Welcome to all of you to the Q1 FY 2022 earnings conference call of Coforge. You would have received our results by now. Those are also available on our website, www.coforge.com. Present along with me on this call are our Chief Executive Officer, Mr. Sudhir Singh, and our Chief Financial Officer, Mr. Ajay Kalra. We will start this forum with opening remarks from our Chief Executive Officer. Post that, we would be happy to answer for your questions. With that, I would now like to hand over the floor to Mr. Sudhir Singh, Chief Executive Officer, Coforge Limited. Over to you, Sudhir. Thank you, Abhinandan. A very good evening and a very good morning to you across the world, folks. Thank you very much for taking this time and for joining us for this conversation today. These are remarkable times that we are living through, and I hope that your family, your loved ones, your team members, and you yourselves are safe and healthy. We meet today, yet again, with the continued shadow of a pandemic that is still raging in parts of the world. The quarter under discussion coincided with the Second Wave in India. Team Coforge responded to the situation by establishing three ICUs within its premises across cities, by structuring 24 / 7 ambulance-on-call services, and by conducting 32 vaccination camps across India. As a nod to the times, let me kick off the discussion today by sharing a rather unusual metric, one centered around vaccination rates. At Coforge, I take great satisfaction in reporting to you that 72.3%, that's 72.3%, of our employees globally have now been vaccinated, and we are on target to complete the vaccination of all our employees who wish to be vaccinated by the end of the current quarter. With that, I would like to share some perspectives on our quarterly performance and the outlook going forward. Before I discuss our quarter one results, I would like to point out that this has been the first quarter that our reported performance also includes two months contribution from SLK Global, an acquisition that we closed in the last week of April this year. In order for you to better appreciate our operating performance, I shall call out organic performance, not including SLK Global metrics, and I shall also call out the firm's overall performance, including SLK Global metrics, separately where relevant. With that, here goes. We are pleased to report that our organic growth as a firm accelerated further during this quarter. In Q1 FY 2022, our sequential organic QoQ growth was 7.6% in U.S dollar terms, 7% in constant currency terms, and 7.4% in Indian rupee terms. This organic sequential 7.6% growth in Q1 follows a growth of 7.1% in U.S dollar terms previous quarter. As a consequence of the sustained growth that the firm has seen, our year-on-year organic growth in quarter one FY 2022 is 32.3% in U.S dollar terms. In quarter one, our organic revenue stood at $185.1 million in reported terms and the reported revenue in Indian rupee terms was INR 13,546 million. The firm's overall performance, including the contribution from the acquired SLK Global, saw reported consolidated revenue grow by 16% quarter-on-quarter and 42.8% year-on-year in dollar terms. In Indian Rupee terms, the growth for the firm in quarter one was 15.9% quarter-on-quarter and 38.3% year-over-year. Overall, consolidated revenue for the firm for quarter one stood at $199.7 million and INR 13,616 million in reported terms. With that, I shall now detail the vertical-wise growth for the quarter under review. The numbers I'm going to talk about now are excluding the impact of the SLK Global addition. Not including SLK Global, as noted, in quarter one, our insurance vertical grew 10.1% sequentially. It contributes 32% to the revenue mix. The BFS vertical grew 3.2% sequentially and contributes 16% of total revenues. Our travel vertical grew 15.3% sequentially and contributes 20% to the revenue mix. The other verticals grew 2.1% sequentially, contributing 31% to the total mix. Our top five clients, not including clients from the SLK Global portfolio, grew 3.9% quarter-on-quarter, and our top 10 clients grew 5.6% quarter-on-quarter. Our top five clients contributed 24.6% to our overall revenue, and our top 10 clients contributed 35.9% of the total revenue. Onsite revenues represented 60% of the total revenues in quarter one, FY 2022. This indicates and follows the continuing trend of a gradual rise in offshore revenues over the past four quarters, with onsite revenue at 60% now being lower than the 64% recorded around a year back. Moving on to margins and to operating profits. During quarter one, we delivered an EBITDA of INR 2,359 million, before accounting for the ESOP costs and the part of the SLK Global acquisition-related expenses that got booked during the quarter under review. EBITDA margin for the quarter stands at 16.1%. The margin performance for quarter one, FY 2022 reflects the full impact of global annual wage hikes rolled out across the organization, with effect from April 1st. They also reflect the impact of transition expenses in four of the five material deals signed over the last six months, and also the movement of some AdvantageGo license sales into the next quarter. We do expect margins to expand substantially over the next three quarters, with quarter two, which is the quarter that we are currently in, expected to be around 200 basis points higher than quarter one margins. Our consolidated reported after-tax profit for the quarter is at INR 1,236 million, a decrease of 7% quarter-on-quarter, and an increase of 54.7% year-on-year. Depreciation and amortization during the quarter also reflects amortization of intangibles created as part of purchase price allocation done for the acquisition of SLK Global that was concluded during the quarter. The impact of the same is $0.7 million in the current quarter, permanently reflecting around an impact of three months. Moving on to order intake and commentary around order intake. This quarter, so the quarter under discussion, quarter one, fiscal year 2022, stood out as a record quarter for the firm in terms of composite order intake, orders executable booked, and also importantly, the size and the significance of the large deals that were signed. Our organic order intake, not including SLK Global contribution for the quarter, was $318 million. You will recall that in the last four quarters, our order intake has been between $180 million-$220 million. Last quarter itself, our order intake, again, you will recall, was $201 million. This was an appreciable jump. Equally importantly, booked orders for the next 12 months, which is what we call out as order executable, not including the SLK Global business, now stands at $560 million. This metric is up 20.4% year-on-year. If we were to include SLK Global, the orders executable for the firm based at the end of last quarter stands at $645 million. During the quarter under review, 11 new logos were signed. This spike in order intake has come on the back of three large and three very special deals signed during the quarter two of these were signed across the BFS and the insurance verticals. The third was a large deal led purely by the horizontal cloud and infra services business. In the insurance domain, the firm signed an INR 20 million+ contract over three years, which is the largest-ever license contract for the AdvantageGo business. Revenues for this, of course, will be recognized over the three years around the license. In the BFS domain, the firm signed an INR 105 million contract to be delivered over four years, preceded by a staggered eight-month-long transition. The BFS deal will bring into play all our core transformation capabilities across enterprise architecture, industry consulting, data architecture, cloud engineering, digital integration, and intelligent automation. Out of this organic