Ladies and gentlemen, good day, and welcome to the Q2 FY 2023 Earnings Conference Call of Cyient Limited. As a reminder, all participant lines will be in the listen-only mode, and anyone who wishes to ask a question may enter star and one on the touchtone telephone. To remove yourself from the queue, please enter star and two. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Krishna Bodanapu, MD and CEO. Thank you, and over to you, sir. Thank you very much, and good evening, ladies and gentlemen. Welcome to Cyient Limited's earning call, earnings call for the second quarter financial year 2023. I am Krishna Bodanapu, Managing Director and Chief Executive Officer. Present with me on this call are Mr. Ajay Aggarwal, Executive Director and Chief Financial Officer, and Mr. Karthik Natarajan, Executive Director and Chief Operating Officer. Before I begin, I would like to mention that some of the statements made in today's discussions may be forward-looking in nature and may involve risks and uncertainties. A detailed statement in this regard is available in our investor update, which has been mailed to you and is also posted on our corporate website. This call will be accompanied with an earnings call presentation. The details of the same have also already been shared with you. Before I start the highlights for the quarter, may I take a minute to brief you on the exceptional items. A lot has gone on this quarter. Very good things that I must say have gone on this quarter. Therefore, before we start looking at the context or before we start looking at the accounts and the numbers, I just wanted to give you a bit of context of how this all stacks up and how we should be looking at these numbers. Before the numbers, I just want to give you the context. On M&A, on the acquisitions, all four acquisitions have been concluded in Q2, and the integration is progressing quite well. I'm quite pleased with how the integration is progressing. All M&A are accretive at an EBITDA level. We will show you the detailed numbers in a bit. On an annualized basis, we are expecting that this will add about $150 billion to our revenue. Again, given that the deals that happened and the consolidation starts at various points of time, as we talk about the future and the guidance, we will also give you a little bit more insight into how it will all pan out. As you know, the Board and as we made this announcement a few weeks ago, that the Board of Cyient met and has agreed that the global electronic manufacturing business that we have, which is Cyient DLM, must be restructured in a different manner. We believe that there's a number of excellent things that are happening in that business right now. The acceleration of technologies like IoT and AI and ML is driving a trillion-dollar market for electronics in the very near future. That's a huge opportunity for us. There is the whole China plus one strategy at play. We are looking at actively engaging with non-Chinese EMS players, and this has significantly increased the attractiveness of India as a market. India's share is expected to increase from 1%-8%, adding $50 billion per year in the next five years. Of course, the push from the government of India for Make in India or Atmanirbhar Bharat is putting a lot of opportunity in place for electronics that are made in India. With a focus on high complex, low volume electronic, we believe we have an excellent niche. Also I want to say that there are significant synergies between the Cyient core services business and the DLM business. A common set of clients, a lot of engineering content in the type of manufacturing that we do and the whole build to spec strategy. Therefore, we still want to maintain a link with the business because there is a fair degree of commonality. Having said that, looking at the enormous potential to maximize shareholder value, the board has approved the formation of a sub-committee to look at all the options. We understand that in the current shareholding of Cyient, that is the services part of Cyient, DLM might not be the best fit based on how some of the economics of that business work, some of the revenue flows of that business work and margins of that business work. We believe it is best to have a structure wherein it is an independent business with, of course, a tight coupling with Cyient because of the reasons that I talked about. The key options that are being considered are an IPO, a partnership with a strategic investor or potentially a spin-off. We are looking at all these options, and the choice will be made by the sub-committee based on the management's recommendation, of course, keeping the best interests of our shareholders in mind. We're very excited about the spin-off because it unleverages a lot of potential, both in terms of value for Cyient, but also for DLM because that business has a significant opportunity to accelerate it. When Karthik gives you the business update, he'll also talk about the order intake and the order book, which means that for us to execute that potential, we will need a lot, we will need capital, we will need flexibility, and we don't want to skew the Cyient financials because of the DLM business. Most, if not all, of the wage hikes planned for the year are done. We will not have any material headwind for the rest of the year because of wage hikes. During the previous quarter, we said a class action lawsuit was filed in a U.S. district court against one of Cyient's subsidiaries. We are fighting this vigorously. I want to reiterate that we're very confident in what we've done, and we've gotten advice that we have a very strong case, and therefore we're going after it with all rigor and with all our resources. We are also accelerated the discovery process, as it's called, wherein the filing of all the data and filing of all the information. Therefore, this quarter, we had an exceptional item in terms of the cost that we incurred on this lawsuit. It will continue for a few quarters, but not at this level because this quarter we accelerated some of the discovery phase, which has led to a little bit of higher cost than what we would have normally anticipated. Therefore now, coming to the highlights. I'll take you through the highlights of the quarter. In Q2 FY 2023, we posted a revenue of $174.8 million, which is a year-over-year growth of 20.4% in constant currency, which would be 60.4% in U.S. dollars and quarter-over-quarter growth of 10% in constant currency or 8.2% in U.S. dollars. In rupee terms, we posted a quarterly revenue of INR 1,396 crores. INR 1,396 crores. This signifies a growth of 25.6% year-on-year or 11.7% quarter-on-quarter. The services revenue stood at $151.1 million, which is a year-on-year growth of 25.8% in constant currency, 21.3% in USD, and a quarter-on-quarter growth of 12.3% in constant currency or 10.2% in USD. Service revenue growth without acquisition is 11.5% year-on-year in constant currency or 3% quarter-on-quarter in constant currency. The DLM revenue stood at $23.7 million, which is a de-growth of 7.3% year-on-year or a de-growth of 3.3% quarter-on-quarter. Normalized group EBITDA. I want to quickly highlight why we're also talking about EBITDA. Because of the acquisitions and the nature of how amortization works in the acquisition, EBIT will be skewed for a little bit. It will be skewed for about a quarter or so because amortization is coming in, but the full impact of the acquisitions are not coming in. Therefore we also want to give you a sense of EBITDA to give you a sense of where the margins of the acquired entities and Cyient