Ladies and gentlemen, good day, and welcome to the Coforge Limited Q1 FY 2025 Earnings Conference Call. Please note all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the management's opening remarks. Please note this conference is being recorded. I now hand the conference over to Mr. Vikas Chadha, Vice President, Investor Relations at Coforge Limited. Thank you, and over to you, sir. Hey, thanks, Inba. Good morning to everyone. You will have received our Q1 FY 2025 results. They are also available on the investor section of our website. W e have with us today our CEO, Mr. Sudhir Singh, our Chief Customer Success Officer, Mr. John Speight, and CFO, Mr. Saurabh Goel. We'll begin the call with opening remarks from the management team, and post that, we'll open the floor for the questions. Before we begin, please note that some of the statements made in today's discussion relating to the future should be constituted as forward-looking statement and may involve risks and uncertainties. Please refer to the disclaimer to this effect in our Q1 FY 2025 earnings press release. With that, I would now like to hand over the call to our CEO, Mr. Sudhir Singh. Over to you, Sudhir. Thank you, Vikas. A very good morning and good evening to all of you across the world, ladies, and gentlemen. Thank you for joining us today as we share our quarter one fiscal year 2025 performance and the business outlook. Quarter one has been a very eventful quarter for the firm. I am pleased to report that we have begun the fiscal year on a positive note, setting in place a very firm foundation for robust growth in the remaining quarters of the year. A 3.7% sequential CC growth, excluding India, with a concurrent expansion in EBITDA by 210 basis points YOY in the same quarter, a record headcount quarterly increase of 1,886, a very significantly improved operating cash flow of $23.2 million for quarter one, and an ever-strengthening order executable next twelve month booked orders, which now is 19.3% higher YOY, gives us confidence that the quarters to come shall see robust and profitable growth. With regard to the acquisition of Cigniti Technologies, I am very pleased to report that we have already secured a 28% stake, and we shall secure 51%-54% ownership of Cigniti during quarter two itself. On the 5th of July, we have assumed board and thereby operational control of Cigniti Technologies. Q2 results of Cigniti shall be delivered under the watch of the reconstituted team that is now running that business as we speak. Cigniti incidentally announced their Q1 results yesterday, where they declared a 2.4% sequential U.S. dollar growth, a 16.7% sequential increase in their EBITDA, and a 10% sequential increase in their PAT. We expect that the Cigniti business shall show even greater momentum going forward, and we believe that a reflection of that performance will be their likely performance in quarter two itself, where not only revenue, but also margin expansion is expected to be very significant. With a cash of $50 million in the balance sheet, the Cigniti business is healthy and poised for significant growth in the quarters and years to come. On a different note, we are now increasingly partnering with our clients to implement real-life AI programs, going beyond just proof of concepts. One example, for an investment management firm, we are leveraging GenAI to automate generation of hedge fund reporting, reducing the time required for that process from weeks to hours. During the quarter, we also made available on the Microsoft Marketplace our Copilot offering to optimize the insurance underwriting process. Finally, before I get into granular details, I would like to call out that starting this quarter, as promised, we have started reporting government excluding India as a new vertical, and we have also started including OCF, operating cash flow, in the fact sheet. With that preamble, I shall now talk you through the quarterly performance and our assessment of the outlook. Starting off with the revenue analysis, I'm pleased to report that during Q1 fiscal year 2025, the firm registered a sequential revenue growth of 1.6% in CC terms, 1.6% in U.S. dollar terms, and 1.8% in Indian rupee terms, respectively. It is important to note that Coforge's global revenues from all markets outside India grew 3.7% in CC terms during the quarter. India in Q1 declined 30% QoQ and contributed only 3.8% to our overall global revenue. During the quarter, in reported terms, our banking financial services vertical grew 10.4% YoY and contributed 31.8% to the revenue mix. The insurance vertical registered a 2.5% YoY growth, contributed 21.4% to the revenue mix. The travel vertical grew 5.4% YOY and contributed 18.1% to the total revenue. The fourth vertical, the new vertical, government excluding India, grew 10.5% YOY and contributed 7.8% to the revenue mix. Other emerging verticals portfolio saw a growth of 12.4% YOY in Q1, and they contributed 21% to the total revenue mix. With that, I shall now move on to the margins and operating profits discussion. During the quarter, we delivered an EBITDA of $49.6 million, registering a year-on-year growth of 22.2%. This reflects an EBITDA margin of 17% for this quarter, versus 14.9% in the same quarter last year. This is a sizable increase, you will note, of 210 basis points YOY at the reported EBITDA level. Our PAT, adjusted for Cigniti-related transaction expenses, has increased by 26.9% YOY in U.S. dollar terms, and that reflects a 148 BPS improvement in PAT on a YOY basis. Moving on to the order intake for the quarter, very pleased to report an order intake of $314 million. This is the 10th consecutive quarter where the firm has reported an order intake of more than $300 million. We have signed two large deals in this quarter. One of these was in the banking sector with one of the largest banks in the world, and this was all centered around data and analytics. The other one was with one of the leading airlines in the world. Our order executable book, which reflects the total value of locked orders over the next twelve months, continues to improve and stands at $1,070 million, and it is now up 19.3% year-on-year. We also signed 