INR 318 million order intake, excluding the SLK business, the U.S. contributed INR 46 million. EMEA was at INR 227 million. INR 46 million was secured from the rest of the world. Finally, to round off this section, in addition to the three large deals that I referenced, we wish to also share that with one of the largest banking and financial services institutions in the world, we have signed a global MSA to provide technology services from and to their centers across U.S., Europe, and India. I shall now pivot to quick commentary around delivery operations and capability build activities. Today, more than 51% of our global tech revenues comes from our digital service lines. Another 20% comes from our cloud and infrastructure service lines. The firm's service pack today, as a whole, is a composite of $100 million product engineering service line, $100 million cloud and infra service line, $100 million intelligent automation service line. With the addition of SLK, $100 million business process management service line, and a $50 million digital integration service line. The cloud services business continues to drive both accelerated growth and sharp differentiation. It also powers fully or partly almost every large deal pursued that we are undertaking. Our engineering convergence-based agenda for the cloud that we've crafted, our own cloud innovation stack framework, our infrastructure-as-a-core transformation program approach for cloud, and our advanced AIOps platform, which is fundamentally an integrated programmable platform, continue to deliver distinct and tangible value and differentiation in this space. Our product engineering service line with its Agile, next framework continues to power through product creation and updates. The AdvantageGo specialty insurance suite is a prime example of this. This quarter, one of the world's largest publicly traded property and casualty insurance companies signed AdvantageGo for the implementation of our underwriting product. Another U.S.-based Fortune 500 insurance company has successfully implemented our insurance risk management software. Within the broader digital practice outside cloud, also outside product engineering, for a global provider of risk management product and services, Coforge implemented a domain-driven design framework to modernize the API architecture to a bit crucial lines of business. That in turn has helped them with the faster onboarding of their partners. Our digital consulting services team also leads our enterprise transformation offering. The largest independent global workforce deployment platform, which is incidentally a multinational conglomerate of over seven companies. With them, we are engaged at the senior executive steering committee level itself to drive that transformation. Finally, to round up this section. On the recognition front, for the third successive year, we have been awarded the Platinum Partner status by Pega. Our digital integration business was awarded our seventh MuleSoft Partner Award today. We were also placed as a leader in The Everest Group PEAK Matrix Insurance Business Model Innovation Enablement Services. Pivoting once again towards the people metrics. The quarter under review broke the record established in the previous quarter of the highest net headcount addition in a quarter in the history of our firm. On an organic basis, again, not including SLK Global in the mix, our headcount recorded a net increase of 1,138 people during quarter one fiscal year 2022, implying a 9.2% sequential increase. This comes on the back of an 8.1% sequential increase in headcount during the last quarter. Effectively, total headcount for the firm, excluding SLK Global, has increased by around 18% over the last two quarters. On a reported basis, after adding in the 6,962 employees of SLK Global who now form part of the Coforge family, our total headcount stands at 20,491. The strong headcount growth, aligned with the significant number of employees engaged in transition activities to service and material deals that we've signed, has led to lower utilization during the quarter at 77%. You will recall last quarter we were at 81%. We expect utilization to normalize as newly secured deals ramp up. Finally, I'm happy to note that attrition continues to be at a healthy level despite very tough market conditions around talent acquisition. To that, it stays at 12.6%. Very quick commentary around balance sheet, and then I'll finally pivot to summing up on the outlook. On the balance sheet front, cash bank balances at the end of the quarter stood at INR 3,017 million after material payouts towards the interim dividend recommended in May and the SLK Global acquisition. Cash expense during the quarter was INR 520 million. The debtors at the end of the quarter stand at 71 days of sales outstanding. FCF for quarter one fiscal year 2022 stands at $5 million. We are pleased to share that in line with our intent to return excess cash generated to shareholders, the board has recommended an interim dividend of INR 13 per share. Summing up, and I'll follow the summing up with an outlook as well. Before I share the updated outlook of fiscal year 2022, I would like to quickly summarize and reflect on the headwinds and also the tailwinds that drive our revenue and margin assessment for the year. On the revenue front, the tailwinds include, one, a 12-month organic committed order book, which is 20.2% higher than where it was a year back, two, r evenue momentum that has accelerated. The $20 million+ in Insurtech wins and the $105 million BFS win represent a material milestone for the firm. three, our client concentration and the associated risk with that client concentration continues to be low and contained. four, upfront resource hiring over the last two quarters has increased global headcount by 15%+. This SME pool is available to staff the demand that we clearly see ahead of us. five, and I think this is important. The increased recognition of our product engineering expertise and our ability to stand up, manage, and grow industry platforms independently continues to have a very positive rub-off on the services revenue stream of the firm. six, again important. Our forays into newer verticals over the last 18 months have now started paying dividends. We have stood up three material verticals in addition to our three core verticals over the past three years. Digital and manufacturing now accounts for 8.9%. That's almost 9% of global revenues. Retail and healthcare accounts for 3.1% of global revenues, and government outside India accounts for 7.4%. 7th big point, the continuing rebound of the travel business, and you've seen the metrics, gives us confidence. We believe this business shall see another flip when the air travel in Europe resumes. Finally, the portfolio of 14,000 clients, where we are enrolled as a preferred partner, has doubled over the last 18 months. Growing these relationships alone reflects a material revenue expansion opportunity for the firm. While all of these are favorable, on the headwind side, supply challenges are a clear headwind on revenue growth. We recognize and are attending to resolve supply challenges, particularly supply challenges around niche skills. In May, we had shared that we are planning for an organic constant currency growth of at least 17% in fiscal year 2022. You will have noted that our organic quarter one revenue multiples of four, just extrapolating, will by itself represent an organic constant currency annual growth of 18+%. Given this momentum and the backdrop that I just shared, we are now planning to deliver at least 19% CC organic growth for the year. Moving on to the margins outlook for the year. The tailwinds around margin include, one, the continued growth-off and discount reversal in our travel vertical. two, a gradual increase in offshoring percentage