variables outside, I would say.
Got it. Thank you, Venu, and all the best. Thank you for your time in the company.
Thank you. Thank you, Abhishek.
The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead.
Yeah, thanks. Thanks for the opportunity.
You spoke about the client specific issue i n terms of both Hi-Tech as well as in BFSI. Apart from that, is there any other c lient specific issue especially in a vertical like Insurance or in Travel, Transportation and Hospitality where vendor consolidation we may win some, maybe may lose some?
Look, firstly Sandeep, I do not think I spoke about any issue as such, if at all. I actually gave an assurance that the productivity part of a top client that we have executed successfully. We do not see that flowing into the Q1. That is the point one and second thing, the question was regarding the banking client where my commentary was more about how we continue to see opportunities with our clients as we go along. Not sure if I missed the context, but there are no specific issues t hat I highlighted.
Outside of these two. What I wanted to know is there any top client specific issue in t ravel as well as in terms of insurance because of California fire and exposure of some of our clients more towards California.
Hello? Hello?
Ladies and gentlemen, please stay connected while we connect the management. Ladies and gentlemen, thank you for patiently holding. The management line is reconnected. Over to you, sir.
Okay, thank you. Sandeep. Sorry, you know, the line got disconnected all of a sudden.
Yeah, look.
Yeah. With regard to your questions on insurance and travel. Look, I think travel as we called out, there were a couple of client specific instances that, you know, had an impact on the FY 2025 numbers. And these clients are actually planning new initiatives. At least I could sort of say that in the near, in the near future, there are no other new impact, you know, on those clients. That was already taken care of in FY 2025 in terms of the further demand outlook from those clients. We have to just wait and watch for some more, a couple of quarters.
Okay. Just a strategic question, Venu, when you are joining back the company. There has been a dual problem in terms of growth being lower versus what i t used to be, LTIMindtree versus peers. Second, margins are also at a very low level despite some of the levers have been used out in the last three to four years.
If you look at gross margin, it is a t all-time high and is one of the lowest in the industry. In terms of focus, do you b elieve driving both the initiative concurrently could be a difficult job and you might have compromised one for the other. What is your strategy in regards to this?
Second, as a clarification in terms of service line transformation, so is it one can understand the GTM model may change from vertical focus to service line focus.
No, firstly let me clarify that part. No, it doesn't mean that. What it means is that the clients are consuming services, service capabilities in a different way. These stays as a need, r ight.? It's no more consuming a part of one service line or anything. Most of the construct, whether it's in the technology modernization, cost saving or the AI kind of a needs, involves more than one service line. When I spoke about simplifying, it's about making sure that we become more agile and become more competitive in the way we address the market. With regard to the service line sales capability, that's the, you know, the first part of it. The second thing is that with regard to playing on both the tracks of revenue and margin, I think it's something we have the capability. It's not the first time we would have addressed these challenges.
We have all the capabilities and we have the teams who can navigate these both. Our endeavor is actually to drive the profitable growth. We need to get both. I do not think you can get the profitable growth. You know, you can get the profit. You are just cutting the cost. You know, you need the revenue and the volume as well. It goes both hand in hand. I know it always looks challenging, but I think that is where we have a great leadership and team in place to deliver that.
Okay, thanks. Congratulations, Venu. All the best.
Thank you.
Thank you. The next question is from the line of Manik Taneja from Axis Capital. Please go ahead.
Hi. Thank you for the opportunity and congratulations for rejoining LTIMindtree. My question was with regards to the commentary that was provided post your third quarter results where you were quite optimistic about sustaining the growth momentum driven by a combination of factors. If you can talk about where were you negatively in terms of verticals with the way how Q4 panned out. The second question is with regards to a Sales Transformation that you're talking about, you've seen a number of exits in the organization in the course of recent months. Could you talk about how you are looking to backfill some of these positions, a nd t he likely guidance to it? Thank you.
Yeah, I think the first part I would request DC to comment and come back on the Sales Transformation.
