Good morning, ladies and gentlemen, thanks for joining the Mphasis Q1 FY 2024 Earnings Conference Call. I'm 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 is a webcast link in the call invite mail that the Mphasis management team will be referring to today. The same presentation is also available on the Mphasis website, www.mphasis.com, in the investment section under Financial and Filing, as well as both on the 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, over to you, Nitin. Thank you, Aman. Good morning, everyone. Thank you for joining us today. Hopefully, we will all get an opportunity soon to meet in person. You've had the opportunity to review our earnings release documents. I would like to take time today to share with you our perspective on recent developments, markets, technology, people, as well as highlight our quarterly performance and how this is setting the base for FY 2024. Let me begin by showcasing the highlights of the quarter, especially as it relates to the various initiatives that we have been executing towards. One, we have set a strong pace of deal closure with record TCV wins of $707 million this quarter, providing a visibility of growth for future quarters. We will be double-clicking on this in the slides ahead. Two, our vertical cohort strategy is showing encouraging results. Our vertically aligned, yet account-centric GTM units have aligned well since we announced this org design earlier this year to create growth diversification by expanding growth through accounts beyond top 5 and top 10 to new verticals, as well as to new clients acquired within the BFS unit. Three, I am glad to report that we are leaning in on AI, with 1/3 of TCV originating from AI-centric deals in this quarter. We have key AI partnerships in place that have enabled us to open up a solid book of business within a short time span. Four, a significant percentage of our TCV and pipeline now emanates from beyond the top 10 accounts, including newer accounts. Our diversification strategy is showing results, particularly as our top 20 clients outside the top 10 accounts and outside BFS in our new vertically aligned GTM structure are scoring well on leading indications, indicators of revenue. Five, while recent quarters have been challenging for us in view of the pressures in the market and selectively in the BFS segment due to discretion in bank cards, we believe that the business is bottoming out. Incremental stability in markets, together with early signs of pickup of decision-making at top banking clients and visibility from record-breaking TCV in this quarter, will help us return to growth through the remainder of FY 2024. We will elaborate more on this in the summary outlook. As mentioned, our TCV in Q1 2024 at $710 million reached an all-time high. Here are a few things that I would like to highlight. TCV wins in this quarter are more than 2x our quarterly average on an ATM basis. Nearly 1/3 of this is from AI deals, including over a $100 million deal. As you are aware, we launched Mphasis.ai, a first of its kind business unit, that seamlessly integrates AI capabilities into existing technology landscape of our clients, as well as powers all of our technology tribes since they were designed to be cloud-first and cognitive native. This is starting to pay off well, as we will discuss shortly. We have won seven large deals in this quarter, of which five are in the non-BFS verticals, which shows that our vertical cohort strategy is working across the board, including within new BFS clients, as two of these deals are in BFS, with one over $100 million in TCV. Four of the seven deals are over $100 million each. Notably, significant TCV in this quarter are from non-BFS segments as well as from beyond our top 10 accounts, and over 70% are in the application service line. Specifically, I would also like to cite our significantly increased traction in Canada, where we signed a $40 million deal and several more are in the pipeline. Our pipeline in Canada has grown 500% year-over-year, and revenue has doubled sequentially in this geography. Almost all our pipeline continues to be driven, archetype-led, and is up 6% sequentially and 23% year-over-year, despite record conversion from pipeline to new core TCV in the last four quarters. Our pipeline is also well distributed across verticals. While BFS continues to generate the highest share of pipeline, at just over 40% of the pipeline, other verticals have a disproportionate share of pipeline compared to their revenue contribution, suggesting that our investment in generating pipeline and our aggressive growth diversification is working. Our pipeline generation in some of the smaller verticals, such as healthcare, has been particularly robust, with pipeline in this vertical up 63% year-over-year. Our accelerated GTM motion in AI builds on the AI TCV in this quarter and helps build a strong and true deal engine for future quarters. Two-thirds of our pipeline is application-centric, further reflecting the strength of our application transformation and modernization delivery practices. Our pipeline is also well distributed across key themes such as data, organization, cybersecurity, agile ops, and platforms. Expertise in these themes is resonant in our trials, as we have discussed with you in the past. We have mentioned in prior calls that we were seeing a lengthening of the sales cycle in converting pipeline into TCV and TCV into revenue due to greater scrutiny of tech spends. While the TCV to revenue conversion cycle is still elongated, we are seeing early signs of some normalization of the pace of decision-making, as reflected in the deal closures this quarter. We expect further improvement during the course of FY 2024. I'm personally thrilled with the opportunity of artificial intelligence to maximize business outcomes. At Mphasis, cloud and cognitive solutions have been central to our unique front-to-back approach to transformation. The Mphasis.ai business unit delivers various benefits to enterprise clients that include offerings that drive business outcomes, starting with an AI advisory unit to help assess and identify key AI interventions to complete archetypes such as contact center transformation, customer experience transformation, et cetera. Access to an array of Mphasis patented AI assets with over 250 ready-to-use models available on hyperscaler marketplaces and frameworks created at Mphasis Next Labs, an in-house research and innovation lab that can be seamlessly integrated into existing systems and processes. Access to state-of-the-art conversational AI platforms powered by GenAI technology and large language models to transform customer experience management, employee engagement, as well as to drive operational efficiency and increase NPS scores. Access to Mphasis Sparkle Innovation Ecosystem, which has enrolled over 50 domain-specific startups, including ones that are AI-focused, that can also accelerate the co-creation of robust