lie. We thought EBITDA was a good reflection of that. Of course, we will obviously talk about EBIT also in a minute. The normalized group EBITDA margin, excluding the impact of one-off M&A costs and exceptional items, stood at 16.4%, up 84 basis points quarter-on-quarter and down 226 basis points year-on-year. Normalized group EBIT margin stood excluding the impact of M&A and exceptional items, was at 11.9%, up 42 basis points quarter-on-quarter, down about 210 basis points year-on-year. Normalized PAT was at INR 110 crores, which is a de-growth of 5% quarter-on-quarter and 9% year-on-year. Ajay will take you through these numbers in a lot more detail. I want to say that as a core business, as the core services business, we are on track to deliver the numbers that we have been talking about, which Ajay will take you through in a little bit more detail. I just request you to bear with us on all these numbers and the presentation this time because of all the M&A that has happened. Unfortunately, the consolidation of each one of the targets kept happening during various points of the quarter. Therefore, we just have to make sure that we give it another quarter before the actual normalized and steady-state numbers come through. In the spirit of transparency, of course, we'll take you through those numbers during the course of the rest of this call. The board also approved an interim dividend of INR 10 per share, which is in line with our philosophy and in our principle of giving back a certain amount of profit to the shareholders every year and doing it twice, once as an interim dividend in Q2 and of course a final dividend. I also wanna give you two highlights for this quarter. Cyient partnered with Honeywell to manufacture Anthem, which is the first cloud-connected cockpit system. It's a very large deal. We also made a press release on this a few months ago. We're delighted that we'll be able to build this product, which is the future of aviation, and it's a multi-year deal for Cyient. A lot of it will go to Cyient DLM because there's a big manufacturing component, but there's also a lot of engineering that's associated with it. In a nutshell, it's a platform that can be virtually modified for any type of aircraft, passenger, cargo, business jets, et cetera. It is a platform that helps pilots much more effectively fly planes. Again, it's at a very high end of technology, and we're very proud that we will be able to do this for many years to come. We're also thrilled to be recognized by ISG as a rising star in IoT, integrating our digital technology capabilities under INTELLICYIENT suite of solutions. This is really accelerating our clients' digital transformation. Again, Karthik will talk about some of the key initiatives and some of the key outcomes that have come because of the focus that we've put in the last two years with digital. With this, I would like to hand this call over to Ajay, who will take you through the detailed financial performance for this quarter. Ajay, over to you. Thank you so much, Krishna. Just to continue from where Krishna left, we feel very excited the way one is, I think, we are creating the new capability through these acquisitions, and we have talked about them, you know, as and when these acquisitions have happened. This really gives us really good growth engines for future. Second, I think in terms of the capital allocation, this is significant improvement which will show us, you know, the ability to do earnings growth at much higher rate. I wanted to give a confidence to all the investors and the analysts that we are very confident about these acquisitions being very accretive on the EPS side, very accretive on the EBITDA side. For the EBIT side, because of amortization, but the synergy, revenue start kicking in, we will also see that it is accretive at that level. With that, let me give you a flavor of the numbers. We talked about one of the highest growth quarter-over-quarter, 25.8%. As we have seen the currency fluctuations, the right numbers to look at are constant currency numbers. 25.8% is year-over-year, and 12.3% is quarter-over-quarter. We've also disclosed the numbers for services and DLMs. DLM has a marginal degrowth of 3.3%. I would say that, you know, it is a scarcity issue. We are improving on the supply side, and you will see that, you know, we have one of the best ever pipeline and backlog for DLM, and you'll see that growth continue in the IC. With these two, I think group growth is at 20.4%. As if you see in terms of the services growth, if I exclude the acquisitions and DLM, we have grown at about 3%. There also I think we have been prudent to make sure that we have some provisioning around, you know, as per the policy of accounting. If you look at that, including that, it will be more like 3.5%. Some of the issues is the good momentum on the core business. It is the same is true in DLM and acquisitions will further add. As far as this year is concerned, as you know, we have added in this quarter one month of Citec and two months of Celfinet. When we add all of them, for this year itself, we will have 14%-15% revenue growth. When we talk about the outlook, we'll also tell you how it will be going forward. It's a well-rounded growth. If you see the chart below, I would only like to call out when you look at the, you know, the growth, some of this is impacted by the margin, but the exchange rates. If you look at NAM at 20%, EMEA adjusted for currency 34%, Asia Pacific is about 11% adjusted for the currency for this year. I think there's a good growth across the region. Some of the EMEA growth, of course, is also, you know, fueled by the addition of the acquisitions, which are based in Europe, the two of them. In terms of the order book, again, you know, as we spoke in the last call, we continue to be on the same policy. It's working well for us. This is our total order book. It's about $150 million, 12 months forward and little bit of about 20% of net inflows for the next 12 months thereafter. That brings us to $150 million or $156 million in constant currency. You'll see a little bit quarter-on-quarter dip, but don't read too much into it. That's just because of the currency fluctuations. Except INR to dollar, in all the currencies we have a nice gain in our forward covers. What it means is you will see, when you look at our other income, we have made a positive other income because of our hedge book position. Also for the next four quarters, what we are looking at is about $3.5 million of gain at the current rates, which are also mentioned on this particular chart. As we have been saying that, you know, unless there is a huge, you know, catastrophic event, we feel that our EPS is nicely protected, for the next 12 months, forwards from the currency perspective. In terms of income statement, I think, I would like to say that, you know, if I can just go to our next slide first, and I'll come back to this. Krishna talked about that, you know, we have two one-offs in this quarter. One is we have this exceptional item where we had the legal fee that was incurred in quarter two, which is about 1.8% impact. We have disclosed the value also here. Another one is that when we have done these acquisitions, we have one-time acquisition related expenses. These are purely for acquisition. They are not integration related, which are in the DLM, which are separately there in the margin analysis there. We are only calling out relating to the acquisition of the target, and that's about 1.7%. If you take these two, one we are passing as exceptional item and