10 new logos during the quarter. On the people front, and I believe this is important, at the end of the quarter, our headcount stood at 26,612, and we saw a net headcount addition of 1,886 people in this quarter itself. Utilization, including trainees during the quarter, stood at 81.6%, compared to 81.7% in quarter four. As I've noted earlier, the net headcount addition in quarter one for Coforge is more than the net headcount addition over the previous four quarters in fiscal year 2024. Last 12-month attrition during the quarter stood at 11.4%. With that, I shall now request John Speight, customer success officer at Coforge, to walk us through capability and delivery highlights. Over to you, John. Thank you, Sudhir. I shall now touch upon the highlights for the quarter related to our delivery operations. In the banking and financial services sector, we've emerged as a strategic partner for a leading investment solutions provider with a five-year vendor consolidation deal. We also signed an enterprise network deal with a global wholesale bank and closed a three-year operations deal for a U.S. regional bank to provide voice and back office support. The insurance sector has seen increased activity this quarter, securing a $20 million project to transform the core platform of a major insurance company. We also signed a multi-year managed service agreement with a leading mutual insurance company, along with a further deal with a prominent specialty insurance provider, strengthening our expertise in supporting insurance growth. In the travel sector, we secured a key deal with a major U.S.-based freight transportation company, implementing our Prism engine to automate their freight rating processes. Meanwhile, in the retail sector, we've been awarded a strategic three-year managed deal to drive operational efficiency and customer experience for a retail giant. We also finalized a major multi-year deal to streamline the supply chain systems for a major food distribution organization. Our government-based business, excluding India, continues to grow. One of the recent wins here was a three-year managed program to design, implement, and support a mission-critical system for a U.K. regulator. Our AI capabilities continue to grow at speed, with new solutions being released to the market on a regular basis. The latest example, available on the Microsoft Marketplace, was our copilot offering to optimize the insurance underwriting process mentioned by Sudhir earlier. We created and deployed RASA, a Rapid Audio Speech Analysis, a system that uses GenAI to analyze agent interactions with both voice and chat for feedback that identifies areas needing improvement, providing insights on possible issues based on customer sentiment. We've continued to develop QE 360, our platform that enables test lifecycle automation through AI to disrupt the testing landscape. Features include AI-based test case generation, low-code, no-code automation creation, AI-based test data management generation, automation self-healing, and AI-based visual testing. We've also developed and deployed AI Ticket Manager, our service desk solution that uses GenAI to eliminate L1 activities and significantly reduces L2 tasks by analyzing, categorizing tickets, and creating self-help to end users. To support our AI agenda, we have added 50 AI specialists to our team this quarter. We've also accelerated the upskilling of our 25,000 employees through our AI Spark training program. We have also cemented a partnership with Kofax to train a large team, creating an enterprise content management center of excellence for a large U.S.-based technology service customer, setting the stage for future collaborations and a joint go-to-market strategy. We've received notable industry recognitions this quarter, including the Intelligent Automation Award by Pega, the Worldwide Emerging Industry Partner of the Year Award by ServiceNow, and European Partner of the Year Award by MuleSoft, the latter for the 10th consecutive year running. We've been recognized in the 2024 U.K. IT sourcing study by Whitelane Research as an exceptional performer in application services, digital transformation, and cloud and infrastructure services. And finally, for the fourth consecutive year, Coforge was certified as a great place to work. With that, I would like to pass over to our CFO, Saurabh Goel. Thank you, John. Let me take you through some of the financial highlights for the quarter. As you are aware, in the past, our cash flow generation has been skewed towards H2, with the majority of cash being generated in H2. We guided towards normalizing the OCF through the year, with multiple steps taken towards strengthening the balance sheet. Our Q1 FY 2025 saw a good cash flow generation of $23.2 million, versus negative $20.5 million in Q1 FY 2024. Accordingly, the OCF to EBITDA ratio stood at 47% in Q1 FY 2025. In Q1, we also repaid the non-convertible bonds of $41 million, which were bearing a high interest cost. This will help in reducing the interest burden from Q2 onwards. We also believe that by end of this fiscal, we should be in a position of being a net cash company. We had also guided for improvement in adjusted EBITDA margins for FY 2025 by 50 basis points and flat reported EBITDA margins in the beginning of the financial year. At the end of Q1, we are up 189 basis points from an adjusted EBITDA margin standpoint and 210 basis points up in reported EBITDA margin standpoint. We have also started reporting the OCF in fact sheet from this quarter results, apart from the government vertical, excluding India, as mentioned by Sudhir. On the non-operating side of cash, you would have noticed a significant increase in cash and cash equivalents by $266 million quarter-on-quarter. This is primarily on account of the QIP proceeds. We have been broadly as per plan towards the closure of Cigniti's acquisition, with 28% stake and the board control of Cigniti on July 5, 2024. We now await SEBI's approval for the open offer. We expect to close the open offer in Q2, post which we would initiate the merger process, post approval from the board of both the companies, and this would take about 9-12 months