Ladies and gentlemen, good day, and welcome to the Q1 FY 2023 earnings conference call of Coforge Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankur Agrawal, Head of Investor Relations and M&A at Coforge Limited. Thank you, and over to you, Mr. Agrawal. Thanks, Rituja, and a very warm welcome to all of you, and thank you for joining us today for Coforge Q1 FY 2023 earnings conference call. As you know, we announced our Q1 results today, which we have filed with the stock exchanges, and the same is also available on the investor section of our website, www.coforge.com. I have with me today our CEO, Mr. Sudhir Singh, and our CFO, Mr. Ajay Kalra, for the call. As always, we'll start with the opening remarks from our CEO, and post that, we'll open the floor for your comments and questions. With that, I would now like to hand it over to our CEO, Mr. Sudhir Singh. Sudhir, all yours. Thank you, Ankur, and a very good morning, good afternoon, and good evening to all of you across the world folks. Thank you for taking the time to join us today for the conversation as we share our quarter one fiscal year 2023 results. Before I delve into the quarter one financial results and the operations updates, I want to take a moment to recall that we began our journey this year on the back of our performance in fiscal year 2022, which was a landmark year for the firm. In FY 2022, we had not only grown our revenues by 38%, but we had also significantly expanded our EBITDA margins despite the significant cost escalatory environment last year. Equally importantly, when we met around mid-May for our Q4 results last, most of the current macroeconomic concerns, including rising inflation, slowing growth, and a potential U.S. recession, as predicted by some commentators, were already being talked about. This was mid-May when we spoke last. Hence, the likely overhang created by these concerns were factored into our annual revenue and our annual margin growth guidance. As we progress through quarter one, through ground-up conversations that we are having with our existing and target clients, we continue to gain further clarity and visibility on our outlook for fiscal year 2023 and beyond. That outlook continues to remain strong, and I look forward to sharing that during my prepared comments and the Q&A today. With that preface, let me start with the quarter one performance. First, quarterly performance around revenue analysis. We are pleased to report that in quarter one, the firm registered a sequential growth of 4.7% in CC terms. The sequential growth in USD and INR terms was 2.7% and 5% respectively. During quarter one fiscal year 2023, we recorded revenues of $238.7 million and INR 18,294 million. This gap between the constant currency and the reported growth is driven by the depreciation of the INR and the euro relative to the US dollar. I shall now detail vertical-wise growth for the quarter under review. During the quarter, our BFS vertical grew 11.1% quarter-on-quarter in CC terms, and it contributed 29.5% to the revenue mix. The travel vertical, which had grown 15.4% sequentially last quarter, was up 1% QOQ in CC terms and contributed 19.4% to the total revenue. The insurance vertical contracted 6.3% QOQ in CC terms and contributed 23.1% to the revenue mix. Other emerging verticals grew 11.4% quarter on quarter and contributed 28% to the total revenue mix. Within the financial services portfolio of the firm, BFS continues to deliver outstanding growth on the back of multiple large deal wins reported in the earlier quarters. The insurance business, after the contraction in Q1, is poised for a very smart rebound in Q2. Our travel business, which had grown strong sequentially, very strongly sequentially by 15.4% last year to surpass the pre-COVID level revenues, continues to see strong demand ahead. The emerging verticals are also poised for strong growth in the quarters ahead. Within regions, North America, which contributed 51.3% of the total revenues in quarter one, grew by 5.5% quarter-on-quarter in CC terms. EMEA, which contributed 36.9% to the total revenue and had grown sequentially by 24.2% in the previous quarter, was flat in the current quarter. The rest of the world, which contributed 11.9% of the total revenues, grew 20.3% sequentially. Our business profile continues to be de-risked and marked by low client concentration. A lack of excessive dependence on a single client or a client cohort has allowed us to deliver robust growth on a sustained basis over the years. During the quarter under review, our top five clients contributed 22.9%, and our top ten clients contributed 35.5% of the total revenue. The top five clients grew 4.1% quarter-on-quarter, and the top ten clients grew 6.5% quarter-on-quarter, respectively. Very quickly, I want to reflect on the fact that one of the biggest structural changes in the operating profile of Coforge Limited, which in turn has driven our margin improvement in the tough supply-constrained environment of last year, has been the sustained and significant increase of our offshore revenues over the past few quarters. We are pleased to report that that trend continued in the quarter under review as well. During Q1 FY 2023, offshore revenues represented now 48% of the total revenues. You will recognize that this is a very significant jump of almost 8% compared to just a year ago. Moving on to the quarterly performance around margins and operating profits. For the quarter, we delivered an adjusted EBITDA of $39.3 million and INR 3,012 million in INR terms. This reflects an adjusted EBITDA margin of 16.5%. In CC terms, adjusted EBITDA margin was 16.7%. Our adjusted EBITDA in quarter one this year is higher than in quarter one last year. As is the case every year, it is lower than that recorded in the last quarter of the previous year. This drop happens largely on account of global salary hikes that are triggered at the beginning of every quarter one. In addition to the 250 basis points drop in Q1 EBITDA over Q4 EBITDA on account of the salary hikes, our SG&A expenses in quarter one were also higher by around 100 basis points over the previous quarter. This is in line with our commitment