Ladies and gentlemen, good day, and welcome to Zensar Technologies Q2 FY 2025 earnings conference call, hosted by Motilal Oswal Financial Services 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 the star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Pathak from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir. Hi, and thank you. Good evening, everyone. On behalf of Motilal Oswal Securities, I welcome you all to the Zensar Technologies Q2 FY 2025 earnings call. We have with us Mr. Manish Tandon, our CEO and MD, and Mr. Pulkit Bhandari, the CFO of Zensar, and a few other members from the senior management team. Before I hand over the call to Manish, I would like to highlight that the safe harbor statement on the second side of the earnings presentation is assumed to be read and understood. Over to you, sir. Thank you. Thank you, Abhishek. Hello, good morning, good afternoon, and good evening, everyone. Thank you for taking the time to join us today to discuss Zensar's financial results for the second quarter of FY 2025. Very pleased to let you know that with me on this call are a few others from the Zensar leadership. Pulkit Bhandari, CFO, this is his first analyst call for Zensar, so please go easy on him. Vijayas imha, our Chief Operating Officer, and Vivek Ranjan, CHRO. The second quarter of FY 2025 stood steady for us. Our highest ever order book of $201.8 million this quarter is a testament to the confidence that our clients have in Zensar to support them as a partner in their transformation journey. Continuous improvement in our client satisfaction scores show our commitment towards the organizational values of being one with client. Investment in service lines and verticals helped us with accelerated GTM. We strengthened our partnerships and built sales rigor. Domain-led solutioning, coupled with new age technology such as AI, has allowed us to capture mindshare of our clients at... and open new spend areas. We witnessed slowdown in certain pockets this quarter, but majority of our portfolio has seen good growth. For Q2 FY 2025, our revenue stood at $156.2 million, representing quarterly year-over-year growth of 4% and sequential QOQ growth of 1.2% in reported currency. Third consecutive quarter with sustained margins reflect overall stability due to our disciplined approach to manage operations, even in a challenging economic environment. In constant currency terms, on a QOQ basis, our revenue in healthcare grew by 8.6%. Banking and financial services saw a growth of 3%. Manufacturing and consumer services grew by 1.6%, whereas telecom, media, and technology witnessed a decline of 8.8%. Overall utilization remains steady, and LTM attrition further improved to 10.1% from 10.6% last quarter. With that, I will now invite Pulkit Bhandari, our Chief Financial Officer, to provide an update on critical financial data. Over to you, Pulkit. Thank you, Manish. Good day, everyone, and thank you all for joining this call. In addition to Manish talking about business, I will take you through some of the key financial metrics for quarter ending September 2024. The reported revenue for second quarter FY 2025 is $156 million in US dollar terms, reflecting a growth of 1.2% sequentially and 4% year-on-year. In constant currency terms, revenue for the quarter grew 3.3% year-on-year basis. We exited Q2 FY 2025 at an EBITDA of 15.4%, improved by 20 basis points QOQ, which is in line with our guided range of mid-teen. Gross margin for the quarter stood at 28.1%, a drop-off to 30 basis points QOQ. Decline was primarily due to wage hike impact of 1.7%, lower volume and utilization impact of 1.1%, majorly due to furloughs. One-time benefit of R&D credit received during the previous quarter impacted the margins by 0.6%, which was offset by exchange benefit of 0.7%, other operational efficiencies of 0.4%, including improved offshore mix. SG&A has reduced by 240 basis points QOQ, primarily on account of provision for doubtful debts created for one of our customers in previous quarter and reduced charge for ESOP and sales commission and other savings, part of which will come back in the next quarter. In this quarter, other income takes into account adverse Forex movement due to cross-currency hedges. Our PAT stood at 11.9%. The order book, as Manish called out, is $201.8 million, which is the highest ever order book. Cash and cash equivalents stood at a healthy $255 million, which is after a dividend outflow of $18.9 million and a BVLS payment of $14 million. DSO further improved by one day to 71 days on account of healthy collections, contributing to the overall financial health and operational agility of the company. ... Some other key highlights, based on our farming efforts, one of our customer has moved into a $10 million bucket. BFSI has remained our strongest vertical, growing consistently for last seven quarters. Our voluntary attritions stood at 10.1%, which has been lowest in recent years. With that, I will now invite Vijay, our Chief Operating Officer, to comment further on Q2 FY 2025 results. Thank you, Manish and Pulkit. Greetings, everyone. I will share details about our operational efficacy, service line performance, and capability enrichment initiatives. We are continuing our journey on operational excellence and making good progress on key imperatives. Our utilization declined by thirty basis points year-on-year this quarter due to unseasonal furloughs in some of our TMT clients. The rigor associated with accelerated