Morning, ladies and gentlemen, thanks for joining the Mphasis Q4 full year FY 2023 earnings conference call. I am Aman, your moderator for the day. We have with us today Mr. Nitin Rakesh, CEO of Mphasis, and Mr. Manish Dugar, CFO. As a reminder, there's a webcast link in the call invite mail that the Mphasis management team would be referring to today. The same presentation is also available on the Mphasis website, www.mphasis.com in the investor section under financial and filings, as well as on the both BSE and NSE websites. Request you to have the presentation handy. As a reminder, all participant lines will be in the listen-only mode. 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. Before we begin, I would like to state that some of the statements made in today's discussion may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the Q4 results release that has been sent out to all of you earlier. I now hand over the floor to Mr. Nitin to begin the proceedings of this call. Thank you, and over to you, Nitin. Thank you, Aman. Thanks everyone for joining us today. I know it's a busy day with multiple earnings calls. We appreciate your interest in Mphasis. I trust everybody has had a chance to review our earnings release documents. As the global economic climate continues to remain uncertain, volatility and business re-resilience will coexist. While enterprise digital transformation remains a core strategic priority for 2023, cost takeout and optimization requirements are also in great demand given the macro environment. Strategic tech spends have slowed down. However, haven't been paused. There is sustained investment in cloud and digital transformation. Cost transformation projects that will free up working capital for cloud, digital, and consolidation is a priority as clients optimize through increased productivity, automation, and other software-driven transformation initiatives. In a recent survey conducted by McKinsey, 75% of the CIOs said that they intend to increase their organization spends in cloud, data, and digital, given that the digital transformation journey underway post-pandemic. There is a rising percentage of CIOs increasingly focused on variabilization of cost structures, unsurprisingly so given the current environment. There is a greater scrutiny of spends leading to elongated sales and contract conversion cycles and tightening of discretionary spends. Buying preferences are likely to continue to favor transformation partners for digital-led change, with vendor consolidation emerging as a theme in the cost takeouts. We have proven frameworks to play in both these buckets. A zero-cost transformation framework where we fund the digital transformation agenda by providing guaranteed cost savings outcomes to clients is finding good traction in this environment. Over a 60 to 6-year period from FY17 to 2023, our revenue journey is marked by several aspects attesting to the firm's scalability. The contribution of BHC revenue as a percentage has declined to 4.5% in FY2023. Despite the decline, we've sustained double-digit revenue takeout trajectory over this period. Our revenue takeout for direct over this period is 15.6% in constant currency terms. The quality of revenue is improving as it moves towards direct business on the back of scaling up multiple marquee logos. We've also set up multiple new engines of growth with newer verticals such as CMT/high tech, healthcare, logistics, and travel. These have become meaningful to overall revenue share, complementing a historically strong presence in the BFSI segment. We will detail that further in our subsequent sections. We've also doubled more than the number of $10 million and $20 million customers in the same period. Our quarterly average net new deal signings have moved up 3 to 4 times from that in FY 2017. Our FY 2023 EBIT is nearly two and a half times what it was in FY 2017 as well. Our Q4 FY 2023 revenue of $412 million represents a decline of 3.1% year-over-year in constant currency impacted by DXC and the mortgage business. Direct revenue at $390 million declined 3.4% sequentially and 1.8% in constant currency terms YOY in Q4. Direct XDR declined 1.1% QoQ and grew 7% YOY, reflecting the headwind environment related to the historically elevated inflation and interest rates. This has particularly been acute in the mortgage segment. On a full year basis, our direct business grew 12% year-over-year in constant currency, dragged down by the mortgage business. Direct X mortgage grew 19.6% in FY23. Direct business accounted for 94% of our overall revenue in FY23 and 94.6% for Q4 FY23. The excess contribution to our revenue is 3.8% as of Q4 FY23. The mortgage business has continued to experience the perfect storm in Q4 FY23 as well. Hammered by the trajectory of rates, consumer price inflation and sluggish home sales, even as leading banks prepare for a recession in 2023. While mortgage rates have started to decline, the market remains hypersensitive to interest rate movements, with purchase demand experiencing large swings relative to minor changes in rates, leading to a freeze-up in activity in residential real estate markets. Contribution of Digital Risk. Our mortgage BPS subsidiary now stands at 6.8% of Q4 FY23 revenue, down from 8.8% in Q3 FY23 in reported INR terms. We've also seen the softening of house prices in the recent quarter, limiting our ability to drive home equity line of business, which is usually countercyclical to the overall origination service line. Our core service line enterprise applications constituting more than 70% of our revenue grew 23.6% in FY23 in constant currency terms for direct business. The BPO segment, which suffered from a downturn in the mortgage segment, declined 16% with the YOY decline in this segment increasing through FY23 as we felt the brunt of the mortgage decline in the last two quarters of the financial year. Our anchor geography, US, grew 12.6% constant currency year-over-year in FY23. Excluding mortgages, the US business grew 22.4% for the year. Rest of the world segment, primarily India business, grew 14.3% in FY23 YOY, albeit off a small base. Direct applications growth stood at 7% year-over-year in the Q4 FY23. We saw tightening discretionary spends and lower contract conversions. Rest of the world grew 18% year-over-year in this quarter in direct, while the YOY decline in BPO widened to 32% due to mortgages. Most of our focus segments continue to grow, driven by wallet share and market share growth. Moving to vertical performance, our mainstay vertical, BFS and direct, continues to fare well, growing 24.1% ex-mortgages in FY23, though 9% on overall basis, weighed down by the mortgage declines. Our smaller and newer verticals such as healthcare are growing quite well, reflected in the 31% revenue growth in FY23 in the other segment. The TMT