as larger size deals have been closed. three, the operating leverage that is coming from the accelerated growth that we all see. The headwinds on the margin side include, one, wage increase effective day one of the current fiscal. You will recall last year there was no wage increase. two, retention cost and hiring cost increase. three, a decrease in utilization, and this is important we believe, as larger net new deals warrant upfront transitions and transition costs. You will recall that in May we had shared that we are targeting an EBITDA pre-RSU cost of 19% for the year. We continue to plan to target a 19% EBITDA as confirmed last quarter. In quarter two itself, we expect EBITDA to jump around 200 basis points over quarter one. This immediate jump in quarter two over quarter one will be facilitated by, one, a forecasted increase in utilization. Our global headcount has grown 18% in the last six months in an effort to staff our new large deals. Four of the material deals signed in the last six months have an upfront transition period. In quarter two, two of the four material deals will complete. Second thing that we gave a short-term fillip is that the annual visa costs that we booked in quarter one this year will not recur in quarter two. Three, AdvantageGo license deals that were held up towards the end of quarter one have now been realized in July and will provide a fillip to quarter two margins. That's the aggregate summary on the margin front. Summing up. Coforge, the name that we adopted around a year back, stands for working together to create lasting value. We believe that at the core of our operating culture is an intense focus on execution and surprise-free operations. We believe that over the last four years, we have put in place the leadership, the strategy, the culture, and the tech capability stack to grow and differentiate. Moving ahead, we remain committed to building on the foundation that we created so painstakingly over the last few years. With that, ladies, gentlemen, I come to the end of my opening remarks, and I look forward to hearing your comments and to addressing your questions. Thank you. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question, you may press star then one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. To use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question assembles. The first question is from the line of Vibhor Singhal from PhillipCapital. Please go ahead. Hi. Good evening, sir. Thanks for taking our question. two questions from my side. In terms of growth momentum that we see, I agree that it's a bit of strong growth in this quarter. We are very well poised to actually cross the guidance that we have given of 18%+ growth. If I do the math, I think the required rate for the next three quarters of unique will be 18% growth. It's very reasonable. Just wanted to check your brains on that, basically, is it that we are just underestimating capabilities we have this time, or are we seeing any headwinds that we've been cautious about this year from a strategic or we call out for any such events like in the second half of the year. Second thing, my third question was actually on the margins front. You very well articulated the breakup of how the margins in this quarter were impacted. Just wanted to check if you could just quantify the margin impact in this quarter? What was the biggest impact of the transition costs to be able to maybe build a bridge this quarter? Sure. Thank you for the question, Vibhor. Let me just take both of them in order. You're right about the mathematical calculation around the growth required to hit the 19% threshold. It is a very low number. The intent before has always been to be conservative around revenue guidance, and that's how we've always offered guidance, which is why we've always met guidance and in most cases exceeded guidance. That is the intent currently as well. We do not see any headwinds, material headwinds to revenue growth. The intent will be to hopefully exceed the 19% threshold, which is why the guidance has been called out very clearly as at least 19% CC growth. Moving on to your other question about margins, Vibhor. Wage impact during the quarter had an impact of between 200 to 200 basis points. Utilization, you've noted, has fallen 400 basis points. Every 100 basis points decrease in utilization has a material down drop on margins again. Advantage Go, we always share those numbers during question answer sessions like this. The negative impact on the firm because of licensed revenue recognition shift in quarter two is about 100 basis points. Very high level wage under 200 to 200 basis points negative impact. Advantage Go business licensed revenue recognition, roughly about 100 basis points negative down drop. Utilization has gone down by about 400 basis points. That has had a significant impact. Finally, of course, there's a fourth parameter to talk about, which was the visa cost that's all been booked in Q1. That too has an impact, but not as strong as the wage or the utilization aspect. Did I answer your question? Yeah. I think quite well covered. Just one last question on the recovery in the travel segment. We saw a very strong growth in the travel segment in this quarter. If you look at the revenue from the travel segment in this quarter, it fell sharply in 1Q FY 2021 and that was because of the shape of the pandemic. When you look at the revenue right now, it's around $38 million, which is just 10% less than what we were pre-COVID. Just wanted to get your take on the composition of this revenue. Is it that we have actually recovered most of the revenue that we lost, and we are back to 10% of the pre-COVID levels in the same accounts? Is it that those accounts in which we had lost revenue, that recovery is yet to come, but in the meantime, we have added more accounts which have got the business we have acquired with them? Okay. When we look at the travel sector from a geo perspective report across Asia-Pacific and the Middle East, the travel recovery is near complete in terms of spend. In Europe, which is a very significant geography for us on the travel vertical front, recovery is still in its early phases, largely because U.K., where we have a material presence, airline recovery has not been on expected patterns, and hopefully that will start roughly about mid-August from now. U.S. again has now started limping back to the levels that it was at pre-pandemic. That's how I would represent the outlook for travel. Pre-pandemic, as you're aware, Vibhor, travel was about 59% of Coforge revenues. At the current point in time, it is 30%. The highest, the one thing that's helped us recover has been the fact that now we have three other verticals which are between 8%-9% contributors to our generation business. That's how we see travel at the current point in time. Over the last four quarters, as you rightly said, the travel vertical after the drop in Q1 of last year, has broadly been growing almost 7% sequentially for the last four quarters. Great. Okay, thank you. Thanks for the presentation. Thank you very much. Thank you. Before we take the next question, in order that the management is able to address questions from all participants in the conference, we request participants to please limit your questions to one per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question is from the line of Abhishek Shindadkar from InCred Capital. Please go ahead. Yeah, hi. Thanks for the opportunity and congrats on great execution. two questions. Firstly, sir, just wanted to understand how durable is this demand? Any comments could be interesting. The second question is, in the employee metric given in the presentation, the others which likely the sub-staff has seen a substantial jump. Is this primarily related to SLK? Does it appear high for a captive