Ladies and gentlemen, good day and welcome to the Q3 FY23 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 0 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankur Agrawal, Head Investor Relations and M&A at Coforge Limited. Thank you, and over to you, sir. Thank you, Faizan. A very warm welcome to all of you, and thank you for joining us today for Coforge Q3 FY 23 earnings conference call. As you are aware, we announced our Q3 results today. These have been filed with the stock exchanges, they are also available on the investor section of our website, www.coforge.com. I have with me today our CEO, Mr. Sudhir Singh, our CFO, Mr. Ajay Kalra, and our Chief Customer Success Officer, Mr. John Speight. As always, we'll start with the opening remarks from our CEO. 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. A very good morning, good afternoon, and a very good evening to all of you across the world folks. At the outset, let me wish all of you a very healthy, happy, and a meaningful new year. I shall now share our quarter 3 fiscal year 23 performance and the business outlook. Q3 this year has been a very strong quarter for the firm, despite the fact that it was the shortest quarter and a furlough-ridden quarter. In this quarter, we signed five large deals, which is the highest number of large deals signed in any quarter in the history of our firm. Our quarterly order intake for the firm again has been the highest recorded ever in our history. Our utilization this quarter jumped 300 basis points sequentially. Our attrition levels came down further to 15.8%. They are probably now one of the lowest or the lowest across the industry. Finally, this quarter, our 12-month executable signed order book stands at $841 million. That again is the highest ever. With that overall context, I shall now talk you through the results, the quarterly performance, and our assessment of the outlook. Moving on with the quarterly performance revenue analysis. I'm pleased, very pleased to report that during the quarter, the firm registered a sequential revenue growth of 3.7% in constant currency terms. In USD and INR terms, the growth was 2% and 4.9% respectively. That 170 basis points difference between the constant currency and dollar growth was on account of 70 basis points of hedge losses and 100 basis points came from cross-currency headwinds. On a YTD basis, at the end of the first nine months of the current fiscal, the firm has grown 22.9% in CC terms, 24.6% in INR terms, and 16.3% in USD terms. On a YOY basis, the firm has grown 20.7% in CC terms, 24% in INR terms, and 13.6% in USD terms. I shall now detail vertical-wise growth for the quarter under review. During this quarter, the BFS vertical grew by 39.3% year-over-year in CC terms and contributed 31.1% to the total revenue. The strong growth came despite the impact of very considerable softness in our BPS mortgage portfolio. Our travel vertical grew 25.6% year-on-year in CC terms, and it contributed 19.3% to the revenue mix. The insurance vertical revenue declined by 6.8% YOY in CC terms and contributed 22.1% to the Q3 revenue. The others vertical grew by 24.1% YOY in CC terms and contributed 27.4% to the revenue mix. Within the others vertical, retail and healthcare now stand at about 8% of global company revenue, and the public sector outside India stands at around 7%. These two verticals are the probable next two global verticals that the firm will carve out over time. Within the geographies, Americas contributed 49.2%, EMEA contributed 14.3%, and the rest of the world contributed 10.5% to the revenue. The farming engine of the firm continues to drive the growth of our top customer relationships. We continue to very successfully mine our key client relationships under a structured enterprise-wide key accounts program. In quarter three, our top five customers grew 5.4% sequentially, and top ten customers grew 3.5% sequentially in U.S. dollar terms. Our top five clients contribute now 23.9% to our aggregate revenues, while the top ten contribute 36.3%. We see the current state of our top ten client relationships offering two distinct advantages to us. First, as you would have noticed, we are not overly reliant on or overly concentrated in any single client relationship. We expect to significantly expand our wallet share in the top 10 clients, given the clear success that our key accounts program has driven for us in the recent quarters. Offshore revenue saw a further pickup and crossed the 50% mark, representing 50.5% of the total revenue in Q3. You will recall that just nine quarters ago, in Q2 FY 2021, offshore revenue was only 36% of the firm's revenue. This has been a structural shift in the firm's operating profile and an important and sustainable margin lever. I shall now move on to the margins and the operating profits discussion. Talking about quarterly performance margins and operating profits. Our Q3 gross margin sequentially increased by 133 basis points to 33.4%. The significant increase in gross margin in Q3 came about because of, one, offshore revenue contribution increase. Two, a 300 basis points improvement in utilization. Three, continued increase in billing of Graduate Engineer Trainees hired directly from college. We believe that the structural shift in the gross margin profile of the firm augurs well for an increased margin gradient in the years to come. It takes considerable effort to effect a 14% swing in offshore revenue contribution, which we have done. It takes considerable effort to build a campus hiring engine at scale, which is now in full play at Coforge, and it took considerable effort to move the needle on utilization by 300 basis points in a seasonally short furlough-ridden quarter, which is what we've achieved. Today, as we speak, we have another 1,000 Graduate Engineer Trainees who are undergoing training. As they become available over the next four quarters, that should provide a further gross margin fill. It is important to note that our gross margin increase has been driven by these three efficiency levers that I've noted above, and not, I repeat, not by currency tailwinds. The entire tailwind on margins on account of rupee depreciation was wiped away by the hedge losses sustained during the quarter. That hedge loss of INR 129 million during the quarter created a headwind of 60 basis points on the margins. As we've shared in the last two quarterly calls, we are investing aggressively, and