Ladies and gentlemen, good day, and welcome to Cyient Limited's Q3 FY 2023 earnings conference call. 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, Managing Director and CEO of Cyient Limited. Thank you, and over to you, Mr. Krishna Bodanapu. Thank you very much. Good evening, ladies and gentlemen, and welcome to Cyient Limited's earnings call for the 3rd quarter of fiscal year 2023. I am Krishna Bodanapu, Managing Director and Chief Executive Officer of Cyient. Present with me on this call are Mr. Ajay Aggarwal, Executive Director and Chief Financial Officer, Mr. Karthik Natarajan, Executive Director and Chief Operating Officer. I would first 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 on 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 presentation. The details have already been shared with you. As you are aware, Cyient Limited's subsidiary, Cyient DLM Limited, has filed a draft red herring prospectus, DRHP, dated 9th January 2023 with the Securities and Exchange Board of India, BSE and NSE in connection to its proposed IPO. As we are in the SEBI-mandated quiet period, the management will not be responding to any queries in connection with the proposed IPO of Cyient DLM Limited or the DLM business and operations. Participants are requested to kindly refer to the draft red herring prospectus dated 9th January 2023 of Cyient DLM Limited, available on the websites of SEBI, BSE and NSE, and the merchant bankers to the IPO, Axis Capital Limited and JM Financial Limited, for any information in relation to Cyient DLM Limited and the proposed IPO. With this, let me take you through the highlights for the quarter. In Q3 FY 2023, we posted revenue of $197 million, which is a year-on-year growth of 28.6% in constant currency, 24.8% in US dollars, quarter-on-quarter growth of 13.4% in constant currency or 12.7% in U.S. dollars. In rupee terms, our quarterly revenue stands at INR 1,680 crores, which signifies a growth of 36.7% year-on-year and 15.9% quarter-on-quarter. Services revenue stood at $167.9 million, which is a year-on-year growth of 34.4% in constant currency and quarter-on-quarter growth of 11.9% in constant currency. Services revenue growth without acquisitions is 10.6% constant currency year-on-year and 3.7% constant currency quarter-on-quarter. Normalized group EBITDA margin, excluding the impact of the exceptional item, stood at 17.2%, which was up 78 bps quarter-on-quarter and down 79 bps year-on-year. Normalized group EBIT margin, excluding the impact of the exceptional item, stood at 12.9%, which is up 98 bps quarter-on-quarter or down 100 bps year-on-year. Normalized services EBIT is at 13.9%, which is up 147 bps quarter-on-quarter and down 169 bps year-on-year. Normalized PAT stood at INR 1,627 million for the quarter, which is a growth of 47.5% quarter-on-quarter and 23.5%... 47.5% year-on-year and 23.5% quarter-on-quarter, which is the highest net profit normalized that we have delivered in our history. Coming to other highlights for the quarter. Cyient reinforces its position as a major contender in Everest Industry 4.0 Services PEAK Matrix Assessment 2022. We are delighted to announce that we have emerged as a major contender in Everest Group's Industry 4.0 Services PEAK Matrix Assessment 2022. Cyient has reinforced its position in the Industry 4.0 space through investments in creating IP solutions and technology studios with lab environments and by strengthening capabilities in Internet of Things, cloud, automation, analytics, et cetera. Cyient aims to address its customers' key business challenges by leveraging the right mix of digital capabilities, technologies, solutions, and platforms to accelerate time to value to time to market and maximize adoption and experience. With this, I would like to hand over this call to Mr. Ajay Aggarwal, who will take you through the detailed financial performance for the quarter. Thank you, and over to you, Ajay. Thank you, Krishna. I am very delighted. As Krishna said, we have overall very well-rounded performance, and a performance that's not only sustainable but which can further improve. When I say well-rounded, I think it's not only that we are getting traction on the top line. We have excellent performance on the profitability, and also on the cash flow. As you have seen, our vision is to be industry-leading. Earnings growth player and also to be the best in cash generation. I think this quarter is a very good reflection of that, and I want to assure you that the same will continue. With this, I move over to the revenue slide. Just to give you a little insight into revenue. Our total revenue is INR 197 billion, as Krishna said. It's gratifying to see we have about 28.6% growth year-on-year. We also have 13.4% quarter-on-quarter. If you look only for services, it's INR 167.9 billion. If you look at the organic itself, it's close to 4%. I'm talking of all numbers in constant currency. The inorganic, there is a growth of about 8%. That totals to about 12% growth on services, which is very nice. On the organic piece, just want to clarify that one, all the acquisitions have been completely integrated and completely reported for the full period. In this particular quarter, we do have a situation where we are looking at the three months of Celfinet performance as against one month last quarter. With this the full run rate revenue of the inorganic