go-to-market solutions for enterprises. Examples from the business unit suite of intelligent service offerings have now been created as additional new archetypes into Mphasis.ai. Examples include GenAI advisory engagement model. This is an offering that is targeted to help enterprises to assess where AI can have the biggest impact in chosen areas. The output of the engagement can help drive the AI strategy and for clients to leverage Mphasis.ai to execute their strategy. Contact center and customer experience transformation is a solution that helps enterprises deliver great customer, agent, and employee experiences, reducing digital leakage and delivering operational efficiencies by introducing AI-based interventions into the ecosystem. We partnered with several hyperscalers as well as specialist market-leading AI platforms and solutions with companies such as core.ai, Postman, and Databricks, as well as other cloud providers. We do expect additional deal archetypes to continue to get robust as we expand on these offerings. We continue to push for revenue growth, which is anchored in a strong client mining model and tech-led offerings. Our Q1 FY 2024 revenue came in at $398 million, impacted primarily by softness in banking. On an NTM basis, we grew the direct XDR business at 11.2% in Q1, with tech growth becoming more diversified in updating market volumes, we do see stability in performance way forward. Our core service line, enterprise apps, contributing our 20% revenue of flat year-over-year in direct, impacted by the tightness in decision spending in some of our clients and weakness in select BFS pockets. The BPS segment is suffered from the downturn in the mortgage segment over the last 4 quarters, declined 33%, with Y-o-Y decline in this segment increasing for the past 3 quarters. Our anchor geography, U.S., was flat XDR on a Y-o-Y basis. Direct at $378 million, declined 3.2% quarter-over-quarter in constant currency terms and 7.2% year-over-year in Q1 FY 2024. Direct ex-mortgage was nearly flat year-over-year, reflecting tightness in decision spends in some of our banking clients, as well as some regional bank pressures. Our direct business accounted for 95% of our overall revenue in Q1 FY 2024. BFS contribution to our revenue is 3.5% as of Q1 2024. The mortgage business declined further sequentially in this quarter, though to a lesser extent compared to that in the prior two quarters. The contribution of Digital Risk on mortgage BPS subsidiary now stands at 6.3% of overall revenue in Q1 2024, versus 12.7% a year ago in Q1 2023. As mentioned, we see incremental stability in this segment, with visible uptick in volumes as well as some current clients, are starting to see capacity buildup requests from clients in advance of recovery in other segments of the mortgage business. Moving quickly to vertical performance, our mainstay vertical, BFS, indirect ex-DR, had a negative 1% growth year-over-year. It was down 14% on an overall basis, weighed down by mortgage. Our smaller verticals in direct such as healthcare are growing quite well, as reflected in our 13% revenue growth in Q1 2024 as the other segment. The TMT vertical within direct also grew well, with a 6+% sequential growth in Q1, reversing some recent weaknesses. While growth rate in insurance has lagged, impacted by classic applications, sequential growth, TCV wins, and pipeline in this vertical look healthy, and we expect to continue to the trend on a sequential basis. As mentioned, to ensure scalability and facilitate the next phase of growth, a realigned verticalized GTM structure has been implemented with the following principles in mind. Align the GTM offer to derive better sales synergies, especially as we focus our energy on deepening our wallet share and market share with our name account strategy for existing and new clients. Enable scalability and repeatability with a vertical focus, powered by deal archetypes providing a set of win themes and propositions. Reorient account cohorts to see new growth opportunities and retain our high-touch service delivery models with clients. With a vertical-based GTM cohort model, we're able to bring vertical industry points of view to bear. Consolidate capabilities and learning within a vertical across accounts can cross-pollinate more effectively.... Our top five clients declined 2% year-over-year, weighed down by multi business pressures in the past 3 quarters and tightness in decision spend. Notably, our 11-20 client segment grew 12.7% year-over-year, indicating the increasing broad-based nature of the growth. Clients 21-30 grew a healthy 18.5% in Q1 on a year-over-year basis. Our new client acquisition revenue continues to grow well, sustaining its double-digit growth trajectory in the first quarter as well. Client mining stats remain steady QOQ and year-over-year. Movement of one client in the $75 million and $100 million plus categories is purely due to mortgage softness playing through for the fourth quarter in a row. We expect this to come back as mortgage clients resume their upcycle. Even as some of our key clients are tightening their decision spends, which has impacted us, we continue to strengthen our wallet share with all of them. Coming to our financial metrics. Our margin philosophy affords us the flexibility to manage our profitability in the face of revenue headwinds. In this quarter, our EBIT margins stood at 15.4%, within the stated margin guidance band of 15.5%-16.25%. An operating profit decline of 4% year-over-year on a reported basis is due to revenue headwinds. Losses in cash flow hedges impacted margins in Q1 FY 2024 by 50 basis points. Our EPS of 21 for this quarter is a marginal decline of 2% sequentially. Cash flow generation at $54 million, adjusted for the one-offs, stayed solid at 90+% of tax average. In summary, I leave you with five points. One, we are seeing signs of bottoming out of recent revenue trends, thanks to stability in mortgage, visibility of growth, given the highest ever TCV of +$700 million, some return in pace of decision-making by clients, especially in decision spending patterns. We have seen a record seven large deals in this quarter, with four of them being over $100 million each. Two, the majority of our TCV and pipeline originate from newly created verticals, as well as from beyond top 10 clients, underscoring the early success of our vertical cohort strategy. Three, our AI-centric deal propositions are paying off with nearly a third of our Q1 TCV from AI-led deals. We are focused on establishing a path of AI acceleration as a full-fledged and digital AI security. Further, we have key GTM and strategic AI partnerships in place to make the most of these opportunities. Four, despite some tightness in decision spends with some of our key clients, we continue to strengthen our wallet share with them. Five, despite the challenging revenue situation of late, our EBIT margins at 15.4% stayed steady and in line with the stated target operating