to drive aggressive growth while still delivering on our adjusted EBITDA annual margin guidance of 18.5%-19% for the current year. A small yet definite downward impact of 20 basis points was on account of cross-currency headwinds due to our relatively larger EMEA exposure and the lower hedge gains captured in the revenues. The fifth large deal in the last five quarters with a TCV greater than $50 million was signed during this quarter. I do wanna point out that the size and velocity of large deals further enhances our offshore operations and our offshore revenues and helps us build strong moats around margin defense. Overall, around margins, we believe that the fact that Q1 EBITDA this year is higher than Q1 EBITDA last year, despite higher salary increases and larger investments in SG&A, sets us up very well to deliver on our annual adjusted margin guidance of being broadly in line with last year's adjusted EBITDA margin levels. I shall share our estimates for quarter two adjusted EBITDA later in my commentary, and we expect quarter two adjusted EBITDA margins to be again materially higher than that recorded in the same quarter last year. Our consolidated PAT for the quarter stood at INR 1,497 million, which reflected a year-on-year increase of 21.1% in INR terms. Moving on to the order intake for the quarter. As you will recall, quarter one last year was a record quarter for the firm, with $318 million of order intake. That number four quarters back had also included a $105 million TCV contract. Now, I am very pleased to report that we almost equaled that record with $315 million of new orders during this quarter under review. Out of this $315 million order intake, North America contributed $123 million, EMEA was at $151 million, and $41 million was secured from the rest of the world. Continuing with our focused approach towards pursuing and winning large deals, we won two large deals during the quarter. One of these was a $50 million-plus TCV five-year deal. Incidentally, this is the fifth $50 million-plus TCV deal signed by the firm over the last 5 quarters. The first of these 2 large deals during the quarter, the $50 million TCV deal that I talked about, represents all incremental revenues for Coforge, and it came from the BFS vertical with a leading bank. The other large deal was in the travel vertical with a leading U.S.-based airline, where the digital integration mandate for the airline was awarded to us. Both deals, we believe, are reflective of Coforge's increasing recognition as a preferred technology partner, which brings deep domain expertise for its clients' business and digital transformation journeys. Our executable order book, which reflects the total value of locked orders over the next 12 months, has increased from $720 million in the previous quarter to now $745 million. Finally, to round off, 12 new logos were also signed during the quarter. I shall now reflect on delivery operations and capability build work executed across the organization. Digital transformations, migration to cloud, and technology modernization continue to remain key themes with our clients. The quarter saw continued focus on strong execution. In the BFS vertical, we closed a major new program with a leading global fund administration player. Over the next few years, we will be helping them build out a new platform using distributed ledgers for issuing and servicing funds. In insurance, we recently performed a technology consulting assessment for a leading U.S. insurance firm to co-create the end-to-end process improvement for rapid cost optimization and business process re-imagining of their global housing business line. We also completed a strategic API modernization program that enabled a U.K.-based insurance major to reduce their client onboarding time from four months to less than one month. The travel sector, as noted earlier, continues to grow for us strongly with major product engineering projects initiated for several global airlines. These included this quarter, the major expansion in our engineering services to drive the transformation of an airline's e-commerce business. As a global digital services solutions provider, we have also partnered with a large freight carrier in North America. With this, Coforge will bring agile next-generation solutions to the transportation and logistics industry. In the public sector vertical, we have won several major deals, including the multi-year contract as the scaled development partner for Strategic Platform Organization. SPO is what it is called, program of a European agency. During this quarter, Coforge received the Azure expert managed service provider tier with Microsoft. We also concluded our partnership with Sysdig, the unified cloud and container security leader. This has seen us launch our container security and monitoring services. Furthermore, as part of our efforts to expand our partnership ecosystem, Coforge entered new partnerships with Databricks, a cloud data and AI company, and also with Newgen, a global provider of a low-code digital transformation platform. Our partnership with key low-code, no-code platform players like Pega and Appian continues to fuel significant growth for the DPA, Digital Process Automation business. We were recognized for our focus on client success by Pega with two client innovation awards recently. In addition, we won the award from MuleSoft for the breakthrough partner of the year, our eighth consecutive award from MuleSoft in the recent few years. In earlier quarters, we had shared our plans about transforming the legacy ADM service line into a product engineering-focused capability. This is an ongoing area of focus, and we have initiated large, targeted learning and development initiatives towards this. In quarter one alone, more than 6,000 of our employees were covered in various technical upskilling and cross-skilling learning programs. The L&D programs have also been expanded to cover project and program management areas. We also continue to invest into domain-specific skills development using learning academies that deliver domain-specific learning paths. This model has also been extended to key customers, where the