is coming in, and we are really doing well on the inorganic side, and this momentum will continue. Next, I go to the next slide, which is on the hedge book. Nothing significant. I just want to say that, you know, we continue to be very prudent, continue to follow the same policy, that's reflected overall, I think we are accretive on the EPS side. Total coverage is mentioned here, and we still have positive about $2 million if you were to look at next 12 months at the current exchange rates versus our head book position. I'll move on to the income statement. I think this is where you all had a concern that in H1, we had taken extraordinary steps to take care of the arrest of attrition and make us very competitive in terms of the people side. That is over now, the benefit of volume, the benefit of efficiencies and no headwind from the wage hike. What it means is we are really looking at extremely good normalized services, EBIT margin, what you have been traditionally looking at, that is excluding the acquisitions, excluding DLM of 15.1%, which is a very handsome increase of almost 2% quarter-on-quarter. Our utilization, our offshoring, I think the focus on letting go of low quality work, you will find that some of that is the lowest ever, and there is a huge effort even on the SG&A optimization. We are working on a lot of benchmarking and making sure that, you know, on each of these areas, whether it is operational efficiencies or our SG&A, we want to become the industry best. Overall consolidated margin has been 12.9%, which is both a combination of the acquisitions as well as the DLM. As Krishna mentioned, as far as acquisitions are concerned, at EBITDA level, we are slightly positive and accretive. All of you have been asking us in the past, we have been accretive. I confirm to you that, you know, if we are at about 17%-18% EBITDA for services for the acquisitions, all four put together, we are positive on that. It's only that in terms of the D&A, it takes time. Once we scale up, we will be able to see the gap also bridged on the EBIT level. As of now, for the quarter, it's not accretive at EBIT level, but it's accretive on the EBITDA level. As I said, once you get the synergies and the focus in the medium term, we will make it accretive at the EBIT level itself. There has been a nice movement on tax. We've been looking at the tax optimization measures. While we are looking at 24.1, I think we will continue to have some benefit in quarter four as well. In steady state, our guidance will be more like 25%-26% of tax rate. In India, we are already adopting that 20% ordinance rate. All round, I want to assure you that there is a complete focus on profitability. We are making choices in our customer decisions, in our revenue decisions to see that profitability is the first priority. I go over to the next one, which is the PAT and EBIT walk. This will explain to you that, you know, I will let you read this. This clearly says if you see, in terms of the normalized items, our impact has been reducing. It has been much lower, less than $1 million in this particular quarter. There is no other one-off. I'll let you read this, and if you have any questions, we will take it up separately. On the EBIT bridge, very quickly, if you look at the bottom of the table, that tells you the journey between the two quarters. We have got a good benefit of scale. Once we get back to 3%, 4%, 5% kind of a growth quarter-over-quarter, definitely it has huge impact on our margin. You can see 139 bps is what we have got. As I said, the utilization, offshoring some of the things that we are doing on making sure that we pick up the right quality of revenue. That's about 150 bps. We did have headwinds in quarter three, the number of days, especially at on-site, are much lower. I can tell you that we will sustain this, and we'll further improve this. In the next quarter with continued traction on the volume side, operational efficiency side, and some of the measures that we are also trying to take to control the HDA. On the cash generation, I think, we have got one of the best DSOs for the company, which is at about 76 days, and conversion has been nice. If you see at a normalized level, if you leave the one-offs, we have generated INR 1.362 billion of Free Cash Flow, which is almost 50% conversion. You will see in quarter four, this traction will continue. We'll further improve the DSO from our current level, both in terms of unbilled revenue, we are winding up many projects in H2 in terms of completion, which were sort of longer gestation by way of their contracts. Also, we are trying to bring down our overdues, we are trying to improve the factoring. You will see that both DSO and Free Cash Flow will further improve. With this, I will hand over to Karthik for his commentary, please. Thank you, Ajay. Wish you all a very happy new year, as Krishna and Ajay talked about, I think we had an all-around performance, both on the sales as well as delivery and operational efficiencies have been brought in. Just to put things into perspective, to start looking at the table on the left side. Look at aerospace, which has grown quarter-on-quarter by 4.4% in constant currency. Since the currencies have fluctuated significantly in Q3, we are looking at the constant currency column. If you look at rail transportation has taken a dip of -4.9%. We talked about rail