from the initiation of merger. The effective date of merger is being contemplated as April 1, 2025. Coming to Cigniti's numbers. Cigniti reported quarter one FY 2025 revenues of $56.2 million, which was up 2.4% sequentially in dollar terms. Q1 adjusted margin was at 12.6% versus 11% reported in Q4 FY 2024, an expansion of 160 basis points quarter-on-quarter. Adjusted EBITDA had one-time expense, which included provision on account of receivable towards government incentive of INR 3,004 million, TDS on ESOPs for prior years amounting to INR 55 million, and long-term service bonus to few employees of INR 35 million. PAT, adjusted for one-time transactional expenses, stood at $4.9 million versus $4.4 million in quarter four. Cash and cash equivalents for the quarter stood at $51.7 million. Coforge will consolidate finances of Cigniti from Q2 onwards. With that, I will hand over the call back to Sudhir for his comments on outlook. Thank you, Saurabh. A 3.7% sequential CC growth, excluding India, with a concurrent expansion in EBITDA by 210 basis points year-on-year in the same quarter, which was quarter one. A record headcount quarterly growth of 1,886. A very significantly improved operating cash flow of $23.2 million that Saurabh talked about, and an ever-strengthening order executable, which now is 19.3 higher YOY, gives us confidence that the quarters to come shall see robust and profitable growth. On the margin front, we believe that by the end of the first half of the year, we shall be operating at a 50 basis points higher margin than the first half of last year, and that shall set us up firmly on the path to meeting our guidance of a 50 BPS adjusted EBITDA expansion in this fiscal over last year. With the Cigniti business leadership now operating under our operational control, and with all due diligence behind us, we remain committed to delivering robust growth across both organizations, both in the short and the long term. 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, sir. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may click on the Raise Hand icon from the Participant tab on your screen. We request participants to restrict to two questions and then return to the queue for more questions. To rejoin the queue, you may click Raise Hand icon again. We will wait for a moment while the question queue assembles. The first question is from the line of Kawaljeet Saluja from Kotak Securities. Please go ahead. Mr. Saluja? Hi, hi, thanks, thanks a lot, and congrats Sudhir team for a good quarter. A couple of questions. One is that, you know, was there a wage revision in the current quarter? I f not, then, you know, what would the profitability performance have been on a YOY comparison if the wage effect was effective from first of April? Thank you for the question, Kawaljeet. Wage effect, wage increase in our case has happened effective the first of July. If it had happened effective first of April, we believe margins would have been depressed by 130-150 BPS. Broad assumption would be 140 BPS. Okay, got that. The second thing, Sudhir, is that, you know, while of course, the overall, the confidence on growth, is encouraging, right? I was surprised to see a weakness in the financial services vertical, and that's a segment of the market which has shown some level of buoyancy. What would you attribute that to? We would-- The final question. Sorry, actually, I just, let me just complete the final question. You know, the final question that you've spoken a lot about growth excluding the India government business. You know, isn't that an annual seasonal factor wherein, you know, the fourth quarter the government business picks up and, you know, there's a decline in 1 Q? S hould you basically really look at performance excluding the India government business, you know, from a 1 Q standpoint? Yeah, those are my questions. Thanks. Sure. Let me take both of the questions in order, Kawaljeet. BFS, we believe it's a temporary blip, and that's a normalization that's happened, because last quarter, our BFS business had grown sequentially 6.4%. It is still YOY 10.4% higher. We continue to believe that, the BFS business for us is gonna continue to drive robust growth. A s we've indicated in the past, we would be disappointed if it doesn't register at least double-digit growth in this fiscal as well. T hat's how I would characterize it. A temporary normalization for a business that's really been on steroids for the last two years from our point of view. Second, as far as growth is concerned, for us, Kawaljeet, we don't really see India seeing a spike. India has always been at only about 4% of our revenues globally. The last two quarters were an aberration, where it went all the way up to 5.3%. This quarter, it's come down to 3.8%. W e don't see the seasonality in India on an ongoing basis. Last year was a bit of an aberration. Where we are right now, 3.8%, we would expect India to continue to operate at 4%-4.5% only going forward as well. Okay. Just final question, Sudhir, thanks a lot for that. You know, when you think about where you were three months back versus where you're sitting today, do you see a marked difference in your growth outlook? I f yes, can you just walk us through what has changed in the last three months for that higher confidence in growth? Sure. The first thing, Kawaljeet, is that on the margins, we see the demand outlook across financial services, particularly, even though it doesn't reflect in this quarter performance, as having materially improved. We see the outlook for the aviation, travel aviation sector as continuing to be extremely strong right now, and we are seeing a rebound on our insurance business. When you look at our numbers, you'll find that all the four verticals seem to be delivering good broad-based growth on a go-forward basis. The second thing that gives us confidence is the fact that our next 12-month order book is increasing. It's now $1,070 million, as I called out. More importantly, it's 19.3% higher than where that number was at the same time last year. YOY numbers have, for the last two quarters, been increasing in line with the slightly improved macros that at least we