learning programs are client-specific, and they deliver the benefit of higher productivity as well as better retention of people. In recognition of Coforge's learning and development efforts, we were awarded the Leaders Award for Best Learning Outcome 2022 by Skillsoft, a global leader in corporate digital learning. In terms of solutions and capability building, Coforge created a member portal on Salesforce Experience Cloud for handling service requests related to travel insurance, which can be used as an accelerator for other Salesforce implementations. Coforge also created a framework on Salesforce Financial Services Cloud for building mortgage journeys. This is a reusable framework that can create customer journeys for retail banking, lending, and mortgage processing. Finally, as proof of Coforge's strong commitment to seamless business continuity, we were certified a new ISO 22301 model for BCMS, Business Continuity Management System. This new standard provides an international best practices framework for security, resilience, and business continuity in an organization. With that, I move on to the people section. During the quarter under review, we added a net 676 people to our headcount in the IT business. For the overall firm, including the BPS business, our total headcount at the end of quarter one stands at 22,742. Utilization, including trainees during the quarter, was 76.2%. LTM attrition during the quarter was relatively stable at 18% and continues to remain one of the lowest across the industry. I'm pleased to inform you that our company was chosen as one of the most preferred workplaces of 2022 by Team Marksmen in association with India Today. Coforge also received the prestigious Great Place to Work certification in India from July 2022 to July 2023. This, incidentally, is the second consecutive year that the company has got this recognition, Great Place to Work. Before moving on to the balance sheet and the outlook going forward, I want to emphasize our strong belief that growth in IT services businesses is largely predicated on a firm's ability to hire and retain the best talent. Hence, during this year, we also plan to materially expand our leadership teams across the verticals, geographies, and capabilities. To be commensurate with the growth agenda of the firm, and you would have seen that reflected in the SG&A increase during the quarter itself. Balance sheet quick metrics before I close. Cash bank balances at the end of quarter stood at $42 million after payouts towards an interim dividend declared in May. CapEx spend during the quarter was $7.2 million, and the debtors at the end of the quarter stood at 72 days of sales outstanding. I will conclude with the summing up and the outlook section going forward. On the revenue front, the key drivers poised to drive our sustained growth include our robust executable order book of $745 million over the next 12 months. The record order intake of $315 million in quarter one itself, including the two large deals we closed. The exceptional growth in the BFS vertical on the back of consistent large deal wins. Continued and sustained rebound of the travel vertical, which we continue to see in FY 2023 and beyond. The incremental revenue potential that we see from our 60+ Forbes Global 2000 clients. The low client revenue concentration that we see, and most importantly, the ground-up real-time conversations that we are having with our clients. They are what provide us comfort around sustained, robust growth going forward. At the beginning of this year, we had provided an annual revenue growth guidance of around 20% growth in constant currency terms. Given our performance in quarter one, we now upgrade our revenue growth guidance for fiscal year 2023 to at least 20% in constant currency terms. On the margin front, we maintain our annual margin outlook of delivering an adjusted EBITDA between 18.5%-19%. At this stage, we see an immediate jump of between 150 to 200 basis points in quarter two over quarter one itself. This expected sequential step-up in Q2 over Q1 margins will be on account of the continued increase in offshoring, planned improvement in utilization, and a large tranche of fresh college graduates who are now becoming billable. Summing up, we believe we are well-positioned to deliver another year of strong operational and financial performance, and fiscal year 2023 will be a milestone year in our journey, where we not only will achieve and surpass our publicly stated goal of becoming a billion-dollar revenue enterprise, but we will also begin advancing firmly, steadily, and hopefully with speed towards the next important milestone of $2 billion revenues. With that, ladies, gentlemen, I conclude my prepared remarks, and I look forward to hearing your comments and addressing your questions. Thank you. 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 Agrawal from Edelweiss. Please go ahead. Hello, can you hear me? Yes, we can hear you, sir. Yeah. Thank you. Good morning, and congrats on a good execution. Sudhir, very good commentary and very strong reiteration of the strong demand environment and your ability to pick up margins. Only two things wanted to know, like, you know, while you are saying that we are upgrading our guidance to at least. But given the kind of order book we are seeing and given the incremental revenue, which is incremental deal which is increasing on the order book, don't you think this number could have been upgraded more? Are you keeping something for the macro uncertainty in your kitty? Number one. Number two, on the margins, again, while, you know, it is very, very welcome step that you are confident of recovering such a substantial margin in just one quarter. My question was that, you know, if you see, last couple of years, post-COVID, the way, we have seen tough competition from the FANGs companies when, in terms of recruitment, they have come into India and also given tough competition to all Indian companies in terms of recruiting the best talent. Now in last two, three months, we are seeing massive recruitment by EPAM across the major cities. All these things, along with the pressure from the startups, have pushed