Ladies and gentlemen, good day and welcome to the Firstsource Solutions Limited Q2 FY 2023 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankur Maheshwari. Thank you, and over to you, sir. Thank you, Faizan. Welcome, everyone, and thank you for joining us for this quarter-ended September 2022 earnings call for Firstsource. On this call, Vipul Khanna, MD and CEO, and Dinesh Jain, CFO, will provide an overview of the company's performance, followed by Q&A. Do note that the results, fact sheet, and the presentation have been emailed to you, and you can view this on our website www.firstsource.com. Before we begin the call, please note that some of the matters we will discuss on this call, including our business outlook, are forward-looking and as such, are subject to known and unknown risks. These uncertainties and risks are included, but not limited to, what we have mentioned in our prospectus filed with SEBI and subsequent annual reports that are available on our website. With that said, I now turn the call over to Mr. Vipul Khanna to begin the proceedings. Thank you, Ankur. Good evening, everyone. Welcome, and thank you for joining us today. Hope you were able to find some quality time during Diwali festivities. Let us take a deep dive on how the quarter panned out. Revenues grew by 1.8% year-on-year in constant currency terms and came in at INR 14,882 million or $187 million. Organic revenue, excluding the impact of mortgage decline, grew by 12.8% year-on-year in constant currency terms. Operating margins were at 8.4% and EPS de-grew by 6.1% year-on-year and came in at INR 1.84. Since we last spoke, the overall macro environment has further deteriorated. The pace of Fed action on interest rates has been much faster than we expected and continues to impact parts of our business adversely. Considering these movements, we are aligning our growth outlook to a range of -2%-0% in constant currency for this quarter. The impact of these factors is also flowing through to the margins. Considering these headwinds netted against the benefits of our cost actions, we now expect operating margins to be in the range of 9%-9.5% for fiscal 2023. The guidance adjustment is primarily due to additional pressure on our mortgage business, the unique situation in the collections market, and some deal delays in our healthcare business. We'll discuss the rationale for this change of guidance as we walk through the industry segments. This isn't the outcome we had anticipated when we started the year, but given parts of our portfolio are highly correlated to the macro environment, the near-term outlook for our business has been significantly impacted. Notwithstanding, we strongly believe that these headwinds to our business are transitory, and it's important to take a step back and put the current concerns of the business in a longer-term perspective. First, I continue to believe that momentum has been strong and will continue to remain so in the medium to long term. This is validated by the 12%-15% growth we expect this year, excluding mortgage and impact from last year's acquisition. Second, as revenue has come under pressure, prudent cost management is critical. We are sharply focused on achieving an efficient operating model. The actions taken are yielding results, and we expect to achieve our normalized operating margin by Q4 of this year. Third, our strategy remains focused on investing in our core and adjacent industry segments to deliver consistent growth and build a more balanced portfolio. I'll expand on this strategy a little bit at the close of my remarks. Talking about industry outlook, our BFS vertical de-grew 7.7% year-on-year and 10.2% in constant currency terms. The mortgage industry's outlook continues to worsen given the aggressive interest rate stance by the Fed to counter inflation, the sharp downward movement in home sales, and the collapse of refinance markets. Rates are at 20-year highs of 7%, resulting in year-on-year declines of 86% in refi volumes and 42% in purchase volumes. This will result in degrowth of approximately 55% in our mortgage business in this fiscal, implying headwind of almost 15% to our overall business. Based on discussions with our clients and an assessment of the market outlook, we were expecting this business to bottom out by Q3 of this year. However, taking the increased headwinds into account, we believe the bottom will now shift by a quarter or two. Amidst all the gloom, we see several systemic upsides in this business. Housing demand is still structurally strong. Total home sales outlook for the medium term, while off from their 2021 peak, is likely to be about 10% higher from 2024 onwards compared to the 2011 to 2020 annual average. Home prices are correcting. Some markets have witnessed as much as 10%-12% correction from the recent highs. Mortgage market participants are experiencing significant margin pressures. While our clients are reacting to the situation by aggressively reducing capacity and headcount, they're simultaneously realigning their operating structures and evaluating transformation cost solutions, either by themselves or with partners like us. We continue to believe this will be a strong growth driver once the origination volume improves from the current lows. Within our