business? Does it also create a lever for margins and growth? Thank you for taking my question, Sir. Thank you. Thank you for the questions, Abhishek. Let me take them in order again. At this point in time, when it comes to demand, there has been a lot of commentary that has been floating around, which talks about the fact that there is a material buoyancy in the demand environment, and that is accurate. When we look at the current scenario and we try to project three to five years out and look at a scenario when demand will start to normalize, we believe that the capability matrix that we have created over the last few years, the tech capability matrix around product engineering, is likely to see sustained long-term demand. Cloud is likely to follow the same pattern. Digital integration is going to follow the same pattern, we believe, as will integrated automation. While the marketplace demand quite clearly is buoyant and at near-peak levels or record levels, longer term for our tech services stack, we think there's a long-term secular high-growth trend on the demand side that we are seeing from the [uncertain] right now. The same thing would apply if I were to flip this and talk about the vertical story. BFSI innovation dollars continue to come in, and clients' dollars have been stable and at a high level. Insurance still seems to be in the early stages of pivoting towards longer-term investments in the tech stack. Travel, of course, should from the abyss that it's been in for a few years, be looking at significant demand because of cloudification picking up, because of touchless travel picking up, because of automated self-service picking up, because of security-related aspects picking up. That's how we see the demand. We see it, at least from our vantage as a firm, as something that is durable, not to use your words. As far as employees are concerned, your observation is right. There's been a step jump. That step jump has come largely because of, almost entirely is how I would characterize it, because of the SLK addition from the metrics that you saw last quarter. We believe SLK, and we called it out last quarter as well. We believe SLK in the short to medium term should be growing even higher than Coforge minus SLK, that portfolio. The intent is to keep these numbers static. We are not in the business of extracting people and taking them out. We will, as we have done with Coforge, try to keep G&A static and drive accelerated growth. As a percentage, that cost keeps decreasing. Just summing up, your observation is correct. The increase in numbers has come from SLK. We plan to cap it at more or less the same levels where SLK is, and we plan to drive accelerated growth even higher than the Coforge mothership and try to offset G&A percentage cost as a consequence. Those are the answers, Abhishek, related to your questions. Thank you for taking my question, sir, and best wishes for a very good one. Thank you, Abhishek. Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Thanks for the opportunity and congratulations for a very good execution, especially on the sales front. It has been consistent. Just first question to you in terms of the EBITDA margin guidance of 19%. You have commented that there would be increase QoQ in the next three quarters. It looks like that there would be a heavy lifting still required in Q3 and Q4, and Q4 exit rates on the EBITDA front could be close to 21% as a whole. Any risk to this? If this is achievable, is it also fair to say that you may enter FY 2023 with 20% kind of an EBITDA margin as a whole, which will also let us say about the margin headwinds then in FY 2023 as well? A little difficult for us at this stage to comment on FY 2023. FY 2022 that we are in right now, our short-term focus is to make sure that we first get to around the $200 million jump that we commented on over the last quarter, then try to extend it if it's possible to extend it, so that the ramp expected in H2 around percentage margins is not very severe. It takes some time for the initial wage increase impact, which tends to be significant, 200 - 200 basis points to get offset, that happens progressively over the remaining three quarters, we've seen that play out over the last many, many years. We expect discount reversals from the travel vertical to continue, almost all of them to go away almost completely by quarter four. On retention and hiring costs, the fact that we've done so much of it upfront to service demand that we've been talking about from almost the three quarters should allow us to have some slack around being a little selective around how many folks we onboard and at what salary points we onboard. As a consequence, I gave very detailed commentary around the headwinds and the tailwinds on margin. I talked in response to an earlier question around what the margin walk, what the impact of utilization, what the impact of AdvantageGo, license revenue not being recognized, what the impact of the market wage appreciation has been. As a consequence, the aggregate overall piece will tick in the short term as the Q2 plans play out on margin. For a full year, 19% EBITDA pre-RSU cost, which is what we talked about, is definitely achievable. Okay. Just a follow-up. In terms of after closure of such great deals on an organic basis, how is the deal pipeline looking out? Still you are having deals above $50 million in this pipeline. The last question in terms of if you look at the full year, generally your Q2 and Q4 are seasonally great. Do you expect the same trend may continue even in FY 2023? That's all. All the best. Yes, Sandeep. So the deal pipeline continues to be robust and our intent, not just this year, but in the years to come, it continues to be, as it has in the past, to drive growth that is robust, to drive growth that is sustainable and is not just a flash in the pan, and to drive growth that could profitable and over time increasing margins. Deal pipeline is robust. Of course, we close $100 million worth of deals and it's taken us about four years to plan that, so we don't expect that to echo almost immediately. But as an aggregate, we look at the deal pipeline, size of deals, number of deals, the spread of deals by tech horizontals and geos, we feel good about where we are. Quarter two and quarter three, I noted this earlier as well, we do not see any headwinds which should result in any kind of a negative surprise against the plans that we have drawn for ourselves for our growth for the current year. Okay. Thank you. All the best. Thank you, Sandeep. Thank you. The next question is from the line of Vimal Gohil from Union Asset Management. Please go ahead. Thank you for the opportunity. Firstly, congratulations on a great set of numbers. I believe mostly you've answered most of my questions. I just had one clarification on utilization. If you could just highlight, given the kind of revenue growth that you've seen even recently, the reasons behind the fall in utilization. You've sort of highlighted that utilization could go down further as you've highlighted the headwind. That seems to be a bit counterintuitive because as and when your employees are off the bench and on projects, utilization effectively should improve. If you could just probably help me clarify this mathematically. Thanks a lot. That's all. No, thanks for the question, two questions, Vimal. Let me take them in reverse order. Just to clarify, we believe utilization will go up. I have not indicated utilization will go down. What I did say was that utilization has gone down from 81% in quarter four to 77% in quarter one. We believe utilization will go up, and that is going to be a very critical and a very important margin lever for us going forward. That's one. Coming to your first question around why has utilization fallen, four of the material deals that we signed within the last