vertical also grew strong double-digit in FY23 at 17.4%, with sequential impact primarily from the BHC revenue decline in Q4 over Q3. While growth rate in insurance has lagged, impacted by client-specific issues, TCV wins and pipeline in this vertical look healthy, and we remain focused on expanding our portfolio of new clients as well as our wallet share with existing relationships. To ensure scalability and facilitate the next phase of growth, a realigned verticalized go-to-market structure has been implemented for FY 2024 with the following principles in mind. Aligning the GTM organization along verticals to derive better sales synergy, especially as we focus our energies on deepening our wallet share and market share with a named account strategy for existing and new clients. To enable scalability and repeatability with a vertical focus to overlay the tribes and squads led competency model so that we can create repeatable deal and delivery templates to accelerate deal cycles as well as to expand leverage available with an account cohort mindset. This is already enabling us to see new growth opportunities and retain our high touch service delivery model with clients. With a vertical based go-to-market model, we can bring vertical and industry points of view to bear, consolidate capabilities and learnings within a vertical across accounts, and cross-pollinate more effectively as we seek to further expand our proven account mining template to the NCA accounts. Our top 10 clients grew 8.6% in FY23. Weighed down with the mortgage business pressures in the past two quarters. On a consistent basis over the past 3 years, top clients have grown well with a 20%+ 3-year revenue CAGR. Notably, our top 11 to 20 clients grew 19.4% for the year, indicating a strong positive impact that our account mining and the new engines of growth are having on broad basing of our growth. Our new client revenue continues to grow rapidly, growing at 39% year-over-year in FY23. The NCA segment contributed 22% of FY23 revenue. We recorded a TCV of $309 million of net new deals won in the Q4 of FY23. Included in this is a $150 million large deal from a new client. In FY22, we had a mega deal of $250 million that contributed to the total TCV of $1.4 billion. Our FY23 net new TCV is at $1.3 billion, and we continue to consistently maintain a run rate of $300 million-plus TCV wins per quarter. Our large deal wins continue to increasingly come from newer verticals and new clients. Despite strong TCV over the last few quarters, our pipeline is up, suggesting that our pipeline generation engine is also firing well. We will cover that shortly. We generate a reasonably high% of our TCV through proactive deal pursuits, where win rates are materially higher than in competitive RFP situations. 95% of our deal wins were proactive in Q4 2023, and we closed 10 large deals in FY 2023. As we report our TCV on a net new basis, excluding renewals, we find the correlation between direct TCV and revenue growth at 0.8. It's reasonably good, but has declined recently due to the DR ramp downs and some slower ramp of deals impacting TCV to revenue conversions. Coming to our client metrics, our track record in migrating clients from one revenue bucket to the next continues to be steady. We had additions to the count of clients in $5 million, $10 million, and $20 million-plus categories on a year-over-year basis. YOY basis, we added one client each to the $100 million-plus and $200 million-plus categories as well. As we mentioned, we won top 10 large deals in FY 2023, two of which were over $100 million TCV each. Our average large deal size in FY 2023 is $61 million, double from where it stood three years back. Almost all of our pipeline is drive driven and is up 9% quarter-over-quarter and 35% year-over-year, despite conversion from pipeline to new sold TCV in the last four quarters. Pipeline is also well distributed across verticals. While BFSI continues to generate the highest share of the pipeline at 36%, it is still reasonably lower than the BFSI revenue contribution. The non-BFSI pipeline is disproportionate to its revenue contribution, suggesting that our investments in generating pipeline aimed at aggressive growth diversification beyond our anchor BFSI clients is working. Our non-BFSI pipeline has increased by 52% year-over-year. Our pipeline is also well distributed across key themes such as data, modernization, cybersecurity, agile ops, and platforms. Expertise in these themes is resident in our tribes as we have discussed with you in the past. That being said, as mentioned, we are seeing a lengthening of sales cycle in converting pipeline into TCVs due to greater scrutiny of tax plans, though our win rates are holding steady. This translates into a potentially strong position with deal wins as these deals move to fruition over FY 2024. Coming to our financial metrics. Our margin philosophy affords us the flexibility to manage our profitability in the face of revenue headwinds. We are extremely pleased by the resilience of our profitability metrics. In this quarter and for the full year FY 2023, our EBITDA margins stood steady at 15.3% within the stated band. This has resulted in operating profit growth in line with revenue growth. Operating profit growth for FY 2023 stood at 15.4% in INR terms, while for the quarter it was 3.6% in Q4 FY 2023 over Q4 FY 2022. Losses in cash flow hedges impacted margins in Q4 FY 2023 by approximately 80 basis points. Our EPS for the full year at INR 87.1 represents a 14% year-over-year increase, while our Q4 EPS at INR 21.5 grew 3% YOY. Cash flow generation for FY23 at slightly above INR 200 million, adjusted for one-offs, stays solid at almost 100% of PAT. We rounded off FY23 marked by duality of performance, above industry performance in direct XDR at 19.6% constant currency, while the mortgage business declined to over 32% in FY23, resulting in an overall direct growth of 12% in CC terms in FY23. We sustained our market share gains in BFS. BFS XDR grew 22.6% in FY23. We had reasonably strong deal wins of $1.3 billion in FY23. Some of our smaller and newer verticals such as healthcare have scaled up and are approaching the $100 million mark on an annualized basis. Despite the accelerated decline in the mortgage business, our EBIT margins at 15.3 stayed steady through the year and within the stated band, resulting in EBIT growing at 15.4% in INR terms, in line with revenue growth. Tighter focus on utilization, fresher deployment, and some increase in offshore leverage helped margin performance. Our operating cash flow, adjusted for one-timers, stood at nearly 100% of net profit. Coming to our FY24 outlook. We enter the year on the back of an expanded pipeline. Cloud, digital transformation, cost optimization and consolidation type opportunities characterize the