I mean aggressively, in the front end leadership and capability build to further drive accelerated growth. As a result of those investments, SG&A, as a percentage of the revenue for the quarter, was 14.9%. That's almost 121 basis points increase over Q2 FY23. Despite these very significant investments, adjusted EBITDA margin increased to 18.5% for the quarter. The consolidated profit after tax for the quarter stood at INR 2,282 million, which reflected an YOY increase of 24.2% in INR terms. Moving on to order intake. Interesting story, order intake. The shortest quarter of the year has proved to be the most productive for the firm, both in terms of the number of large deals and the order intake registered. We closed five large deals during the quarter, which is the highest number ever recorded in the history of our firm. One of these was a $50 million+ deal within the insurance vertical. Our order intake of $345 million during the quarter was again the highest quarterly intake for the firm. The $50 million plus TCV was structured with a specialty insurance carrier to support its core systems upgrade, as well as servicing and building capabilities in newer areas of operations. Another $30 million TCV was signed with a banking major. This deal was anchored by our Data and Analytics service line and involves advanced analytics in financial crime and fraud management, BI reporting, and platform modernization for the next three years. Americas contributed $208 million, EMEA $113 million, and the rest of the world $24 million to the overall order intake. Our executable order book, which reflects the total value of locked orders over the next 12 months, stands at a record high of $841 million compared to $802 million in the previous quarter. This metric, which we track closely and have reported quarterly over the last 5+ years, is also indicative of strong expected growth beyond just the current fiscal year. We also signed 11 new logos during the quarter. Moving on to the people metrics. At the end of quarter three, total headcount stood at 22,505. The quarter saw an increase in utilization by 300 basis points, as a consequence, we were able to deliver the volumes with a marginal decrease of 138 people in tech services. attrition during the quarter further declined to 15.8% in Q3 from 16.4% in Q2. Employee attrition at Coforge, and I've said this often, continues to remain amongst the lowest and probably is the lowest across the IT services industry. I will now hand over the call to John Speight, Chief Customer Success Officer, for providing insights into our operations and capability creation. John joined the firm around five years back, shortly after I did, and I've had the pleasure of having him as my colleague over the past 12 years across organizations. He currently drives our customer success function and oversees key accounts growth and consulting capability build agenda. Over to you, John. Thank you, Sudhir. I will now touch briefly on our key delivery operation highlights. As you are aware, effective delivery execution has and continues to be a core part of our customer value proposition. In our insurance business, we successfully implemented an automated underwriting solution for a large U.S.-based customer. This resulted in significant reduction in time taken to issue policies and the corresponding reduction in their cost base. For a global specialty insurance group with offices across the U.S., South America, U.K., and Europe, we've been chosen as their global strategic partner to work with them in their digital transformation programs. This encompasses the run, the build, and transformation across all of their systems and will leverage our end-to-end services spanning capabilities such as consulting, digital, data, analytics, cloud, and automation. Before I move on from insurance, I just wanted to let you know that we were recognized for the first time in the recent Everest Group PEAK Matrix for application and digital services in both P&C and L&A insurance segments. We were classified as a star performer in the major contender segment, a significant achievement for us. Moving on to banking and financial services. We have successfully completed a very large transition from the incumbent provider at a tier one bank. With the transition completed, we've now embarked on transforming the delivery to outcome-based service models. The partnership with this bank has grown on the back of our delivery excellence, and we are moving up the value chain. One such example is the modernization of their business intelligence platforms that provide advanced analytics services in areas such as financial crime and fraud protection. In travel, transport, and hospitality business, we've successfully partnered with one of the global airlines to improve their customer experience when using kiosks. We've now rolled out the new kiosk platform at 25 airports worldwide and are currently planning the rollout for a further 20 airports. The new kiosks support 12 different languages and have helped improve the customer experience by significantly reducing the self-service check-in time. We continue to explore and invest in emerging technologies. Our Metaverse COE is now operational. The Coforge Metaverse Experience Center is a virtual reality space that is being used to demonstrate use cases across the industries. We've also embarked on a program to use the Metaverse for our leadership assimilation programs and employee onboarding here at Coforge. It's a great way to deliver value while we build up our Metaverse capabilities. We recently announced a partnership with the Mack Institute for Innovation Management at The Wharton Business School. The Mack Institute supports both industry and academic communities, helping to apply innovation research into real-world deployable solutions. This partnership will help reinforce our efforts to enhance our technology capabilities and to help us deliver value-added solutions to our customers. I would now like to hand over to Ajay for further details on financials. Thank you, John. A very happy new year to everyone. Sorry about that. There's some audio issues. Let me begin again. Let me briefly touch upon the key balance sheets and tax metrics. Our cash and bank balances at the end of Q3 financial year 2023 stood at $49.5 million compared to previous quarter of $50.3 million. CapEx spend during the quarter was $5 million. The days outstanding were 73 