the attrition levels at insane numbers and also has pushed the cost, thereby also, you know, along with the travel pains and the lockdown pain, which has triggered the subcons as well. My question was, aren't we at the worst of the margin in that sense? Isn't our P&L keeping at least 300-500 basis point of cost right now upfront, which with normalcy returning should reverse, number one. If that is not the case, does this equation actually is valid given that, you know, on macro uncertainties the growth will come down and margins will also go down? How is that possible? Can you please explain or what is your sense on that? Because if growth is going to come down, then your attrition has to fall extremely sharply. That will result into substantial savings in the form of sub-con reversing to a great extent and also, the replacement costs going down substantially. The mathematical equation which says that growth will also come down and margins will also come down, is that at all valid? I mean, I haven't seen that working out in last 30-35 years. Sandeep, thanks for the question. Thanks for the detailed commentary as well. Let me take both your questions in order. As far as the revenue guidance is concerned, as you noted, we've upgraded the guidance to at least 20% CC growth for the year. I've always maintained, the firm has always maintained, that when we give a guidance, the intent is always, A, to achieve it, and then B, try to exceed it, right? The guidance continues to be conservative as it always has been from our end. The intent has always been to meet and exceed. As the next three quarters evolve, we will keep updating it as warranted. As far as the second question is concerned, your question, if I were to synthesize that, was fundamentally that if growth were to fall, would margins fall as well? Our take on it is as follows. Given the order book we have, given the order intake we've seen, given the velocity and the size of deals going up, we do not really see growth tapering down below the guidance that we've set. We've set a minimum threshold. We believe all the metrics that you talked about, almost every macro economic scenario that we can model, will still allow us to deliver this base minimum growth. We believe the margin guidance that we've given, and I reiterated that in my prepared commentary, is definitely gonna get met in just about every scenario that we look at, including variations when it comes to revenue variation. I appreciate the aspects you talked about. We do see salary costs having gone up. This quarter, the average salary increase was greater than what we gave in quarter one last year, and I want to emphasize that. Because of the factors that you were calling out, we see continued competition in the market. We do not want a scenario under which attrition goes up and then we post-facto try to retain people. We built all of that upfront. We believe margin guidance is something that we should be able to deliver on. Honestly, there's just about no scenario that we can see where growth is gonna be below the guidance that we've offered you. I trust I've answered your question, Sandeep. Thank you. That's very helpful and best of luck for the current quarter. Thanks, Sandeep. Thank you. The next question is from the line of Vibhor Singhal from PhillipCapital. Please go ahead. Yeah. Hi. Good morning, sir. Thanks for taking my question. Congrats on great performance yet again. Sudhir, two questions from my side. One is I wanted to basically get some idea on the travel vertical. As you mentioned that we have basically surpassed the pre-pandemic revenue level in this vertical, which was badly hit by the pandemic. Just wanted to basically understand the difference in the nature of the work in the travel vertical that we have today, and where are airlines and hospitality segment in terms of their revenue to us pre-pandemic. Are we, I mean, are we still below the pre-pandemic level and the revenue has come from other sources, or have we surpassed that? How do you see the growth potential in that vertical going ahead? Specifically, I'm talking about these two subverticals of airlines and hospitality, given the kind of travel surge that we are seeing globally. And my second question. I'll probably take the second question once you answer this one. Thank you for the question, Vibhor. Let me address the question that you had around both the subverticals, airlines and hospitality. I mean, travel in general, we really don't see a demand problem coming up for the rest of the year. Airlines, if I were to just refer to the latest TSA data that we were looking at, it's 20% quarter two, and I'm talking calendar year quarter two, over quarter one, saw a 20% increase. The domestic RPK metric, which is the revenue passenger kilometer metric, month-on-month has gone up 9.3%. So clearly everything that we're picking up from all sources around airlines shows a very significant bounce back, and from all metrics it appears to be a sustained bounce back moving forward. The second subvertical you talked about was hospitality. Again, hospitality, hotel occupancy across North America is currently higher than the pre-pandemic level. We expected it to come up slower, but it has actually bounced back much, much faster. The U.S. Travel Association, when they came up with their latest reflection on how they see the rest of the year panning out, they said it's both the travel spending and a volume surge will continue despite the inflation that the U.S. is seeing. So on the demand side, both the subverticals you talked about, Vibhor, all data backs up the fact that the demand has come back and is likely to continue to remain sustained irrespective of whichever way, or largely irrespective of whichever way the macros play out. Right. My question was actually, one is, where are we in terms of our revenue from these subverticals vis-à-vis pre-pandemic? A second question is a follow-up to your commentary, was that yes, these companies are doing really great and their cash flows are definitely improving. What are we seeing from them in terms of their tech spend? I mean, have they already upgraded large part of their basically content