pipeline. While we expect to have a soft start to FY 2024 as we deal with some slowdown in BFS, including client-specific issue and delayed contract conversions in this environment, we expect Q1 to be characterized by stability across segments with strong sequential growth starting Q2 onwards, which will result in a rising YOY growth through FY 2024. For the full year, we expect to register at least industry average growth in direct X mortgage. Good news in the mortgage segment is that we have started building up a pipeline and drafting new deal constructs. We've seen green shoots of activity with some deal closures in the recent weeks. As this plays out through FY 2024, the mortgage segment we believe is close to bottoming out. We expect this segment to be incrementally stable through much of FY 2024. There is potential for volumes to increase in the second half of FY 2024 based on macro impact softening, as well as due to the nature of this segment in late stage of an economic downturn, where the possibility of rising delinquencies create opportunities for trading of loan books, leading to higher servicing and diligence volumes. We are also driving greater offshore leverage in the business in this segment of mortgages compared to before, ensuring that we are able to tap into newer segments of work with the same clients, as well as expanding our market share. We also have visibility to the DXC segment and are jointly aligned on a continued relationship with an expectation that this segment of our business will stabilize while we look for additional synergy opportunities. We will update you further as we progress this engagement over the next few weeks. On margins, we retain our message of margin stability, expecting to hold EBIT margins in the 15.25%-16.25% range in each quarter of FY24. We'll open the call for questions. Operator, if you can line up the questions, please. 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 remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Participants connected on the webcast may click on the audio question button below the media player to ask 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 Padmanabhan from Investec. Please go ahead. Yeah. Hi. Good morning. Nitin, I probably missed this, but excluding Digital Risk, is it still a decline on a sequential basis? This second thing is, one of the calls we had yesterday, I suggested a freeze on spending by a few customers, and that could sort of come away from towards the end of Q1. Are you seeing a similar trend? Finally, from a Q1 perspective, do you think what you're seeing on a run rate basis, can Q1 also be a decline? Finally, if you could just based on your experience, if you compare COVID and now, we have seen a much sharper sort of 2 quarters of decline versus COVID. Contextually, what are you seeing different in terms of client behavior? If you could just give some sense on all these. Thank you so much.' I think in terms of direct, was the question direct ex mortgage? Is there a sequential decline? Is that the question? Correct. There's a 1%. Yeah, there is approximately 1% sequential decline in direct, ex mortgage, predominantly driven by some of the issues that we saw crop up in March and some ramp downs that led out of that issue. Your second question around is there a spending freeze? I think it depends. The answer is more nuanced. If you look at banks that are more Wall Street oriented, there's definitely, you know, reprioritization of spends because the activities haven't picked up, especially on the investment bank and trading side, more on the corporate side. On the commercial retail asset and wealth, I think the environment is much more BAU and stable, and we are still continuing to see demand there. As such, we haven't really seen, so to speak, freezes. Of course, depending on what the situation with each customer is, you know, there's definitely some element of reprioritization. Of course, on the, on the regional banks where there are impacts, we've definitely seen, you know, significant issues crop up and ramp downs that obviously are baked into some of the numbers you see and some of the guidance you see. In terms of your question around Q1, as I mentioned, I think the in our minds, the quarter is really a stabilization quarter. Bulk of the decline in, in mortgage seems to be behind us. We just have to kind of make sure that the volumes hold up. Probably Q1's gonna be a bottom quarter from that perspective. In direct ex mortgage, you know, we definitely expect a certain uptick in Q1. Again, I think the environment is a little bit, you know, hazy. We are expecting, you know, at least from Q2 onwards, a strong sequential growth in direct ex mortgages. I don't know if I missed anything from your question list. That's kind of the environment right now. The last one was on some contextualization on the COVID period versus now, because you've seen two quarters of decline. Sure. in terms of client behavior. What seeing. Yeah. I think COVID impact was a little bit different sectorally. There were sectors like airlines and hospitality that really got impacted, for a long period of time. Whereas, e-commerce and financial services actually had a pretty strong pickup very quickly given the excess, you know, infusion of cash that came through multiple initiatives, especially in the U.S. I t's a little bit apples to oranges. T he common theme, though, is that the tech investing super cycle that started in favor of you know, cloud data and application transformation, legacy exit, you know, tech debt reduction, and now AI, I that cycle has continued to keep pace. Of course, given the tightening of budgets, clients are looking for ideas to reprioritize cost takeout into change programs. IO verall budgets being flattish, they're really looking for ideas to reprioritize internal spends. That's where a lot of this deal-making that we've talked about is happening. To give you an example, the greater than $150 million deal that we signed with a new customer is in BFS and is the nature of the zero cost transformation type deal where we are squeezing the run costs, gaining wallet share at the expense of other providers in that account. It's a new account for us. We're obviously gaining share there. Reprioritizing a lot of the spend and that comes through savings into a modernization program. That's very helpful. Thank you. All the best. Thank you. Thank you. Thank you. The next question is from the line of Mohit Jain from Anand Rathi. Please go ahead. Sir, two questions, both on revenue, mostly an extension of the previous one. Sure. In the Q4, as you spoke about slight decline, and now you're guiding for, say, decline behind us in terms of mortgage business. First is now you are expecting Q1, Q4 revenues to be flattish, or should we assume a steep decline in Q1 as well before