see around the edges. The third thing, and I think this is the best reflection of, of where our confidence stems from, is the headcount addition. Out of the 1,086 net headcount increase, only 250 are graduate engineer trainee from colleges. The rest are folks who've been brought on board, and we will see upsides on the revenue front in the quarters to come because of the very strong headcount addition that I talked about. Fantastic. All the best. Thank you. Thank you. We'll take a next question from the line of Manik Taneja from Axis Capital. Please go ahead. Thank you for the opportunity, and congratulations, Sudhir, for the strong performance. Just wanted to get your sense with regards to the headcount addition that we've seen in the current quarter. While the headcount addition is very impressive, the increase in manpower cost is, is, is much lower. W as this headcount addition skewed towards the later part of the quarter? That's question number one. And if you could also talk about the significant step up in on-site hiring and the increase in on-site mix that we've seen in the current quarter. T he third question, once again, related to the wage hikes. If you could help us understand what drove our decision to essentially defer wage hikes by a quarter, and how are we thinking about our plans to essentially manage our average resource cost, which was suggested to be a significant margin lever, over the foreseeable future? Sure. Thank you for the questions, Manik. Headcount addition 1,886. 250 of those are graduate engineer trainees who will take between 4-8 months to become available. Forty-five percent of the 1,886 were BPO resources, where the revenue productivity ends up being lower than where it is. Y es, the last piece around that is most of the headcount addition was towards the second half of the quarter. Even in cases where they've been assigned to projects, there is, as all of us know, a normal onboarding and a transition lag to billing that is in place. T hat's how the 1,886 headcount addition played out. The other question that you had was around wage hikes. Wage hikes, we've been extremely fair with the employees over the years. Last year, we were possibly the only firm that did do a wage hike on the first of April, and did a very material wage hike, which was reflected in the margin, in the margin impact in Q1 last year. This year, the call that we've taken around wage hike was in line with what we've seen across the industry, and in line with the fact that our ARC over the last two and a half years has gone up almost 40% and needed a correction. That was the business call that led to that decision. Did I answer both your questions, Manik, or did I miss any one of them? T hese are just to essentially get sense on how should we be thinking about this ARC cost on a go-forward basis, given the on-site step-up in terms of hiring and the relatively subdued pressure on intake in the quarter? Yeah, the on-site increase has been a marginal increase, Manik, so I don't expect that to improve AR to adversely affect ARC in any manner. The program that we have in place to put a strong check on ARC is firmly in place and will continue to deliver. We will also announce in the rest of this week the name of the leader who's come in and is running global delivery for us, and the principal mandate, not the principal, but the most immediate mandate I've handed over to him as a global delivery head, is to make sure that he works with Saurabh and his team to continue to keep a very sharp eye out on ARC. To make sure that at a minimum, we deliver on our margin commitment and hopefully do slightly better than that by the time this fiscal year ends. T he last one, before I get back into the queue, if you could talk about the weakness that we've seen in terms of revenue growth within our top customers this quarter, because it appears that the growth is supported outside of top ten customers this quarter. Yeah. Actually, Manik, the, the weakness was only in the top five. Top six to 10 have actually done very well. Our top five have a preponderant number of banking clients. As I said earlier in response to Kawaljeet's question, banking has seen a, a normalization after, I believe, about 12 or 13 quarters of extremely significant growth. Quarter two, we would expect banking and these accounts from the banking sector to bounce back. Thank you, and wish you all the best. Thank you, Manik. Thank you. We'll take our next question from the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Yeah, hi. Thanks for taking my question, a nd congrats, Sudhir and Saurabh, for a solid quarter. Sudhir, two questions from my side. I mean, last year, we did phenomenally well in terms of the overall revenue growth rate. Despite the fact, I think we faced challenges in the top clients in almost all of our verticals: travel, banking, insurance. What is the outlook on the top clients in those specific verticals for this year? You did mention that, of course, this quarter, the banking sector saw some bit of a normalization. But how is the pickup in those specific lines in the insurance, the top two travel accounts, and of course, banking as well? Do we expect them to have bottomed out and pick up the growth momentum, and hence the growth to be driven in the next few quarters by the top five and the top 10 accounts? Or do you think it's going to take some time to basically pick up momentum, given where they are at this point of time? T hen I have a second question. Vibhor, we expect the momentum to be back starting quarter two itself. It might pick up further in the subsequent quarters, but quarter two should see this metric getting corrected. The intent always is to make sure that growth comes not from the top five, top 10, and so on, and these subsequent accounts. W e would expect, with the normalization in this quarter around large banking clients getting corrected, these numbers to start falling back in the normal pattern from quarter two itself. Got it. Got it. T hen if I can just put, secondly, if I can just, pick up your brain on the travel vertical. Banking, of course, you've mentioned, and I think a lot of the other players in the industry