portfolio, we see the following opportunities. We continue to maintain our market leadership. By YTD September, we've added 12 new clients, and we have a strong, diversified pipeline. While volumes are low in this current market environment, we are well-positioned to take advantage of the upside once the current market activity stabilizes. As a testament to our market leadership, NelsonHall also rated us as a leader in their unique mortgage and loan services 22 reports for the overall market. While the StoneHill Group acquisition has also been impacted by the adverse market conditions and will miss its earn-out targets, the quality control and due diligence services segment is starting to find its footing with the increase in capital market transactions in the industry. We're building an aggressive go-to-market push into mid-markets for these services. To summarize, the purchase finance market is soft, and the refi market is down to a trickle. Our servicing business has held up reasonably well. As and when the mortgage market stabilizes, we are positioned well to capture the volume and the wallet spend. Let me shift to collections. Historically, our collections business has been a strong hedge against the down cycle in the mortgage industry. This time, however, we are going through a unique economic phase. Delinquencies are rising at a slower pace despite the rapidly rising interest rate environment. We believe this is primarily due to still very low unemployment rates and the strongest household balance sheets U.S. has seen in the last 40 years. However, it's a question of when, not if. For several reasons, delinquencies are expected to rise over the coming quarters. Total outstanding credit card revolving debt, which is most relevant to our collections business, hit a high of $1.15 trillion, up 18% from a year ago. Delinquencies, while still lower than historical expectations, are rising. The Fed recorded the most recent quarter at 1.81% versus the prior quarter of 1.66%. Average U.S. credit card interest rates are pinching close to 19%, the highest on record since 1996. These rates are expected to continue to rise. The nature of our client conversations are increasingly around capacity augmentation. Incidentally, the top five U.S. banks increased their credit loss provisions by 35%-80% quarter- on- quarter in the September 2022 quarter. While we wait for the volume pickup, what have we been doing? We continue to diversify our business consciously and actively beyond the big card issuers. Our digital collection platform is the primary go-to-market vehicle to expand into fintech and utilities. The more we do, the better we become. We are now able to onboard a new client every 6-8 weeks versus 12-14 weeks earlier. We had a strong quarter, adding 9 new clients. We are excited to announce that we now work with top 3 BNPL players in the USA. The strong portfolio of early, late stage, and legal collections underpinned by the market-leading digital collection platform and a strong win momentum this year, all position us strongly to harness the likely volume growth in this market over the coming quarters. As a reminder, our legal collections business acquired last year runs a multi-year recovery cycle and accounts pay as you collect. The impact of lower placement volumes in calendar 2021 and 2022 will have a lagged impact on the future revenue growth of this segment. Notwithstanding, it's a strategic addition to our offering. It extends our target market, and we are pleased with the cross-sell wins thus far. Shifting to the UK, BFS segment. The growth story in this segment continues with a growth of 11.9% year-on-year and a pipeline that continues to grow across fraud, mortgage, and customer experience. The demand environment, pipeline activity, and digital adoption remain strong despite the political uncertainty and tough economic conditions. Despite high inflation and higher talent costs, unemployment rates remain stubbornly low, in fact near 50-year lows. This is possibly the toughest labor market we have witnessed in the UK, putting pressure on fulfillment. Our investment in sales and solutioning made over the last 12-18 months are yielding encouraging results. We continue to expand our existing relationships and add new clients. Currently, we are finalizing operation strategy and capacity planning for the next year with our key clients. I want to highlight two notable wins this quarter, both illustrate a diversification and expansion of our client base. One, we are helping an international payment fintech to automate their lead generation, third-party referral, KYC, payment screening, and sanction screening processes. Two, we were selected by a specialist neobank, Shawbrook, as their operations partner to deliver best-in-class customer experience through our digital-first solution and people-centric approach. We are pleased to make meaningful inroads into the increasingly important UK digital banking segment. Our healthcare segment continues to grow consistently at 21.2% year-on-year and 12.9% in constant currency. As some lingering weakness in the provider business have been more than offset by the strength in HPHS. The key themes permeating through the U.S. healthcare ecosystem currently are a holistic consumer-centric orientation