margin guidance. Tighter focus on utilization, pyramid optimization, and some increases in offshore leverage helped maintain margin performance. Our operating cash flow, adjusted for one-timers, stood at 100+% of the net profit for the quarter. Coming to our FY 2024 outlook. We entered FY 2024 on the back of an expanded pipeline, as albeit marked by lengthening sales cycles and slower contract conversions. Cloud, digital transformation, cost optimization, and consolidation type opportunities characterize the pipeline. As noted in our last call, we expected to have a soft start to FY 2024 as we work to deal with some slower than DFS and delayed contract conversion in this segment. We expect strong sequential growth going forward, with an expectation of acceleration through the remainder of the year. A good news on the market segment is that we are seeing green shoots of activity with an uptick in volumes across select segments, as well as pickup in client requests for capacity addition, besides an increasing pipeline and new deal constructs. As this plays out for FY 2024, we believe the market segment is likely bottoming out in Q1, and we expect this segment to be incrementally, sequentially growth accretive through much of FY 2024. Also noted in our previous call, we now have visibility to stability in the DFC segment and expect that headwind to abate on a sequential basis. On margins, we retain our message of margin stability, expecting to hold the EBIT margins in the 15.25%-16.25% range in every quarter of FY 2024, with a continued focus on operational rigor, giving us increased confidence on the trajectory of our performance, and hence an upward bias in margins through the remainder of FY 2024. On that note, moderator, let's open it up for 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 hands-ups 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 Kumar Rakesh from BNP Paribas. Please go ahead. Hi. Good morning. Thank you for taking my question. Rakesh, my first question was on how are you classifying the AI? You talked about one-third of the TCV are in the AI. Suppose we classify into three segments, preparatory work for building AI models or consulting and development of AI models or testing of those models. How would you be classifying your AI, and where are you seeing the most part of the demand coming from? Kumar, I think, there is more to AI than just GenAI. That's the first point. I think a lot of the deal-making and the activity that we are undertaking right now is in essentially helping clients implement orchestration platforms and third-party products that actually enable them to roll out these models across the enterprise. Of course, they are going to continue to use the publicly available LLMs, open source LLMs, but at the same time, those LLMs need to be trained, they need to be configured, they need to be set up with the right security protocols, as well as in-integrated with their existing application stack. I think that's kind of the first big area of opportunity that we tapped into. Second, as you start thinking about areas that solutions will impact in short order, before enterprises really fully integrate, you know, for example, you know, a Copilot or a Amazon CodeWhisperer. I think the immediate opportunity actually starts showing up in areas where there is digital leakage, whether it is experience, automation, whether it is creating a highly digitized engagement model for internal employees or partners or end customers. As you know, combining conversational AI with GenAI, I think is where the immediate opportunity has been for us. The third area is, we have also started to see significant embedment of AI in operations optimization and transformation, which is much more than what RPA was. I think this is a massive, massively more powerful ecosystem of platforms that are being deployed, in helping truly transform the way you run business operations, ongoing processes, documenters, document management, and more importantly, things that require significant training of models to detect things like fraud, money, you know, anti-money laundering, sanction screening. I think there's a significant opportunity in the whole governance with compliance and documentation space. Those are, I would say, the early wins that we've seen in the last three months. Thanks for that. Quite helpful. My second question was on the deal win side. There's quite a phenomenal increase that we have seen. Can you please give some color on, are some of these deals already part of the DFC channel, or all of this is entirely incremental deals that we are seeing? How is the pipeline looking like post the deal closure that we have seen? I think, Kumar, we don't really include any DXC deals in this in this TCV disclosure. This is all direct TCV. This is business that will continue to have an impact on our direct revenues. As such, you know, those two are completely separate and always have been. The uptick really is, you go back last two or three quarters, we've had an expanding pipeline, but obviously the pace of decision-making was a little bit slower. We've seen some unclogging of that in the last three months. We've also seen some opportunities where we were fairly nimble and jumped right in to actually construct deals where we thought client had urgent needs. Some of them are in the nature of transformation we talked about. Some of them are in the nature of accelerating the adoption of both cloud and cognitive, because there is a time-bound, for example, a data center retirement strategy, and the need to meet certain goals by certain time periods. You know, especially in this cost-constrained environment, they cannot afford cost overruns. I think those have created significant opportunities around legacy modernization, application transformation using cloud and cognitive. Of course, you know, we've given a breakout of where the pipeline sits today in terms of our tribes. The rest of the pipeline is actually still pretty healthy because we've grown at 6% sequentially despite this level of conversion, and it's up more than 20% on a YoY basis, at almost across all our segments except BPO. Got it. Thank you for that. Thank you. The next question is from the line of Ankur Rudra from JP Morgan. Please go ahead. Hey, thank you. Just maybe to start with, Nitin, could you maybe elaborate on this, you know, TCV that you've been able to achieve this quarter? Clearly, it's been very healthy and very strong. From what I can see, the net TCV you announced is more than the revenues in the last 12 months. Of course, we've seen some, you know, challenges in terms of conversion there. Could you maybe highlight if there's any change in your confidence of the conversion going forward, which is driving your confidence on growth returning? If it's possible to sort of also break out the moving parts within DXC, DR, and the rest as it translates to the contracts you've won. Ankur, there are two things to think about. I