procurement and capability enrichment continued in Q2. We had a gross addition of 693 employees in the quarter. As Manish and Pulkit have said, our voluntary attrition reduced to 10.1%, which is a forty basis point reduction sequentially. The offerings from our service lines and industry services groups continue to resonate well with our clients. The share of revenues from our service lines, that is advanced engineering services, data engineering and analytics, experience services, and cloud and infrastructure and security services, increased to 53.9%, which is 70 basis points higher sequentially and 170 basis points higher year-on-year. On a quarter-on-quarter basis, in reported terms, cloud infrastructure and security services grew by 11.8%. Data engineering and analytics grew by 6.8%. Application services and enterprise applications saw a marginal decline of 0.4%. Advanced engineering services saw a decline of 1.9%. Experience services revenue dipped by 11.9%. In Q2, we significantly enriched our innovative AI offerings and have now cataloged them into four major solution stacks. They are enterprise AI solutions, responsible AI solutions, enterprise cognitive hyper automation solutions, and multi-modal micro vertical solutions. These solutions are helping our clients accelerate their transformation slash modernization journey. Our talent transformation efforts in Q2 focused on accelerating the shift towards T- and Pi-shaped roles through gamified learning events. We continue to expand our multi-level domain training and certifications in healthcare, BFSI, gaming, and MCS domains. Partnerships with key technology providers have been instrumental in delivering cutting-edge certifications and collaborative learning experience in AI, GenAI, data engineering, and cloud. With that, I now hand it back to Manish. Thank you, Vijay. With the looming geopolitical threat, markets remain volatile. This might result in delayed decisions on discretionary spending, and focus will be on projects with near-term ROI. However, with signs of easing interest rates, we expect some increased investments leading to business inflows. We are closely working with our clients to navigate any challenges and continue to invest in relevant areas and skills to be competitive and grab any opportunity that we come across. With that, we can open the lines 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 their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset 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 Nitin from Investec. Please go ahead. Yeah. Hi. Hi, Manish. Hi, Pulkit. I have a couple of questions. So, one is: in the current quarter, considering you already had some two weeks of furloughs, is it fair to assume that, you know, Q3 will be less weaker than normal? And also, if your thoughts on furloughs going into the next quarter. So that's the first question. Yeah. So Nitin, thanks. Good hearing your voice again. I think, you're right, that, we had impact of furloughs in this quarter, so we are expecting lower impact of, furloughs in Q3. And, also the vertical that is the most, most impacted by furloughs, which is the TMT vertical for us. If you look at that, our percentage, revenue from that business has declined from 27.2% to something like 22%. So we definitely see lower impact of furloughs between Q2 to Q3 than what we saw last year. So that is definitely, the case. We are also not, we are in October, towards the end. We are not hearing anything extraordinary, in terms of furloughs, that we have not heard, before. So from that perspective also, it should be, I think we should do better Q2 to Q3 this year than what we did last year. Got it. The second one was on, I think on the ISG call. They had mentioned that, Zensar is one of GCC deal with Old Mutual and, stuff. So, just your thoughts on is this already in the revenue base? Is this likely to come going forward? And, looks like there were some, non-services revenue this quarter compared to the previous quarter. So, is this part of any large deal, to which vertical does it pertain to? So that was the, second one. And, lastly, your thoughts on the large deal opportunities and, this quarter is very good, but, you had large deal opportunities across verticals, so how do you see those closures trending? Okay, so there were lots of questions. First of all, we do not comment on individual customers and issues, and as I have said before, we follow a very conservative approach to reporting order bookings. We report order bookings based on signed statements of work. Even though the GCC for any GCC, the uptake might be higher, but we will book only what we have an SOW for. That is the first question. On large deals, we are seeing good amount of traction on large deals. But again, by large deals, I do not mean 50 million plus. I talk 15-30 million range. I think we have two deals in flight where things are looking okay, and we are keeping our fingers crossed even as we speak. And those are not reflected in order bookings of this quarter. In general, see, we are very clear on pass-through revenues. There is hardly. We don't report pass-through revenues per se, because as I said, we will either account the revenue if we are providing services with it in a significant fashion, integrated in an integrated fashion, then we report it as gross. Otherwise, normally, we report it as net. So from an analyst perspective, what you see as the overall number for revenue, you should consider it as all services revenue only. I hope I have answered your question. Yes, sure. That's very helpful. I'll come back in the case. Thank you so much, and have a very good day. Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah, thanks, thanks for the opportunity, and congrats on a good execution. Manish, just wanted to understand, there has been one mini closure in this quarter, which has come close to two point two five months in the quarter. So what could be the contribution of same, and that is the reason the Healthcare Life Sciences vertical has seen a substantial growth? Okay. No, I think Sandeep, the BridgeView revenues, since this is the first quarter and middle of the quarter, those revenues were not very material. I think it's too early to look at BridgeView separately, and going forward also, we have bought this company from an integrated perspective, and we will be reporting integrated revenues, going forward also on healthcare and life sciences, so I would that you rather focus on healthcare life sciences revenues, from a vertical perspective, rather than looking at individual acquisitions. Because the acquisition specialties have shown maybe $13 million annual revenue from BridgeView. So you are saying that may not reoccur to us? No, so that I think there were two classifications. One was basically total revenue, then there was managed services revenue. It was bought in parts, and as what Manish called out, this was a part quarter. We are in the process of integration, so that number is actually non-material, so when you look at HLS as a whole, you should assume that what you see today is largely organic revenue in HLS. Okay. Okay, helpful. And, Manish, just wanted to understand, do you believe maybe post-December quarter, which is seasonal in the TMT sector, might have seen the worst, and it may be on a growth path starting from January? Sandeep, to be frank with you, even the clients in the TMT sector don't know where the bottom is. Okay, so, I mean, I don't want to make statements which even my client doesn't know what is happening. So while from Zensar perspective, I can tell you that we want to grow despite the TMT vertical. That has been our strategy, and that is what we have been doing over the last six quarters. We have seen consistent growth in the non-TMT vertical. And we want to be able to show that momentum and growth irrespective of what happens in the TMT vertical. So just a follow-up on that, do you believe, versus your earlier expectation, we are on track to at least achieve our industry growth rate starting from next year, which is FY 2026, despite challenges in TMT may or may not continue? Look, again, it's a question which depends on the industry also, right? But, I can tell you that, if you take out that particular vertical, then I think we are already at industry average growth rates. Okay. And, Pulkit- [crosstalk] Actually, we are even better. Okay. Okay. And last question, what should be the sustainable SG&A from three Q, four Q? Because in the opening remarks, you said, some sales commission, which was reduced in two Q, may come up again in Q3, Q4. So some of the benefits may stay, some of the benefits may go away. But as I had called out, that the EBITDA that we are solving for is basically mid-teen, and we would like to maintain that. So anything which is over and above that, we basically recoup that into the business with regards to building sales and capabilities. So that's the way you should look at it. Okay. Thank you, and all the best. I will come in the follow-up. Thank you, Samir. Thank you. The next question is from the line of Manik Taneja from Axis Capital. Please go ahead. Hi, thank you for the opportunity. I had a couple of questions, some of it related to your internals. We've seen an increase in terms of our active client base in the current quarter. Is there a change in the methodology in terms of the way we report that? That's question number one. The second question was with regards to the strong growth that we've seen in the offshore revenues. If you could help us understand what drove that. The third question was just a clarification to what Nithin had asked earlier. What we see in terms of our P&L, we've seen an increase in terms of cost of traded goods, and thereby, is that driving revenue growth in the current quarter? Those would be my three questions. Thank you. Manik, sorry, we couldn't. The first question was that number of active clients has increased. Is there a change in methodology? I doubt there is any change in methodology, and Pulkit here is confirming that there is no change in methodology in the way we report number of active clients. If you remember, we had formed a good NN and NE engine, and now some of that is bearing fruit. That is number one. What was your second question, growth in what? Growth in offshore revenues. Basically, Manish, we've seen offshore revenues have grown by, at almost, close to between 4% to 5% in the current quarter, and which is possibly the best that we've seen in several quarters. Yeah, if you guys need margins, then we have to do that, right? So, there is nothing... I mean, it's a conscious strategy that we have, that we want to get some good margin growth, and margin growth happens primarily through offshore revenues. And part of that, if you see, despite basically wage hike and few other headwinds, part of that has also benefited us on the gross margin, right? So despite wage hike and furloughs which were not precedented, this