stabilization returns in Q2? That's only for mortgage business. Sure. On the direct side, now there's some, what should I say? There is some commentaries are different across various companies. To that extent, what are we expecting from our clientele in 1Q? This is on ex mortgage direct business. Sure. the quantum of decline that we saw in Q3 and Q4 is definitely behind us. We are not expecting that quantum of decline in Q1. T he question is, are we at the bottom or are we near the bottom? I think the answer is we are definitely near the bottom, and we'll probably, you know, get a little better idea over the next few weeks on whether Q1 is the bottom or Q4 was the bottom. I think the quantum of decline will definitely. even if there is a decline in Q1 in the mortgage business, it will be a fraction of what it was in Q3 and in Q4 in absolute terms. The reason I'm not able to give you a clear answer is because, you know, volumes go up and down, with very little changes. Sir, that is clear enough. That is clear enough. I'll give you an example, right? When the mortgage rates came down to around 6%, January volumes picked up quite dramatically, and then they dropped off again in February and March. That's the volatility that we are seeing in that business. Also some very short-term delinquency type issues create immediate opportunities, so I think we are very focused on those. I think the short point is that the quantum of decline will definitely be a fraction, a small fraction compared to what we've seen in the last two quarters. On the non-mortgage direct business, I think the key metric I will point to is the continued expansion of the pipeline and the fact that we are still able to consummate large deals where we are actually creating these opportunities proactively. I think we are fairly confident about in retaining our win rates, which we have actually maintained through Q3, Q4 despite the environment. As we see green shoots of stability, even in BFS, we've seen good uptake of deals. The fact that our pipeline is 35%, 36%, you know, higher than last year and the win rates are stable means that we are actually setting ourselves up for fairly significant TCV gains, you know, over the course of FY 2024. So I think that's the best way to think about, you know, the environment right now. Of course, it is hard work to close those deals and it's even hard work to close them, and convert them to revenue. T he activity, while it may have slowed down, hasn't really paused that much. That's the silver lining, so to speak, in the current environment as well. as a takeaway, you are not seeing any slowdown in, say, business closure, deal closure for 2Q as well. That the $300 million that you spoke about sort of continues-? Yes. at a similar momentum. Yes. The second thing is that the TCV, which we won last year. Last year meaning FY 2023, but because of conversion being slow, we could not convert into revenues. Do you expect, in FY 2024 some of that... What happens to that actually? Does it become order backlog, which will flow through in FY 2024? Yes. Do you think that is something which could be lost-? Yes. in future releases? No, it is not, it is not lost. It definitely goes into the backlog. I think I explained in the last call as well. Sometimes you sign a 12-month $20 million deal, and because of the ramp slowdown, it becomes an 18-months $20 million deal, but it doesn't disappear. In 2024, our revenue growth should be slightly faster than the TCV growth in that sense. I think let's wait for the next quarter or two to declare victory. the backlog definitely adds up. Yes. Okay. Perfect, sir. That's all. Thank you. That's all. Thank you. Great question. Thank you. The next question is from the line of Ankur Rudra from JP Morgan. Please go ahead. Thank you. Morning. Ankur, you're not audible. Ankur, you're not audible. Please use the handset. Can you hear me now? Yes. Yes. Okay. Thank you. No, I just said that, clearly a tough quarter. I wanted to get a sense, Nitin, how the demand, billings and bookings evolved through the course of the quarter. Was it consistently bad from January and February, or did you see this more later in the quarter in March, which is why you're pointing to the weakness in the Q1? That's the first question. The second question is, you know, you've highlighted, you know, we've obviously seen continued and sustained signing success, very good signings momentum despite the revenue softness. Is there a certain level of signings that you need for Mphasis to stay at the same place, and on a quarterly basis? For example, you've highlighted how it's been $300 million or so on a quarterly basis. Is there a minimum 100, 150 required just to sort of overcome the melting iceberg problem that, you know, we have every quarter? Ankur, I think the answer is two-part. Firstly, at least on the mortgage side, things definitely got tougher through the quarter because as I mentioned, January was a bump in volumes given the mortgage rates are at or below 6%. Home equity line was actually quite robust, but both of those, you know, kind of had a, had a ramp down through the, through the quarter. On the TCV side and on the direct side, I don't think there was any perceptible, you know, deterioration barring obviously the two weeks in March where there was significant reprioritization of just executive bandwidth in dealing with some of the issues. Some clients were seeing massive inflow of funds, so they had to, you know, divert all their resources into onboarding customers and doing KYC and making sure the systems are holding up. Some clients were having significant outflows, so there are obviously different sort of challenges there. in terms of if I look at the trend of TCV closure, the fact that we were able to close two large deals and one of them at $150 million+, basically, and I think many of those activities continued through the quarter. There wasn't any perceptible deterioration, so to speak. The bulk of issues that we've seen in the last two quarters, compared to the peer group really came out of the mortgage business. You know, last quarter we had sequential growth in direct X mortgage. This quarter we had a minor decline. Not unusual given the environment. So I think from the melting iceberg perspective, what we really have to do is focus on making sure that this mortgage decline, and the DFS decline gets under control. That's exactly what I mentioned, that we think we are very much near the bottom, if not at the bottom in the mortgage business. We definitely have visibility to the DFS stability, you know, at around these levels for the foreseeable future based on just the nature of our engagement. On, your question around what's the minimum TCV required to sustain, I think we've consistently done $300 million plus. That's, I would say a good benchmark to