days in Q3 versus 70 days in Q2 in INR terms. In USD terms, the DSO were 68 days compared to 66 days in Q2. The effective tax rate for Q3 financial year 2023 was at 23.3% as compared to 17.7% in Q2. You may recollect that we had one-time benefit last quarter that we got from one of our foreign subsidiaries, where we were able to take the benefit of net operating losses. Our normalized tax rate for Q3 is around 21.5%, and our ETR will continue to be in the range of 21%-22%. The Operating Cash Flow for the 3 months that ended 31st December 2022 was at $30.4 million, which is about 69% of EBITDA. The OCS and DSO were impacted due to collection of one of our large clients coming in the first week of January and impacted the DSO by 5 days. In addition, I just wanted to give an update also on the company's proposed ADR offering. The current market conditions are not favorable and hence ADR listing has been delayed, though the company remains fully committed to the ADR listing. The company continues to monitor market conditions closely. With that, I will hand over the call back to Sudhir for his comments on outlook. Thank you very much, Ajay. Let me move on with the summing up in the outlook section, ladies and gentlemen. The five large deals signed during the quarter, the highest order intake, and I said this earlier, in the history, in any quarter in the history of the firm. Finally, the highest 12-month signed order book in the history of the firm at the current point in time gives us confidence in our ability to drive sustained, robust growth in the coming quarter and in the coming year despite the uncertain macros. The fact that the farming engine across the accounts is delivering sustained, de-risked, robust growth. The change in our client portfolio mix, where we today have 60-plus Forbes Global thousand client relationships to farm further. The aggressive, very aggressive investments in sales, marketing, tech, and functional capability build that we are making, allied with an improving margin gradient that allows us to invest further, gives us further confidence in that assertion that I just made. As a consequence, we are now upgrading our full-year revenue guidance to 22% organic CC growth, and we maintain our adjusted EBITDA annual margin guidance. With those words, and with that, ladies, gentlemen, I conclude my prepared remarks, and I look forward to hearing your comments and to addressing your questions. Back to you, folks. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephones. 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. Participants connected on video link, please click on Raise Hand icon to ask a question. Participants connected on audio, please press star and one to ask a question. We will wait for a moment while the question queue assembles. The first question is from the line of Ravi Menon from Macquarie. Please go ahead. Hi. Thank you, gentlemen, congrats on a pretty good quarter. You said that there were significant headwinds in BPM, despite that, you seem to have grown there. You know, if mortgage was a headwind, what are other parts of BPO that actually did grow? No, I said that there were significant headwinds in BPS mortgage, BPO mortgage, Ravi, and the numbers that I called out were for the BFS portfolio, which includes the BFS BPS portfolio. The mortgage business saw a considerable decline, but given this very significant momentum that we have ongoing across our broader BFS portfolio, it continues to power ahead with the speed that it has been over the past few quarters. Thanks, Sudhir. I was saying that specifically BPM itself seems to have grown, you know, from like INR 25.7 million to INR 28.8 million. Are there parts of BPM that is still growing or that's... BPM is growing, but it's, I mean, as pieces or the aspects of BPM, the parts of the business across BPM which are not on the market side are doing very well. We've talked about this in earlier calls as well, Ravi. The cross-sell is moving very well. We've been able to make forays into the travel BPO space. We've been able to very aggressively start getting into the analytics space, which is an allied area. We've been able to cross-sell very effectively in the insurance space with the BPS offerings, which for the acquired entity, SLK, were initially only on the BFS side. Interestingly, in this quarter, the BPM business also signed a $20 million-plus deal. One of the five large deals that I talked about was a BPM-led deal that we closed. Did I answer your question? Yeah, great. Thank you. One more follow-up on this, you know, service line. Data integration, given that, seem to have done really well over the last year or so, but this particular quarter we've seen a decline there. I mean, is there furloughs or some projects coming to an end? How should we see this? Most of the business right now on the data side is with BFS. There are very significant furloughs, the BFS clients that we saw. That's why you see a temporary blip. Data Analytics, we feel very, very good about. It's really scaled up multiples over the last two or three years, and we see that growth continuing, hopefully accelerating here. Great. Thanks so much, and best luck. Thanks, Ravi. Thank you. The next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Hi. Good morning, sir. Thanks for taking my question, and congrats on the very strong deal flow that you reported this quarter. Sir, on the deal flow itself, if I could get some color on, as you mentioned, there was a $50 million deal that we booked in the insurance segment. Would it be possible to provide some breakup of the $345 million? I mean, how was it in terms of vertical? What would be the number from banking, from travel and from the other verticals? No. Before I provided numbers around the geos. I can give you some more color around the five deals and where they came from. Two out of the five deals. Yeah. -were from the insurance vertical, which we suspect starting Q4 is gonna rebound smartly. One of them was a DNA Data and Analytics-led deal from the BFS space. The fourth came in from the BPM profile that I talked about. That's broadly where four out of those five deals came from. The geo-wise split is what I've given you. If I look at the current quarter- Yeah. The quarter that got over, most of the large deals were centered around the BFSI space, so it became almost evenly from insurance and from big banking. Got it. Got it. That's really helpful. I