has helped us in a way. Okay. What was your third question, Manik? So Manish, the third question was with regards to cost of traded goods that we see in the quarterly P&L. That number essentially seems to be close to about $1.5 million in the current quarter. Or sorry, $1.5 million of incremental revenue between, incremental cost between [audio distortion]. We gave salary hikes this quarter. No, Manish, I'm talking, not talking about wage costs. I'm talking about cost of traded goods in the P&L. That's why, as what we had called out earlier, the way you should look at it is, this is all integrated deal, part of integrated deal. So you should construe this as managed services, rather than basically, as I said, that we follow net accounting. Okay. But how should we be thinking about this line item going to go forward? Because I understand this could be part of integrated deals, because this was something which had been coming off through the course of FY 2024, and had been some amount of headwind to the overall growth. And this quarter, we've seen this number jump up once again. So what should be a sustainable level for comparative element? It's so difficult to give a number there, in terms of how we should look at it, because it all depends on how we are constructing deals and what basically deal gets structured in what quarter. So would not be ideal to basically give a specific number here. But every time it is there, or if you want to, in any quarter, you want to basically do a double click. We'll be happy to do that with you. Like, like what we are doing today. Sure. And the last one, Manish, with regards to the comment that you made with regards to how we should be thinking about our third quarter growth. Typically, third quarter, we've always experienced sequential decline. And this time around, given the furloughs impact in the high tech vertical happened in second quarter, and thereby the incremental impact in third quarter may be less. Do you think we should be able to essentially mitigate the usual trend and thereby see some positive growth in third quarter? Manik, I can't make predictions or I can't give you guidance, but it has been our endeavor that we need to deliver growth every quarter, and the endeavor is there to deliver growth. Rest, we'll see how it pans out. I mean, still two and a half months to go, but the effort is there to make sure that we try and deliver growth every quarter. Sure. Thank you, and I'll get back to you. Thank you. The next question is from the line of Jalaj, from Swan Investments. Please go ahead. Yeah. Am I audible? Uh, yes. Yes. Thanks for the opportunity. So my first question was with regards to the TMT vertical of the high tech. I just wanted to understand that, if the degrowth or is it majorly because of the furloughs? And if it is, is it broad-based or some client-specific, let's say, a top client or a hardware or a software-based client? No, so it was not very. It was primarily through one or two, two or three clients only. It was not broad-based, and some of these clients are facing challenges, especially as you know, some of the legacy technology companies are facing challenges, growth challenges themselves. It was due to that also to some extent. Got you. I understand. And do we expect this to continue, or what sort of conversations are we having with clients? I guess you did allude to that, but just to double-check to that for the next quarter or going forward. Look, it's. I I was asked before this that, have we seen the bottom of it? I mean, and my response was, when your client also doesn't know whether they have seen the bottom, then how can I comment on whether we have seen the bottom or not? So I would say, and as I said before also, it has been our endeavor to grow our business with or without the TMT vertical. And, over the successive years, last one year, with the reduced exposure, we have reduced the exposure from 27% to 22% to this vertical. And, as a result of that, the impact of furloughs or the uncertainty is going to be much less than what was there in the past. So if I may just add, if you look at both MCS and banking BFSI, which is more than 60% of the... 67% of the revenue, both of them have grown consistently over last six quarters. MCS, except for one, basically, it has always grown. And BFSI, of course, has grown consistently for last six to seven quarters. Yeah. Yeah. Got it, got it. Thank you. And the second question was with regards to the acquisition. So have we consolidated the numbers this quarter? I just wanted to understand onto the impact on the growth this quarter. And secondly, does that have to do something with the jump in the clients being at the time? Does that have to do something with that also? I think on the acquisition, as what we have called out for this quarter, it is not material. Going forward, we'll basically integrate it, so you should look at HLS as a whole. I think the second question that you asked was, does the client base include the acquisition? Answer is yes. Understood. And last question: So there was this jump in the offshore revenue, which came up. So has there been a? I'm assuming there would be some margin. There will be some revenue freshers because of that, because the rates would be very different. So if I were to just look at the growth currently, if you were to, we would break into the amount of volumes would be a lot, a lot more than that, than what the growth rates right now show up in the revenue? Yes, I think