six months are still under transition phase, and that has warranted some transition investments in costs and in employees and people and SMEs. That's why utilization number has fallen. Fair enough. Just one follow-up on the margin, though, quickly. Your margin guidance of 18% post-RSU, this is after the integration of SLK, which you had highlighted at the time of acquisition that this was an asset which had higher margin characteristics. Your margin guidance includes your SLK assumption as well, I would believe? When it comes to revenue guidance, we had always qualified it saying it will be at least 19%. At the end of this quarter growth, and as far as EBITDA guidance is concerned, we are targeting 19% for the composite organization, because it is a relatively small part of the overall firm. Even if it comes up as higher than the firm's average, it is not going to move the needle too much. 19% is the EBITDA target for the composite firm for the current fiscal year, and 19%+ is the revenue target for the composite firm for the current fiscal year. Okay. Thank you so much, and all the very best. Thank you. Thank you. The next question is from the line of Manik Taneja from JM Financial. Please go ahead. Hi. Thank you. Congratulations on a great quarter and starting a very solid note. I had a couple of questions. Number one is, on the deal wins in the U.S., is there some one-off impact there, given the fact that actually we had about $100 million of deal wins in the U.S. on a quarter previously. This quarter that number appears to be low. That's question number one. The second question was with regards to how do you see the on-site offshore mix of revenues progress more from a two to three year timeframe, given the fact that we've had some offshore shifts in the last four quarters and despite some of the large wins we are transitioning currently. Thank you. Thank you for both the questions, Manik. Deal wins, out of the $318 million, the U.S. is $46 million and this quarter it's just a passing blip. The demand pipeline in the U.S. is very strong. The investment around sales and marketing addition have also been very focused on the U.S. in the recent years. U.S. should be back to near normal to higher than normal run rate starting quarter three. As far as on-site offshore is concerned, on-site revenue is now falling from what used to be roughly around 64%-65%, to 60% this quarter. If the deal velocity and if the median size of the deals going up, if that trend continues, we think on-site revenues might fall below where they are, or at least at a minimum stay where they are. Okay. Thank you. All the best. Thank you, Manik. Thank you. The next question is from the line of Mukul Garg from Motilal Oswal. Please go ahead. Thank you. Sudhir, before I take the question, just wanted to share a feedback. Your revenue growth performance has been really exceptional, and while we understand and you have clearly laid out all the pulls and pushes on what is driving growth, it would be a lot more useful if the guidance can be a bit realistic. You guys are doing an amazing performance, and I don't feel like there is any harm in portraying the growth you are seeing going forward over the next three quarters, rather than a flat set of performance. Just wanted to share that feedback. On the question, I just wanted to probe a bit on the margin guidance, which you are giving. Is it possible to quantify the support from the shift of license sales to Q2 and reversal of discounts on the overall margin improvement, margin guidance mentioned for FY 2022? Excluding these, is improved pricing one of the reasons why your margins will go up over the next three quarters? Or is this more a case of containment on the SG&A side? Thank you. Thank you for the feedback, Mukul, and thank you for the question. Let me very quickly respond to the feedback. I think as a firm, we will take that as a backhanded compliment the fact that we said 19%+ revenue organic CC guidance is conservative. I do agree with the max part of what you're saying. There is scope for us to perform better, and I want to assure you and everyone else on the call that it is our intention to try to maximize growth. Thank you for that feedback. Coming back to your question around margin guidance and a more granular breakdown of that margin guidance. License deferral from Q1 to Q2 had a negative 100 basis points impact on our quarter one margin. That's something as we think for the walk from Q1 to Q2. That's something that we are factoring in. Discounts, especially in the travel vertical, continue to reverse. As I noted earlier, we expect for the firm, a blip, a material blip in margins owing to some big discounts going away, given how the pandemic has progressed of late, that to happen around Q4 of the current fiscal. Third, your point around pricing improvements being a lever is correct. We have seen that. This is still 20 days of view from the trenches. Interestingly, it's been a little bit of a surprise to us. Interestingly, the ability to ask for and get higher price realization for especially niche skills. This time around has been led by the APAC geography. The willingness of clients from APAC to align with increased pricing asks is higher. I'm not saying it doesn't exist in Europe and North America, but it is higher in APAC. We continue to have conversations with clients across North America and Europe, and also secure pricing increases. In our experience, those pricing increases are not across the board MSA linked for all skills kind of price increases. They are more structured around individual engagements or individual niche skill SMEs for whom prices are getting renegotiated. That is how I would characterize the answer on the pricing improvement comment that you had, Mukul. Thanks. The second question was on SG&A. There was a meaningful increment or increase in the SG&A cost this quarter. Was that primarily because of SLK getting integrated into the organization? The second part is, if I look at the SG&A investments, SG&A payouts you guys have been doing and actually slightly longer term over last four years. It has very meaningfully trailed your revenue growth at around 1.5% quarterly increase versus revenue growth almost reaching 4% on a QoQ basis between Q1 FY 2018 and Q1 FY 2022. How should we see this? SG&A is always supposed to be more variable in line with your revenues, unlike a fixed cost, but the behavior and the performance is more fixed in nature. How should we see this going forward? Mukul, if you look at our SG&A, if I just reference the point that you're talking about, right. Our SG&A from around fiscal year 2018, it used to be roughly about 19%. In the quarter under review, it's come to 13.6%. There is a trailing impact that you talked about. The long-term secular impact as growth has accelerated versus the SG&A as a% has been coming down. 13.6%, which is where it is a number that, for us, seems to be a number that we would like to hold. We don't want to push it beyond this because it's not just this year. At some stage, maybe after quarter two, we need to start sweating over next year and how to make sure that growth sustains and hopefully exceeds. That's how we're looking at SG&A numbers breakdown. 