recovering in H2, we are hoping that by Q4, we should probably be getting this in the positive territory. Communications, which has grown by 1.3%, they've been one of our stars of growing at 20%+ year-on-year. I think that story continues. As far as mining, energy and utilities, we have grown about 6.8%. Solid performance across all the segments of mining, energy and utilities. New growth areas, the growth is led by automotive and semiconductors, they've grown by 8% quarter-on-quarter in constant currency, leading to overall services without acquisitions growing at 3.7%. We are able to counter the furloughs or lesser working days in Q3 with operational efficiency by maximizing on utilization as well as the offshore mix. The organic offshore mix has gone up by about 180 basis points as compared to Q2. Our initiatives on automation, S-curve, and price hikes continue to help us, and we'll talk about some of things as part of the next steps. Including the services and acquisitions put together, we have grown about 11.9% quarter-over-quarter at the group level, leading to 13.4% quarter-over-quarter. If you take at the services level, including acquisitions year-over-year at 34.4% and 28.6% at the group level. As far as order intake is concerned, we have seen a significant momentum in Q3 and led by aerospace, communications, automotive, and mining. We could really see a year-over-year growth of 18% in our order intake. This is purely for services, organic. We have not yet integrated the inorganic part of the order intake into our books fully. As far as this is at constant currencies more than 22% plus year-on-year growth. I think this is something which is giving us confidence about the demand momentum. We talked about earlier that H2 is likely to be better than H1. We also won about five large deals, and two of them are coming from aerospace and two from energy and utilities and one from automotive and mobility, leading to about $60 million worth of total contract potential. Let me give a quick color on the business performance outlook. I think the markets continue to be dynamic considering the geopolitical, high inflation, rising interest rates. I think that the challenges will persist. We are definitely starting to see some green shoots. If you get really deep dive into each of the segments and aerospace. We expect the commercial aerospace to come back to 2019 levels by H2 of 2023 from various analysts and some of our customers. The Revenue Passenger Miles are expected to probably surpass sometime in 2023 as compared to what was predicted earlier to be in 2024. Also the China zero COVID policy and that being unwounded, I think that should help us to make this momentum that we talked about happen in this year. Also led by some of the initiatives around digitalization, smart factory and sustainability in aerospace. I think this helps us to continue to make prediction of growth. We have grown about 3.5% quarter-over-quarter in Q2. With 4.4% quarter-over-quarter in Q3, we expect probably close to double-digit growth quarter-over-quarter for Q4. Rail, which is still in the recovery path, and the growth is led by advanced automation and analytics and also the Rail Traffic Management Systems and the billing systems. I think those are the growth areas that we are seeing as far as rail is concerned. We expect rail to come back to a growth trajectory from Q4 and probably will take another few more quarters for us to hit trajectory that we were running earlier. Communications, which has been our strong robust growth engine, I think continuing to make inroads and some of the growth led by 5G private wireless as well as on the fiber, and especially the time to market improvement and led by Smart FTTx, we call it as our offerings, along with some of the digital initiatives to improve cost and customer experience. Some of the interesting solutions that we have been able to bring along with Celfinet on the low energy consumption devices and helping to automate the process of energy to being reduced on the operational cost. I think some of them will help us to grow on the communications moving forward. Moving on, mining. Mining is driving the growth based on the decarbonization as well as the energy transition efforts, which is driving the demand for newer minerals, newer materials, including zinc, cobalt, copper, and lithium. I think that growth is likely to be exponential, and we are seeing the growth in improving the mining operations to be intelligent, safe and sustainable. Some of the opportunities we are seeing includes the robotic solutions, safety of the operations, private 5G deployment and partnering with Celfinet, I think are giving us some interesting synergy opportunities to pursue. Energy and utilities, I think the biggest opportunity we are seeing for the next 3-5 years is about the clean and sustainable energy and, led by hydrogen battery storage and carbon power capture technology investments are likely to see the growth happening as we talked about. We also won two deals. One of them was improving the supply chain management for carbon sequestration technologies. I think this is an interesting opportunity that we are able to expand with the customers that we have acquired about three years ago. New growth areas, and automotive continues to be our growth engine, and which is essentially driven by software-defined vehicles