another one is one-off which is not likely to repeat. We have restated our numbers to show for each of the line items that, you know, what is our reported effect, what's our normalized effect, same for the percentages. We also reported the PAT and normalized PAT. With this background, if you go back to the earlier slide and explain these. I think the headline number that I would like you to see is that for the core, we have improved our margin at about 112 basis points. You will see we did have a headwind of about 1.5%, because of the wage hike that happened in this particular quarter. As Krishna mentioned in the beginning, most of the wage hike is over now. I would say 90% plus of the wage hike is over. We have been able to offset that by improvement in offshoring. There has been pricing increase. There has been focus on improved offshoring. We have also got some other benefits out of automation and other initiatives. It's very nice that, you know, within the quarter we have been able to offset whatever was the wage hike. We did get, you know, some other, benefits, in terms of volume absorption, little bit on currency, but they have been plus and minus. Overall, I think from the operational efficiency, we have been able to take care of the wage hike. We've continued to work, very hard to make sure that we are working on each of these levers, to be, you know, quarter-on-quarter improvement, in terms of our, margin. DLM also has done marginally better. We have given 8.3% margin in DLM, which is up by about 410 basis points. You will see that, you know, we have, good traction in DLM in the coming quarters as well. Finally, I would say the normalized PAT is what you should look at. If you exclude one exceptional item for the DVC and one-off expenses purely for M&A in terms of acquiring these entities, then our normalized PAT is stated here, which is the number INR 1,103 million, which Krishna already talked about and which is at about 7.9%. I would say this is how you know we have tried our best to explain. There is an annexure which also gives you very clear understanding of where the margin has increased and where the margin has not you know where the tailwind and headwind has been on the margin. Only one more thing I would like to highlight what Krishna mentioned. If you look at EBITDA level, I think we are doing very well. I think most of the acquisitions are at company's level of EBITDA. However, when you look at the, there are two aspects. One is depreciation or amortization for the standalone entities before they were acquired, which hits the P&L. Second is the D&A that hits because of the investment that's in the consolidated balance sheet. They have been provided for, but I just want to call out that, you know, those costs are built into the estimates we have. I would request some time to look at the EBITDA. We will disclose at EBIT level also. 70 basis points is the dilution in terms of the acquisition. This is mainly on account of that dilution in terms of the amortization of the assets that we have created on the balance sheet. Also, this has some impact of the integration costs that we will incur. We have planned about 3% of integration costs in this period. This is the summary in terms of how to read the profit and the margin. Thank you for your patience, and we would be happy to take any questions. Last thing on the cash generation. I would say that in our free cash flow, what we have generated during the quarter and the DSO, you will find there is an improvement. We are moving to getting back to 50%+ free cash flow generation. This quarter it is 35%. If you take the one-off, it is much higher than that. We are working on all elements of free cash flow, including the DSO. We feel there is a potential to further bring it down and get back to the usual levels of free cash flow that we have generated in the past. With this, I'll hand over to Karthik to talk about the business performance. Thank you, Ajay. Good day, everyone. Hope all of you are enjoying your festive season and following on what Krishna and Ajay talked about. Trying to deep dive a little more on the business performance. I would say all in all, it's a great execution that we have been able to bring in for the Q2 2023. If you just look at from ARC, which is Aerospace, Rail and Communications, and we have seen a growth of 0.9% in constant currency quarter-on-quarter. I think this growth is led by aerospace and followed by communications. Rail transportation continue to see a challenge like we talked about earlier. The good news is, communication has definitely grown by 23% year-on-year in constant currency. Aerospace is very close to the double-digit growth for the year as well as for quarter two. From the Mining, Energy, and Utilities, I think this is a new configuration we talked about in the last quarter. We have seen a growth of 3.9% in constant currency. Year-on-year there is a slight dip, but it is likely to see a positive growth for the full year, and I'll talk about it in the next few slides. The new growth areas, which is essentially the medical devices, semiconductors, automotive, and high tech, I think they are definitely ramping up very well with a 9% constant currency growth and 23% year-on-year growth. All in all leading to 3% growth in constant currency services, dot on IC and at 11.5% year-on-year. To provide a color, if you look at we have had the highest billable hour in Q2 in terms of volume, and which has grown at 6.8% quarter-on-quarter. Most of this growth happened in offshore, and that's the reason why you're seeing the revenue growth at 3% and which is also shown in terms of our profit margin improvement. We also improved our offshore mix and the utilization which improved by 370 basis and helped to counter the headwinds of about 150 basis point of wage hike that Ajay talked about. The bill for services improved by 120 basis, and that really has been achieved through lot of efficiency improvement that we have been able to bring in in the quarter. Services overall including acquisitions and we have grown at 12.3% quarter-on-quarter and 23.8% year-on-year in constant currency. At the group level, 10% quarter-on-quarter and 20.4% at the year-on-year level. If you look at order intake, I think this is definitely one of the highest order intake that we have for the group over the last four years, and this is about $ 247 billion. The services have grown by 5.6% in dollar terms. If you look at in constant currency, that has grown by 13%. DLM, Krishna talked about, which has grown by 253%. I think we are definitely building a nice order book as far as DLM is concerned, and we continue to see the traction in this business. We've talked about some of the restructuring part. We'll have more details on the subsequent conversations. Also to conclude on the large deals, we have closed about five large deals of $ 105 million. I think this is again continuing to build the momentum as we talked about in the past many quarters. To give a little more outlook on the business performance, I think the market dynamics are definitely more fluid and more uncertain, and due to the Ukraine-Russia conflict, higher energy prices or high inflation. I can really get into some of the specific verticals, and if you look at aerospace, I think the demand is steadily increasing and the supply chain challenges continue to be an issue for many of our customers. The opportunities are seen both on commercial as well as defense area. Some of the interesting areas in urban air mobility and space are creating new opportunities for us, and also