and the overall technology, or do you still believe there is immense scope for the digitization and the technology upgradation, given that they're now generating cash as well? Airlines and hospitality, both the subverticals, Vibhor, our revenues compared to pre-pandemic levels are now higher. The fact that we bounced back almost 15.4% sequentially last quarter. Last quarter is when we crossed it, and we'd called that out, so we are already higher compared to pre-pandemic. These two subverticals and the broader travel sector in general is focused on two key technology buckets where they're investing significantly more than the others. They happen to be migration to the cloud, and a lot of that, especially in the airline context, is being driven by resilience issues. The second space where significant money and focus and investments is going is in the whole contactless travel/automation. Cloud transformation, cloud migration, and contactless automation are areas of spend. Both of these areas, we are not towards the lag end of the cycle. We are in almost all cases, either in the first half or in the middle of that investment cycle. Got it. My quick second question is actually on the margins front. I mean, you very well mentioned that there is no way that we are going to miss our guidance, and we will be able to meet the guidance. We did pretty much that last year as well, so I'm sure we have enough confidence in the company being able to deliver that. Just wanted to understand, is this going to be the trajectory of our margins going forward or going forward as well, that in one Q. I know there is a salary hike impact also, but as you mentioned, there was almost 100 basis points of R&D spend as well. Is this going to be a trajectory going forward for our margin profile every year that in Q1 we are going to see a sharp fall Q on Q, and from there on every quarter we are going to build up on it? Or do you think, as management we are working towards maybe smoothening the margin profile throughout the year? Vibhor, let me first start off with margins, right? Q1 margins were higher than Q1 margins last year. As I said, Q2 margins will be higher than Q2 margins last year. Our annual guidance is more or less been in line with last year. We feel very, very solid about delivering on the forecast around margin we've given you. Sure. As far as the trajectory is concerned, this year we've taken a conscious call because we feel very confident that we will deliver on the annual guidance, which is why in quarter one itself, our investment in SG&A jumped by 100 basis points over quarter four. That's largely despite actually the fact that our salary increases this year we've consciously given higher than we gave in quarter one last year. I mean, if I were to look at the composite picture around margins, this year has been a bit of an outlier because, A, the kind of salary corrections we've done at the outset are significantly north of what under a more stable cost regime one would normally do. Okay. When things around attrition come back to normal, I would expect that the Q1 drop is not gonna be as significant. It would likely be about 250 basis points over Q4 and not about 350-400 basis points as you've seen in this year. Got it. Great. Thank you so much for taking my questions, Sudhir, and wish you all the best. Thank you very much, Vibhor. Thank you. Ladies and gentlemen, to ask a question you may press star and one. The next question is from the line of Manik Taneja from JM Financial. Please go ahead. Hi, thank you for the opportunity. Just wanted to pick your brains on a couple of things in case you see pressure in terms of. Sorry to interrupt you, Manik. Can you please speak a little louder? We cannot hear you, sir. Yeah. Is this better? I'm audible now? Yes, please go ahead. Yeah. Thank you for the opportunity. Sudhir, basically just wanted to pick your brains on how do you think, or in terms of how do you see each of the, your service lines behave in case we see pressure in terms of customer spending? That's question number one. Then I also had a couple of clarification questions. If you could help us understand the impact of the one times related to an Indian government customer that's there in note number seven, and also, clarify on the sequential improvement in margins that we are expecting in second quarter. Thank you. Thanks. Thanks for all the three questions, Manik. I'll take question number one and number three, and I'm gonna request Ajay to take number two. At this point in time, Manik, if I were to look at the material service lines from our vantage product engineering, data, Salesforce, cloud, and digital, which in our context is more experience and integration, demand is buoyant across all. If there were to be an issue around demand macros, we would expect ADM as a service line to possibly see some impact. At the current point in time, given the migration that we are trying to effect, and I talked about L&D initiatives in this regard, I suspect we should be able to weather that and deliver at a very minimum on the annual guidance that's already out there. I'll take question number three as well and then request Ajay to jump in on question number two. As far as the sequential margin expansion is concerned, Manik, three levers that we believe will help us grow at least 100-200 basis points over Q1 in Q2 itself. The first is utilization. The quarter has already begun. The first month is nearly over. We believe utilization is gonna see a very smart rebound, jump in Q2 over Q1. The second is offshoring. You've seen this, Manik, it's already 8% higher than where it was a year back. Offshoring revenues continues to go up, and that is a structural sustained driver, not. Along multiple axes, right? Productivity, fresher induction, and so on. The third piece, which derives from the second factor, is the number of freshers, folks, fresh college graduates who we are increasingly incorporating into billable roles. Those three factors. Our utilization increase, offshoring going up, number of fresh college campus hires getting available in quarter two are the ones that will drive this blip in Q2 over Q1. Ajay, on to you for