13.6% this quarter is lower by 40 basis points from the 14% that we saw last quarter. The other interesting metric that you would have seen in the fact sheet that we shared with you is that the number of sales and marketing people have actually expanded. They have gone up, one, not just because SLK got added to us. They've also gone up because as we've been creating newer verticals and as horizontals like cloud have started securing larger deals for us, we have started adding some of our existing delivery SMEs to the pre-sales teams of the horizontals of the newer verticals that we created, and also to U.S. geo, which we think can be a very material growth ramp for us over the next three to five years. Did I answer your question, Mukul? Clearly, that is a very fair assessment. We just wanted to add just kind of context to this. Are you seeing any force multiplier because of your Insurtech platform on your SG&A cost? Obviously the margins on product sides are generally higher. Is that also one of the reason why over a longer period, you have been able to hold the cost while improving your revenues? No, the biggest lever, as we assess it, Mukul, is the fact that over a period of time. If I look at trends growth rate, we are almost twice as large as what we were four years ago. Our SG&A costs have been rising, and they should keep rising. They've been lagging, as you rightly said, the growth that the firm has experienced. That's been the biggest lever. I would not say that AdvantageGo, which is roughly only 5% of our global revenues, has been a very significant force multiplier on the SG&A side. Understood. Thanks a lot for taking my question. I'll hand it over to the queue. Thank you. Thank you. Thank you. Pleasure, Mukul. Thank you. The next question is from the line of Dipesh Mehta from Emkay Global. Please go ahead. Thanks for the opportunity and congrats for very strong execution. Two questions from my side. First is about, can you help us understand whether Q1 turned out in line with what you anticipated at the beginning of quarter or turned out better or worse? If better, then what surprises maybe can be, if you can talk from perspective? Second question is on data center related thing. Can you provide percentage allocation of SG&A global across tangible, intangible property? How we did that assignment? Thank you. Thank you for the question, Dipesh. Let me first request our Chief Financial Officer, Mr. Ajay Kalra, to take the depreciation question. If you'd like to address question one as well, please go ahead, Ajay. Sure. Thank you, Sudhir. On the purchase, I'll go in reverse order. On the purchase price allocation, we've done the preliminary assessment of our purchase price assessment for SLK Global. As you would recall, the total consideration to SLK was INR 920 crores. Total identified tangible assets net of liabilities were INR 182 crores. Identified intangible assets were valued at INR 316 crores. The goodwill we recorded was INR 615 crores. Does that answer your second question, Dipesh? No, it does answer. The only question is about INR 315. In total, we will amortize over what period? The amortization period would be approximately 10 years. It primarily consists of customer relationship and contract. It is around 10 years. Okay, thanks. Yeah. There was a question preceding the second question as well. Let me take a quick stab at that. The question was, Dipesh, whether quarter one came in line with what we expected. It was in line. It was broadly in line with what our expectations were. Getting into quarter one, we knew that we were closing a $100 million deal, and we haven't closed a $100 million deal, at least in the last four years as an organization. The fact that we were able to close it is not a surprise, but in many ways it was a validation of the efforts that have gone on over the last four years in recreating the technology stack, the domain stack. And I've said this in the past, and Ajay has also said since this, because the revenue is seeing such a spike, utilization has gone down because of the investments which had to be made to start staffing these deals. They aren't surprises, but those are the two aspects. See very, very sharp and accelerating revenue growth leading to a lower utilization. Wasn't a surprise. It was a conscious decision, it was a little away from what we had built in around our utilization plans for quarter one. Thank you. The next question is from Sandip Agarwal from Edelweiss. Please go ahead. Hi, Sudhir. Good evening. Thanks to your whole management team for taking my question. I congratulate you on three fronts, on a great quarter, a great guidance, but more importantly on the bold call of taking margin hit. You have retained your employees and you have kept your attrition under control. I also want to ask you a question that probably Mukul also asked. I will ask it a little different way if I can get something more out of it. Check in the order of 38% year-over-year, travel opening up, demand supply massive mismatch. We don't see that this will be under control. Your attrition is lower, you obviously have good amount of talent with you already. Why you are so giving such a beat guidance of 90%? I understand that you might have given something for third wave or even three peaks and companies are massively understaffing. I'm not blaming anything on that part. What I'm trying to understand is there really some worry which keeps you holding to this 90% guidance? You just want to keep the price for the investor every quarter? It will be almost impossible to achieve 90% unless there's some, anyway, you are aware of some key client loss or something. That is what my worry is. I just think with this kind of volume and travel opening up, everything going in our favor means 20%-25% something which is like we will not have to make the efforts to do that because your people are also with you. It's also high attrition in the key people. Can you please help us little bit here? Thank you for the question, Sandip, and thanks for your comment. I just want to reiterate, and I think I've said this earlier, we do not have any worries linked to headwinds around potential client loss or an existing revenue stream loss at all. I want to be absolutely clear about it. We've never lost a material client, at least over the last 16, 17 quarters that we've all been getting together and talking about performance. We really see nothing of that sort on the horizon at all. Our guidance, I want to underline it, and we will underline it again, is at least. We haven't said unlike digital, we've given a fixed number. On revenue, one, we have kept it up by 2% from the last quarter. Two, we continue to qualify it as at least 19%, as Mukul has recognized, and I tie this back to Mukul's question as well. It is going to be a dynamic number. We have the next two or three quarters to continue to assess how the market progresses, how our deals progress. Sandeep, I would encourage you, given the way we worded it also, to look at it as a threshold. That's what we are calling out for, Sandeep. There is no material headwind that is playing into any of the commentary on revenue guidance. Yeah. Sorry. Go ahead, Sandip. Second thing which I wanted to know is, how long you are seeing a position in the client market where pricing power is coming back? Is it a decade or more? That's an interesting question. There's always been pricing power whenever a firm or whenever we've been able to stand up a bunch of SMEs who delivered clear to definable impact over time. It's never been a situation where things were so bad that you couldn't go back to a client after doing excellent work or after providing for an exceptional SME pool and not ask for a revision. COLA has been baked into a lot of our contracts, and there have always been ongoing conversations. That strength has intensified over the last 12 months. Let me make sure I get this right. The way I would put it is, in the last seven to eight years, this is possibly a point in time where the ability to go back and have that conversation and have a very high conversion rate is the highest that I've seen over the last one decade. That is how I would call this out. Thanks a lot, Sudhir, for taking my question. Best of luck for the future quarter. You have an excellent team in place, and you have retained all your key people once again, and I am very confident that your at least 90% threshold will be returned very, very