so. You are right, because we a lot of growth is happening on the offshore side in terms of revenues, so while we have not done the calculation, but yes, in terms of volume, it could be, it would be better than what has been indicated here. Just on double clicking onto that, is it some strategic move we are having, or is it a part of the deal that it was supposed to flow this way, or we had reached to a milestone where from an on-site to an offshore model had to happen? No, I mean, look, if we have to build on margins, sustain margins, grow margins, then offshore, as we all know, is much more margin accretive than on-site, so it has been a conscious strategy to try and have as much work offshore as possible. Understood. Understood. Thank you, and best of luck. Thank you. Thank you. The next question is from the line of Abhishek Pathak from Motilal Oswal. Please go ahead. Hi, thanks for the opportunity, and again, I congratulate you on the good set of numbers. Sir, on the TMT vertical, you know, from a strategic perspective, you know, considering healthcare has been growing so consistently across the board, are there any plans to sort of, you know, focus more over there and you know, certainly reduce the exposure to telecom a bit? I mean, from a two, three-year perspective, can we expect the contribution from telecom, you know, to probably reduce from here, or do you expect that to remain at the current levels? Thank you. Yeah. The only thing is that how you achieve that reduction. I would like to see achieve that reduction by growing other parts of the business much faster, and also grow in telecom, rather than telecom shrinking, and reducing the business, so from a strategy perspective, we would like to have... Because the telecom vertical has been a volatile vertical for, or TMT has been a volatile vertical for almost everyone and for quite some time, so strategically, we would like to reduce our exposure, but again, how you get to that point is also very important. We want to get to that point by making other verticals grow faster than the TMT vertical. Right. Now, sir, just as a follow-up on the manufacturing vertical, you know, a few peers have called out some weakness, right? So any color to add there, and are we seeing anything ultimately, you know, a difficult there in terms of converting deals or ramping up, you know, revenues or anything of that sort? Not for us, at least, and primarily because we consider this as MCS, manufacturing and consumer services, right? And a lot of it for us is retail. Manufacturing is a relatively smaller sub-segment for us, but I don't see. I at least didn't hear any negative comments from my team on the manufacturing side of things. Understood. Understood. Thank you, and all the best. Thank you. The next question is from the line of Girish Pai from BOB Capital Markets. Please go ahead. Yeah, thanks for the opportunity. Just wanted to dig a little deeper on this unforeseen furloughs which you've seen in the TMT clients. Is this very specific to you, or are you seeing this in other vendors of these same clients? I'm sure some of these clients would be having a multi-vendor situation, because we've not heard these kind of furloughs mentioned by other peers of yours. No, the furlough, when it's a furlough, it is for everyone, including the employees of the clients itself. So it basically depends on the amount of exposure, as to the impact, of a furlough, right? So if your exposure to that client is less, or to those set of clients is less, then your impact will be limited. If your exposure to those set of clients is high, then, the impact will be more. But a furlough, actually, it's not just vendors, it is also that, the employees of the company also, are furloughed. Okay. So you're not losing market share or wallet share within these clients? That if we are losing or gaining market share in these clients, it has nothing to do with the furloughs. That's the point. Okay. We saw a gross margin decline QOQ of about 230 basis points. Can you just margin walk on that? Or how that, what has driven that? Broadly, this is the first we gave salary increments to our clients. Broadly, that has cost us close to 1.7% overall, in terms of the gross margin. As you know, the quarter in which you give the salary hike, the impact is fullest, and then it tapers down over the next two or three quarters. I would say it's primarily driven by that, and also, when there is furlough, then there is impact of that furlough on the margins also, because you have the people, but you know, there is no revenue coming in for. Those, I would say, are the primary reasons for the same. Okay. Some of your peers of the mid-size variety have been talking about there being more decline, and also the conversion picking up between pipeline to deals and deals to revenue. Would you have any comments on these two elements of the demand? No, the only comment I can give is that we have just had the best order booking in the history of the company. For the first time, we have crossed INR 200 million. The order booking has been INR 202 million. Now, others can comment on pipeline and all this stuff, but ultimately for me, as a CEO, I love it when it hits my pocketbook. Okay. Thank you. Thank you. The next question is from the line of Shraddha from Asian Markets Securities. Please go ahead. Yeah, hi. Congrats on a good quarter. Two questions. First is, you indicated that there was volume growth in this quarter, but if I look at the employee