think about. As the leakage in mortgage drops off, even though the YOY comparisons will still be tough for a, for a few quarters, definitely the sequential number will start looking healthy again. That's the reason why we're indicating strong sequential growth in the direct X mortgage business as well as potentially, you know, improvement in the mortgage revenue through, you know, as we progress through the year. Think of Q1 as stabilization and really, you know, making sure that we are plugging that leakage and hopefully, you know, bring the growth momentum back as we continue to convert deals and revenue. Got it. Thanks for the color. Just last question. I noted your statement about expecting very strong sequential momentum from Q2. What gives you the confidence right now, you know, the level of visibility that 1Q will be the bottom and you'll see growth momentum, you know, restart from 2Q? Anything specific from clients committing to start these dates? Obviously the environment remains- Yeah. uncertain. I know that's beyond your control. I'll, again, link back to the previous answer. I mean, we had $10 million-plus declines in both quarters just from mortgage. Just plugging that leak itself will give us the springboard that we are looking for, and that's the visibility, you know, we are looking for in Q1. Secondly, we talked about the backlog. We talked about conversion of closed signed deals, we obviously looked at the pipeline and, you know, have an expectation of how we'll progress some of those deals, especially with existing large relationships where we have a better handle on how that plays out in terms of closure and conversion. I think it's a combination of those two things. Got it. Thanks, Nitin, and best of luck. Thanks, Ankur. Thank you. The next question is on the line of Manik Taneja from Axis Capital. Please go ahead. Hi. Thank you for the opportunity. While part of my question has already been answered in response to Ankur's question, I just want to get a sense on what are you seeing with one of your large customers on the logistics side which has decided to target significant cost savings as well as in-house, more work or ship more work in-house, with the setting up of a new captive in Hyderabad. Again, not to go into specific, you know, client, items, but the two themes that continue to resonate, including with the customer that you're referring to without naming. Firstly, we are actually very, very strongly positioned when it comes to being the transformation partners. If you also noticed, there is not just a cost and a captive conversation, there is also a significant reorg of the whole, you know, tech and infrastructure estate that they run across the org. I think we are the chosen partners for that, you know, and have been for a period of time. In, in short, the wallet share gains there have been strong. I think confidence comes from also the fact that we continue to align towards spend areas that they've prioritized. Many of our peers within top accounts continue to actually get deprioritized purely based on the alignment with transformation programs. I think our confidence comes from the position we have in many of our top accounts, the forward-leaning, you know, tech-driven change agenda that we are driving and the close alignment with executive priorities, as they work through their own, you know, internal change programs. Sure. one last one, basically on the changing org structures, specifically referred to towards moving to a vertical-based GTM structure. Yes. This is in contrast to the account-based GTM structure that we've followed in the past and the merit that you've spoken about that particular structure. If you could help us understand what's driving us to change this GTM going forward? Absolutely. Great question. I think firstly, we are not going away from a named account strategy because that is very much part and parcel of the way we drive our account planning and mining template and the success that we have seen in our top 10 and 11 to 20 accounts. The reason to do a realignment, I, you know, rather than reorg, I use the word realignment of GTM, is because there is now merit in taking smaller accounts, you know, for example, within BFS, that will gain a fair amount with this account cohort mindset because the priorities and the patterns of problems and solutions within BFS are very, very, very similar, even though they're powered by the same tribes and squads. If the common element earlier was the tribe and squad and the solutions layer, we've created another common element of account cohorts because there is leverage to be gained, time to be gained, repeatability and scalability to be gained as we look at, you know, these account cohorts to be from within the same vertical. Think of this as a blend of an account-based high touch structure with a very deep understanding of, you know, what that account needs and how we plan to run it and mine it. Combine that with of course, the success that we have had in opening new logos and now scaling those logos with the learnings we have in the large accounts. that's really where this is coming from. The change is not drastic, because, you know, a number of our large accounts, you know, were already in BFS, for example. The change is a little bit more focused, and it will give us an opportunity to also double down on areas where, you know, where from a vertical standpoint, you know, we weren't able to see those patterns. Hence, you know, you'll probably see a little bit more incisive growth mindset in some of the verticals outside of BFS as well. Sure. Thank you. All the best for the recovery ahead. Thank you. Thank you. Next question is on the line of Mitul Shah from the Reliance Securities Please go ahead. Yes, sir. Thank you for giving me opportunity. Sir, in initial remark you highlighted that Your non BFSI deal pipeline growth is 55%. Within that, can you highlight which vertical to which segment you're seeing much more growth and sharper or faster recovery? Second question, if you can give some more light in terms of geography-wise outlook. These are two my questions. Thanks. I think, outside of BFSI, just by sheer size of the vertical, you know, high-tech for TMT has the biggest pipeline. We also seen green shoots of recovery in the current calendar year in that business. Last year was a tough year. While the Q4 headline number shows a decline sequentially in high-tech, that's largely driven by DXC, as I said in my comment. I think if I look at just peer size of large deals, you know, high-tech's probably the one that definitely is leading the charge. There are also interesting deals in travel and logistics. You know, we just talked about, you know, a situation with logistics. I think that's also sitting right there. As we built up the healthcare unit, we also think there are