hybrid or electric air electrification of aircraft. I think that's the new opportunity that we have seen. Apart from significant opportunities we are seeing through the aftermarket and overhaul revenue, I think this would help us to grow roughly about 10% for the full year, while we have seen 7.8% for Q2. Rail. I think we continue to see challenges and, due to the consolidation that has happened in the industry, and also some of the issues related to, the infrastructure spend that is happening globally due to the challenging environment and high interest rates. I think we are hoping that, some part of this would recover by Q4, and, we are still keeping a close tab on some of the areas we want to modernize our offerings on signaling and DevOps and automated fare collection and sustainable transportation and mass mobility area. We are cautious about how the rail business would recover over the next, three quarters. If you go to communications, I think this has been, building up nicely for us over the last, four to eight quarters. The network rollout momentum across fiber and 5G, I think the demand continues to be high. We have seen serious opportunities around high energy consumption of 5G radio. I think this is going to create a huge challenge in Europe especially. We have some of the solutions which are being built through the Celfinet acquisition that we made. We are looking at how do we monetize some of these offerings by working with some of the customers who look for ideas to reduce their energy consumption. 3G plus, 4G and 5G, all radios gonna be put live, and this would also create new opportunities for setting up some of the old technologies as well as rolling out for the Cloud RAN or Open RAN. I think these are new opportunities that we are really building up to continue to grow this particular segment. Mining, I think, safety concerns and tough mine operations are paving way for sustainable mining. At the same time, all the energy transition and clean energy, carbon neutrality, all this would need new materials, whether like copper, lithium or sulfur, and how we think some of them can be supported for our customers. Also most of the offerings are around autonomous operations, digitalization, safe operations, intelligent asset management are continuing to see momentum in our business. I think this business has grown nicely for Q2 at close to 70%, and we are confident that we'll see continue to see the similar kind of growth for rest of the year. Energy and utility, I think, there is significant profit that is made by the utility companies due to the high energy prices in Europe. This will also make them very much on carbon-neutral technologies, and that's something that we are really excited about. With the future acquisitions that we made on energy, now we think we start looking at new technologies like hydrogen, battery storage and carbon capture technology investment areas, as well as integration of all the new energy sources into smart and micro grids are likely to accelerate. We feel that this will give us new opportunities for us to pursue. To go to the new growth areas, this is a segment which is definitely doing very well for us and led by automotive and mobility and the investments in software virtualization as well as the service-oriented architecture and software-defined vehicle are definitely growth areas for us. Healthcare and life sciences, which has already shown growth about 80%-90%. We are seeing this momentum continuing and influenced by the regulatory changes that are happening globally. We see continuous opportunities in terms of predictive, proactive, personalized health systems. I think that's a bigger opportunity that we are currently working on. High tech, which was the Infotech Geospatial business, and we are trying to reposition this business to drive more system integration capabilities and applications and cloud analytics opportunities. For the last mile tech companies, which really, drive their business around the location-based, solutions as well as space and sustainability initiatives. We hope this business should start getting into the growth path by end of this year and should start showing the growth for the next year. Semiconductors, and I think the demand from automotive and, IoT and connectivity Krishna talked about continue to be high. This business has grown about 40%-50% so far. We continue to see this business building the momentum that started in the beginning of the year throughout rest of the year as well. Also some of the supply chain diversification, investments that are happening through the U.S. CHIPS Act or European Chips Act is likely to create significant, new opportunities for us across plant design and building up designs to the fabs that are being set up, and as well as, new designs that are going to come up. We are bullish on how the semiconductor will pan out for the next, many quarters. Last, the DLM business, we continue to build on our order book, and we talked about multi and large deals. The supply chain challenges continue to be there, but we are hopeful that they too will be far better than what we have seen in H1. We talked about some of the positioning that we are taking in the market, especially around the innovative technology solution that we are investing on. I just want to share a few examples in terms of how are we really changing our, orientation or engagement with our customers. Just to quote you, the tailing dam management solution is supposed to improve the safety of mining environment. There was a recent failure of a dam which has resulted in about 6-8 lives being lost. There were more than 30-40 people are still in critical stage. How we think some of them can be better predicted, and our solution is likely to help the mining customers. This is the combination of our ability to understand the ESG requirements as well as the sensor data that can be integrated with digital platforms. I think this is going to be a sign of things that we are going to build upon across many of the segments. The network testing, which is cloud-based AI-driven device performance functional brand and core network functions. I think this is another opportunity that we are building up as an offering for us that can be taken to many of the communication customers that we have today. Autonomous industrial systems, I think this is another interesting area where perception-based technologies can be integrated with our 5G customers and how we think we build autonomous trucks or autonomous construction vehicles. We are helping the customers to bring this technology and also create AI-enabled models for assisting the control of some of these equipments in the more complex work environment like mining and other things. Last but not least, the digital platforms and asset data management. I think this is one of the wins that we had in the earlier quarter, and where we are building an integrated web-based cloud solutions with automated smart accelerators that would really help in driving the digital transformation across mining, energy, and CPG clients. All in all, I would say a decent execution quarter, and we are really working on getting that execution better in H2 of this financial year, and we'll probably leave the rest of them for Q&A. Back to you, Krishna. Thank you very much, Karthik. If I may summarize with the quick outlook, we want to be a little bit more granular this time on the outlook, considering what I said earlier, that is, the number of things that are going on and the various points of time that these acquisitions are coming