question number two. Thank you, Sudhir. Manik, on the note number seven, this is an old earlier years dispute where one of the Indian government clients have deducted arbitrarily and amounts which are not contractual. We are adequately provisioned against any eventuality. There is an outstanding of INR 137 million, which is in dispute with the client. We are in the negotiations, and we are confident of recovering the whole of the AR, including this INR 137 million. Sure. Thank you for the clarification. Just wanted to understand if there is any P&L impact of that amount in the current quarter. As mentioned in the note as well, there is no impact on the current quarter, Manik. These are for the earlier years, and you would see the similar note in our annual financials as well. Thanks a lot. Best wishes for the future. Thank you, Manik. Thank you. The next question is from the line of Rishi Jhunjhunwala from IIFL Institutional Equities. Please go ahead. Yeah. Thanks for the opportunity. Sudhir, can you comment a little bit on the insurance vertical? We have seen, you know, some decline this quarter, and over the past two, three quarters, the sequential growth has kind of tapered off from a pretty strong one Q last year, which of course could have been related to the acquisition as well. Given that a rising interest rate environment should ideally be positive for insurers, how do we, you know, expect that to play out slightly from a medium-term perspective, and what exactly went wrong this quarter? No, I think, I believe quarter two, which is the quarter that we're already in, is the quarter from which you should see not just a rebound, but a smart and a sustained rebound in the insurance revenues on a go-forward basis. Your point is noted, but as I have said, in the past also in group calls, we believe insurance has been a differentiated vertical for us and a growth driver for us. By the time the year is over the next three quarters, insurance should again clock in a very solid performance for us. From the macro perspective, we continue to see in insurance strong momentum across commercial, specialty, personal lines, and the broker business. Specifically, these businesses targeting the mid-tier market. The demand there that we see ahead of us for the remaining three quarters is strong. I would almost characterize it as very strong. We also find carriers are increasingly looking at alternatives to large tier one consulting firms, given the current market dynamics. Coforge, we believe, again, is uniquely positioned with its hyper-specialized offerings in P&C insurance to gain traction. Quarter two, you should see a smart rebound, and we believe it's gonna be a sustained rebound, on a sequential basis. Understood. Was quarter one a more specific client issue, or it was across that you saw some bit of volume decline? We saw a generic volume decline. There was one client where there was an issue, but that client also should see a bounce back in Q2, which is why there's a lot of confidence and which is why sitting here two and a half months before the quarter gets over, I can tell you that we will be expected to see a smart rebound in quarter two itself. Understood. The second question is on your geographic exposure, right? While optically it looks like you get almost close to 40% of your revenues from EMEA, can you give slightly more detail in terms of, you know, what kind of verticals do you have exposure in in Europe? And would it be fair to assume that some of the higher growth verticals are there in Europe and probably the impact from, you know, the crisis as well as currency will not be as high as it optically looks? Europe at the current point in time, Manik, has exposure across the verticals that we work in. Three years back, if we were to have this conversation, I would have said that Europe for us was in some ways a one or a two vertical play. At this point in time, all the three verticals are in play. Even the emerging verticals are doing a good job in terms of driving growth for us. It really isn't the case of either being only travel concentrated or BFS concentrated or insurance concentrated. Europe continues to be a place. When I talked about this 100 basis points increase in SG&A, we continue to invest very, very strongly in increasing the front-end sales and pre-sales team as well. Understood. Just one last thing. Our bank borrowings have gone up from INR 3.5 billion to INR 6 billion on a sequential basis. Just wanted to understand the reason for that, and was the you know, cash flow generation weak for any particular reason? Yeah. This is Ajay Kalra. There was an increase in bank borrowings in this quarter. It is very typical in quarter one, our cash flows are weak because all our significant annual payments, whether it be the bonuses, the variable compensation of the employees, the interest payment or the CapEx, those are all in the first quarter. Generally, our first quarter cash flows are weak and. However, we do However, we do expect that these will improve over the next three quarters. In addition, our DSOs were also higher in this quarter, which is very typical in the first quarter. That is also eating into the working capital and requiring additional working capital, and therefore reducing the cash flow. It's very typical in the first quarter of any year for us. All right. Thank you and all the best for the rest of the year. Thank you, Rishi. Thank you. Participants who wish to ask a question, please press star one. The next question is from the line of Shraddha from Asian Market Securities. Please go ahead. Yeah, hi, Sudhi. Congrats on a good quarter. A couple of questions. First is on the deal pipeline. Any directional sense can you give us on the pipeline? How much is it up on a Q-on-Q basis? Any mix, any change in mix of type of deals that you're seeing or any change in the sales cycle that you're seeing? Yeah, thanks for that question, Shraddha. Deal pipeline continues to be robust. As I'd alluded to the fact, it's now over the last five quarters, we've closed five $50 million-plus deals. And that's obviously a significant step up in terms of the median size of the deal and the velocity of