are also commenting on pickup in USBFS. But how is the travel segment looking like? Because I think, after the initial, let's say, pickup in spending post-COVID, most of the travel clients had kind of held back their expense because they were getting organic growth any which ways because of the surge in travel across the world. Has that spend revived? Are we looking at some deal closures in near future? How do you see this vertical panning overall, given it didn't do exceptionally well last year, how do you see it doing this year? I see, travel doing better than last year for us. We look at travel as a composite of three different subsegments. The first one for us, of course, is the airlines. For airlines as a whole, when we look at IATA data also, they are still looking at a 10.7% year-on-year increase in passenger demand for the whole aviation industry. In this particular segment, we are clearly seeing a technology overhaul across airlines that is going on, especially after the Southwest fiasco that had happened, December 2022. We continue to see both big data and biometrics again being areas where there's significant demand coming in. Interestingly, I do want to point out, Vibhor, that now we work with five out of the top 10 airlines in the world. T his sector, to that extent, the fact that it's seeing a 10.7% YOY increase in passenger demand, as per IATA, the outlook is good, and we feel good about it. The second sector that we operate in is hospitality, and that is continuing to thrive with the increase in demand that we've seen, leading to implementation of solutions that are supporting frictionless stays, and there's a lot of AI-driven personalization also we are seeing. The third sub-segment is logistics, and in that sub-segment, we anticipate no growth in 2024, and the focus there remains on supply chain resilience more than anything else, and on cost containment through AI and automation. John, would you like to add something else to this? Sorry, I'll just get myself off mute. Not too much, Sudhir. I think you covered most things, well there. I think in the hospitality side and airports, we will continue to see significant growth. And obviously, there's quite a lot of work we're seeing coming up on the legacy modernization and transformation. Obviously, a lot of it being driven by AI, and the way it's being now used to fast-track the migrations. But I do see that growth continuing, certainly in the markets I'm working in. Sure. That was really helpful. Sudhir, if I could just dwell a bit further on this. Sorry to harp on it, but it's a very interesting conversation that I think we're having on that front. I think a couple of industry experts have kind of hinted that in the specifically in the airline industry, the kind of passenger traffic growth that we are seeing, of course, that is leading to very good cash flows for the airlines, which should eventually turn out into high tech spend. But given the already level of, of automation, I mean, the contactless baggage check-in and all those things that the airlines have done, the, I mean, the scope, let's say, or the intent of further, let's say, improvement or tech spend, had basically temporarily, if I may say, come down for the airlines. Would you agree with that? Did we, did we also see that, to some extent, last year? Do you see that changing a lot, or do you think, it's, I mean, it's not the case and the tech spend and the intent of the higher tech spend continues in the airlines? Sorry, John, did you want to say something, or should I go ahead? I was just gonna carry on. I was gonna say, based on our findings so far, the spend is continuing. A lot of effort is going into a lot of the operational back-end processes, as well as the front-end customer experience. Also, there is increasing amount of work going on the e-commerce, the loyalty schemes as well, surrounding the core airline businesses. That's what I would like to say. Also, if I may, you're absolutely right, John. I f I can also give you some anecdotal references there, Vibhor. We work with the two largest GDSs in the world. We also work with possibly one of the oldest PSS and border management services organizations in the world. I mean, I know John would have gone and met them, but I met the CTO of one of the GDSs and the CEO of the other firm that I talked about. I n both instances, this could be specific to these organizations, the outlook, as they see it, around their tech spend remains resilient. Got it. Got it. Thank you so much for taking my questions. If I can just squeeze one question for Saurabh. Saurabh, would you, could you just, help us elaborate, what were the exceptional items, for Cigniti, in this quarter? W hat is the core margins for the business that we are looking, going ahead on a quarterly basis? Vibhor, in the current quarter, so there were three line items wherein the exceptional expenses came in, and one of that was already part of the contingent liability that they reported. I t was a government incentive around SEIS, and it was INR 3,433 million. T hat was one. T hen the other one was TDS on ESOP expenses pertaining to prior period of 2017, 2018, wherein there was some demand that came in, in the current quarter. Again, it was a known issue, but long-pending issue, and it has been settled, which is INR 55 million. T hen in previous quarter, in Q4, there was long service bonus that was given to employees. A couple of employees were left out, few, few of them, and they've also been given that long service bonus in the current quarter, and hence it's close to INR 35 million. Now, putting all of this together, right now, the adjusted EBITDA margin for the quarter was 12.6%. The wage hikes for larger part of the delivery organization, up to band four, has already been given. W e are looking at a substantial margin expansion in quarters to come. I think between quarter two to quarter four, we are looking at 16%+ EBITDA margin going forward. You're not expecting any more exceptional items, I would say? We are not expecting any more exceptional items which will impact consolidation, because there are certain settlements that have to happen, but that will be taken care as