in into signing and therefore into the consolidation. What you have at the top is the FY 2023 outlook. We continue to stand with our outlook that we'll be lower in the 13%-15% range in constant currency for the group in organic terms. With DLM, we're actually quite happy, I would say, that we can up the forecast a little bit further because we have some good order intake that has come in, but more importantly, we've been able to secure the material supply. High single digits up to 10% is what we're now expecting in DLM. We want to reiterate the 13%-15% growth in constant currency. Through the course of this year, we will add 14%-15% in revenue because of acquisitions, again, in constant currency. In terms of the margin, again, we're going to what we said. We expect the full year normalized EBIT margins for the organic business to be in the 13%-14% range. Obviously, with the work that we have to do, we understand what it is, but we still have a line of sight, or we have a clear confidence on at least the lower end of that guidance. Really what we want to do is get towards the middle. We still hope for that. Normalized EBITDA, and again, we want to talk about EBITDA for a few quarters also, just to give you a sense of where things are with all the acquisitions. Therefore, I'll say normalized EBITDA for the full year will be 16%-17% for the group. As Ajay had mentioned, the acquisitions are accretive. After doing all this math, we believe that or we're confident that the Q4 normalized EPS will be INR 14-INR 15 for FY 2023. I'll come to the next slide in a second. Of course, the tax rate is expected to be 27% alongside, free cash flow conversion will be in line for the full year after we take into account what has happened this year. We also want to give you a quick overview into what we see for the next year, because I think a lot of these things will start to settle in, and therefore we've already started planning for the next year because there is going to be a lot of work for us. In FY 2024, we have the ability to a billion dollar run rate, which is obviously quite exciting. Therefore, we're working very judiciously to get to that run rate hopefully in the middle of the year rather than later in the year. We'll keep you updated. For EPS, taking everything into account and how the acquisitions will fare, we're confident that EPS will at least be INR 60. I want to repeat and say with confidence that the EPS will at least be INR 60 for the next financial year, that's FY 2024. With that, once again, thank you very much for the patience in hearing what has happened during the quarter, but more importantly, the outlook, which is quite exciting for us into the next couple of quarters to round out this year and next year. We will now open it up for any questions that we can answer. Thank you. Back to you, Madhuri. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Krishna Thakkar from Anand Rathi. Please go ahead. Hello, sir. This is first on the aerospace side. You guys have shown confidence on the double-digit growth side of the number. If you could give some more details on what is happening on the aerospace side from service side perspective, not from manufacturing perspective. Second, while our growth rate seems to be improving, our order intake is still slow for the second quarter. This is related to services because DLM. I think we've done well on the order side. How should we read these two numbers from an outlook perspective? Thank you for the question. I'll ask Karthik to address it. Thanks, Krishna. I think your observation for Q2 is a seasonal thing, and typically Q3 is a strong quarter for order intake. That's why I gave both the dollar as well as the constant currency number of 13%, because we are still tracking it on the dollar orders today. To answer your first question on aerospace, I think we are seeing a lot of opportunities around aftermarket. As you would have seen in the last two years with passenger miles slowly ticking along, which also means many of the aircrafts which has not been taken for service or repair or overall, I think they are all coming to what we call them as shop visits. I think that is really growing by 20%. Our aftermarket business is definitely very strong. Some of the customers who are associated with the engine programs that we were doing it for the last eight years, I think they are really shaping up well in terms of their demand, which is flowing to us. That's one change that we have seen. Second, about the embedded and digital solutions that are required for the aerospace and defense, I think that continue to be robust because they want to improve the productivity. They want to really drive a lot more risk initiatives than what they've done in the past. We are working with one of the Japanese customers to help them to build a roadmap on Industry 4.0. How do they roll out when they want to grow from x to 4x in terms of production capacity for the next three years? We are involved in helping them to build the roadmap. I think that's another example in terms of where we are seeing that kind of growth. Another one is about integrating the cabin management with sensors. This will probably improve the comfort level of the passengers and how we think we can probably have a lot more services that can be delivered through the sensors that can be integrated to their cabins. Some of these opportunities are new. We have not seen them before. I think that's what is driving the growth for us. Apart from defense, which is likely to get stronger, as you can imagine, in terms of what is happening globally. This is one segment where there's going to be a lot more investment that's going to flow in. Just to make sure that the country wants to protect their borders, and they want to make sure that their citizens are safe. This is going to drive significant growth in Europe as well as in North America on the defense side of the business. Sir, how big would that be for Aerospace vertical? Sorry, I couldn't get your question, please. The defense part of it, how big could that be for Aerospace vertical? No, it is probably about less than I would say 15-20% of our aerospace business comes from defense. Which is likely to see growth as part of what is happening globally. Understood. Thank you. Ajay sir, on the exceptional item, this is like a one-time payout on the legal side or is there something which can come in 3Q and 4Q as well? I think it could continue in Q3 and Q4 as well. As Krishna said, given the phase of activities that happened in this quarter, we feel that this should be the peak. It continue in Q3 and Q4 as well, we'll continue to report the update and the number here. Q4, the quantum is likely to be similar or will it like fade away gradually into fourth? As I said, that was the extent that there is a peak of the activity in terms of preparation. Sure. Difficult to say right now, our sales should go down for quarter three and four. Okay. On the banker fees, this is purely one time done and dusted in Q2? Yes, 100%. It is one time done and dusted in Q2. Okay, perfect sir. Thank you. If I may just add. Not the case. We actually are accelerating some of the discovery process because obviously we are also keen to get it done and over with. That's why we believe that Q2 is the peak and it'll actually normalize quite a bit in between. We will obviously report it, but we're also quite confident that we will be able to manage it quite well. Just in continuation, is there a liability amount which is attached to this case? Like how big could it be? No, I think it is a