significantly. Thanks. Thank you, Sandip. Thank you. This question is from the line of Vikas Ahuja from Antique Stock Broking. Please go ahead. Hi. Thanks for taking my question and congrats on a good quarter. My first question is, client concentration which continues to improve. We have seen client contribution coming down from roughly a little over 40% to close to 36% now in three years. You think we need to use the same template for vertical rise exposure as well. BFSI is more than 50% of total revenues now, post-acquisition. Are you happy with that kind of exposure, or you think we need to diversify over time? Second one is, as Vibhor mentioned earlier, we are 10% behind pre-pandemic run rate on travel vertical. Do we still think from here, travel will continue to lead the overall pack, assuming Europe follows U.S. maybe with a lag of three to six months? Also, last quarter you talked about a couple of large deals we have won in the travel segment. Have the ramp effects already come this quarter or those will be coming next quarter? Thanks a lot. Thanks for the question, Vikas. I'm going to take it with and if Ajay wants to come in, I request him to also come in on the question. Client concentration, yeah, at top 10% or 36%, and we feel very good about it. We've always believed as an organization that the biggest risk to the firm or clients is keeping too much of our figurative eggs in a single client or a few client baskets. The fact that client concentration is low gives us very significant confidence that growth will be sustainable in the medium to long term. We always talk about robust, sustainable, and profitable growth. The sustainable growth largely drives off the fact that we do not have high client concentration. Your comment around the fact that you need to mirror what we've done on the client concentration side on the vertical side is something that we recognize, is something that we have been pursuing. If you look at us as an organization, and I called it out, there are three verticals that have been created over the last 18 months, which are now somewhere between 7%-9% of our global revenues. We made very, very concerted efforts at standing them up in a lot of industries. That's also continuing. BFSI, while I'm in, I'll go ahead and clump together as one vertical. The way we look at it is BFS and insurance are very different dynamics at work. Insurance is roughly 20%. BFS on the technology side is 16%. Given the large deal that we signed, $105 million on the banking side, we expect BFS to increase very significantly and to be driving growth for the firm, which has not been the case in the last two or three years. Banking should be a clear growth lever. Insurance continues to have a very differentiated and a story that stands apart at government services. That should continue on the curve it is. Travel because our expectation is that the growth that we've seen over the last four quarters, post quarter one last year, is likely to sustain in the medium term. There may be ups and downs in a few quarters here and there. Largely because we believe the full recovery from our vantage has not played out because Europe travel has still not recovered. Recovery has largely been North America travel and APAC travel centric. That's answered the question number two. Question number three around travel, we talked about two material deals which were won in travel in Q4. I just talked today about the fact that two out of the four material deals are expected to complete transition in the current quarter. They happen to be the two travel deals that were signed in the previous quarter, where we had 10 components, and we will now move to steady state operations in Q2. Did I answer your question, Vikas? Yes, this is very helpful. Thanks a lot. Thank you. Thank you. you. The next question is from the line of Rishi Jhunjhunwala from IIFL. Please go ahead. Yeah. Thanks for the opportunity. Just to answer the question, maybe a couple. One, can you give the G&A points on revenue and margins on your NIIT Technologies, which is AdvantageGo, Whishworks, and [uncertain] Sure. Ajay, would you like to give it or would you like me to go ahead on that? I can give the numbers. The AdvantageGo revenue for the quarter was INR 750 million. EBITDA was 15%. For Whishworks, the revenue for the quarter was $689 million, and EBITDA was 15.5%. Another thing which I would like to add is that Whishworks Equity, 100% owned by Coforge, after the residual equity stake will be acquired in FY 2022. Understood. Just secondly, Sudhir, can you give some clarity in terms of comments which you've made around capital in the sense, our main investor looking for ADR? You had made some comments in the morning. Just how do you understand basically what's the time are they looking at in this plan, if that's something you can share? Sure, Rishi. As we shared earlier, and as we shared earlier this morning as well, the board has passed an enabling resolution on the July 6. We have shared the details of that resolution with everyone. Our assessment, the board's assessment at the current point in time, is that we do not have any primary requirements which we are pursuing as part of the process. The board's assessment also at the current point in time, under this enabling resolution, which is still awaiting approval by the shareholders. That process will complete on the July 30 at our AGM, that if the board were to decide to go for the issuance of depository receipts, we would prefer to do it the ADR route and not the GDR route. That's where we stand currently, Rishi, on the enabling resolution passed on the July 6. Understood. That basically is a conversion of the locally listed ADR. No impact on our primary capital, right? Yeah. At this point in time, the board believes that we do not have primary requirements that need to be serviced. All good. Thank you. All the best. Thank you. Thank you. The next question is on the line of [uncertain] Please go ahead. Yeah. Hi, Sudhir. Thanks for the invitation and congrats on a good quarter. If you look at the receivables side, there is a INR 200 crore increase sequentially, and this more or less equals the sequential increase in overall firm revenue. Across industries and across companies, we understand that this growth is coming back from a low base. Some amount of working capital is getting absorbed back into the business. In our case, the quantum of this increase seems to be pretty high. If you can give some more color on whether we are witnessing any change in the working capital terms, new contracts, or if there is any change in the revenue recognition policy, or if the speed is being driven by any one particular vertical. Incidentally, another competitor of yours with high exposure to travel has also witnessed a similar trend this quarter. Thank you for the question, Ajay, can I request you to take that, please? Sure. Thank you. The increase in the receivables which you are seeing includes the SLK Global. There is no change in the DSO of the firm and the overall composition of the terms, the payment terms and the overall operating cash flows and profit structure, working capital. It's just the addition of the SLK Global that is driving the increase and that increase in the receivable. Okay. I would suppose then if the revenue also got added, right? In terms of if you are looking at the incremental revenue at overall firm level, so are we suggesting that SLK Global has a much different working capital profile than what we have in the core business? No, we are not suggesting that. There were some components that work got delayed in India government because of the second wave pandemic to the tune of approximately $5 million. That will get recovered in Q2. However, in Q1, there was an impact. In addition, I just want to also add that if you would look at the Q4 of FY 2021, the