Manik, the way to look at it is that we had a strong growth in Q2 and we also saw good order inflow in Q3, which kind of made us believe that the volumes are going to come in for which there will be good growth in terms of Q4. Obviously, multiple factors, mostly macros, as you are aware of, which kind of played a role in terms of two aspects. One is many of the deals that we closed which were supposed to start, they did not start in the same way. The ramp ups were delayed. Secondly, some of the deals which were expected to close in Q4, they also kind of got carried forward into the next quarter. These are some of the factors that did not play out the way we had anticipated.
That is why you will see that there was a well planned in terms of. If you look at the intake for Q3 and Q2 and Q3, the intakes were high, but we could not really ramp up the way we wanted. Of course, another good news is that some of those deals will get closed in this quarter. You will hear about it as we go along. Otherwise, I mean, that is why the growth momentum could not continue, though we had anticipated. On the Sales Transformation, let me hand it over to Venu.
Thank you, DC. Look, I think on the Sales Transformation, as I mentioned, it is more about, you know, getting a better version of ourselves in the context of the new playbook or in the new AI economy. Right. That means we already have a great sales team and, you know, we have a very effective way of managing our client relationship. You know, we're sort of infusing with a new playbook that is needed in the context of AI economy. That is how I look at the Sales Transformation. You know, all of our industry leadership or anything is constant and is steady. There have been no exits in that part of the organization. One or two exits that we had, we have backfilled it very successfully. The growth office, we consolidated under one leader.
Now we have a global Chief Growth Officer and we also integrated the vertical delivery as well under one single Chief Delivery Officer. I do not think we have any risk with regard to the exit. In fact, we have, you know, a good interest for, you know, for the leadership infusion as we start growing as well.
Sure. If I can chip in with one more question. This question was for Vipul with regards to our Fit for Future program. We're talking about some of the easy wins come through very quickly in FY 2026. If I look at your cost split up over the course of FY 2025, we've seen our non manpower expenses come off meaningfully over the course of last couple of quarters. If you can talk about what exactly has driven some of those efficiencies and how should we be thinking about these expenses on a go forward basis.
I think Abhishek, as we said that under Fit for Future program we are targeting agility and cost optimization and there are many tracks in that program that we are simultaneously focusing on.
Some of the tracks which have started yielding results are in terms of the overhead side which you have seen and you have yourself commented on in the SG&A side. I think some of the other initiatives which are going to start playing out will be in the manpower cost area also as we address the spread span of control and also the optimization and driving the efficiencies in the workforce management process and the talent process. We are also as we are adopting AI more and more. We have already said that the increase in headcount versus revenue may not be linear going forward. I think all of these levers playing together is what we are looking at. Some of them have already been in place, some of them will start kicking in further now.
Sure. Any targets or any timelines that you're giving to the margin improvement aspiration?
Manik, as you know we don't give a guidance per se for the future, but I think in terms of the timelines or impact that will be visible through the quarters in FY 2026 as we g o along.
It's a journey which will start getting visible from Q1 onwards.
Yeah, sure. Thank you. All the best for the future. Thank you.
Thank you. The next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead.
Yeah. Hi. Thanks for taking my question. Venu, I had a question on the strategy that you mentioned about the various initiatives that you are taking in terms of a chief growth officer and the revitalization of the employee workforce. I think in terms of the target that you're looking at, I mean these strategies to achieve that target, is there any target in our mind, a North Star maybe that we want to basically achieve this kind of a growth if not numerical in absolute terms in terms of relative to peers or industry, similarly on the margins front.
Are there any targets or that you're looking at or if you can't share them with us at this point of time, is there a timeline that we are looking that we would be looking to share that, o kay, this is what we aspire to be in six years of time or whatever that time frame could be?
Look, I think, you know, in the short term it's about getting the growth in the first quarter, which I feel, you know, we are reasonably confident of achieving that, r ight? In the medium term for the full year, you know, I would not comment on any specifics, but I think I will live up to the spirit that DC has been advocating over the years of industry leading growth. I think that's what our endeavor will be to achieve that. As I said, in the short term of the Q1, as I see it, I think I'm reasonably confident of getting the growth.