part of PPA already. I t will not impact- Got it. -consolidation. W hat is important has already been baked in PPA. Even this, SEIS was part of my PPA, but because this came in and got settled in quarter one itself, and hence we took a hit and it will get adjusted in PPA now. Got it. Got it. Thank you so much for taking my questions. I know I overshot my time, but thank you so much for answering my questions, and wish you all the best. Thank you. Our next question is from the line of Dipesh Mehta from Emkay Global. Please go ahead. Yeah, thanks for the opportunity. I have two question. First, about the margin. Can you help us understand margin decline quarter on quarter? What factors led to margin decline? Because BPO was not there, and rest of the metrics seems to be fairly stable. I f you can help us understand what factor led to QQ weakness in margin. Second question is about insurance. I think you indicated about recovery in insurance, and we are, I think, hearing for some time. But if I look underlying growth momentum perspective, it is not showing any material change. I f you can give some comment around. Even deal intake-wise, we have seen some momentum in the prior quarters. I f you can give what is working in insurance and what is yet not played out, so that gives some sense about how to expect trajectory of growth. Thank you. Saurabh, can you take margins and then I'll take insurance? Yeah. Dipesh, a couple of things. One, we book the visa cost in quarter one of every financial year. E very financial year, you will see that, we would have a margin dip of roughly 350 basis points, between Q4 and Q1. 250, 200 to 220 to 250 would be on account of wage hikes, and 100 basis points would be on account of, visa cost and plus, some, renewals that will happen on Microsoft licenses, true ups, and all of those. I n the current quarter, we had visa—we didn't have wage hikes. In quarter two, we expect wage hikes to be much lower than what they have been in the past. Point number one. Number two, there was a visa cost that came in, in the current quarter, plus there was increase in on-site headcount, increase in on-site, ramp-up that had happened, because of which, margins were lower. T hese were primarily two reasons, and we are at 17.9% adjusted EBITDA in the current quarter. By end of H1, as Sudhir also mentioned in his remarks, we will be 50 basis points higher, versus the H1, previous year, which would mean that, the drop-in margins in quarter two, because of wage hikes, will not be, as significant as it has been in the past. Coming on to the insurance question that you talked about, Dipesh, we had talked about a very significant deal in the last quarter. The ramp-up of that deal has proceeded. It's been one of the largest ramp-ups that we've seen in insurance for a while. At the current point in time, insurance YOY growth for the firm is 2.5%. We believe if current projections hold at the end of Q2, that number should be up materially. Okay. Thank you. Thank you. Thank you. We take our next question from the line of Ashwin Mehta of Ambit Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. Just one question to Saurabh. Saurabh, in terms of the transaction charges taken this quarter, does it cover both the QIP as well as the acquisition? And do we envisage any further transaction charges going forward? Current quarter almost covers pretty much anything and everything, and that was done on the transaction. A very minimal expenses on the merger would come in, I think, but we are pretty much done. Okay, fair enough. I n terms of, in terms of the margin impacts, for the next quarter, just 20 to. Is it more like 130-150 BPS in the next quarter? Yeah, b ecause of wage hikes. On account of wage hikes, but then there'll be some efficiencies, and hence, I think the guidance is that we will be, from an H1 to H1 perspective, we'll be 50 BPS higher. Okay. Thanks, Saurabh. Thanks, and all the best. Thank you. Our next question is from the line of Ravi Menon from Macquarie. Please go ahead. Hi, thank you for the opportunity, and congrats on really strong growth in Americas. Want to understand, you know, why are we seeing that? A lso in Europe, why is there a decline now? You had several quarters, I think about eight, nine quarters of good growth there, and finally, that's down a bit. O n BFS side, too, Sudhir, you spoke about how some of this decline is just you know blip and will return to growth. But could you give some more detail about what sort of programs have come to an end? H ave you—are you seeing a spend start in a different spot or with a different set of clients? U.S. and Europe, Ravi, is again tied to banking. The e-banking clients where we've seen the temporary blip in Q1 are largely Europe-based, and that would explain the Europe performance. As far as BFS is concerned, we expect growth to come back from the same clients. There's just been, in some ways, a normalization, a bit of a pause that comes in, in between program transitions. But we are not seeing any change in the nature of spending, and we are not looking at newer clients to drive growth from because the relationships are unstable or the spends have dried up. That's not the case. A lot of the 1,886 people that we brought on board, a significant number of them. I have either already been aligned to some of these banking clients or will be aligned almost in the coming weeks. That's how we are seeing banking and insurance and Europe, [by the way, apart from India]. Thanks, Sudhir. S trong ramp-up in BPO, is this related to travel or is this related to the mortgage business picking up? Could you talk a bit about that? It's, it's right across, Ravi. The SLK acquisition that we had done three years back in order to set up a BPO business, it's now three years, and the cross-sell has proven to be very effective. Growth, interestingly, in this quarter, came from a retail client, which is one of the emerging verticals that we talk about in the BPO space. When we acquired that asset, it was an asset focused on doing process services for banking, but then we've, we've been able to radiate very successfully into insurance, into travel, and now into retail. Great. Thank