OCF was 144% of the EBITDA which was significantly higher, and we had a significant good collections in Q4. On back of that, the next quarter obviously has some headwinds because of the higher collections in the previous quarter. On an overall period basis, it evens out, but there is no changes in the trend in terms of over the last couple of quarters. Okay, Ajay. If you can repeat the intangible assets. Did you say it's INR 315 crores and goodwill is INR 615 crores? That is correct. I'll repeat the numbers once again. The overall purchase consideration for 60% was INR 920 crores, as you're aware. Total tangible assets were INR 192 crores. Intangible assets were valued at INR 315 crores, and the goodwill recorded was INR 615 crores. We are also considering the future payouts related to this, right? Of INR 920 crore because obviously these fees will add up to more than INR 920 crore. That is correct. The future acquisition cost has been recorded at INR 213 crores and there has been non-controlling interest which was recorded at INR 102 crores. Okay. Thanks, Ajay, for my questions. All right. Thank you. Thank you. The next question is from Ashwin Mehta. Please go ahead. Yeah. Congrats on strong growth this quarter. Sudhir, just one clarification in terms of the deal flow. We were talking about last quarter that we are chasing three class deals, of which one was INR 100 million deal. That INR 100 million seems to have been signed. Just as a follow through, does the deal for this quarter include that or we are expecting decisioning on that to happen in the subsequent quarters? One of those two has been converted, and they were referenced in the two other large deals cycle acquisition. There's another one that is still in play and continues to be in play. Okay, fair enough. Just a small follow-up here. We had earlier talked about the ESOP charges this year would be almost a bit lower than the last year. This quarter, there was an increase in terms of ESOP charges. Do we see going forward a normalization of that and we expect that to keep a reduction in terms of ESOP charges? Thanks for the question, Ashwin. Ajay, can you take that please? Yeah, sure. Thank you, Sudhir. Ashwin, the increased cost of MIP basically includes the grants given to the leadership that was hired during the quarter, including the leaders of our recent acquisition, SLK Global, at the higher market price. We do expect that the overall ESOP cost would be at approximately 85 basis points instead of the 60 basis points which we had guided earlier for the financial year. Okay. 85 basis points is for the financial year that you're now giving. That is correct. Okay. Thanks a lot and all the best. The next question is from Sandip Agarwal from Edelweiss Securities. Please go ahead. Yeah, thanks for giving me opportunity again. Just one question, Sudhir. On the demand side, if you look at more than 50% of your portfolio, which you indicated charts engineering, cloud, digital, intelligent automation are in high demand and you believe there could be a multi-year demand for this game as a whole. I'm not asking for a guidance, but do you believe any reason not to believe that the organic growth momentum, what we are seeing in FY 2022 can even continue in FY 2023 if there are no major COVID-related waves or no other macro-related risk as a whole? I'm not asking for guidance, but directionally you believe these kind of a growth momentum can be sustainable beyond FY 2022 or you believe FY 2022 is a year of COVID demand and growth may actually come down a bit in FY 2023. Sandip, even last year during the pandemic, if you look at the travel vertical, right through the pandemic, the rest of the business outside travel for the firm grew at 18.4% organic CC terms. Pre-pandemic, the previous two years, we were growing at about 16% CC organic, and we were of course putting the building blocks around tech stack build-up in those first two years. Year three during the pandemic other than travel, we still delivered 18.4% CC organic growth. Travel for us is a very big vertical, but we did it. This quarter clearly we pulled out 19%+ and we'll see where we finally land up. Our intent as a team, as an organization, has always been to discover a path to sustainable 20% organic CC growth. That's an ambition. That's not a guidance. We believe there are clear paths, that journey to that destination that exist. We have seen organizations which are not necessarily India-based in the IT services space, create those and be on those for the past few years. We are attempting and we are putting in everything that we have to try to get to a model where we can start delivering those growths on a sustained basis. Just to close, are we confident that we found the path already? I think the answer is no. Are we very intent on trying to get there at some stage? The answer is clear yes. Okay. Just second question, maybe you can answer overall how the industry as a whole, because looking at the customer side, attritions are real issues. The mitigating factor could be client acceptance for the pricing as a whole. For industry as a whole, if you look at 50% of the portfolio is digital, 50% is legacy. You also said pricing increase are coming in pockets or specific engagement rather than across MSA as a whole. That might you believe could be a net increase on the realized pricing at Coforge level may not be very high or you see the pricing increase on new skills could be actually offsetting the pricing pressure which we may see for legacy portfolio as a whole? I think the blip that we've seen on pricing is likely to be temporary. I do not in the medium to long term see pricing as something that's going to keep going up. At some point in time that leverage will start decreasing and we will come back to near normal levels. Pricing is something that needs to be negotiated on an ongoing basis. To my mind, the bigger margin lever that we will have available to us as an industry will be one, making sure that we stop eating our own dog food and inject automation in back office operations with the same intensity with which we've been able to inject that into some of our client organizations. With bill sizes progressively going up, and I'm talking in relative terms for mid-tier players like us, offshoring itself is going to be a very significant lever on the margin increase, given the historical offshoring percentage levels that mid-tier firms have had and where we can land up if we continue securing the large ticket deals that we have in the recent past. That's how I would aggregate and margin as we see them from our vantage. Okay. Last, just bookkeeping. Here you have said INR 102 crores on a budget size allocation is towards what? Because your voice was feeble. INR 213 is towards earn-out, INR 102 is towards what? INR 102 is towards the non-controlling interest. If you would recall, for SLK Global, we had acquired 80% where we had acquired 60% upfront and contracted to acquire another 20% after two years. The balance 20% is considered as non-controlling interest and that's the INR 102 crores. Okay. Thank you. Thank you very much. That was the last question. I would now like to hand the conference over to Mr. Sudhir Singh, Chief Executive Officer of Coforge Limited, for closing comments. I'd like to reiterate the gratitude of the team, all 20,000+ employees of Coforge to all of you for having made the time for this conversation. It's late evening in India at least. Also, thank you for your interest and for the comments and the insights that we continue to pick up from our interactions with all of you. I look forward to speaking with you along with Ajay three months from now, and we hope that you, your families, your friends, and things stay safe for the next three months and beyond. Thank you very much for your time and for your interest once again.