think you mentioned that our TCV closure in the last four or five quarters has been almost one is to one because it's direct TCV. The way to think about it is, while that has a definite impact in providing revenue visibility, the leakage of one, discretionary cuts, two, the leakage coming out of mortgage units, as well as on a YoY basis, of course, we've declined the DXC business. All those three obviously have been headwinds to revenue on a run rate basis. The fourth thing that I want you to think about is that in the current environment, not only are we seeing tightness in spends, but there was a pretty significant, you know, pressure on anytime you had a project closure or you delivered a program, it got harder and harder to find, you know, shorter-term organic, you know, growth programs to fill that bucket. I think that will definitely revert back to mean once discretionary spend gets a little bit more normal. It's not quite there yet. The conversion of sold TCV to revenue has also been slow, as you probably heard from, you know, the rest of the industry participants as well. The early signs are actually fairly encouraging. Of the TCV we closed in Q1, we have seen already impact, you know, in quarter, you know, to obviously towards the later part of the quarter. Obviously it will play out in the run rate through Q2, and which is what gives us the confidence of the fact that we seem to have found a base and a bottom in Q1. Thank you. In terms of growth, I just wanted to clarify. One question on. Sure. I'm sorry, Manish wants to add something. To your question, Ankur, on the color we are having DFC, DR, and non-DFC, DR. You know, like Nitin mentioned, we are not only seeing contract closures, we are also seeing conversations from customers on volume increase as well as starting to build for capacity. That gives confidence that mortgage has certainly bottomed out. In DFC, based on our conversations and the various, you know, negotiations that we are having, we believe that we will be able to hold the current run rate on a stable basis. Thank you. The follow-up was on organic growth this quarter. What are the revenues recognized from this core.ai's professional business that's been acquired? Ankur, I think it's not fair to talk specific clients. We basically signed a fairly large partnership on professional services, product engineering, and solutions development. I think, there is an element of that in the numbers, but we are not gonna break out individual client numbers. Fair. The question was more in terms of organic growth, because there was an acquisition that was mentioned in the notes to accounts. I think acquisition is more from capability acquisition. There was, there wasn't an M&A transaction here. You'll have be paying $60 million on a next three-year basis for this professional services business that's been taken over by Mphasis. I think what we've done is we basically, you know, created a construct where we are embedding their solution in our deal archetypes. There is an arrangement that we've constructed with them that will create an ability for us to actually get bulk licenses for us to be able to rebundle those solutions. It is, think of this as a solution construct. We're gonna build by partner as our approach. The things we build, the things we partner, you know, clients we partner with. I mean, it's not unusual for us to go do the same thing with multiple other partners in pretty happy scale up. I think it's a fairly comprehensive 360 partnership across both firms. We have a platinum tier set up with them, and we've made certain joint commitments into the partnership on both sides. Okay. The last one, I think, is more around the AI announcements you've made. I mean, it sounds very exciting that you've won $250 million worth of AI deal. Just to help us put this in context, the biggest company in the industry, Accenture, has announced that the total AI revenues they have at the moment, or GenAI revenues, is about $100 million. How do we make sense of your number, which is two and a half times that? Is this a very different definition that you are using versus what they were using, A? Also, you know, maybe you can clarify how much of this is generative AI versus, you know, analytics, which you had anyway from before. Sort of in terms of the large deals, normally large deals take time to win, to construct, as you know. Has there been any sort of retagging here, because AI has become more relevant to the clients now, and hence it's important for them to call this AI? Not really, Ankur. That's why I said it's not, you know, AI-powered. It's actually pure AI. Basically, implementation of things that I explained to Kumar earlier on in the question. There is no element of existing revenue being reclassified as AI in this case. Okay. I mean, just as a follow-up to that one, you mentioned the industry's had this leaky bucket problem and as everybody else in the last 6 months. Do you think generative AI can accelerate that or make it tougher, especially on the BPO side of the business, you know, some of the more legacy, applications, maintenance side of the business? I think it's again, you know, every new tech platform is an opportunity and a threat. We've seen the same thing play out in infrastructure services over the last 10 years. While it's been a headwind for people who manage those infrastructure assets and data center services, it's been a huge tailwind for players like us who are always asset-light and focused more on the application, as well as transformation side. Similarly, whether this is a threat or an opportunity is a reflection of what your current portfolio of services is, and how you can actually construct transformation deals, without necessarily focusing on, you know, immediate, you know, impact on these services. Because there may be an element of transforming what you deliver to the customer, because if you don't, somebody else will disrupt it anyways. I think we are very forward-leaning on creating propositions and being very proactive with clients in applying those services and technology assets in our current book of business. We've won great amount of wallet share in the last five years using that strategy. For us, it's definitely a tailwind. We are, as I mentioned, on being very proactive in constructing almost every tribe, led deal archetype, you know, powering it with AI, whether it is app dev, whether it is modernization. I think there are some really interesting use cases in modernization. There are some really interesting use cases in cloud-led transformation. We talked about ITSM, IT assist, you know, customer experience support, and of course, business process operations. I think given that many of these areas, we have a fairly, you know, forward-looking view, and in some of these areas, we don't have a large share of wallet, we can definitely expand our share of wallet using these capabilities. This is an interesting way to hedge open opportunities that