opportunities there that have emerged. While we've closed some very strong TCV in healthcare in the last, you know, 12-18 months, that's also something that is represented. I think high-tech, travel and logistics are probably a bigger share right now, just given the size of those businesses. Question on geography-wise. Yes. Sorry about that. I think, from a BFS, bulk of our exposure in Europe is BFSI. There's definitely been some knock-on impact there, and hence you've seen a little bit of moderation in growth in Q4. Pipeline actually in Europe has also increased. We do have some very large deals that we continue to work on. For the year, we definitely have double digit, you know, type visibility into growth in that region. Our growth in rest of the world, primarily India, has been very strong. You know, healthy double digits, and we expect the healthy double digit trend to continue, you know, in that segment as well. That's how I'll give you a little bit of a sense of the non-U.S. side. Of course, for our overall, direct business to grow in line with industry, the U.S. has to grow, you know, ex mortgage. I think that's kinda where we stand on the geo breakup. Thanks, sir. Thank you. Thank you. Next question is on the line of Dipesh Mehta from Emkay Global Financial. Please go ahead. Thanks for the opportunity. Couple of question. First, about just some comment about the vertical growth trajectory. If I look insurance remained weak for some time for us. If you can provide some sense what is currently going on in insurance? Sure. We had hope for growth, but it so far not played out in terms of recovery in that vertical. Second thing is logistics. Even though, YOY growth is good, but for last four, five quarters if one look at, it is very flattish kind of performance. After a good run when we used to club it into emerging, we separate it out, significant growth trajectory, now it is flattening out. Whether it is challenges in broad-basing growth perspective compared to a large client that is what creating issues, or how one should look this growth, or medium term, how we expect it to be more secular growth projection. Third question is about the growth. I think you said FY 2024 would be a substitute onwards growth. Do you think we can have a positive trajectory of growth in FY 2024? Thank you. Dipesh, let me take those three in the order that you asked that question. I think you're right. Insurance has, you know, weather dust as well, specific to, you know, a large client issue that has gone through some significant corporate restructuring activity. We won two large deals in insurance in the last two quarters. As they start to ramp up, starting late Q4, early Q1, we'll definitely see sequential growth popping up in insurance in Q1. With this vertical realignment, you know, that's one of the byproducts of that will be, hyper growth laser focus on each of these segments. Which is the reason why we actually created a realignment to create these account cohorts that we can then drive growth in. In terms of your question around logistics, you know, definitely we had some headwinds given the restructuring, and slowdown in e-commerce. Not just across one customer, but across actually a broader group. Some of that has definitely been countered by the growth in our travel and airline business. We definitely think FY 2024 is a growth year. You know, both on a sequential basis as well as on a year-over-year basis. I think part of the issue for Q1 will get solved when we convert the pipeline, but we definitely are well-placed with both travel, as well as, you know, transportation and logistics, for FY 2024. I don't think... Again, I think as I mentioned, we've actually gained quite a bit of wallet share even with large relationships in that segment. I think your third question was around, can you remind me please? The full year. Full year growth. Got it. Yeah, yeah. Like you said, you started. As I mentioned, right, Q1 stabilization definitely means focus on sequential growth. In our direct ex-mortgage business, full year growth is definitely visible, as I mentioned, at market. Even in our BFS non-mortgage business, full year growth is visible. You know, question is, you know, whether it will be at market or can we push it higher? I think there's a little bit more uncertainty to work through there. Other segments, definitely full year growth is visible. I think it really will boil down to from a headline perspective, you know, as we stabilize the mortgage business, if we are able to find sequential growth, then I think you will see strong sequential growth across the headline number as well. On a YY basis, because of the mortgage drag that continued through the year, you still may find, a little bit more muted YY numbers for overall business. You know, that's the, the silver lining there, as I mentioned, is the fact that closure conversion and pipeline continues to be strong. Understand. Thanks. Thank you. Thank you. Next question is on the line of Ashwin Mehta from AMBIT Capital. Please go ahead. Thanks for the opportunity. Nitin, consolidation and taking wallet share through zero cost transformation in large accounts has been one of the key drivers of our growth. What are the trends there across verticals? Is there a decision-making slowdown there as well? Secondly, we have a% exposure to our top 10 clients. Any client-specific issues to call out and how material are these from an exposure perspective? I have a follow-up. Sure, Ashwin. I think as I explained, deal making is happening. Deal origination is actually happening much more at a robust pace because there is extreme amount of openness and willingness from a client to hear a story on how we can construct a transformation thesis without actually, you know, asking for fresh funding. I think that has definitely opened up a whole series of opportunities. It's not that we were not taking the solution to market in FY 21 or 22. It's just that, you know, the enterprise segment was so flush with spend money at that point that they were more focused on spending than saving. As that has become, you know, a lot less challenged, you know, there is high visibility, high acceptability for constructs that create this mechanism, as evidenced by the large deal that I just talked about. I think that definitely has legs. There is repeatability and scalability in that archetype. You combine that with the new focus that a lot of our clients have on creating productivity by using tools like AI and Copilot. That actually has become another interesting wedge into creating modern engineering practices-led deal archetypes. Still early days for that one, but I think that'll become really serious contender in the next, you know, couple of quarters. I think the cycles are you know, a little bit more elongated. I would say more elongated from a