backed by analytics and integrated digital technologies. Integration of virtual tech-enabled pathways and traditional service offerings. Reimbursement incentives for providers to use these innovations for managing health quality and costs. Fourth, strong partner and vendor relationships that increase resilience. Investment in these segments by health plans and providers will continue to fuel the spend in the areas we operate. Our strategy to focus on top 10 health plans, growing our digital intake business, and creating bespoke BPaaS solutions for mid-market health plans continues to yield good results. We are seeing a trend of strategic vendor consolidation from the larger health plans. These are large deals, and after hard-earned ranking as the leaders in payer operations segment, we are now often a part of these buying motions. This quarter, we were awarded a meaningful back-office deal with one of the top 10 health plans. We won this against top three competitors in the industry on the strength of our solutioning and our credibility to execute sophisticated transformations. Digital intake business is seeing good traction. Our investments in modernizing the platform and building the right AI and digital partnerships have allowed us to build a healthy pipeline in this segment. The recent Healthcare Payor Digital Services RadarView report from Avasant, a leading advisory and consulting firm, upgraded Firstsource from disruptor to innovator, a step away from leadership on their scale. There have been some deal closure delays, especially on larger opportunities, which we had to factor in the guidance for rest of the year. The provider segment continues to struggle as the industry deals with the residual impacts of COVID. The public health emergency has been further extended until the middle of January, again delaying normalization. More importantly, hospitals are grappling with significant hikes in medical care costs, extending the buying cycles on RCM and other administrative services where we play. Longer term, it should lead to more outsourcing and globalization. On the positive side, as the PHE starts to come to an end, we expect strong demand emerging from Medicaid redetermination services. We are currently building a digital solution to capitalize on this demand in the next few quarters, and have signed up first couple anchor clients. Our CMT business continues to grow strongly. This quarter, we grew 7.4% year-on-year and 14.2% in constant currency. We continue to witness steady growth from our top clients across their products and service lines and expect to keep ramping up for this demand. We are focused on building our US comms business, and I'm pleased at the progress thus far. I expect reasonable growth in this segment next year from our investments. There is increased interest for offshoring amongst our clients, given the talent situation in onshore markets. All our offshore locations, India, Philippines and Mexico, are growing steadily. Additionally, we've been incubating digital media and EdTech segments for the past few quarters. We have secured meaningful marquee wins in both these segments. We expect our DECC and intelligent back office offerings will help drive healthy growth in this niche segment, primarily from secular changes in consumer preference for consuming media and higher education. Also, difficult economic times provide tailwinds for change in these sectors. Again, it's been hard to forecast in this environment given our business mix, and I'm genuinely disappointed to revise our growth and earnings guidance down again. I'll reiterate, this is a year in transition. If you zoom out and click on our strategy for a moment, we consciously chose to grow and pursue market leadership in mortgage and collections as the two ends of think of like a barbell, naturally hedged against each other. Notwithstanding the current market impact, we have achieved market leadership in both segments. In addition to the investment and developing market success in HPHS over the past two years, we are now adding a portfolio of adjacent, less cyclical businesses to supplement mortgage and collections and to drive the next phase of our growth. One, we are moving into other consumer lender, consumer lending products and broader retail and SME banking, leveraging our mortgage, collections, and UK BFS expertise. Sameer Ahluwalia joined us recently to lead the effort into adjacent BFS segments. He's a renowned financial services executive with deep experience in building and scaling BPO businesses across all BFS segments globally. Two, we're targeting select additional CMT segments, as I mentioned, digital media, EdTech and parts of big tech. Three, we are diversifying collections into fintech, utilities and communications through our digital collections platform. You've all seen the BPO market continues to operate in a strong demand environment driven by the twin client themes of cost efficiency and digital. With these adjacent expansions, we intend to participate more broadly in this market environment. Now, let me hand over the call to Dinesh to cover details of our financials. Thanks, Vipul. Let me just walk you through some of the financial highlights. Revenue for the Q2 came in at INR 14,882 million or $187 million. This implies