count, that number has come down and so has utilization. So what went behind volume growth? So how did volume growth come through, despite both these metrics showing negative traction? I think the utilization has actually gone up, right? Okay, just a minute. Manish, if I can take that. Yeah, Vijay, go ahead, please. Yeah. So the reported utilization is after factoring in the furloughs, so as a consequence, it shows lower. But when you look at the, if you exclude that stuff, then the volume growth kicks in, and that is why we have been able to, like, basically grow. Right. And then, how should we look at employee addition from 3Cube, given that furlough impact is largely behind us? So do you expect to add incremental headcount from next quarter, on a net basis? So, again, Vijay, see, we do not want to. We look at. We first for an efficiently run company, it is important not to maintain too much of a inventory, so to say, of bench and headcount. And the market situation and market conditions have eased in the last one year. Our attrition rate is one of the lowest in the industry at 10.1%. Now, what that means is that we can afford to wait and add capacity based on the revenue that is coming in. So that is what Vijay and the team is doing. That instead of headcount driving revenue, we have revenue driving headcount, and that is what you can afford to do it in this market. You couldn't afford to do it maybe five years back. Okay? So that is our strategy. So for us, we don't look at headcount as a metric as a forward-looking metric. We look at it as a rear-view metric more than that. Right. Thanks, Manish. And the second question is, some of the companies have indicated increase in discretionary spending, especially in BFSI. So any thoughts out there for you? How are you looking at discretionary spend in BFSI? I would love to know which customers they are talking about so that I can go to them. But I frankly have not seen any material change in the spending patterns of our customer base. I think I have said. I have been saying that I don't see many changes happening till the U.S. elections are over. I would say that now that time is only two weeks away, so we don't have to wait much longer to see the impact. But I have not seen any change, any significant or material change in buying behavior of our clients. Right. And just last question, if I can squeeze in. I guess we do quite a good work around SAP S/4HANA, and given how SAP numbers have been and what other companies have also indicated in terms of traction building up in SAP S/4HANA side. So any comments there as to how do you look at that opportunity, and can that incrementally add to the pipeline and revenue growth going forward? Yeah, we are very excited about the opportunity, and especially in healthcare and life sciences, we have signed some very good deals, although smaller deals, in that area. And I would say that I think the industry is on to something, as far as SAP is concerned, and I see that as a growth area for us also. Great. Thanks, Manish, and all the best. Thank you. Thank you. The next question is from the line of Amit Chandra from HDFC Securities. Please go ahead. Yes, sir, thanks for the opportunity. So my question is on the order bookings. So obviously, it's the highest order booking that we have booked. But some more like color on that, in terms of how much of, you know, in the order booking is like negative? And also the, you know, the nature of the deals that we're winning, is it very different from what we were, like, winning a year back? And also in terms of the composition, whether it is led by more larger deals or it's a combination of more shorter deals, like within the order bookings. Yeah, good question, Amit. I think, first of all, you know, our order booking philosophy, we do it only against signed SOW. So, and in the past, I have said that anytime our order booking is in the 1 to 1.2 times quarterly range, it's good for us. So which means that, you know, our duration is of the deals is in this range. At this time, as you can see, we have, I think, 1.3 or something as the order booking. 1.3 times the quarterly revenue. So that is, that's a very good sign. I think, qualitatively, if I were to comment, compared to last year, this year we are seeing more managed services deals, as we are just trying to get into much more managed services business, and that's why you see our offshore thing also improving. As far as NN is concerned, we added 12 new logos this quarter, and some of them are the who's who of the industry, so that is a positive sign, but typically, your order book primarily comprises of EN and EE, which is renewals and EN, so bulk of the composition is EE and EN overall for us, so that is the color I think that I can provide at this stage. Hopefully, it'll answer your question. Okay. And so, obviously, you know, BFSI has been doing pretty well for us. So, within BFSI, insurance is also a larger vertical for us. So as you mentioned that we're not seeing any, you know, push from the, you know, rise in discretionary spend there. But, within BFSI, if you can, you know, throw some more light, what is driving the growth? So obviously, what is the industry push? Secondly, within BFSI, is it more BFS or is it more driven by insurance? It is driven more by insurance for us, and on the BFS side, it is more driven by finance, by payments, the payments side of things and packages side of things, for us, so I would say those are the key