we were hitherto not really playing in. Thank you. Appreciate the call. Best of luck. Thanks. Thank you. The next question is from the line of Nitin Padmanabhan from Investec. Please go ahead. Yeah. Hi, good morning. I had a couple of questions. I think first is on the Digital Risk side, you mentioned request for increase in capacity. I'm just surprised that it happened so early because the rates still seem so high. Contextually, what's really happening here that it's sort of picking up earlier than one would imagine? I think that's the first question. I think you have to think about not just the new originations. I think rate-sensitive part of the business is first mortgage and refinance. There are four other lines of business that are not rate sensitive. One is the whole home equity line of credit. We talked about that in the last, you know, 12 months. There, given that housing prices have remained fairly stable, there is an opportunity that, you know, and you know, consumers are tapping into, to take out, you know, second loans or home equity loans. That uptick is the first uptick that became visible over the last, you know, few weeks or the later part of the quarter, and has carried into the current quarter as well. Second, you know, there is a pickup in diligence activity because you know, loan books have started getting traded. We had actually called for that towards late spring, early summer, so that doesn't surprise us. Go back to the call, I would say six months ago, we actually did say that the market will not stay locked forever. That trading activity leads to diligence services. We do expect that to continue to pick up as well. Third, as you know, the interest rate cycle enters its late phase, banks are also gearing up for loan restructurings, as well as, you know, servicing those loans, you know, both on an inbound basis as well as proactively reaching out to consumers, because in the end, banks want to deploy the capital they have. They want to, you know, extend those loan tenures and so on and so forth. I think that's what's driving the current uptick in volumes. There are still ways to go before we see, you know, any major uptick in refinance, for sure. First mortgage probably will recover before that, because, you know, the housing market has actually stayed fairly robust. Issue is more on the commercial real estate side in the U.S. The residential real estate, the rents, all of that has been fairly robust. Perfect. That's very helpful. The second was on the ramp-up, right? One is the earlier deal, maybe Q3, and so forth. Have they started ramping up, or do you think that begins ramp up? Second, the deals that they've won today, do you think they sort of ramp up on time, and by when, do you see them sort of ramp up? Right. That's on the ramp-up side. I think as I... Yeah. Go ahead. Yeah. The second part was on the existing book of business. Excluding mortgage within BFS, do you continue to see sort of headwinds on revenue as we saw this quarter, continuing for some more time, and sort of tempering down growth despite the accretion from the deals? Yeah, those are the two questions. I think, on the first one, as I mentioned, it's, you know, as Manish called them, the three phases: origination, closure, and conversion. Origination actually was fairly robust over the last 12 months. That's the reason pipeline has grown this robustly, in a, you know, on a year-over-year basis as well. Closure, I think, was a little bit muted. That's why our TCV was trending in the $300-$400 range for four quarters in a row. That seems to have definitely picked up, because I think there is a, there is a point at which the execs are, have to make some decisions and move on because there's a finite amount of time with which they need to implement certain programs. Of course, our ability to blend their needs with a proposition is something that's come in very handy with the proactive nature of our pipeline. I think the closure has definitely picked up, and that's the first sign that we are seeing that decision-making is starting to move out a little bit out of that frozen zone. The conversion, while it is not where we expect it to be, we still have a proportion of deals that are taking fairly long time to convert. Depends on client situation, you know, business cycle that a customer is in, as well as, you know, the ramp-up schedule that they originally agreed to versus what they want to rebaseline it to. There is a lengthening that has happened there. Given just the experience in the last three months, through the quarter, it progressively seemed to get a little bit better. We do have early signs that not only is origination and closure are getting better, the conversion is starting to get a little bit better. We are cautiously optimistic. Too early to tell, but early signs are encouraging. Sure. On the Banking Financial Services existing book of business, do you continue to see headwinds there on a going-forward basis, mortgage? Yeah. I think, I think the... This was probably the crescendo quarter when it came to bubbling up of all the issues that came up in the banking sector, starting in March, and probably culminating in, you know, the prices getting resolved, at least for now, through, I would say, middle of the quarter. Right now, I think it is status quo. It seems to be stable. We haven't seen any, you know, ramp down requests in the recent, in a few weeks. I think the, another two or three months, 2024 budgeting cycles will start. We will see some, you know, pent-up demand and or, unspent budget kind of starting to open up, between the Labor Day to Thanksgiving, the, you know, peak season. At the same time, it's a little bit too early to call whether, you know, it's across the board activity because there are segments of banking that are still fairly stressed, especially on the CIB side. On the consumer side, things have been fairly stable and continue to be stable. Wealth and asset has been fairly stable because that's been a bright spot actually across the, the domain, and we just talked about mortgages as well. I think increasingly, as we see resolution of cyclical issues, we will see opening up of spends on the discretionary side in the very short run. That actually will give us some short burst revenue and clearly are important for, you know, consistent growth. Perfect. That's very helpful, Nitin. Thanks a ton, and all the very best. Thank you. Thank you. The next question is from Mohit Jain, from Anand Rathi. Please go ahead. Yeah, sir, I have two, three questions. One, if you could talk a little bit about the tenure of the TTB that we closed at $700 million. Say, for comparison sake, Q1 2023 versus Q1 2024, how we should see the tenure thing? And second is related to the split of BFSI decline that we saw in 1Q. What part is mortgage, and how should we see between regional bank, mortgage, and then four degrees? I think on the first question, there is no major change to call out in terms of the