Got it, got it. Also, just a couple of questions on the Q4, I mean, on the outlook and just specifically on the Q4. I mean, we've heard a lot of our peers talk about heightened level of uncertainty in the Manufacturing and Retail vertical. These two are key verticals for us. Of course, the impact of the uncertainty is mainly because of the tariffs. Is that also what is kind of reflecting in our conversations with them, or do you think that nothing as of now has come up with them and your outlook for these specific verticals, let's say in the near to medium t erm?
Y ou know, actually it's, you can't generalize it across the sector because it depends on where the client's operations are, where the supply chain is, where do they sell and so on. It becomes very difficult to generalize it. I can tell you how our demand is looking on these two sectors. right? In Manufacturing, I would say sort of phrase it as, you know, steady and growth oriented in the short term, that is that we can say. In Retail, we have very exciting conversation going on on some of the strategic deals and strategic engagement. There has not been material requests. There is no material request that has come to us at the back of the tariff changes.
The fact about discretionary spend is still muted, that still remains the same as what it was in the previous quarters and clients are adopting wait and watch. The three areas that I called out in the beginning about cost saving, vendor consolidation, tech modernization initiatives across these three areas, specifically these two sectors, I would rephrase the way I said it. Steady and growth in Manufacturing, Retail, some couple of exotic engagements that we are in the discussion.
Just one last bookkeeping question. The healthcare vertical, though it's a small one for us, saw a very sharp decline in this quarter, both on a QoQ and YoY basis. We almost lost $10 million of revenue on a quarterly run rate basis in this quarter. Any specific thing to call out, any client specific issue which might reverse in the next coming quarters or anything on that forum rate?
No, I think you know there is no client specific issue per se. Most of the business in healthcare and public services is project based. You know there are these project based business related cyclical impacts in the public services. That's all about it. I mean there is definitely no customer specific issue.
Could it be a DOGE impact that the government of U.S. is leading the initiatives?
Most of the work we do in public services are all India. There is no, no impact like that. There is no DOGE impact.
Got it, got it. Thank you so much. Thanks for taking my questions and wish y ou all the best.
Thank you.
Thank you.
Thank you. The next question is from the line of Abhishek Kumar from JM Financial. Please go ahead.
Yeah, hi, good evening and congratulations Venu on your new role.
My question is, you know, it's d ifficult environment to execute transformations of any company. Any macro that you have kept in mind or how contingent is your transformation program on the macro? Have you baked in similar macro ? Any deterioration or in other words what can derail the transformation or delay this?
Okay, first let me clarify the question with regard to the transformation. Let me define what are we focusing as an organization? Look, we have a lot of things already in place. We have great capabilities, fantastic clientele, reference base and the successful engagements across many years and so on.
Ladies and gentlemen, please stay connected. We lost the line for the management.
Ladies and gentlemen, we have management reconnected. Over to you, sir.
Thank you. Abhishek. I don't know till where you heard me. Otherwise I could start from the beginning.
Yeah, I think it's better if you c an start from the beginning.
Okay. All right, thank you. Look, I think firstly as I said, I just want to re-baseline or contextualize the transformation question that you said. Right. The way I look at it is the very fact that I come back to an organization which is familiar to me, r ight?
I know the people. Of course, I worked with DC for many years and Nachiket and other leaders for quite a few years. We are looking at ourselves as, you know, how do we get better with our own version? You know, I call it as, you know, can we become a better version of ourselves? Transformation may look like a very heavy lifting multi-year theme kind of a narrative. That is not what we are at it. What we are at it is identifying specific areas where we can get better, r ight? Fit for Future, for example, is one area. I think there is an opportunity for us. We can get better at the cost, right?
We need to get better at the cost, again, because of the macro uncertainty and also because an opportunity that AI has given us to re-baseline certain element of cost. We are bringing all that under one umbrella called Fit for Future. That is a very specific thing, not related to the external environment. It is hugely in our control to deliver that. The second thing is that with regard to the Sales Transformation that I spoke of, again, look, it is about how do we ensure that we give newer playbook to our sales leadership? How do we give new sales.