also just wanted to take your brains on the guidance part. We've upgraded our guidance in this quarter and maintained the guidance for the margins also. If, I mean, in this quarter, of course, the growth was impacted because of a seasonally soft quarter. Given the numbers that we have, that leaves a very tall ask for Q4, both in terms of growth and margins. Margins, I know you mentioned that we decided to spend more on the NTB part this time, which does, can be recovered next quarter in itself. I think on the growth part, the required rate for the next quarter comes out to be quite steep. I mean, is this the deal flow that we got in this quarter that's giving us the confidence or the overall momentum that you are seeing? A related question to that is slightly a little bit of a longer term. I mean, how do you see again, the next few couple of quarters play out in terms of, I mean, U.S. possibly heading into a slowdown, how the client conversations have been around that and how do you see the deal mix changing because of that? Let me take the questions in order. The first one was a question around the growth that we anticipate in Q4. The guidance that we give you over, and we've always given consistently is in organic constant currency growth. At the end of the first nine months, YTD Coforge is already growing 22.9%. The 22%, at least 22% constant currency growth guidance by our estimates is a relatively conservative guidance. We believe that we only need to grow in CC terms 3.5% to get there. Clearly, given the momentum that we have, given the five deals that we've signed, given that we've just grown 3.7% in a shorter seasonally weak follow load ridden quarter where mortgage industry was also seeing a very significant drawdown, gives us confidence that we should be able to meet and exceed the annual 22% CC guidance that we talked about. That's answer one to question one that came from you. The second question from you was, how do we see the somewhat longer term play out? I did call that out in the commentary that I talked about towards the end. This is a good time in the year. and we actually at Coforge believe it's also a good time in the industry when the world is looking at uncertain macros to actually lean into growth. That has underpinned our very strong, very committed, very aggressive investments in sales, marketing, capability build, and you've seen that in the current quarter itself. Given the five deals which will now start ramping up, I suspect we'll start seeing the impact effectively from Q1 of next year. This quarter is likely to be a transition. We feel that despite the uncertain macros, despite the fact that there is a lot of ambient noise around what may or may not happen, we've been able to start insulating ourselves from a lot of that conversation. The order executable, I told you, is the highest ever. The order intake was the highest ever. The number of large deals have been the highest ever. Clearly there's a good ramp for the next few quarters which hopefully will insulate us even if some of the worst-case scenarios start playing out. We should continue to be on what we've always called out as robust growth. I think it's gonna be a very good time for us to prove that we can deliver sustained growth even when the market turns. Looking forward to it. We'll see what happens, but we feel good about the future. Got it. Great. Thank you so much for taking my questions, and wish you well. Thanks very much, Sudhir Singh. Thank you. The next question is from the line of Shradha Agrawal from Asian Markets Securities. Please go ahead. Thanks for taking my question. Hi. Congrats on a good quarter, Sudhir. Couple of questions. Our deals in insurance have been pretty strong, but somehow that is not reflected in growth. For the last few quarters, insurance has been on a soft trajectory. Do you see there's a delay in deals getting converted into revenue or is there something else which is holding back growth rates in insurance? That is question number one. I'll ask the other question. Insurance, Shradha, quarter four, which is the quarter that we're already in, we should see the clear turnaround and that vertical, that business for us, get back onto a path that it should be. You're absolutely right. This quarter we closed 2 large deals. We've had a large deal closure, if I remember correctly, in the previous quarter as well. It takes a little bit of a time to transition these deals, to lean into these deals, but Q four, the quarter we are in, insurance should be exactly where it's been for us over the last 4 and a half years. Do you have a follow-up, Shradha Agrawal? The line for Miss Shradha Agrawal has got disconnected. We'll move on to the next question from the line of Rahul Jain from Dolat Capital. Please go ahead. Rahul Jain from Dolat Capital, please unmute your audio from your side and proceed with your question. Yeah, hi. Thanks for the opportunity and congrats on strong performance. Sudhir, I'm sure you would share the precise guidance for FY 2024 in April. Just to understand the math now, based on your 12-month order book that is up 20% and also based on multiple conversations with clients and potential pipeline that the company is chasing, is it safe to assume that we may be able to replicate the current growth momentum at least for next two, three quarters, if not beyond? It's a tricky question, and I think you know that yourself, Rahul, before. We feel good. I'm saying this again, and I wouldn't say this if we did not really feel good about where things stand, right? It's always a very sweet spot to be in when you can get into quarter four. The new year is about to start, you have tailwind of 5 large deals which will really start delivering from quarter one of next year. Clearly there is a buffer. You've talked about it, the order executable being at INR 845 million, the order intake being at INR 345 odd million that we've looked at. The way I would characterize it is, I mean, one doesn't know the future, but everything that we could have done to insulate ourselves from a deteriorating or a significantly deteriorated macro in the quarters to come, we seem to have done a fair bit of it. We feel given our size, we're certainly not a large scale IT player. We should be a billion-dollar IT services firm. Growth is as much a function of the ability of the firm to rest wallet share, especially when things are slowing down, by leaning into that opportunity