litigated case, so it's very difficult to say. Again, I wanna be very clear to say that, look, it's something that we are very, very confident, so we're not taking any provisions or anything because we are confident that what is happening here on the right. We have some very good people advising us and support us multiple times. All right, sir. Thank you wish you all the best. You're welcome. Thank you. Next question is from the line of Nitin Sharma from Macquarie Research. Please go ahead. Nitin Sharma, please go ahead with your question. Your line is unmuted. As there is no response from the line, we'll move to the next question, which is from the line of Shraddha from Asian Market Securities. Please go ahead. Yeah. Hi, sir. Congratulations on a good quarter. Couple of questions. Firstly, what is the normalized margin expectation that we are building in for FY 2024 EPS to be INR 63? Right now we believe that we will see a little bit of margin improvement, but it's not a significant improvement. We still are working on that. We're looking at least the base case scenario before we obviously will refine that number and provide you a better insight. As things go by. Right now we're just assuming a slight increase in maybe like a 50 basis points increase in EBIT for next year. But obviously there's a lot more work to be done, so that can only get better, which we will update you as we have better insights. But we wanted to get a sense because, you know, there's a lot going on, and we didn't want to leave things in a sort of limbo. That's why we wanted to provide you at least the base case, and then we'll refine the base case. The margin on this base case, because there's some very good growth that will come in, both organically and also because of these acquisitions giving us the full impact of integration. That's how we've built up, so it'll only get better. The reason I'm asking is because Celfinet and Citec are very high margin businesses, and you have indicated that in the first year of integration, margins could be lower and probably trend more towards company level margin. Post the first year integration, ideally those margins should trend back to their original margin levels. From that perspective, I think 2024 margins can be quite better than what the 15%-17% normalized EBITDA margin you're talking about for FY 2023? Yes, we are right. That's why I said we want to work a little bit more before committing definitively. Also in Celfinet, I'll say that you are absolutely right, the margins are much higher. Also the impact is relatively small, right? Because Celfinet is about 20 on this sort of $700-some million. Let's say $750 million. Celfinet is about $25 million. The impact of that is going to be quite muted in that sense. That's why we're just being prudent in terms of what calculations we use at least to give you a direction of where next year is headed. Right. For one clarification, when you say acquisitions, do you also include the strategic buyout deal that we have called out last quarter? Yes, absolutely. We do. Okay. Again, that's also very small. I mean, that would be less than or it could be a percentage or so of other. Right. How is the ramp-up purchase happening there? Because this was expected to be one of the top five clients gradually. Sorry. I'm sorry. Please go ahead. Yeah. Please go ahead. ahead. I'm done. The ramp-up is going quite well. Actually, that's been one of our growth accounts, as we had talked about, and that was the anticipation. The ramp-up is actually going quite well, and we, you know, that's the client or the account for which we did the strategic buyout, will actually end up being one of our top 10 customers, most likely maybe this year, but definitely next year. Okay. Just last one question. The rail transportation business, we've been seeing consistent decline. I was assuming that the offshoring shift that we were seeing in one large account in that business, that might have, you know, stabilized by now. Do you see this offshoring thing which is impacting the overall revenue or is it some budget cutting part also that is playing in this vertical? Yeah, look, thanks, Shraddha, for the question. I think as I said, there are two, three factors. One is the consolidation of two of the major companies which is resulting in lesser IT spend as compared to what they would have done individually. Probably they are trying to rationalize where they want to keep some platform, where they want to let go of some of the old platforms or legacy platforms they would have had inherited along with them. Second, there is also a significant the infrastructure spend that we talked about and which is likely to be. They have a huge order book, and they're trying to prioritize the orders they want to execute where they can get some cash flow. I think that has been one of the challenges for them from their end customers, and that is impacting that. Third part, what you talked about was offshoring, which is definitely true. Probably the first two is likely to improve as we start exiting end of this year. Also, as I talked about, the other element was the highest ever billed hours that I talked about in terms of volume. I think the volume growth is something that we are really happy about, and we hope the same momentum continues as we start getting into next year. Okay. Sorry, please. Karthik, in terms of your optimism on growth for FY 2024 among the verticals that we operate in, do you think aerospace could be driving growth for us in the organic business in 2024? Or, because communications growth seems to have tapered off this quarter, maybe on a high base, 2024 growth numbers for communications might not look that great. Will it be aerospace or will it be some other vertical doing that heavy lifting for us in 2024? May, may I suggest for 2024 numbers, we will wait for another quarter before getting into the details. We've done some preliminary work just because of obviously we've put in a lot of resource behind the acquisitions and therefore in our intent we did a lot of preliminary work, and that's where it gives us the confidence. To get into the details and considering the paucity of calls, I believe today is also a very busy day for everybody. I'll maybe re-request that we hold off 2024 questions for the next quarter's call. Great. Thanks, Krishna. That's it from my end. Thank you. Thank you very much. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Sameer Dosani from ICICI Prudential Asset Management. Please go ahead. Yeah, thanks for the opportunity. Few questions. One is on telecom vertical, right? We have seen on a Q-on-Q basis until last quarter, very good growth momentum. So this quarter it has been. Is it a one-off? Because commentary suggests that, you know, growth momentum will continue. So how do you see this growth? First is that. Second, DLM, obviously H2 is always better because of the seasonality. Do you expect a similar thing going forward? Thanks. Yeah. Sameer, I think what we have seen for Q2 was one of execution issue that we got into and that is behind us now, and we hope we continue to build the momentum for H2 on the communication business. The demand would also be slightly patchy in some customer segments, so that's what has not grown as fast as what we have done in the first quarter of this year, even for the past three quarters as well. On your second question on DLM, I think we are definitely seeing a better supply chain visibility as compared to what we started off this year. We are confident with the current order book as well as the supply chain