tenure of large deals. However, there is a little bit of drying up of shorter duration small deals, and that's tied to the discretionary spend pattern that we talked about. I think as such, the seven large deals, the duration, the multi-tower nature, the transformation type deals, all of that's fairly consistent and have spent fairly steady over the last four quarters. The only change to call out, as I mentioned, is the small, you know, organic growth type deals. For example, when you roll up a project or if you lose two or three people, that deal gets stopped. I think that is what is, that's probably the only thing to call out for in the, in the shape of, about the TCV. On the second question around, direct XDR, versus direct, you know, direct BFS, I think that data has been published in the deck. I think direct XDR was almost flat on a YoY basis. Of course, on a sequential basis. I mean, the DR business also degrew in this quarter, not to the extent that it had in the last two quarters, but it is, it's definitely, still being headwinded. I think it's not fair to break out the impact from segments of banking, so, you know, I'm not going to answer what impact was from regional versus non-regional, because then you're starting to get very specific. Okay. in regional- All percentage takes together. Sure. Yeah. Regional banks, are we done with the cuts, et cetera, that you were anticipating, or do you think some of that will flow through to Q as well? I think on a consolidated basis, we are probably bulk of it is behind us. We do expect. That's the reason we mentioned that we are cautiously optimistic, but it's hard to call exactly the bottom in a segment that is so exposed to macro. At this point, I think, all I'm gonna tell you is bulk of the cuts are behind us. Mortgages definitely seems to have bottomed, and that's kind of was one of the biggest headwinds to our BFS business in the last four quarters. I think we will look forward to additional data points through Q2 to see if we can truly call a bottom in the entire banking business. Okay. One last, again, on Q2. We recently want to announce this BFL subsidiary transfer. I'm assuming that will be consolidated in Q2. How should we specifically look at Q2 growth outlook, given that some of the tailwinds are also coming in? I think it is, it's hard to give you specific Q2 guidance. We are, as we mentioned, we think we had a base formation and a bottoming out in Q1. At this point in time, it looks like that we will see sequential growth, but it probably will accelerate as we get into Q3 and Q4. When you say sequential growth, sequential growth plus whatever the subsidiary adds up, right? That's the comparison. Over Q1. sequential growth plus something from the BX subsidiary, which will close this? I, you know, you're asking me to answer something that I'm not willing to disclose at this point in time, only because the. As I mentioned in the past, I would not like to discuss specific contractual arrangements, you know, with the outside world. It's something that we have to be kind of guarding it. I think, there is. All of this is baked into the guidance I just gave you. No problem. Thank you very much, sir. All the best. Thanks, Mohit. Thank you. The next question is from Deepesh Mehta, from NK Global. Please go ahead. Thanks for the opportunity. Couple of questions. First, about the greenfield tech. I just want to understand nature of competition, which you face, $400 million plus deal, and I think, one other, on the last deal, which you declared $41 million in Canada. If you can provide some sense about nature of competition, and you indicated non-behavior, but if you can provide some sense about the type of work which we do, and if possible, some of the industries where we are, trying to provide offerings, and whether it is part of non-top three kind of focus areas, in terms of some of the emerging, verticals which you indicated. Second question is, you indicated some one-timer in cash flow. Can you provide some more detail what one-timer you are referring to? Last question is about the DXC subsidiary-related transaction. How one look at it? If I look last few years of that subsidiary performance, remain very inconsistent, both on revenue and margin performance. First, about the capability, how we see synergy with Mphasis offering. Second thing is, what are your growth plan? Lastly, what is the current revenue under that entity running at times? Manish, why don't you take the last two questions, and then I'll talk about the pipeline outside and the wins and the competitive intensity. Hi, Dipesh, Manish here. Taking the question on the cash first, the one time is essentially three things. You would have seen in our balance sheet, a classification of non-current assets. That's a structured contract, and the finance cost of delayed collection is baked into the commercials. But it does come up in the DSO and the receivables. Then there is a collection that was erroneously sent to us from the client of a large amount, close to $25 million, you know, where the SWIFT code did not come in, and then, you know, that got reinitiated, and it hit the account after the nostro account hit after the third of July. Because the weekend happened, and it's a long weekend, Fourth of July, some of the collections came in late. If we were to normalize for these three, we are talking about almost 13 days impact on the DSO. Without these, we would be at 64, 65 days of DSO. That's what we have called out as one-timers. All of this money came in, you know, except for the deferral, the rest of the money came in 7th of July. We have not included that in our cash flow for the quarter ending 30th June. Second question on the DXC transaction. It's a capability acquisition, primarily helps us in building our relationship with Microsoft and capability that we can take to clients in implementing Dynamics. We looked at the asset, from the perspective of synergy benefit and the function of time that we can have in our client base, and we feel very, very good about the fact that it comes along with logos and revenues that also gives us a boost in our Europe business. At an overall level, you know, wouldn't like to comment on what happened with that business within DXC, but we do believe that, you know, once we acquire, we will be able to create a lot of value, out of the transaction. Going back to your other question on the competitive intensity, especially on the large deals. I think it's not a surprise that almost every deal is hard-fought. While we may have had an element of, you know, helping shape the deal proactively, given the size of the deals and the governance mechanism at most large enterprises, banks included, there is a competitive process that everybody follows. I think, you know, the usual players that you can think of, from our larger peers in India to the global SIs, to specialist consulting regional firms, almost all of them are present. You know, in many cases, many