a year-on-year growth of 4.2% in rupee term and 1.8% in constant currency term. On the margin front, operating margin came in at INR 1,254 million or 8.4% of the revenue for the quarter. It's implying a year-on-year margin decline of 411 basis points. We mentioned earlier, we have been driving several tracks across the organization on direct costs, operations costs, support costs, as well as on physical and tech infra alignment to help expand the margins. Profit after tax came in at INR 1,294 million or 8.7% of the revenue for the Q2 FY 2023, a year-on-year margin decline of 76 basis points. In this quarter, we have a gain of INR 578.6 million in other income relating to the fair value of the liability for the variable consideration linked to the revenue performance on acquisition done in FY 2022. These liabilities are expected to be settled in Q3, Q4 of FY 2023. This treatment, which is the other income, is in line with the technical requirement of Ind AS 103 and also ICAI guidance notes. During the Q2 FY 2023, we have generated INR 2,128 million from cash from operations, and our free cash flow was INR 2,028 million after adjusting for CapEx of INR 100 million. Closing cash balance as of September 30 was approximately INR 2,472 million. DSO coming at 56 days versus the 59 days last quarter. Net debt as of September 30, 2022 stands at INR 6,055 million or $74.4 million compared to INR 7,333 million or $92.9 million as of June, a reduction of INR 1,278 million. Tax rate for the Q1 was around 17.4%. For FY 2023, we expect it which should be within the range of 17%-19% for the year. Our FX hedging, we have coverage of GBP 30.7 million for next 12 months with average rate of INR 104.7 for a pound, and coverage of $75 million with an average rate of 81.7 per dollar. Considering the current market scenario, we are also exploring some of the long-term hedges based on some of the client contracts which we have. With this, I open up for the questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Manik Taneja from JM Financial. Please go ahead. Hi. Thank you for the opportunity. I had a couple. The first one was a bookkeeping question. If you could help us understand what was the contribution of mortgage revenues in the current quarter? The second question was basically just wanted to get your thoughts as to the fact that while we are seeing some of your global competition, global peers continue with the beat and raise phenomena, why are we struggling on a relative basis? And if it is a portfolio issue, does this underperformance continue into the next year as well, given there are concerns about macro recession and both leading to a weak economic environment? Thank you. Hi, Manik. Thank you. The mortgage this quarter was about somewhere between INR 24 million-INR 25 million. So, that's kind of the mortgage number. It's about 13% of the overall business. On the other question, relative to market, I mean, obviously, as I said, we expect this year, excluding mortgage and excluding impact of acquisitions, purely organic, excluding mortgage, we expect growth of 12%-15% this year. As far as next year is concerned, look, structurally, we expect headwinds should kind of ease out, right? Especially what we've seen in mortgage. You know, the portfolio will be reduced significantly as we go into next year. Collections should be in a different place than what has been this year. All the growth investments in adjacent areas, that should start to line up. I think that's kind of my commentary in terms of next year. I do believe that if we kind of mitigate out the impact of mortgage decline this year, we've had good healthy growth of 12%-15%. Sorry to prod you a little bit further on this. A little even on this, the growth that you're talking about, ex-mortgage and ex the impact of acquisitions, this number has been scaled down over the course of last six months. That essentially tends to raise questions around the level of confidence in terms of the growth. Because when we guided at the end of FY 2022, we were looking for a certain amount of growth. This number was pulled down after first quarter and has been pulled down further after second quarter. In that context, even next year, one is worried about the macro. Should we expect this part of the business to essentially start growing at a slower pace next year? Manik, it's a fair question. They've had to bring down the guidance for non-mortgage as well. I had mentioned something, I'll kind of clarify some. Clearly, if you look at non-mortgage, we expected higher growth from collections this year, given how traditionally when economic cycles turn, what happens to collection. This time is unique, right? The household balance sheet, the average cash balance with people is much healthier than what we've historically seen in the last, whatever ex-recession cycles coming in. That's caught everybody by surprise, including our clients, in terms of how protracted the delinquencies and its impact on collection volumes has been. That's been one big reason. Second, just tactically between last and this quarter, what's impacted that business is that we've had some delays in deal closures in HPHS, which has made us kind of adjust the forecast down for healthcare. Still very healthy growth, but some adjusted