you. And on this airline customer you acquired, is this something that is a major customer of Cigniti that you were hoping to get in, or that is outside the sense, it's still to be tapped? No, these are none of what I called about as a customer was to anything to do with Cigniti, because we will only talk about Cigniti clients starting Q2. The airline customer that it was, it was a long-term Asia-Pacific-based airline client of Coforge, and a large deal was signed with them. Great. Thank you, Sudhir. Best of luck. Thank you, Ravi. Thank you. Our next question is from the line of Abhishek Kumar from JM Financial. Please go ahead. Yeah, hi, good morning. My first question is on order book growth. Sudhir, we have seen last few quarters the gap between executable order book growth and the revenue growth has kind of widened. Is it because you know the smaller deals which are won and consumed during the years have kind of dried up? I f that is the case what gives us the confidence that the growth in executable order book would kind of necessarily translate into better revenue growth for us? Saurabh, would you like to take that? Yeah. Abhishek, point number one, the growth in executable order book is in line with the kind of deals that we are seeing, and at least when we look at this number and we compare it to the billing or the revenue recognition that happens from this order book over the next few quarters, it is. It has been in line, and we haven't seen any leakage or shrinkage on this number. I think the only difference has been between the growth that we have reported versus this number, because this is from the executable order book to the reported revenue number. As you've always mentioned, there are waterfalls of three parts. One is the renewal that would come in through the year. Second part is the existing accounts wherein we will sell new opportunities and new business. T he third bit is the new customers starting to ramp up. I t is either the new business in the existing accounts or the new business with new customers, wherein the slowness comes in. That is what is impacting the difference between the growth in executable order book and the revenue number that we report. I t's not that the shrinkage is happening in the executable that we have right now. Sure, that's helpful. My second question is on testing. I think in our prepared remarks also, we mentioned a lot of GenAI-led automation. W e also hear from some of your peers that testing is one area which is ripe for disruption because of GenAI-related efficiency gains. Now, in that context, how do we look at Cigniti's portfolio? Do you think there is a risk, you know, because of AI, et cetera, in terms of volume deflation? Yeah, I think we've answered this question repeatedly over the last three months since we announced the acquisition. We clearly don't see a risk, and the proof lies in the pudding and in the numbers. We've shared Q1 numbers. We've given you. I think we've been very, very clear that the fact that this asset under our watch has been acquired not for testing revenue or testing expertise, where we already had a $100 million service line, but for helping set up a healthcare, a retail, and a high-tech vertical. That plan is absolutely on track. We believe, and we say this emphatically, that Coforge will be one of the fastest growing firms, but Cigniti will grow faster in the quarters and possibly the next few years than even Coforge. Y es, if it is functional testing, clearly GenAI is going to come, disrupt, and take away revenues, but there are also opportunities around testing in an AI-infused environment that we see. In any event, we haven't done the acquisition because we wanted testing expertise. We didn't, and we don't. We have done it to add three new verticals, and given everything that we've seen with the team, given that now we have operational control over that entity, given that the sales head is now a leader, she has moved from Coforge to Cigniti, given that I have best estimates for the next three quarters from her, given that Saurabh has margin estimates, and he talked about a very big jump in margins, we feel rock solid about the acquisition that we've done. We believe not just quarter two, but quarter three, quarter four, and next year will prove that this is gonna be a high growth, high margin asset under our watch. Saurabh, would you like to add something to it, or John, would you like to add anything to it? No, Sudhir, I think you have covered it all, but yeah, I would want to reiterate, margin piece, Sudhir, at least for, for the business. Because, as we see, as we stand today, and, the progression that we're seeing in Q2, Q3, Q4 margins for the acquired business, 16% is what we have guided, 14% is what they delivered last year, and 12.6% is what they have seen current quarter. And I think 16% is bare minimum what we will do, the endeavor will be to, will be to exceed that number. Great. That's very helpful. Thank you and good luck. Thank you, Abhishek. Thank you. A reminder to our participants, if you wish to ask a question, you may click on the Raise Hand icon. We'll take our next question from the line of Asis Das from Mirae Asset Capital. Please go ahead. Hi. Thanks for the opportunity. Saurabh, I have a question for you. Like, if you look at the segmental margin, the EMEA segmental margin has declined and sits lower, lowest in last several, several quarters. Could you just explain me, like, what is, what is the reason for that? Yeah. S egmental margins, number one, also has the cost on account of transaction-related expenses which have got allocated to them. I f you compare margins, segmental margins versus previous quarters, so all that cost has got allocated when we arrived at segmental margins. T hat's point number one. I t won't be an apple-to-apple comparison. T hat's point number one. Number two, the softness in the BFS vertical has led to a little softness in margins in that region. But otherwise, it's not that the margins for the segments have substantially gone down. It's because of the allocation of transaction-related expenses. Okay. Okay. And the next question is on the ESOP expenses. This quarter, it's