as it is about what is the rate at which the broader market is growing. Broad market is way too big. We still have a very small piece in that sandbox. We think as things change, we should be able to expand wallet share, and we should be able to drive what I will for now characterize as robust growth. Hopefully robust growth despite the macros going up or down. I'll leave it there, Rahul. I know it doesn't answer the question completely, but that's how I would present. Maybe Sudhir, just a suggestion which may help a lot of us is that I really appreciate that you came out with your first ever guidance at the most uncertain time, you know, and which somewhere says that you have some slight, and an important word you always keep is like at least in your guidance, which is also a rare thing to see. Clearly says you have a certain grip or understanding or visibility on the kind of an outlook that you share. What if we could, you know, can think of giving guidance on a 12-month forward rolling basis rather than giving an annual guidance? Because that guidance at the beginning of year is far more, supportive of the thought, but as the year progress, I mean, having a guidance for Q4 now is not helping as much as it was helping me, earlier. Maybe that's a different aspect which we could work it over a period of time. Just a small suggestion. Thank you. No, I think it's a great, it's a fantastic suggestion, Rahul. Thank you very much for that, and you're absolutely right. The first time we started giving guidance was around the time that COVID struck, and we had very significant exposure to the travel industry. Which is why we thought it was imperative that we like to think we have a very strong execution engine and a very strong grip on the business, that we step up to the plate and offer that guidance. I take your point. The only response I will have to you is over the last five years, if you look at us, every quarter we call out the next 12 months order booked, right? Which is what we call out as order executable. If you look at our growth over the last five years, over the last 20 quarters, there's been a very strong correlation between the graph, the order executable graph, and the actual revenue recorded over the next 12 months. While we can't, and you will appreciate this, while we can't keep on giving a 12-month forecast, we do try to give some comfort, some indication around how much is already locked in. I think we have not just a fairly, I'd like to say a very good record in terms of a very strong correlation between the OE movement and the actual revenue that comes over the next 12 months. I'll leave you with that thought, I take your suggestion, and I think it's a fantastic suggestion. Thank you so much. Thank you. The next question is from the line of Shraddha Agarwal from Asian Markets Securities. Please go ahead. Yeah. Hi. Sorry. Sorry, I got dropped off. Just another question on BFS. Some large IT names have expressed some concerns on capital markets. From that perspective, what is our positioning in capital market and overall BFS, and how do we see macros playing out in that segment? Capital markets buy side, especially asset and wealth management from our vantage, Shradha, has always been a good happy hunting area. The big change that's happened within our BFS portfolio, what's actually driven growth for us really stemmed from that $105 million 4-year 8-month deal that we've announced about a year and a half back. The very significant ramp up in that bank. The very significant ramp up in some of the other top 10 relationships that we have. If I were to look at it, if I were to start characterizing how we look at BFS, we still see spends even on the Capital markets buy side when it comes to enterprise-wide modernization. We see a lot of interest coming in around low code, no code, and we see data solutions still in demand. As we see it, and if I were a betting person, we would still like to say that for the next few quarters, irrespective of the macros, irrespective of what we're already picking up, irrespective of the fact that BFS we've seen very significant furloughs in the quarter that closed. That momentum from a Coforge BFS business perspective should sustain. We've seen nothing as a leading indicator, given the pipeline that we have, the locked orders that we have to indicate that it will go down. That's how I would put it. There are issues, there are headwinds, given the momentum we have getting into that, we feel good about where we are and we think it is likely to sustain. Yeah. Thanks, Sudhir. That's good to hear. Another thing is, of the five large deals that we closed this quarter, was any deal driven by any vendor consolidation exercise taken by any large account? Were we, you know, on the favorable side of it, or any cost takeout deal in the pipeline that increasing intensity of cost takeout deals versus transformational deals? Anything on the deal pipeline and the deal closure with respect to vendor consolidations you can talk about? Yeah. I'm just reflecting on it as you speak. The $50 million deal was a clear vendor consolidation. That came in, if I remember right, at about 55 over 3 years, and that was a win. That was a clear win. The BPM deal was again, interesting. Smallish deal, but very material for us, $24 million deal. That again, was a vendor consolidation. Cost is increasingly at play. John, you might want to add some perspective here. In almost all of these five costs, and transportation seem to be going hand in hand. Transformation, I beg your pardon. John, over to you for your comments. Thank you, Sudhir. Yeah, I mean, we are seeing an increased interest in cost optimization programs. Obviously, vendor consolidation is one of those levers that can be applied. I expect to see more and more use cases around costs coming through. We also see an awful lot of interest around process efficiency. Again, looking to drive down to automate and reduce costs through efficiencies. Sudhir. All right. Thank you. Um, if- If I can squeeze in one last question. Your margin guidance, according to my calculation, still implies a 200 basis points plus sequential improvement that is required in Q4 to even get to the lower end of the guidance band. What do you think are the levers available to us to have such a sharp, you know, margin improvement exercise to happen in Q4? Yeah. If you reflect back, the first two quarters of this year, our margins were