and autonomous systems are essentially driving the growth. Electrification, hydrogen fuel option and different technologies are areas that we are really making investments to see how do we continue this growth trajectory. Healthcare and life sciences, which is driven by what I would call it as the interoperability and patient-centric outcomes, connected devices, digital platforms are the ones which are seeing growth for us. We have seen some muted performance in Q3. We expect this is due to one or two customers which will probably come back to the normalcy in the next one or two quarters. High tech, this is one area we are starting to see some green shoots in newer areas of space and aerospace. We are definitely looking at how do we leverage our capabilities that we built over last two decades to be helping us to grow in newer areas, and especially on the technology as well as on the satellite and space areas. Semiconductors, this is one area which has done well for us from Q2 to Q3. However, due to some of the inflationary and consumer demand that is slowing down, there may be some kind of a softness in the next 2-3 quarters. With that, we talked about some of the technology solutions and programs that we announced almost about 12-18 months ago. We are starting to make significant progress. I'm not going to read all the elements of this slide. I'll just pick on two, three key ones. We started working on digital twin for nuclear power plants, and this is an interesting project and we are trying to build how do you think we can help the customers to assess the performance and maintenance requirements and be able to continue to help in improving the productivity and operational efficiency. Similarly, I talked about the Enterprise Private Networks. We've been able to help in making the assessment on network requirements and do the network design and be able to roll out for one of the mining customers. That's something which is an interesting area that we are beginning to work on. Autonomous Industrial Systems and interesting project to work on our private customer. How do you think you can bring autonomous operations of passenger cars into off-highway road segments? This is about vision systems getting integrated with analytics and how the operator will be able to maneuver the vehicle when they are not able to see some of the things in front of them. With that, I will hand over back to Krishna for providing the outlook for us moving forward. Thank you, Ajay and Karthik for the details. If I may summarize the outlook, I first want to say we continue to see very good momentum in our organic business and our Q4 organic revenue in constant currency will be higher than Q3. Like I said, you know, this is backed up with some very strong momentum, order book, order intake, et cetera. This will be driven by growth in aerospace, mining, communications and automotive. Having said that, and like Karthik also provided a brief, there's other areas also where we see further tailwinds that are possible, including rail and so on, so forth. Overall, we're confident that Q4 will see further acceleration in growth. We'll add 14%-15% in FY 2023 revenue due to acquisitions in constant currency. We expect the FY 2023 normalized margins for the organic services business to be in the 13%-14% range for the group. We're quite confident that we will be well in that range and towards the higher end of that range. We expect FY 2023 normalized EBITDA to be in the 16%-17%. Again, we're quite confident we'll be at the higher end of that range. The Q4 normalized EPS will be in the INR 15-INR 16 range compared to the INR 14.9, which is what we did in Q3. The effective tax rate will be around 26%, also because we've done some optimization and have some benefits. Free cash flow will be in line on a normalized basis. As you could see, Q3 cash flow cash generation is also back to where we used to be, and we will continue that. Just to reiterate what we said last time, again, I'll also say this is what we believe is the base case scenario. We have not done our budgets, et cetera, obviously. We will reiterate that in FY 20 2024 we have a $1 billion visibility or run rate visibility, and the EPS next year will at least be INR 60. Again, I want to just reiterate this because we talked about it last time, and I just want to say we're very confident. Having said that, we haven't done enough work on it to give a more substantial number, but this is the minimum case that we believe that we will achieve for next year. With that, once again, thank you very much for your support, and I will hand it back to the moderator for any questions that you may have. 