those deals getting signed. Order executable at $745 million, order intake during the quarter at $315 million again attests to that. At this point in time, large deal going forward, when we look at the pipeline, both qualified, unqualified, is robust. I would almost characterize it as very robust. If I were to look across service lines or across geos, we have seen so far absolutely no slackening of demand or the pipeline, so far. INR 315 million, again, Shraddha, was almost equal to the highest order intake ever in the 40-year history of this organization, so things are looking good. Also, I mean, are you seeing more of vendor consolidation deals that are coming up rather than the large transformational deals that you used to have earlier in the pipeline? Any change in the type of deals that are there? Yeah, the big change has been the number of proactive deals that we are closing have gone up significantly. A lot of these $50 million deals, the reason why we've landed them is because we are increasingly not being reactive. These are proactively structured conversations. Some of them have been absolutely sole sourced. And that's been the big change that we've seen over the last couple of years while the pandemic has been going on. It's not just what's coming to us, it's also what we are being able to create with the tech consulting and the process consulting team in the front. Okay. Sudhi, the next question is, through SLK, we've got some exposure to the U.S. mortgage market. In light of rising interest rates, how do you see SLK performing in 2023, and do you see any near-term weakness in SLK's growth profile? SLK, the contribution numbers, as you would have seen, in the fact sheet, Shraddha, the contribution continues to be in line with the previous quarter. At this point in time, the cross-sell piece seems to be doing very well for us in quarter one, which was the quarter under review for our conversation today. We signed the first material travel client leveraging what was the erstwhile SLK and is now the Coforge BPS business, which has been a big milestone for us. The second thing that's working well for us is the Fifth Third Bank, which was the largest client and is also a JV partner for us. We've been able to start radiating now into the analytics space of the bank, which was not a space that the erstwhile SLK was able to break into. The softness that is there because of the interest rates that you alluded to is getting set off by the cross-sell that we've been able to achieve and which we hope to accelerate going forward. Do you expect SLK to grow lower than the organic business for the Coforge in 2023, or do you think it will be at par with the overall organic rate? Early days, we're looking at the current guidance from our end is at least 20% CC growth for us. It should be more or less broadly in line, where we see it for now. We'll keep updating you on this as the quarters progress. Yeah, that's helpful. Another last bit from me. I mean, we did have very smart hiring last year, but hiring this time around seems to be a tad muted. Any comments out there? Because I think the guidance you had given on hiring was that even this year, hiring should be broadly similar to the last year levels. But we've had a slow start to hiring in this quarter. Comments there would be helpful. Yeah, Shraddha, on the tech business side, we've hired almost, the net addition is almost 700, which is broadly in line with what we've seen in the recent quarters, and that continues to be good. What we'd also done was we'd hired upfront in quarter one itself, if you recall, last year. If you look at our current utilization, we have enough slack to be able to pick up growth going forward. Our utilization, as I told you, is only about 76.2%. BPO business headcount has seen a slight decline because the fundamental premise for acquiring that business was that we will take that $100 million BPS business, inject automation, and try to do more of transaction-based volumes. The BPO headcount has come down. Tech continues to be, we believe, very robust in terms of net headcount addition. Can you just reaffirm the hiring guidance for 2023, the fresher hiring target that we're looking at? We don't have a hiring guidance at this point in time, Shraddha, but fresher hiring continues to be a structured program. Last year, we hired 1,600, and as growth continues to come through, given the pipeline we are looking at, we continue to invest very heavily there. It's more or less in line with the growth that the organization will see. Great. That's it from my end. Thanks a lot. Thank you, Shraddha. Thank you. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead. Yeah. Hi. Am I audible? Yes, you are. Yeah, yeah. Thanks for the opportunity. My question is on the guidance. What would have added to your confidence in this guidance for Q1, as you know, the growth in Q1 is not very high, and also the order bookings in a Y-over-Y kind of flat, which brings down the KPM trajectory relatively over versus previous quarters. Is it just because you have now little better clarity on the year with one quarter behind you and conversations are static versus which you were thinking earlier could have gone down in life. I'm sorry, Rahul. Can you repeat? You're breaking up. Can you please repeat? I got the first part. From what I understand, you wanted to know why are we confident that we'll turn in at least 20% CC growth. What is the rest, remaining part of your question, please? Yeah. Essentially, if you are adding to your confidence, it should either come from a better performance in Q1 or let's say better order intake or something, which is not the case in Q1 as such. But is it because you have now better clarity since you have one quarter already behind you and conversation has not worsened, which you might be thinking earlier, in light of uncertainty, which is not as bad as now is. That is what is adding to your confidence? No, let me correct you there, Rahul. The order intake this quarter was almost the highest in the 40-year history of this organization, $315 million, right? If you go back five quarters, the firm used to struggle to cross $200 million. The