higher than the first two quarters of the previous year. Last year, our quarter four margin always has a gradient. Last year, our quarter four margin was 20.4%. We need to add 170 bits over quarter three in quarter four to get to the lower end of the guidance. At the current point in time, we feel good about it, and I'll tell you why. We feel good about it, A, because there was 100 bits impact in the current quarter because the mortgage drawdown. A lot of our mortgage business is transaction linked. There is a lag by between the volumes going down and the costs being taken out. The cost is now nearly corresponding to the lower volumes. That 100 bits is a natural flow that we will get getting into next quarter. The other pieces, again, are the specific around the GET numbers that we have. I talked during my commentary around the fact that we have 1,000 GETs who are now getting billed, which is the second lever that comes in. The third lever, of course, will continue to be a modicum of operating leverage that we've always got around margin. Our calculation shows we need to go up by about 170 bits. We feel that we should be able to do it. We need to deliver about 19.7%. Last year, we delivered 20.4% in quarter four. Given the fact that the offshoring engine has scaled up far more than it was at the same time, Q4 last year, we feel we will deliver. That's why we made the discussion, that we will deliver on it. Just to add here, somehow my calculation shows that you need to get to 20.8% margin in 4Q, which is a 230 basis points improvement. Is this discrepancy because of your guidance being in constant currency and we looking at dollar terms... Sorry, we looking at reported EBITDA margin? Just want to get a confirmation on the margin guidance. Ajay, do you wanna address that? Yes, Sudhir. Thank you, Sudhir. Shradha Agrawal, this is our calculation. The margin uptick that is required is 170 basis points. It's actually between 150-170 basis points, depending upon where our revenues will go. Since there is a uptick of the revenues from Q3 to Q4, that'll also help us improve the margin from a year perspective as well. You need to factor that as well while calculating the margin uptick. We can talk in detail. Shradha, if there's Offline. Yeah. If we can have a follow-up with you on the exact calculations and, you know. Sure. Thanks, Anup. Thanks, Ajay. Thanks, Sudhir. Yeah. Thank you, Shradha. Thank you. The next question is from the line of Rishi Jhunjhunwala from IIFL Institutional Equities. Please go ahead. Yeah, thank you for the opportunity. Sudhir, you know, couple of questions. Firstly, on the margin side, right? If you really look at it, over the past 5, 6 years, you know, our gross margins have continuously trended down, even if, you know, even though we have delivered industry-leading growth. You have recently talked about, you know, the, you know, expansion on the gross margin side in the near term as well. I know to some extent it was also in the last 2 years, because of the pain on the travel and hospitality side. Just wanted to understand if you really look at, you know, us, going, you know, up in terms of the margin bands, where do you think the gross margin profile ideally should be? Do we have those levers or is it structurally that we are going to remain around, these levels? Rishi, if you look at this quarter, we walked the talk, right? I mean, the talk that you heard from us over the last two or three quarters, we walked it. Our gross margin has jumped sequentially by 133 basis points. We believe very strongly it's gonna jump again sequentially in quarter 4 over quarter 3. Your question is valid, but I would point you to our numbers for the current quarter. This quarter, gross margin has jumped very significantly. It's now at 33.4 from 32 last quarter. We believe we're gonna be certainly north of 33.4. I mean, if I were a betting man, I'd say more than 34 for sure in quarter 4. I hear you. All I'd say is just look at current quarter, we walked the talk. Understood. The other question is, you know, if we look at the trajectory of your year-on-year growth in executable order book for the last three quarters, we have seen somewhat of acceleration from 16%-20%, from 1Q to 3Q. This is despite the fact that, during this period, you know, the overall macro has continued to become worse or at least sentimentally worse. If I look at it from the perspective of, you know, where your next 12 months or FY 2024 growth could be, even at 15% growth, it would imply that your executable order book as a proportion is probably one of the highest that we have seen in the past 4, 5 years. Just wanted to understand, you know, in terms of conversion of this order book into, you know, revenues, how much of it would be dependent on, you know, macro not becoming significantly worse? Or the other way to put it is, what could be the risk to this revenue conversion, if at all? There's no risk to the revenue conversion. This is locked-in orders, Rishi. What we call out every quarter, 12 months locked-in orders, right? This is not a pipeline. This is what's already locked in. The risk really remains between the revenue that we're going for versus what we already have locked in. Very rarely do we find that what's already locked in kind of washes away. If you were to go back and look at the order executable that we end a year with and the actual revenue that we recognize, I would disagree with that assertion that getting to 15% means that we have to significantly up what we already have. I think the order executable that we are at currently, mathematically, nobody knows how it's gonna pan out in the future, should make 15% a slam dunk for the future. Yeah, no, I was actually asking the other way around that it looks like you will definitely do at least that much. Was there a risk to that? That's what I was referring to. Maybe that was an argument that I did not grasp. Yes. Yes, absolutely. No, we I mean, we'd like to hope that we will. I've obviously been trying to wordsmith my way out of here by talking about robust growth, sustained growth. We've always had robust growth, sustained growth for the last two or three years. I know that you know our revenue growth numbers over the last three years. We still think despite the ambient noise, despite macros which even in the best case are likely to deteriorate somewhat, we've got enough of a tailwind to be able to push into the storm if a storm