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 touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Thanks for the opportunity, congrats on a good execution. Just wanted to, in terms of the guidance, we earlier used to guide on organic basis 13%-15% growth in the group revenue in CC terms. This time there is no mention for the same. Any change in that outlook? Sandeep, we're looking at the trade-offs because we have, like I said, we definitely have acceleration in Q4 in terms of revenue. We're also using this as an opportunity to look at what are the areas that or what are some of the things that we can also refocus on, because we also wanna use this opportunity to continue to focus and build on margins. If you look at it, for example, this quarter, in spite of the almost 4% growth that we had, our subcontracting work has come down to less than or about 2% is the number in subcontracting. If you remember, at a peak, that used to be 6%, 7%. Obviously, that's not the quality of revenue we wanted, so therefore we've disengaged. We're also looking at Q4 as an opportunity to do that. That's why, you know, we didn't put that. What I'll say is we will be close to that, I'd say, 13% number, just realistically. We're just seeing what is the right trade-off, because there's also an opportunity to just strengthen some of the margin-related levers because we are seeing some very good growth, which gives us the opportunity to make some choices. We will be in that ballpark, when we make these trade-offs. Okay. Okay. Karthik has just commented that in the fourth quarter, aerospace within services may show a double-digit growth on a Q-on-Q basis. Will it be just in services or at a console level? What will drive this growth? What has been, the growth in aerospace? I think, as I said. Thanks, Sandeep. Karthik here. I think as we guided, we are definitely seeing potential momentum building up. Some of the large OEMs that we have been working for many years are starting to spend money on. I think that's definitely an interesting sign. China coming out of the Zero-COVID policy, probably they would see about 2 billion people traveling in the next 45 days or so. I think this is probably something which is never seen in the last 2.5 Years or so. Which is definitely a great positive momentum for us. The third thing was, some of our large customers and are likely to see a growth of teams for 2023, especially on the new engine or new aircraft sales, combined with the operating hours increasing and increase in terms of their MRO spend. Okay. This outlook is only for services business, right? For the aerospace. Yeah. Whatever I covered, we are not talking anything about DLM in the call today. Okay. With many diversification through M&As in Europe as a whole, are we witnessing any amount of client decision-making slowdown in some of the acquisitions which we have done because of the macro pressure, supply chain pressure, gas shortage in Europe as a whole? I would say, I think as far as the new energy, transition or energy transition is concerned, we are very bullish on the medium to long term. We are seeing, some of the newer areas. There was one customer who partnered with us in winning a carbon capture solution for a very large customer of theirs. This is kind of indicating that the momentum is definitely getting built. The energy transition is a global phenomena. It is just not about Europe, and it's happening across Asia-Pacific, India and North America. We are continuing to be bullish on the energy transition for the medium to long term. Okay. Okay. The last bookkeeping question, if I can ask. Ajay, sir, whether this legal and charges for the legal suit which is going will continue in the fourth quarter as well? Yes, they will continue in fourth quarter. As we had mentioned, the outcomes and the process of this is really a little bit medium term and long term, so it will continue for some time. We keep on updating as we get better insights into it. Yes, it will be there in quarter four as well. Okay. Quarter four could be the last quarter or it can continue beyond that? No, I think it could continue beyond that. It will take some time to get settled. We don't know precisely. It is a question of many more quarters, not one quarter. Cash balances are down. Is there a debt repayment in this quarter? I think for the acquisitions, it is just a timing issue between quarter two and quarter three. We had taken some sort of, you know, loan to fund the acquisitions, and subsequently it was reduced by infusing the equity into the subsidiaries. Just a point of time thing. We have funded the acquisitions on one part by our own cash, which is equity, and one part by debt. I think the debt part got done in the quarter two, and the equity infusion happened in quarter three. You are seeing that swing. This cash is reduced because of the usage in the acquisitions that we did in this year. Okay. Thanks and all the best. Thank you. Thank you. The next question is from the line of Mihir Manohar from Carnelian Asset Management. Please go ahead. Yeah, hi. Thanks for giving the opportunity. First of all, congratulations on a great set of numbers. I mean, these are really good numbers in the challenging environment. I specifically wanted to ask something on the order intake. You know, we are having a good order inflow of roughly $240 million from the services side. Sanjiv, what is driving this order inflow? Which are the areas? What kind of deals are we winning? Also on the commentary, I mean, in your opening remarks, I mean, Krishna, you mentioned that pipeline is at 1.5x, in the presentation. Just wanted to get more color and, you know, which geography, which areas are leading to this pipeline and how do we see pipeline transitioning into order intake? That was my first question. My second question was on the, you know, the captive deal that we won in first quarter, that captive deal and plus the Honeywell order. Sanjiv, what could be the revenue contribution from both of these deals? From which period could they start contributing to the revenue? Those were the