conversion to revenue standpoint than from, you know, just pure deal standpoint. I think the deal environment is still fairly conducive for us to continue to create and close deals. That's also reflected in the pipeline numbers I shared with you, both YY and sequentially. Your second question. Any client-specific issues? If you look at the top 10 clients, I think obviously there is a fair representation of BFS in there. I think we did talk about specific, you know, clients that got hit in March. As a metric, the top 10 metric will probably get a little bit challenged in the short run. That's the reason why 11 to 20 growth and NCA growth, you know, is really what we will continue to focus on as we've done in FY 23 as well. That's why I think the non-BFSI, you know, pipeline growth is also very, very much, you know, being driven proactively. I think some of these metrics will get a little bit skewed as some of those issues, you know, come into play, at least in the very short run. Good news is there is no wallet share loss in any top 10 customer, you know, across the company. Sure. Just one follow-up for Manish. Manish, we've seen material hedge losses on the revenue line. How does that look from an FY 2024 perspective, the current rates forward? Sure, Ashwin. We follow a hedge policy of getting visibility to the next four quarters and then declining, you know, percentage as we go to the second year. A lot of the cover that we had taken last year for the next four quarters were kind of significantly challenged when we saw a significant depreciation in dollar in a short time. Good news is a lot of that has kind of got consumed. As we get into Q1 and Q2, we should exhaust all of that, you know, to almost, you know, 100% by quarter two. If the spot remains in the 82.5 ZIP code, we will start seeing, you know, near zero impact of hedge losses in the books. That would mean an expansion in the bottom line from where we are today when we are taking a charge of almost INR 28 crores for the quarter. We have also consciously kept, you know, the future quarters a little less hedged. One, because of the uncertainty, and more importantly because the forward premiums have come down significantly because of a significant reduction in the gap between the interest rates in India versus the interest rates in the U.S. You know, that also gives us an ability to kind of benefit from further depreciation in dollars. In short, the two quarters that we saw losses of INR 29 crores and INR 28 crores, they should come down as we go forward, and we should get closer to the spot rates as long as the spot, you know, remains in that ZIP code and does not depreciate significantly. Manish, in that light, and given the utilization scope that we have, why are we guiding for more like flattish margins and not an improvement? Is it to kind of expand spends on the selling side of things? No. Ashwin, our guidance is 15.25%-16.25%. As you know, we are currently at 15.3%. I think it would be fair to say that we expect the reported margins to go up certainly this year versus what we saw last year, driven by one, improvement in utilization and fresher deployment, and second, the gains of exchange coming in. Because the revenues declined, we were not able to benefit fully in our margins in quarter four. You know, while the gross margin expanded to 27.4%, we would have expected it to expand more. Some of it got eaten away because of the revenue decline impact that we had to absorb. Also because the revenue drop leads to lower operating leverage because absolute expenses in S&M and G&A remains kind of constant. We saw that the G&A percentage went up. As we go forward, when the revenue growth comes back and we start seeing that operating leverage and the gross margin expansion, we feel more confident about expanding from 15.3% upwards. You know, what that exact number will be is difficult to say, but it should certainly be more than 15.3%. Sure. Thanks, Manish, and all the best. Thank you. Thank you. Next question is from the line of Abhishek Shindadkar from InCred Capital. Please go ahead. Hi, thanks for the opportunity. Three questions if I may. The first is on, you know, the top customer. In the growth, can you just give us a color? You know, was there any specific ramp-up of project? You know, what drove that? The second is, you know, wanted to get a sense on the portfolio of Blink UX. You know, we had a great capability, but exposure to DFS and high tech. So your, you know, what you're seeing in that market from a demand standpoint would be helpful. The third question is on the employee number. The reduction that we are seeing, is it largely voluntary or is there any voluntary component in that as well? Thank you for taking my question. Sure. I think on the large customer, I mean, again, not to get into specific client commentary, I think there again is a wallet share gain play that we've talked about over the last 12 months. You know, you can expect that, you know, from a wallet share perspective, we will continue to have very strong, you know, position there. Whether that, you know, spend continues to hold up. You know, if there is any fluctuation, we'll probably, you know, find out over the, over the course of next quarter or 2. But from a positioning standpoint, from a spend standpoint, we feel fairly, you know, confident that our position remains strong there. Secondly, on the Blink, stroke, I think bulk of that client base is high-tech. Even within high tech, it's more the FAANG group. You know, there was some slowdown in the last couple of quarters, but we've seen in the recent few weeks, aligned to what you're seeing in their earnings. There actually has been a pretty decent uptick in deal closures. There is definitely visibility to continued sequential growth in that segment of the business as well. Not to mention that we've already seen significant benefits on both synergy revenue and synergy deals from that business in the last 12 months. In fact, the Influence deal wins have actually been very, very strong because that the whole point was to use that as an arrowhead to drive, you know, to drive larger deals in our existing client base, and that also has happened. Nitin, the other question was on attrition. Voluntary or involuntary. You want to take it? Yeah, I can. Abhishek, we had kind of tightened our recruitment and looked at utilization with a very, very rigorous and intense lens. We haven't let go anybody. We haven't had any involuntary attrition. All of what you see is a reduction because of voluntary attrition, which we kind of managed to not backfill by recruiting from outside, but by deploying people from within, a large number of which were fresher deployments. Thank you for taking my question, and best wishes for 2024. Thank you. Thank you. Next question is on the line of Sandeep