more than one are present as we go through the competitive process. To give you an example, you know, there was a large deal in the banking segment where there were seven people that were invited to the bid, and, you know, many of them were incumbents. We were not. In that case, you know, we over a period of three months, we managed to run through the process, and at the back of our tribe-led deal archetype, we actually very differentiated really well and came through the process, you know, to win the business. I think almost every deal is very similar in nature when it comes to the competitive intensity. Yes, of course, some of them, you know, we very proactively work to identify the opportunity, and that gives us a higher win rate in the proactive deals. That's kind of typically the nature. There are, you know, especially in times where demand is stressed, the competitive intensity actually does get higher. Couple that with slower decision-making, you know, it is definitely a lot of hard work that goes into making these deals, kind of come to closure. Dipesh, to your fourth question on the industry and type of work in the TCV, majority of the growth in TCV over the last quarter actually came from outside of BFS. The good thing is that, you know, the work has got a lot of broad basing from a demand perspective. Geography-wise, as we talked about the fact that there is a significant TCV from Canada, given its proportion to the size of Canada business. From a service perspective, large part of it is app development. Application centric. Application centric. From a, from a vertical perspective, it is actually, you know, reflective of investments made in building some of the other verticals. From an account perspective, a lot of this is from beyond the top 10 customers, which is again reflective of the investments we made in NCA and our efforts to diversify. If you think about it is actually helping us diversify across all dimensions, the clients, the verticals, the geography, and from a capability perspective, not to forget, significant contribution from the AI-led transactions. Understand. The only follow-up question which is, I think, unanswered was, the entity which we, the DXC subsidiary I'm referring to, what was is the revenue under it? You know, we would not like to disclose that, Dipesh. You know, it's like Nitin mentioned earlier, it is. I think the right way to think about it is, Microsoft business applications is the reason we actually took over that book of business. It is part of a strategy that we've been following of building a string of pearls around capability. It is something that had been in the works for many months, in terms of, you know, really identifying pockets where we could, you know, get to a business arrangement that works for both parties. It is not material in terms of, you know, the overall, you know, size of our business. At the same time, it is from a capability standpoint, it is definitely something that will. It's already creating synergies because we actually integrated that pretty much on day one. Understand. Thank you. Thank you. The next question is from Sandeep Shah, from Equirus Securities. Please go ahead. Yeah, thanks for the opportunity. Just one question, Nitin. Is there any large client-specific issues still bothering you in any of your industry cycles? I think now, as I mentioned before, the metric that we are maniacally focused on is wallet share within a customer and expansion of TAM in that, in every large customer. These are two things that we continuously focus on as we drive the account plans. If I focus on these two metrics, I don't see significant areas of concern that give us a pause, saying, "We need to double down," or, "We're not really well-placed in any of our top accounts." Of course, it also depends on the environment that those accounts are going through. In some cases, we've had certain client-specific issues that have, you know, kind of lingered on for a little bit longer. I think on an overall basis, it is driven more by what's going on outside our control versus, you know, the micro focus that we've been bringing to the table, you know, pretty consistently over the last, you know, 5 years. I think we'll continue to execute the strategy. We'll continue to expand that cohort account planning-based model to accounts outside our top five, top 10, which is why I broke out the performance coming out of accounts, you know, in 11-20 and 21-30, as well as outside of BFS. I think the three vectors of diversification we continue to expand on. Of course, given that we are so focused on TAM expansion and wallet share expansion inside of our existing top customers, I think we will actually disproportionately benefit, either through consolidation, which also has continued to show good promise, or through return of spends. Okay. Okay. My question was on that, the part which you alluded, the issues in the large clients which are outside your control, led by macro issues. Those issues largely bottoming out, or you believe still, it's early to call out that? I think it's too early to call it out at a group level. I think they are, as I mentioned, right, it all depends on the segment that we are operating in. You know, some of those clients, while we've actually grown the share of wallet in tech services, we obviously lost revenue on the mortgage side because that just was so high with the same customer. I think it's more nuanced by LOB or by segment that you are operating in. Even within our very large customers, you know, some of them have been more exposed to the slowness in deal making on Wall Street, which has an impact on their spends in CIB versus their spends in consumer or payments or asset and wealth. I think it's a little bit more nuanced right now, which is why I gave you guys an outlook by LOB or business segment within banking. I think that's the way, right way to think about it. Obviously, we are more comfortable today in many of those segments than we were three months ago. But I think it's too early to say that across the board, you know, the demand come back or there is a big bang change. Okay. Thank you. All the best. Thank you. Thank you. Next question is from Ashwin Mehta, from Ambit Capital. Please go ahead. Yeah, thanks for the opportunity. Nitin, I just wanted to get a sense in terms of the $700 million+ of deal flow, any duration changes that you've seen versus earlier, given that there were $400 million+ deals here? The second question was, in terms of our margin outlook as we go through the year, given that we have significant scope in terms of utilization growth is also expected to improve. The third one is on our top 10 client cohorts, because we've seen sharp declines there. As a cohort, do you see that stabilize as you go forward and see a similar sequential growth that you're guiding for the overall company? How should we see that? Ashwin, on the first question around duration, I think I just answered it a few minutes