questions. Okay. On the first question, Mihir, I think as you know the flow of how the sales cycle happens, the pipeline gets filled, it gets converted into order intake and then to revenue. What we are seeing, the kind of deals that we are participating now, we started bringing focus on the five pillars that we have been talking about, whether it is about digital, embedded, software, semiconductors and geospatial and networks. I think we are seeing momentum getting built up across all the seven clients. We also talked about some of the high-growth segments, whether it is automotive, healthcare, mining, communications and aerospace joining this party. I think we are seeing growth across all the vertical segments. That's where we are seeing the order intake growth that we have talked about to the tune of 18.2% in dollar term or 22%+ on constant currency. I'm sorry I didn't get your second question. Where is the order intake coming from? In which industries? That's what I talked. May you add second question to follow this, please? Yeah. Yes, I mean, on the deals which are there, the Honeywell deal on the DLM side and the Bosch and the captive deal which is there, which is won in the first quarter. What could be the revenue contribution from both these deals? Yeah. I think, we are not talking about any specific clients, Mihir, but, as we talked about, even during our Investor Day, we are doubling our automotive business compared to last year. I think that trajectory is still intact. Sure. Sure. Yeah. That's it from my side. Thank you very much, and congratulations on the great numbers. Thank you. Yeah. Participant who wishes to ask a question may press star and one. The next question is from the line of Shradha from Asian Market Securities. Please go ahead. Yeah. Hi. Congratulations on a good quarter. Am I audible? Yeah. Yes, Shradha, you are. Thank you. Yeah. Congrats on a good quarter. Two, three questions. Can you just tell us what has been the organic services growth in nine months 2023 so far? Sorry, organic services growth in? In nine months. In nine months. I guess, nine months. Yeah, I think, should be about 11% or around 11% constant currency. Yeah. Okay. Okay. Sir, the other question is why are we guiding to flat EPS in 4Q despite the fact that Karthik mentioned that even Aero can grow double digits and EPS of 15 at the lower end would mean flat EPS on a QOQ basis. Are we hinting at a margin decline, you could say in 4Q? No, let me clarify that. I'd say, see, we've never guided on EPS. We just did it last quarter for the first time because there was a lot of acquisitions and, you know, there was a lot of various things that were going on in the business which didn't reflect a very good, or a very, or which didn't reflect the ground reality. That's why I guided for EPS for next year. I just wanted to say that we are at least holding on to that. Yeah, we will... I mean, logically, we will do better than that. Again, I don't want to get into next year because we haven't done enough work. I'd say logically we'll get better than that. That's why I said at least 16. At this point, I don't think it would be prudent to get into too much more in that. On Q4 also, you know, again, I think we will be at least at the higher end of that range, given that we did 16 or 14.9. We also see a margin expansion in Q4. We'll just be in the higher end of that range for sure. We're just being cautious with various things that are going on right now. Also, the other thing I will say is, we will have some one-off costs because we've taken a number of actions in terms of making sure that we take a... We set ourselves up for a good FY 20 2024. There's some actions that we need to take in terms of giving up space, in terms of breaking some of the or renegotiating some of the contracts. There'll also be some costs that is associated with it. I think we are anticipating some of that cost, which is what will depress margin a little bit. I'll say, you know, we're quite confident, at least from both a. Definitely from a gross margin perspective, we're very confident that it'll hold. From EBIT also we're confident that there will be expansion. It's just that we wanna be prudent given that we also wanna take some aggressive decisions on costs that will pay off in FY 2024. Renegotiating some client contracts is what you mean? No, not client contracts. Vendor contracts, like hardware, software, space and so on, so forth. Got it. sir, just, any outlook on how Citec has been stacking up? It's been one full quarter of consolidation now. any outlook you would want to give on Citec? It's too early to call out, Shradha, but I think so far it is on track. It is progressing well. The kind of opportunities we are seeing definitely makes us to be excited about what we can offer in the next 12, 18 months. We are trying to synergize our go-to-market and by integrating the state teams together. I think that process would happen sometime this quarter, and, we would probably have a better view by the time we complete, we conclude this quarter. If I may just add to that, I think, there's, we're also winning some good new deals through Citec and because of the combined entity and the synergy. In fact, there's one on which the customer made a press release. The customer is the Aker Solutions, the FPSO company. Customer made a press release citing Citec's capability as