does arise and still deliver that robust growth, Rishi. That's about all I can say, and I know you understand that. We feel good about it. There's just a lot of good tailwind. There's momentum building up at the right time right now as we see. Connecting. Yeah. Yeah. Fair enough. One last question. Can you give some color on AdvantageGo? I mean, it clearly has been a differentiated product on the insurance side. Historically, it's done really well. Just wanted to understand where it is, you know, how do you think about it, you know, progressing over the next couple of years. Are there any changes required in terms of, you know, growth or positioning of that product? Yeah. We realized about 6 months to 9 months, 2 to 3 quarters back, Rishi, that we definitely needed change within that business. That business has not been growing at the pace that the rest of the organization has to the extent that now it's likely just about 1, maybe 1.2, 1.3%, Ajay, keep me honest on this, of our aggregate revenues, right. This quarter, when I say this quarter, I mean quarter three, we onboarded Ian Summers, who was the CEO of Sequel, our biggest competitor, our principal competitor in that same London Lloyd's Reinsurance market. He's now become the business leader. He's the person who's going to be driving this now in the London Lloyd's Reinsurance, the Bermuda and the U.S. market going forward. Long story short, abbreviating my answer, we recognize the fact that we needed a fresh pair of eyes to look at the business. We recognize the fact that that business was actually pulling the firm down, and I'm not talking down in absolute terms, but in relative terms, and that we needed to relook at it. Last quarter, I talked about the fact that we relaunched our underwriting platform and Ian and team are reconstructing the overall front end. Next year, not quarter four. Next year, we think we should see in percentage terms, it's a small business. In percentage terms, the growth from that business, it should be materially higher than what the firm will record. Again, absolute terms, given the size, not very material. All right. Thank you so much. Thanks very much, Rishi. Thank you. The next question is from the line of Rajiv from Citi. Please go ahead. Thank you for the opportunity. Just 1 question. If I look at your executable order book or order intake, it looks really good, robust. At the same time, if I look at the headcount, it is only up 2% Y-o-Y, and the utilization is almost at its peak level. How do we connect all these three data points? This is the first quarter, Rajiv, where you would have seen us not adding to the headcount, and that's largely because in the last 4-7 quarters, we very consistently kept our utilization low. Today, given the fact that where the market is joining ratio. Joining ratio is the number of people who are actually joining after the offers you roll out, having gone up almost 20%-25% over the last 3-4 months. We feel confident enough to be able to take that utilization number 300 bits within a quarter, which both you and I know is a follow-driven shorter quarter, right? That relieves a lot of people that we could get into the billing pieces. For us, starting Q4 once again, you will see the same cycle which has been going on for the last 8-10 quarters continuing. Net headcount will go up. The second thing I want to point you to is when we talk about headcount reduction, most of it in the current quarter was led by the mortgage DPS business. It's not a very material business, but it's a business that we do largely linked to volumes, and we have to react very, very quickly to volumes going down. Last two quarters has been that over and over. Otherwise, where we stand today, I talked about this in my commentary as well. We have 1,000 GETs, Graduate Engineer Trainees, who have either completed training or are undergoing training, and it's a six-month training in our case, and are available to build anytime, right? We're not short of people who will be needed to staff the large deals that we won. Starting Q4, you will start seeing the net headcount back on the trajectory it's been in. This was a utilization correction quarter. It's been a very significant jump in utilization in a seasonally weak follow-driven quarter. Next quarter onwards, we'll try to keep utilization at around 80, 81, possibly take it a little bit more, and the rest is obviously going to come in by headcount. Sure. Thank you. Thanks, Rajiv. Thank you. The next question is from the line of Ashish Dave from Mirae Asset Capital Markets. Please go ahead. Good morning. Thanks for giving me opportunity. Sudhir, when you spoke in your initial remarks, you talked about retail and public subvertical. Sorry to interrupt you, Mr. Dave. The audio is not clear from your line. Please use the handset mode. Hello. Is it audible better now? Yes, sir. Thanks for giving me the opportunity. Sudhir, in your initial remark, you talked about two subverticals, retail and public, and you expect that to perform well going ahead. Just want to know what growth you reported in those subverticals in Q4, and what is the outlook going ahead? Ashish, this is the first time, you're right, that we called out the contribution. We are not calling out the growth numbers on a quarterly basis in this quarter or in the quarters to come. We will scale up a little bit more. Outlook, we think is positive for both of them. We'd like to think very positive, which is why we're planning to carve them out at some stage as standalone verticals to become vertical number four and number five for the organization. John, do you wanna add anything else to that or Ajay? Nothing for me to add. I think you covered it well. Okay. Got it. Nothing for me, Sudhir. My second question is on your TTH vertical. You reported a large deal in Q1 FY 2023. Last 2 quarters you have not talked about any deals on TTH travel vertical. We have good quality, good competencies in TTH segment as well as client base also looks strong. Again, I just want to understand, like, are we winning deals? How, how is the deal momentum in the TTH vertical and what kind of growth you are expecting in FY 2024? TTH this quarter, this year should be, and I'm talking TTH more from a North America and a Europe perspective. We are anticipating pretty robust growth, 25% plus, and I'm talking raw numbers at the current point in time, Ashish, from that piece itself. Not working very well for