visibility. I think both are equally critical to see how do we improve on our execution for H2. Okay. We will see a recovery in that. We will see that finality, right, improvement. Yeah. In DLM. Yeah. Lastly, this question is more of the guidance that, not guidance, but a number that you mentioned, $1 billion revenue visibility. If I look at, you know, current numbers and if I try to do the math, you know, if you look at, even if I assume that you will reach $1 billion, by Q4 FY 2024, it gives me around 4%-4.5% CAGR. How confident are we of that number? Does this include, and I'm assuming that this includes, you know, some macro issues, you know, some buffer from that also. If you can just explain that. No, absolutely. I think, also I'll just, quickly say that, we also get one more, if I may call it a bump, because, Citec will be fully integrated in, Q3. That itself will give us another fairly significant, bump because Citec numbers, like Ajay said, is only for one month, and that has been our biggest acquisition. But having said that, you know, we're quite confident with, where things stand, even taking into account the, macro situation because, you know, we've looked at industry by industry on what we do and where we stand and how does the macro impact it. You know, if you just look at, and can I just give one example of, say, the semiconductor industry, where we're doing a lot of work for the transition of chip manufacturing from China to the U.S. and Europe. Europe will also announce, I think, a $50 billion investment into semiconductor plants, which will translate to a lot of engineering work for us. We're also looking at these things because these industries are also a bit more, you know, they're not. The reason why a plant is going from China to Europe or the U.S., there is a very strong strategic reason. It's not necessarily just a sort of a nice to have project. This is a strategic project. Therefore we're quite confident that even. Of course, if the worst case macro situations turn out, then that's a different story. You know, if Russia drops a nuclear bomb somewhere, obviously all bets are off. Outside of that, we're quite confident that even in an environment where we will have some challenges with recession, et cetera, many of the industries that we're in will do quite okay because again they're based on. A lot of the work is based on operations of things like power plants, which have to continue no matter what, are based on things like the transition of the semiconductor industry or like Karthik explained of the aerospace industry which is still much bigger in size and therefore there's a lot of work on operations and MRO. Therefore we're quite confident in the sort of immediate cases of the macro. Of course, if it is a worst case scenario then that's a different story. Yeah. I've included my two months of Citec's, so $175 million plus $15 million two months impact. If I look at $190-$250, it's again 4%-4.5% CAGR. I get your answer. Yeah. Also, just last question on the broader macro, right? If I look at broader IT services plus the R&D, FD, all companies are speaking about growth slowdown in Q3 and Q4. How do you see that impacting your business? In that scenario, how does your guidance or outlook changes? Thanks. Karthik, do you wanna answer that as well? Yeah. Sameer, I think we are still lined up for now. We did not see significant cancellations barring one or two projects which got deferred towards the right. We are still keeping ourselves closely aligned with customers, and we are definitely looking at the implications of the difficult winter in Europe and probably the Fed rate hikes in U.S. and how we think that's going to pan out and what is going to be the implication of it from our customers. I think we are still seeing a cautious view from our customers. Yes, I think they are really looking at the budgets. We'll have a better view by end of this quarter, which is by December, January, for us to have a better view for the next year. We are still confident that at this point of time we are seeing momentum and we want to continue to build on that momentum. On the deal signing also you don't see any delays. Do you see that? I think what we have seen is that there are some delays and there are some hiring freezes from customers organically, so which means they are open to work with partners and some of those issues are definitely seen, but we did not see significant program cuts or a major shift in terms of their approach that they are taking for the near term. Understood. Thanks for the answer. Good luck for the future. Thank you very much. Thank you. The next question is from the line of Mihir Manohar from Carnelian Capital. Please go ahead. Yeah. Hi. Thanks for giving the opportunity, and, congratulations on good set of numbers. I just wanted to understand your thought process behind DLM. I mean, you know, we have decided to separate DLM from this company. So what is the thought process that has gone behind it, and how are you looking at this business strategically? And also if you quantify something in number terms, you know, how are we looking at this business over the next three to five years? What kind of inquiries are you getting, and what is the thought process that has gone in separating it from the company? Yeah. So that was the only question. Thank you for that question. The idea behind it was, as you know, the DLM financials and the way the whole business works is very different from the services business. That has brought in a certain degree of uncertainty, and it has brought in a certain degree of how our investors are viewing Cyient. We took a long, hard look at, you know, what is the right thing for Cyient and the shareholders of Cyient to look at the DLM business. said, "Okay, what is the best way to structure it such that Cyient still has a control on the business? Or has a good connection to the business," because for the reasons that I said, we are winning a lot of leads, including the aerospace project that I talked about, because DLM is a part of Cyient. Design-led manufacturing is a very interesting thing. Our customers are using us quite a bit for transitions and so on, many things there. Taking everything into account, we had a lot of discussions in the board, and we said we wanted to structure it in such a way that it can have its own independence because with all the order book that Karthik already talked about, but also with the macro, what's happening there with China plus one, India, pervasiveness or presence of electronics more and more, we're gonna grow very, very well over there. We will require capital. We understand that existing shareholders might not be very happy with us investing significantly in the DLM business, and therefore we thought it would be best to separate it out because it will need to raise its own capital for growth. We are working on a plan where that business can grow about 5x within the next five years with the margins that we already have. It's a very significant growth, but also it will require capital both, as you know, CapEx, because we will need to build one or two more factories, and our customers are also asking us for other options like Vietnam and Mexico and so on and so forth. It will also need working capital because that is a working capital-intensive business. Before that really scales and starts to make very large dent on the P&L, we thought it was best to structure it separately and really let it grow. I mean, I think really unleash the potential because we are in that spot with the order book that Karthik