one of the key reasons why they're gonna undertake this project. The two companies that they mentioned are Citec and ABB as their partners in executing the project. This was all something that the customer made. We did not do any of the press release. Right. Just one last question, if I can. Karthik, I think last quarter you had indicated that Aero for this year should grow, you know, 9%-10%. This quarter itself we are at a run rate of 8%-9% in constant currency on a year-over-year basis. Given the fact that we are talking of double digit quarter-on-quarter, I think we are implying a double digit year-over-year growth also in full Q in Aero. What has changed from Aero's perspective in just one quarter? Is there some single client budget that has moved up significantly, or is it across the clients that we are seeing better traction compared to what was anticipated at the end of last quarter? Yeah, I think good observations, Shradha. I think we expect, growth for year-on-year to be deep, and that's definitely, given based on where we stand today and what we are looking at for Q4. I think what we are also seeing that is this is slightly broad-based. I think the decline has topped. That's what we have been talking about. If you look at last four or five quarters, we've been successively growing quarter-on-quarter in aerospace. We have not seen a dip. We also talked about, few of our large customers are continuing to grow, which is getting broad-based. I think that's what I would really say that gives us confidence for, seeing the momentum in the aerospace sector. Good to hear that, Karthik. Thank you so much. Yeah, thanks, and all the best. Thank you. Thank you. Ladies and gentlemen, to ask a question, you may press star and one. Participants who wishes to ask a question may press star and one. The next question is from the line of Sameer Dosani from ICICI Prudential Asset Management. Please go ahead. Hi, team. Congratulations on a good set of numbers. Best wishes to all at your end. Just one clarification. Slide number 17, you know, Cyient services, you have mentioned that $240 million is the order intake. Then, you mentioned that the five large deals have a total contract opportunity of $15 million. What is this difference? If you can just clarify that. Thanks. The order intake is the purchase orders we received during the quarter and, which goes into our SAP system. Okay. That means confirmed purchase orders from customers. Okay. The contract potential is something that the customer signs up with us about, say, $10 million and, depending on some of the large segments and $5 million on smaller segments. We consider anything which is more than $5 million for smaller segments and $10 million for larger segments as part of total contract potential, and that is $60 million from five deals that we are announcing here. There is a good Q-on-Q growth and, so just want to understand the incremental part is slightly longer than 12 months or a longer project or is it like, you know, you'll see that in less than 12 months or so? I think we always looked at year-over-year because of the seasonality. Okay. Some customers would tend to issue the purchase order by Q3, some would do it in Q4. Okay. I think this is close to the second highest order intake that we ever had on services business. Okay. To that extent, it's definitely high. You'll always look at this more than a QOQ number. Look at this as a YOY right now. Understood. Understood. Second question is about the communications part. I think, after a robust, you know, growth in Q1, Q2, I think now the growth is slightly lower. Is there some contract that would have ended or if you can just comment on that, is there a pickup that you can expect on a sequential basis in communications? Thanks. Yeah. I think there are about a dozen customers that we work with where they may keep changing some priorities for this quarter to the next quarter because all of these businesses are driven by time to market and their ability to gain market share and revenue for the customers. There could be some change that would happen in any of the quarters. If you look at from Q4 - Q1, we have grown double-digit in comms and which has sustained and continued to grow on top of that. That's essentially what is happening. We see that the momentum in communication continues, and we are definitely positioned on this segment. Okay. Okay. Lastly, my question is around utilization. Utilization now we are at, I think, 90% as per your presentation. Is that something which is sustainable was my question. Thanks. Yeah, I would say I think, we would always like to expand in terms of our bench, and I think that is going to be some initiative that will be taken as part of what we want to do in Q4. Our intent is to maximize the utilization as far as the Q3 is concerned, where there were lesser working days and the furlough effect. I think that is essentially what it has shown. It is good to see that most of the bench that we carry and they are relevant bench. I think that's something which is definitely seen based on what we have looked at on the operational efficiency. Understood. Understood. Lastly, when you say QOQ, double-digit growth in aerospace, Is the growth rate that is you are speaking about is sustainable? Because, you know, we are already much lower what in this, in this vertical versus what we did in, you