drivers, overall for us. Okay. Okay, sir. Thank you, and all the best. Thank you, Amit. Thank you. The next question is from the line of Nitin from Investec. Please go ahead. Yeah, hi, thanks for the follow-up. Hi, Manish. You had mentioned. Okay, so my query is on BridgeView. So is there any seasonality to this business? I know you mentioned that you look at it as an integrated fashion, but considering this is something new, it would give us some color. Is this a seasonally weak quarter for that entity, and do you think that, you know, Q3, Q4 are relatively better? And should we assume that base revenue, that services revenue that you have mentioned as a base, at least for our estimation perspective? So that's the first one. And the second one is your thoughts on the outlook for retail vertical, how you're seeing things broadly there? And finally, do you think margins have sort of bottomed out, broadened from today for the year, and from here on, it should start trending up? That's the last question. Thanks. Okay, so first of all, on BridgeView, it's you have to remember that Bridge View was a spinoff, so to say. It was split into two businesses, and we bought the services business, someone else bought the product business. So there was some amount of disruption overall. Second is obviously Q2 is not the best quarter for pharma and healthcare life sciences industry. So that is the second factor. Are we happy with the acquisition and are we positive about its growth and trajectory? The answer is an unequivocal no, yes, and we feel good about what we have done overall. The second question was around NCS, manufacturing. [crosstalk] Manufacturing and commerce. So we are seeing pretty good growth actually there, knock on wood. We're seeing some pretty good growth there. We are actually very, very good on supply chain in this vertical. And we are seeing a lot of traction in that in that area, especially, especially as supply chains have become much more complex due to integration of e-commerce and physical stores and so on and so forth. So we are seeing very good traction there. And I think we'll have a good Q3 also, as far as this vertical is concerned. Your third question is on margin. So traditionally, Q2 is. Actually, the weakest quarter for margins is usually Q3, primarily because of furloughs and so on. So whether the margin has bottomed out or not, I don't know, but we are fairly confident that we will maintain margins in the mid-teen and tight range in the mid-teens. So that is where we stand. Yeah, I asked that question primarily because, in the context that we have had higher furloughs in this quarter, there's already a margin impact. And in that context, logically, one would think that it bottomed out this quarter, and, you can't have incrementally margin headwinds back before this quarter and the next quarter, so that's the context of the broad question. So, directionally, do you think that's a fair way to look at it, is all I'm asking? So if I may just add within there, the furloughs in Q3 are slightly more wider than this quarter. But nonetheless, despite that, I think our objective of basically mid-teens is what we'll get to. So, I'm saying irrespective of that, we'll basically maintain mid-teens. Got it. Fair enough. Thank you so much, and all the best. Thanks, Nitin. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah, thanks for the opportunity and follow-up. Manish, just wanted to understand the deal flow entering into second half based on the deal pipeline you are foreseeing. So Q2 has been really strong, but if I look at the growth in one H over growth in one H of last year, it has been close to 2%. And based on your expectation and hope of a large deal closure, do you believe total deal flow could be better than two H of last year? I would say, the only comment I will make is that if you look at Q2 to Q3 last year, and if you look at Q2 to Q3 this year, we will do better this year than what we did last year. That is all that I can say, Sandeep. Okay. And you are saying your target range on book-to-bill is 1 to 1.2x, right? What I say is that as long as the order booking is in the 1 to 1.2 times quarterly revenue range, I think we are normally quite okay. Okay, okay. And just a clarification, the clients who are gone on furloughs in the Q2 will continue to remain on furloughs, and therefore there is no incremental impact, or they may not be in furlough and that may lead to a better three Q versus two Q? No, no, the furlough, so to be frank, in Q2, there were two or three clients who did the furlough. And in Q3, the furloughs are normally more broad-based than before, right? Than what happened in Q2. But again, to some extent, as Nitin pointed out, we already have been impacted by some furloughs in Q2. So the incremental impact of furloughs in Q3 is going to be less than if there were no furloughs in Q2. That's all that we are trying to say. Okay. And Manish, within the TMT as a sector, is it possible to give breakup within telecom, media, and tech as of contributors to the total revenue within TMT? No, I don't think it will be appropriate, because one is a lot of clients span these sectors. You know, there is convergence that is happening in technology, media, and telecom, and that's why they come together. Now, that convergence is happening, and now you want us to show divergence, it's a bit difficult. Okay, okay, but is it fair to assume the large client concentration would have gone down because it has been a