Shah from Equirus Securities. Please go ahead. Thanks for the opportunity. First question, can you give some color in terms of our exposure to regional U.S. banks and that may lead to any new client-specific issues? That is the reason we are calling out the Q1 DFS being softness. If yes, will it bottom out in the quarter two or that softness may continue beyond 1, 2 as well? As it stands today, we already saw some hit of that in March and, you know, on a run rate basis that will definitely show up in Q1. Again, things might change, because that's a very fluid position, but we already gave out the fact that our total exposure is low single digit, so that should give you some sense on what the, you know, the impact can be. Obviously, you know, we are not expecting it to fall off to zero either. Definitely, we think that Q1 is probably the biggest hit there, and after that, we should definitely see stabilization on a sequential basis. Okay. Thanks and all the best. Thank you. Thank you. The next question is in the line of Harshal Sethia from AUM Fund Advisors. Please go ahead. Hi, sir. What is the percentage contribution of mortgage business in the current quarter, which was 8% last quarter? I think I mentioned that in my remarks. It is, I think 6 and change. 6.4. 6.4. 6.4. Okay, thank you. Thank you. The next question is on the line of Shraddha from AMSEC. Please go ahead. Hi, Nithin. I have just one question on the mortgage business. What is the mix of origination and home equity in mortgage for us currently? I think last quarter, we had called out that the home equity portion might still be vulnerable, even though we might see some stability in the origination part of mortgage. What is our view on what the business has within mortgage now? Shraddha, you are very difficult to hear because I think there's some disturbance on your cell phone. Is the question, what is the current mix of home equity versus the rest? Or is the question on the outlooks? Yeah. home equity versus origination in mortgage and what is the view on the home equity portion. I think, about a third of the business continues to be non-origination, non-diligence based. That's kind of where we are at the end of Q4. That obviously mix was very different 2 years ago, where home equity was in almost nonexistent for us. Does that answer your question? No. I think last quarter you had indicated that the home equity portion in mortgage could be vulnerable and that home prices and wages can start crashing now. Correct. From that perspective, how do you see the home equity portion playing out, now? I Shraddha, it's better to think about it as a composite. I think we talked about us, the fact that we are, you know, bulk of the decline is behind us, and we are definitely close to the bottom. The internals of the outlook, I think we've seen some impact on housing prices translating into volumes already in the last three months in the recent quarter. I think at this point it does look like we might be able to at least stabilize, you know, the overall business between all the service lines. I think I'll just leave it at that. Sure. That's it. Thank you. All the best. Thank you. Thank you. we'll take the last question. That is the next question from the webcast, which is from Santosh Nikam from SN Wealth. Question is on future growth and new business verticals. Is there any new technology company is inventing? I've already answered a lot of the growth-oriented questions around outlook for the year, even at a segment level. I will not repeat that answer. I think the question around new technology is probably in relation to all the, you know, the buzz in the market around ChatGPT and AI. You know, Mphasis has actually been one of the leaders in the space for the last few years. As early as FY 2019, we've actually had our own machine learning platform, and we've also incorporated earlier versions of GPT as well as GPT-4 into those algorithms. These algorithms are available for consumption on the AWS marketplace for the last four years. We have algorithms on quantum computing as well that are already available using quantum simulation, simulator. Our tech-first approach really definitely is helping and is giving us the ability to continue to craft solutions based on some of these new technologies that are now become mainstream. I think the biggest takeaway from the ChatGPT revolution is that it's now a mainstream boardroom topic, and that gives us the ability to actually continue to drive conversations and deals. The two primary areas where we are seeing adoption of these new, you know, these cutting-edge new tech areas, one is in what we call modern engineering practices and developer productivity, which is again, an opportunity for us to take more wallet share from our competitors if we are able to actually align our clients' software development and engineering practices more towards using these tools. The second is in areas that have a significant automation element. For example, contact center automation, using digital self-help, you know, and chatbots, as well as in creating agent productivity using, you know, ChatGPT or a large language model, for which also we have a deal archetype and will continue to make further announcements as we expand in that segment. We are very actively participating in those areas as well. Thank you. We have one more text question that has just come in. It is from Atreya R. from iThought. Could you please talk about the M&A strategy at this time? Are we looking at anything in the near term? I think difficult to answer the timeline, but I will take that question as I can answer it, which is M&A is very much, you know, on our execution path. We've constantly looked at deals, especially in the recent quarters. We have deals under consideration. We have deals under diligence. Potentially, as we expand our outlook, given the current environment, we will also get a lot more strategic in looking at using M&A as a tool to diversify into, you know, expand our growth and diversify into new verticals and new geographies as well. All of that is in our consideration set for FY 2024. Again, hard to confirm when a deal will happen, but we are hopeful that in the current financial year we should be able to consummate a transaction or two. Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference over to Mr. Nitin Rakesh for closing comments. Thank you and over to you. Thank you all for your time and your interest. We look forward to talking to you next quarter. We will continue to drive responsible growth. You know, I believe it's a long weekend, so take care and enjoy the long weekend. Thank you very much. Ladies and gentlemen, on behalf of Mphasis Limited, that concludes this conference. If you have any further questions, please reach out to the Mphasis Investor Relations at investor.relations.