know, pre-COVID. Yeah. Thanks. We have not done the planning for fiscal 2024 yet. Maybe by the time we conclude this quarter and the next quarter results, we'll talk about our view for the next financial year. Sure. Sure. Okay, thanks. Thanks. Thank you. Best wishes. Thank you. Thank you. The next question is from the line of Athreya Ramakumar from iThought PMS. Please go ahead. Yeah. Good morning, team. Sorry, good evening and, you know, congrats on the performance. I think most of my questions are answered, but I just had one, you know, maybe a medium-term question. I think we have been talking about, you know, benchmarking our bottom line or the profitability with our peers. I just wanted to know, you know, what maybe on a three-year perspective, what are, you know, medium-term aspiration is on the top line and whether, you know, we are going to focus on reducing, you know, the volatility in the numbers? I think that has been an issue in the past as well. Sure. Say, two things on that. On the top line, I think, you know, we've sort of talked about what our aspiration is or what our goal is in terms of getting to the billion-dollar revenue in the next fiscal year. I would leave it at that because we haven't done a much longer-term plan against that. In terms of the bottom line, we've done a lot of work because as you said, you know, there is a gap to our peers, and we've started to take a lot of actions. We've identified where some of our inefficiencies have been, and we've started to take a lot of actions around those inefficiencies. What I would say is, and also if you, if you look at it where I talked about the Q, you know, some one-offs in Q4 potentially affecting margin a little bit. That's also because, you know, to achieve some of the longer-term goals, we will have to take some renegotiating contracts, et cetera, which could have a cost in the short term. I would say by the end of next year, next financial year that is, we will get to the at least the average of our peers. I think that will be a good starting point for then to then reflect back and say what more is left in the business. The actions that we have identified and started to take, I think there's a line of sight to get towards at least the average of our peers by the end of the year. Sure. Thank you. Yeah. Thank you. Maybe if I could just ask one more question on, I think, I guess based on the acquisitions, the onshore, you know, ratio has gone up. Is there, is this gonna be the new normal or is there potential, you know, for improving on this number as well? It's too early to comment on it, Athreya. I think by the time we have a better visibility over the next 1 to 2 quarters, we'll keep you updated about it. I think as you would have seen, we have improved our offshoring by 1% every quarter for at least last 10 to 11 quarters. I think our intent is definitely there as part of what we want to do in the business. Sure. Thank you so much and congrats again. Thank you very much. Thank you. The next question is from the line of Saurabh Sadhwani from Sahasra Capital. Please go ahead. Yeah. Hi. This is the first time I'm looking at Cyient. I just wanted to understand, what are our capabilities, in the aerospace vertical. What kind of work do you do in there? Saurabh, if I may ask, I think it'd be good. If you could reach out to Mayur, we'll set up a more detailed conversation because it'll take a bit of time to explain what exactly we do. Could I suggest that you reach out to Mayur and. Yeah. He will set up a conversation with us. Sure. Sure. Sure. Sure. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Krishna Bodanapu for closing comments. Thank you very much. I'll just say that, thank you for the support and, thank you for hearing this out today. Obviously, things are looking quite good. The vertical that was a bit of a lag for us, which was aerospace, which at one point was the largest vertical and today is the second largest. Aerospace is back, and aerospace is back with a vengeance, I would say. Like Karthik talked about, we have a double-digit growth. While, we, you know, is a double-digit growth every quarter-over-quarter sustainable? Probably not. It's not that the business will de-grow. It's that the growth that we're seeing is sustainable for a long time. We just need to see how much will it be. Will it be 10% or 5% or what that number is quarter-on-quarter? We still need to understand. Having said that, we find ourselves in a good spot where, you know, aerospace, which was a bit of a challenge for us, has now become our strength and therefore with the rest of the business also doing quite well and with a great deal of compliments to the team, especially led by Karthik on investing in the right areas, be it embedded or digital, what we call five pillars. I think the potential for us is significant because much of the order intake and more importantly the pipeline that's building up is also in these areas which are quite sustainable and what our customers want for a long time. Therefore, you know, I'd just say thank you very much for the support. As we talked about last quarter, things have come back on track this quarter. We believe that it's only going to accelerate from here. Thank you for the support. We will be in touch. Thank you. Thank you. Ladies and gentlemen, on behalf of Cyient Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.