talked about. We believe in the process, Cyient shareholders will also benefit generously because there'll still be an ownership from Cyient, hopefully, depending on which option we come up with. Over a period of time, that will be another great source of capital for Cyient to leverage on as we grow the services business. From a growth perspective, about a 5x in five years, otherwise I would say I'd be quite disappointed in that business. Sure, Krishna Bodanapu. That's really helpful. If you could throw some more light here on your capital efficiency part also. I mean, you know, when we look at current numbers on the capital efficiency for this particular segment, DLM, it doesn't look encouraging. I mean, how would the capital efficiency pan out? You know, given we are seeing increasing inquiries in India for this part of the business, I mean, we are talking about 5x revenue, that's really good. How should we as investors see the margins and capital efficiency for this part of the business? Absolutely. I think as Krishna explained, one of the constraints really doing this is that, you know, there is one business which is 15%-18% potential business in services, and there's another business, you know, which possibly is 6%-8% margin business, and we're trying to take it to 10%. I mean, we put a lot of constraints in terms of what margin business this can be. If it goes to, you know, 3x, 5x in three to five years, I think what is important is it will not be a 15% margin business. It has to be, you know, at a very different margin profile. That, the returns on the assets have to be much, much higher than what they are. Once we change those, some of those rules of the game and not worry about the dilution of the services margin, we feel that, you know, current ROE, which is about 12%-13%, we can easily make it to 20% plus. That is the one thing which will be a good reflection of capital efficiency. Sure. Yeah. That's really helpful, yeah. Thank you very much. Yeah. That's it from my side. Thank you very much. Thank you very much. Thank you. Ladies and gentlemen, this will be the last question, which is from the line of Sandeep Shah from Equitas Securities. Please go ahead. Yeah. Thanks for the opportunity. Just, if I look at the performance of the services business excluding the acquisitions in the first two quarters, the first quarter was close to 2.5%, this quarter close to 3%. While the implied growth guidance in services on organic basis will be higher than 13%-13%, which may require 3.84% kind of a growth. Just extension to Sunil's question. In the second half, generally it's usually weak for the engineering R&D because of furloughs, and the fourth quarter could be a part of 2020 IT budgets, which may have an impact because of the macro issues. How confident are we in terms of good execution in services in the second half as well, considering all these factors? Karthik? Sure. No, Sandeep, I think like what I answered earlier, I think we continue to see momentum on various sustainability initiatives that we are part of across, whether it is mining or energy and other customers that we are associated with. I think some of these programs are very long term, and they cannot afford to delay them, so they will continue to be there. We are hoping that the communication should start getting back to the growth trajectory like we spoke about. Aerospace would still it is not at the peak that we had in 2020. We are still hoping that that should chug along. That is still a long cycle business, and we expect that to continue. I think I understand the question of uncertainty and challenges we are likely to see, and you probably have a better view as we close Q3 or Q4, and we can definitely talk about more with certainty by the time we get to the next call. Okay, Karthik, just, I missed one of your comments on the railways, of which one of the factors being consolidation of entities has been rationalizing the engineering R&D spend, second being offshore. What was the second element on infrastructure which you said? Because railway growth outlook, we were expecting a bounce back in the second half. Now we expect the bounce back to happen only in the fourth. Yeah. I think that is led by increase in the interest rates globally, and most of them are funded by the government. They need to pay it at 0% or 1% interest rates instead of 3% or 5%. I think that's going to really have some more prioritization that's likely to happen globally. While if they have four or five programs and which ones they want to prioritize for the near term. That is likely to be the scenario. Also given the energy crisis that we are likely to see in Europe, and what we are also hearing is, they may probably reduce the number of trains that are run and how you think they can reduce the number of trips they make in a day. Given the challenges that are likely to be seen with energy being seriously critical for the winter season. I think those are the two, three factors that I talked about. Just the last question, Ajay. I think we are maintaining a 13%-14% EBIT guidance, but now we use the word on adjusted basis versus earlier guidance did not use the adjusted basis EBIT margin because at that time also we were knowing there would be M&A related costs which would flow through the EBIT as well. Why there is a change in the way we guide for the EBIT margin now? If I may just answer that, because we did not know the impact of these numbers, and that's why we are looking at the number for the sustainable and sort of the ongoing operations, because these things are really one-off. That's why we're saying, you know, if you take these off because, you know, the numbers will also have an impact on the yearly number. That's why we're saying if we take these off and therefore we can come up with the, for whatever the sustainable operation is, what is the number. That's why we're saying without taking these one-offs. Okay. Thanks, and all the best. Thank you. Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you very much, and thanks to everybody for taking the time on what I understand is a busy day with a number of calls. I want to thank everybody for your support in understanding these numbers. It's been an exceptional quarter for us, but also, we're very, very excited that it sets us up for some very exciting growth for the future, as we talked about. We will continue to engage with you and provide you a good visibility into what that is and how things are going to evolve. Thank you very much for all your support. May I again invite you to the Investor Day. It is on eighteenth of November in Hyderabad. It will be an all-day session. For those of you who attended our previous Investor Days, you will recall that it'll be a good mix of internal presentations on strategy, on operations and financials. Also, to show you some of the things that we do, and more importantly, or most importantly, I'd say, also meet with some of our clients to talk to them about where they see the business going and science making in the business. Mayur will send out an invite or has already sent out an invite, and I'm sure we'll send you multiple reminders. Please register for it. It will be a pleasure again to show you with a lot of pride what we do in person. With that, thank you very much. Thank you for the support. I want to say to everybody that, you know, we're very excited where we stand, and I think we have a very strong set of quarters coming up. Thank you. Thank you. Ladies and gentlemen, on behalf of Cyient Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.