us. You're right. Last two quarters we haven't declared on material largely. The farming engine, something that John drives for the organization, right, has continued to chip away very, very efficiently. Travel and transportation obviously rebounded both the passenger side and the cargo side. There seems to be a lot of confidence and a lot of commitment around springs going up. Springs are going up. We've been riding that wave. We've been farming. We have used the COVID period to rest wallet share, in many cases become the only partner in a client situation. We've been riding that wave. We've been going through the farming engine on the travel side. It's not as if there are no large deals that we are pursuing. We are, but we have none to report over the last few quarters. Thanks. That's it from my side. Thank you. Thank you, Ashish. Thank you. The next question is from the line of Hiten Jain from Invesco. Please go ahead. Hi, Sudhir. One question. How do you think about the margins over the medium term, say next two to three years? Given that there are definitely tailwinds on the supply side, you've got one of the lowest attrition in the industry. At the same time, the growth is looking quite strong. It depends on how do you think about investments in your business. Do you think investments will accelerate from here on or do you think operating leverage will be good enough for you to continuously report margin expansion going forward given growth continues to be strong? I think we are very committed to margin expansion. We don't believe that growth for the sake of growth is the only goal that we should be going after. There are three things that give us a lot of confidence and which have allowed us to keep investing even at a time like this when macros are uncertain on the margin front. First is what I called out. Our offshore revenue as a percentage of overall revenue is now 15.5%. The offshore factory has grown very significantly. Our CTG now in the last 6 or 7 quarters for offshore revenue has been almost 8%. That structural tailwind means along with the increased utilization, along with the fresher factory, the beauty factory that is working, we think we should be able to move the margin needle materially. The only call, the execution call that Ajay and I have to take is when does one actually start letting when does one start moderating investments and letting some of these margin levers start impacting the bottom line. This quarter, and I talked about this earlier in response to a question which had come from the IIFL team, gross margin has already gone up very significantly. It's more a question of margin. At what point in time do we stop this very aggressive investment in sales, marketing and capability? I'm just trying to make sure that I characterize this correctly. We believe that even as we stand as a firm, there are enough levers for us in the short term if we wanted to do a material uptick, drive a material uptick around margins. A year or 2 years down the line, margins should be up. We have done a planning exercise where we planned around what we should look like at $1 billion roughly where we are versus at $2 billion. We would expect the margin profile to be superior, significantly superior at the $2 billion given the operating leverage that we find. Ajay, would you like to take this and add some more color around data on this? Sure. Sure, Sudhir. As we have seen in this quarter, our gross margins have improved, but we've also done an investment. As we go ahead in the near future, at least we will accelerate those investments, and keep investing for future growth. However, as we mentioned, we will take a call on when to rein in those investments and start expanding the margins, and that should happen in a couple of, in 1 year or from 1 year onwards. Great. Thank you. I'm sorry we've answered your question, but did you have a follow-up in case it was relevant? No, no. It does give me a lot of color. Thank you. Thanks a lot. Thanks again. operator, just keeping a time check here. We have time for one last question, please. Then of course, we'll we can individually follow up with everyone who have any questions. Over to you, operator. Thank you. We'll take the next question from the line of Abhishek Chandra from Incred Capital. Please go ahead. Thank you for accommodating me, and congrats on a good quarter. Just one question. It seems that, you know, broadly, for the quarterly earnings, we are hearing that, you know, the vendors have been able to defend, vendor consolidation deals better. Any color in terms of who's losing right now in the market and, you know, any particular, mechanisms in terms of pricing, delivery, you know, what's working for, you know, generally our vendors? Any color could be really helpful. I request John to step in as well. The only thing I can tell you is we certainly are not losing, as you would have figured out. John, would you like to talk about some of the levers that we see in play? Yeah, no problem, Sudhir. I think one of the biggest things that we've been very, very successful at over the last few quarters and years has actually been translating IT into business outcomes. It's really resonated well with our customers. Obviously, it's all based on a very, very strong execution bias on delivery. What we have actually accelerated has been the use of consulting-led solutioning. And this has actually paid significant dividends in the positioning of lots of our customers and also the types of conversations we're having with the customers and actually how we can then take that to close your deals. Thank you. That's it. All right. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Sudhir Singh, CEO and Executive Director for Coforge Limited for closing comments. Over to you, sir. Thank you very much, ladies and gentlemen. I know it's, it was early morning for most of you in India and for and possibly late evening for anyone who joined over from the States. Thank you very much for your questions. Thank you very much for your suggestions and your comments. We've always said this, and we've always meant it. The insights that you offer mean a lot to us. They help us significantly. Once again, thank you very much for it. Once again, a very, very happy new year to you and yours. Thank you. Good night. Thank you everyone. Thanks a lot. Thank you. Ladies and gentlemen, on behalf of Coforge Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.