on the lower side, and earlier it was mentioned that it would increase. W hat would be the ESOP expenses going ahead in the remaining quarters? Asis, see, ESOP expense is also a function of grants being issued to the leadership team. W e expect the grants to be issued in the current quarter. W e had guided for 160-170 BPS from a full year perspective as ESOP expenses, and we stick to that, that guidance. Okay, got it. O ne question for Sudhir. Sudhir, see, you are giving right now you are giving the guidance for travel, insurance, and banking. W hy don't you resume your growth guidance for the year, FY 2025? No, Asis, we've taken a very conscious call. We will not. We have not given a guidance for this year, and we will not be giving a guidance going forward as well. There is no other midcap firm in our industry that gives a guidance, and we are aligning with that process. Okay. Thank you so much. All the best. Thank you. Thank you. Our next question is from the line of Debashish Mazumdar from Svan Investments. Please go ahead. Hi, guys. Good morning. Hi, Sudhir, Saurabh. Good set of numbers. T wo questions I have. Sudhir, if I remember last year, you very clearly called out that H2, there is not any recovery that you are seeing, where others were bullish. O n the macro perspective, do you think that we are kind of bottoming out and things have started turning back? T hat is the first question. And the second question is, I'm not asking for a quantitative revenue numbers, but earlier you used to call out a relation between your order book and your revenue growth. C urrently, we are around 19% order book growth. I s there any material relation that you can bring it out between the revenue and order book? Sure, Debashish. We believe that the demand has not just bottomed out, but that it is picking up. Okay. There was a niche phase when demand was falling, which is where I think we met more than a year back. There was a bottoming out, and now while we don't see a very rapid increase, but there is clearly a rebound on the demand front. It is tepid, but it is definite. As far as order book is concerned, revenue, the order book, you will notice, on a YOY basis for the last two quarters has been reversing. Net of India, even this quarter, the revenue growth has been sequentially 3.7%, which is higher than the 2%-3% band that we were normally operating in. T hat, at this point in time, while we have some more internal metrics that we are tracking, from an external perspective, what we would like to call out is, on a YOY basis, order book is improving. Therefore, logically, in a very gradual manner, sequential growth on a YOY basis should also start seeing an improvement from where it is. T hey think-- Yeah. Yeah, sir. Back to that, I think the headcount addition is another metric, along with the order book increase, which gives confidence. Yeah, absolutely. Absolutely. Yeah. But, so, one last question on this headcount itself. This addition of headcount, especially in S&M. Is it more to do with cross-sell, Cigniti capabilities or it is like our organic business has so much of potential that we are hiring this much of number? This is organic. It's organic business. It has nothing to do with Cigniti here. This is all Coforge, and this is all organic. Okay, okay. Thank you so much for answering my question, and wish you best of luck. Thank you. Thank you. We'll take our next question from the line of Shradha Agrawal from Amsec. Please go ahead. Yeah, hi. Congrats, Sudhir, on a good quarter. Just one question from my end. How should we look at the depreciation and amortization cost after we consolidate Cigniti into our financials? Sure. T hanks, thanks, Shradha. Saurabh, would you like to take that? Yeah. Shradha, we should be expecting-- A gain, the purchase price allocation is yet not complete because, we'll have to true it up depending upon the June financials. But, we are looking at a pickup of $8.5 million-$9 million in the amortization on account of purchase price consideration, from quarter two onwards on an annualized basis. Okay. Sure. That's it. That's it from my side. Thank you. Thank you. Thank you. We'll take our next question from the line of Chirag Kachhadiya from Ashika Institutional Equities. Please go ahead. Yeah, thanks for the opportunity. I have just one question. Within BFSI, among top five clients, which areas, facing the normalization of growth, practice-wise, if you can share? Yeah. No, we—this is, as I said, it's just a temporary blip. Overall financial services industry, particularly as inflation levels in most developed markets are stabilizing towards the target levels, given that interest rates appear to be reaching a plateau, the growth in spending isn't, as I said, on the margins, seems to be seeing a rebound. T his is a temporary blip for a business which has possibly been the fastest, and I'm not 100% sure if it's true, but possibly the fastest growing banking business across the industry globally. It's a one-quarter phenomenon. We should be back on the growth path in quarter two. I won't call out anything that's a big, big concern. There is obviously right now a notable emphasis on upgrading core platforms to facilitate digital transformation imperatives. There is, there are funds that are flowing in there. Retail corporate banking in trend, in the focus on enriching digital channels, so there is funds coming in there as well. But overall, just a temporary blip, as we called out earlier. Okay, thanks. All the very best. Thank you. Thank you. That was the last question. I now hand over to Mr. Sudhir Singh, CEO of Coforge Limited, for closing comments. Ladies, gentlemen, thank you very, very much for your time and for your interest. As always, these were incisive, probing questions that also educate us around the nuances around our business, and we really appreciate your time around this. We look forward to seeing you three months from now in the next quarterly call. Stay safe, and thank you once again. Thank you, members of the management. Ladies and gentlemen, on behalf of Coforge Limited, that concludes today's conference. Thank you for joining us. You may now click on the leave icon.