the top end of that growth. Third, given the tight UK labor market and given the kind of work we do there, which is mostly onshore contact centers, it has put pressure on business fulfillment and extended some of the ramp timing. Those three factors from last quarter to this quarter has kind of made us trim down the forecast for rest of the rest of the business. You're right. There'll be some element of uncertainty going into next year, so it's hard for me to kind of play out at this point in time how exactly next year will play out and its impact on financial services and potentially the recovery cycle and providers. In general, I feel much better about next year compared to where we have been this year. Vipul, following you, further on this. Is there a difference in terms of the portfolio mix for us compared to some of our global peers like a WNS or an EXL? Sure. Right. I mean, we— You know that our mix has been something around 45% banking, of which a big chunk has been mortgage U.S. market as well as the collections market and the U.K. BFS market. We obviously do not participate in some of the other sectors in the economy which have been growing, which is travel and hospitality, manufacturing and logistics, utilities, and sort of things like insurance, right? We don't participate in those markets. We play into these segments in BFS, and then we play in healthcare, which our HPHS business has grown very well, I think better than the market. Provider, which not a whole lot of mainstream BPO players play in, so where we have a unique niche. I think that's been subdued through the COVID, so that's been a little bit of an dampener. Then finally, CMT is something which besides comms, something we are building up. You know, tech has been a growth driver for many of the players in the market. That's been our focus to grow. It's been a slow build, but slowly and steadily we're kind of making inroads into that. Kind of that's how we kind of look at the different sectors of the market, us versus where the mainstream players are going into. Sure. Thank you. All the best for future. Thanks, Manik. Thank you. Participants, to ask a question you may press star and one. The next question is from the line of Dipesh from Emkay Global. Please go ahead. Thanks for the opportunity. Couple of questions. First, just try to understand the healthcare business. I think there you indicated about some deal closure velocities, softness. Can you provide some more detail what is playing out in the market, and what drives slow deal closure and how you expect it to change? Second thing on the provider side in healthcare, business remains soft for us for some time. How you expect it to evolve over next few quarters, considering some of your peers are indicating healthy growth, and I think they are delivering for last couple of quarters. Second question is about client addition. If I look, our client addition remained very robust over last few quarters, but it is not getting translated into revenue performance. Can you help us understand quality of client which we added maybe in last two years, outside of mortgage business? How the ramp-up is happening in those clients in terms of pace of growth? Because we don't see more than $1 million, $2 million, $5 million kind of different buckets. So if you can help us understand some qualitative sense about how the progression is happening. Last question is about tech business. If you can provide some sense how the progress is happening since. Yes. Hi, Dipesh. Thank you for those questions. I'll try to answer, and if I forget some components, please come back. Healthcare deal velocity, I think as I mentioned very consciously when we reinvigorated this business couple of years ago, we said we'll target the top 10 health plans. Very competitive space. They are mature buyers. They are into their third, fourth generation of contracts, given out in some cases and additional areas that they're looking to outsource. I think we've made very strong progress. We've entered those accounts. In 8 of the 10 now we have entry. What we are seeing is that as they get into more strategic RFPs, more contract renewals, obviously they run pretty you know resilient exercises, pretty exhaustive exercises for RFPs and stuff like that. The fact that we are now into them and we are on the panel, we are now participating in those. These exercises tend to be long. They start with a timeline, right? Multiple things come in, and they kind of extend the timeline. It's not structural, it's not unusual. What we had forecasted for growth, especially in sort of Q3, Q4 from some of those, that's kind of slowed down for us from a timeline to what we expected to where they are, and that's kind of pushed out some of the growth for next year. Q2 was strong. We expect some moderation for that in Q3, and then come back in with a reasonable amount of growth in Q4. Again, nothing structural. It's just the timing of the deals on how we had forecasted in our pipeline and how it's playing out in the market. The good news is that we are now participating in health plans. The good news is the digital intake market is looking strong. Digital intake tends to have a little bit of a longish implementation cycle. It's complicated. It's kind of critical for the client. I