troubled account for the last many quarters? We don't comment on individual clients, overall, but as you can see, the overall percentage of TMT vertical has reduced from 27% of revenues same quarter last year to 22% of revenues this quarter, so you can draw your own conclusions. Okay, thanks, and all the best. Thank you. Thank you. The next question is from the line of Debashis from Swan Investments. Please go ahead. Hi, good evening to the management team, and congrats on a good set of order booking numbers. So the first question is related to offshore. We started, and congrats on that also. We started the journey at 41-42%. We have reached to 50% of our revenue today on offshore numbers. So do you think that we have reached a proper level of offshore revenue as of 50% of our overall revenue, or we have further scope to improve there? I mean, proper level. I don't know what proper level is. Why I'm asking is most of our peers are operating at this level, only 50-52%. We have crossed that journey of 40-50% now. Do you have a further scope of improvement at the offshore level, or are we satisfied with the current level of offshore? If we look at, again, there are some leading metrics and then there are some lagging metrics. Okay? So for us, for me, this is a lagging metric. It's not that I decide one fine day that I will move hundreds of people from on-site to offshore. Ultimately, we are in the business of serving clients, and ultimately we want to get to a position, where the client is comfortable with the on-site offshore ratios and so on and so forth. So, more offshore, I know that more offshore is good for us, but ultimately we also have to see what's good for our clients, and based on that and the industry trends, we will arrive at it. It's not that, I don't want to sit here and say that I want to take the offshore ratio to 55%. If there is client demand, yes, would love to do it. But if the client, if the business is in a different mix, and client needs are in a different mix, then we'll go for that. Okay, let me put it this way: the current order book and pipeline that we have, do you have a further scope of higher offshoring from that order book and pipeline? No. These, see, again, these things are, as you said, it took us six, seven quarters to go from 42 to 50, and as you come nearer to these numbers, every incremental% takes even much more effort. Right? Right. Right. I don't think I can project the order book and say that, you know, this will improve our offshore ratio materially. At this stage, at least I am not in a position to say that. Okay, understand. And the second question is on hiring. So most of our competition, whether large or similar size or small, we started seeing hiring improving there and going to freshers. We are already at kind of 80%-83% utilization. So do you think this time, the manpower reduction is more to do with the unplanned furloughs and our hiring plan is continuing? Or it is like that we are not going to pressure right now, more in depending on just in time? No, I think, as I said, if you heard me to the previous question earlier in the call, I had said that we have stopped looking at employee headcount as a leading metric. Because in today's environment, you can hire just in time, and that's what we are trying to do. So our aim is to hire the right set of people in time to service our clients' needs. So while you might... And it's not that we have not been hiring, I mean, we hire close to 600 gross additions, if you look at it, are close to 600 per quarter, 200 per month. But as I said, I want manpower to be a function of revenue and not the other way around. Okay, understand. And a third one is more of a request rather than question. This quarter we have two events. One is unplanned furlough, and the second one is one acquisition. So these two things are kind of impacting multiple of our metrics, whether it is volume growth, whether it is hiring, whether it is order book, whether it is utilization. So if you can guide us, and multiple participant is trying to understand this question in different ways, last one hour, almost. So if you can give us some sense that what is the steady state business growth or volume growth or hiring or order book for us in this quarter, so that it will help us to predict at least next two to three quarters in a better way. I think on the furlough, we have called out very clearly there is a 1.1% impact on the gross margin. And the second part of your question, which is the acquisition, as what we have called out, you should consider it as not material for this quarter, for sure, right? So I think that will give you a sense in terms of where our realistic growth is and also basically the margins. But acquisition must have also benefited in our order book and in our hirings, stuff like that, right? No, it's too small to basically make any difference to the overall numbers. Okay. Oh, thank you very much for answering my question. Wish you all the best. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to the management for their closing comments. So just wanted to thank you all for coming on this call and expressing your interest in Zensar as a company and our performance. As the CEO of Zensar and the management team, we remain committed to doing well for our shareholders. And you have seen that commitment over the last few quarters, and we will continue to strive to do better as we go along. Thank you. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.