highest in our history has been $318 million in a quarter, and that was quarter one last year. We had signed, if you recall, a $105 million TCV deal. We've signed $315 million. In the nearly 40 years existence of this organization, this is almost the highest ever. That is where the confidence comes from. The second place where a lot of confidence comes from is the fact that order executable, which is the 12-month signed order book, has now jumped to $745 million. If you look at the 5-year history of this organization and this management team, our revenue numbers, their trajectory has very closely mirrored the order executable number. That I would posit to you is where the confidence comes from. It's close to a 5% CC organic growth, which we believe very strong. It is almost the highest order intake ever recorded in a 40-year timeframe for this organization. It is a 12-month signed order book of $745 million. Hence we believe that the worst-case scenario for us should be a 20% CC growth for the firm. Right. Essentially what I was referring to was, let's say order intake on a LTM basis, which remains same. But regardless, I got the flavor. Secondly, Go ahead. We can hear you. Yeah, yeah, sorry. Let's assume if things have to worsen based on your past experiences from previous relatively weaker economic cycle, you think that the kind of situation where we are in the, you know, project life cycle or technology support, we could be still comfortably covering this year for sure, even if things have to worsen. Is that the understanding right? Yeah. I mean, Rahul, order intake obviously can fluctuate during a quarter, but, and maybe LTM is not the best way to look at it. As I said, the one key takeaway that I would like you to carry is this has been almost the highest ever in our history. Second, as I said during my prepared comments, 20% CC growth bakes in almost any kind of negative that the macros can throw at us. In response to an earlier question where we talked about interest rates, where we talked about demand environment possibly getting depressed in the second half, we baked all of that in. After baking all of that in, 20% CC growth is the least that we think we will deliver as an organization. Right. Right. Thanks for that color and, best of the luck. I think you've delivered well in a, COVID year also beating your guidance. Hope you will do this year as well. Thank you and best of luck. Thank you, Rahul. Thank you. The next question is from the line of Rishi Jhunjhunwala from IIFL Institutional Equities. Please go ahead. Yeah, thanks for the follow-up. Just, Sudhir, if you can break down our others vertical. You know, it's become like almost 28% of revenues and has grown pretty well over the past two quarters. Just wanted to understand which subverticals within that, you know, are doing well and where you would see pressure. You know, if you can, you know, if you are planning to split that out going forward. Rishi, others, we've traditionally not called that out, but the one sub-vertical that's doing exceptionally well for us is public sector outside India, particularly across Europe and Australia right now as a composite. When I talked about other emerging verticals, I talked about some of the recent wins, not necessarily INR 20 million plus TCV wins, but significant wins that we've also recorded. Within this public sector space, it is digital process automation that as a service line is resonating sharply with the demand asks coming in from this set of clients. Other verticals also continue to shape up well. I mean, there's positive traction across media. There's positive traction around retail where we started working, and we'd called this out with one of the world's largest retailers, and that relationship has ramped up significantly, and there's positive ramp-up across healthcare as well. Understood. Just one, you know, bookkeeping kind of question. You know, our BPM growth has clearly been strong and, I'm assuming largely led by SLK, where we do not have a complete control in terms of stake. On the other hand, minority interest in the P&L has actually gone up substantially if we look at it over the past 3-4 quarters, which basically means that subsidiaries where we do not have complete interest, their profitability has gone up substantially. You know, is it largely attributable to SLK? Is SLK now running at a, you know, profitability level which is much higher than what we were initially anticipating? What do you expect that will trend going forward? It is largely related to our BPS acquisition that we did last year. The minority interest is primarily related to that. As Sudhir had mentioned, that we have been reducing our headcount, and we have been automating a lot of the processes and moving to the transaction-based pricing. The profitability of that business is improving, and that is what is also reflecting into the minority interest as well. Rishi, as Ajay said, along with cross-sell, this is the other premise that has worked out well for us. The reason why we wanted to make this acquisition was because we saw a $100 million BPM business adjacent to a $100 million automation business that we already have. As Ajay alluded to right now, the fact that we've already been able to start injecting automation is what has allowed us to drop headcount and hold revenue or slightly grow it over time. That's why the margin and the profit is coming ahead of what we also would have thought about a year back. Okay. Thank you so much. Thank you, Rishi. Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Sudhir Singh, CEO, Coforge Limited, for closing comments. Thank you very much, ladies and gentlemen. We understand this call and at this time is early for India, and it's pretty late for some other parts of the world. We wanna thank you for your continued interest and support. We continue to reflect very actively on all the questions and the suggestions that come out of these calls, and we look forward very sincerely to seeing all of you three months from now in the quarter two call as well. Thank you once again. Bye-bye. Stay safe. Thank you. On behalf of Coforge Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.