ago. Nothing to call out. Duration, contract duration, multi-tower nature, transformation, all of that has been fairly consistent on the large deals side. There isn't any significant change in any of those that is. That's point number one. I think a corollary to that was that we've definitely seen a downtick over the last couple of quarters in the smaller deals that typically do add up to in-quarter revenue and ACV. I think that is tied directly to the cuts in discretionary spend and the lack of opportunity to backfill or project rollovers that don't get refunded. That's the first point. Second, maybe on margin, Manik, you can take the second one. Ashwin, we talked about our philosophy of maintaining margin in a narrow band with investing for growth. We talked about the fact that there will be an expansion in margin as we go forward. We did expand the margin, although a very small number, 15.4% from 13.3%. When you think about it, this came despite the sharp decline in revenue and the pressure we had continuing from, you know, the prior quarter on a variety of metrics. Operating metric, as you rightly mentioned, continues to give tailwinds, whether it is utilization, whether it is kilome, whether it is, you know, the value student sales leading to better pricing environment. We feel confident about, you know, the margin as we go forward, leading to us guiding to a fact that we would be reporting expanded margin as we go forward. You know, I know that the environment is very different, when we look at the peer group, but, you know, we feel really confident that we will deliver the expanded margin. We have done our bit in terms of making sure that that happens, despite the investment that we want to make, in the business as we go forward. I think the third question was around the top 10 cohort and when do we see a recovery? I think, as I mentioned, I just gave our nuance by lines of business. I think as we've seen demand uptake on the market side, that will definitely feed back into the top 10 cohort because there are, you know, multiple clients where we do service them on the market side as well on the tech side. Second, I think, some of the large deal inflow will definitely feed in at an overall company level. The large deal closures, the pipeline is fairly strong in BFS, as I mentioned, but I think the closures have to pick up a little bit more for us to start seeing that uptick. I. My sense is, there's probably a little bit of a lag between, you know, especially in some of those banking-heavy top clients. The confidence on second half acceleration really comes from an uptick in the top 10 cohort as well. Sure. Thanks, Nitin. All the best. Thank you. Thank you. Thank you. The next question is from Manik Taneja from Axis Capital. Please go ahead. Thank you for the opportunity. I think it seems that we have lost the line from Manik. We'll move to the next question. That is from the line of Abhishek Schindler from InCred Capital. Please go ahead. Hi, hope I'm audible. Yes, Abhishek, you're audible. Please go ahead. Yeah. Hi, thanks for the opportunity and, you know, congrats on the strong bookings. Just one question on the bookings. Wanted to understand if you can give a color whether, you know, these are wallet share wins or, you know, we did we displace any competition? Secondly, you know, was there any change that you noticed in the closure timelines of these deals from, you know, the initial conversations to closure? What I'm trying to understand is, was there a bunching of closures or, you know, these were actually, you know, they closed, you know, way before than you anticipated? Thank you. I think on the, on the first question around placement of competitors, I think I answered that in the context of competitive intensity. Given that majority of these are also a top 10, you can actually easily say that, you know, many of them are wallet share gain deals because we've constructed propositions and effectively eaten into somebody else's share of wallet, because we've in many cases bundled change and run our transformation in these deals. There are deals, for example, the likes of Canada, that are pure greenfield new client acquisition deals, where we were able to really construct a proposition and create an opportunity. I think that's kind of, I mean, whether you call it wallet share or customer, new customer acquisition, you know, I leave it to you to decide. There is obviously an element of, as I mentioned, fairly high degree of complexity that is involved in getting a deal from origination to conversion. Not just closure, but conversion. I think while there has been some uptick in that, it is very specific to certain segments that I think we would like to see that spread across other segments as well. Given that there is a significant portion of these deals that are, you know, also outside of BFS, I think some of that we play in. There, you know, we've called out deals in healthcare, we've called out deals in high tech. I think all of those continue to really help the overall strategy of diversification as well as creating new engines of growth, both from a deal standpoint and, of course, significantly on the revenue side. Did I miss anything from the question? Abhishek, does this answer your question? Thank you. Sir, we have one last question that we received over the webcast. That is from the line of Harish Alamchandani from Smart Money on Three Financials. The question is: Sir, I trust your leadership, vision, and enterprise. However, can you please plan to deliver 15% QOY growth in net margin by increasing revenue and cutting on OpEx? Harish, you know, thanks for the confidence. We have stated the philosophy of maintaining margin in a narrow band and, you know, investing for growth. We believe that that delivers a better return to our shareholders, given, you know, the growth multiplied by EBIT eventually is the EPS. We will continue to look at avenues for investing and while making sure that the margin remains in the narrow band. Having said that, as the scale happens and as we grow, we believe operating the leverage gives us an outward bias to the margins, and that's what's reflected in the expanded reported margin this quarter and the confidence of reporting an expanded margin as we go forward. Thank you. Ladies and gentlemen, that will be our last question for today. I now hand the conference back to Mr. Nitin Rakesh for closing comments. Thank you, and over to you. Thank you all for your interesting and pursuing your questions this morning. While the macro environment continues to remain uncertain, we are very pleased with the record-breaking TCGS Delta large deal in this quarter. We continue to cautiously be optimistic, and at the same time, we continue to update you through the remainder of the year and look forward to seeing you all on the next call. 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@mphasis.com. Thank you for joining us. You may now disconnect your lines.