think that's where it's kind of getting. Wider softness. Why it's soft for us is because we play in a certain niche of eligibility services and receivables management. It's 100% onshore business, very profitable. We are the market leaders. This is exactly the segment which has been impacted by public health emergency, where the government has kind of, through the public health emergency, put automatic re-endorsements, right? For people, right? As a measure of saying, "Hey, regardless of what economic segment and coverage you have, you are now eligible for this, for this program." Once that goes away, normal volumes will return in that business. How it will play out, I think we had two or three strong quarters of wins. The implementations are in progress for that. As we go into the future, as I mentioned in the past, last couple of quarters, we've been expanding the scope of our offerings and going mid-cycle in the RCM, which is about coding, AR follow-up, et cetera, which are traditionally services very amenable to offshoring. We have seen growth in the offshoring market for those services. It's a new segment for us. We are at it. We have couple of irons in the fire. Because it's a new practice, it takes a while to build up. As it starts to build up, I think we participate in an additional market segment that historically we haven't. On your second question of client addition, robust numbers, I think, couple of factors there. One, mortgage, we continue to add a healthy clip of new clients across the market segment. The challenge is volumes, right? The clients have signed up, but the volumes are very low. Obviously there have been reductions in volume from existing clients, but even in the new deals that we signed, you know, late last year, early this year, volumes are slow on the mortgage side of it. Second, the acquisition that we did of StoneHill, it because of those services it does, QC and DD, the ticket size for them tends to be smaller, right? While you get the number of clients, the ticket size per client is lower relative to what we've seen in the traditional mortgage business. That's sort of one factor. The second factor is that as we grow more digital, especially the collection business, and we've been expanding beyond just the big card issuers into Fintech and utilities, again, they tend to be smaller companies. They are growing their businesses. Collection cycles also take longer to build, right? They have length now that, you know, the delinquencies build, right? We see more wins because of digital. The ticket size is less. You know, in general, I think the quality of clients is great. Some due to market conditions, we haven't seen the revenue come through, and some inherently tend to be smaller ticket sizes given it's digital or narrow services like QC and DD that we play on. That's the second one. The third question you had was on what are we doing on tech. Tech, it's been a build in a competitive market. As I mentioned, we are focused on two or three segments. One is digital media. This is media going to digital media. Decent progress in UK and US on that. Second one is EdTech. We've been focused on the EdTech segment for the past two or three quarters now. We've had good two or three wins there, in kind of building up the EdTech business, especially when the market is tighter for some of the startups. I think we see a good healthy demand building up for that. Within the big tech sector, we are focused on a couple of service areas, and I'm pleased with the development there. I think we'll be able to share some good milestone wins for that in the third quarter as we go along that. Lower than what I expected to be at this stage, but reflects the competitiveness of the market. We continue to chip away at it, and I think tech will become a decent growth driver, in the short to medium term as we go into next year. If I can ask you one- Yeah. Yeah. If I can squeeze one more question just to get overall sense. Now, we have given revised guidance. Now, we cut obviously for last couple of times, so I presume we are now very conservative when we guide for next two quarters. What would be the upside risk and downside risk in your opinion, considering some of the moving item like collection velocity, HPHS deal closure momentum, plus some of the moving item like mortgage and other. If you can provide just some sense about upside and downside risk. Thank you. Yeah, Dipesh. Our forecast is a muscle that I acknowledge we need to beef up. One is the market condition, the second is we need to get better at forecasting and giving guidance. On the downside risk, I think we have factored in all that we can see. For us to hit the downside, it's pretty much flat quarters all the way through till the end of the year. By the way, Q3 we do expect will be kind of flattish compared to Q2 because of the further mortgage decline that we are seeing in Q3 relative to Q2. The growth from other sectors will be kind of washed out by mortgage. On the upper end of the guidance, what we expect is that traditionally Q4 or the March quarter tends to be strong for us in collection because of tax refunds and stuff which people get and then hence higher collection. That's one upside that we have baked in. We baked in that our healthcare business, especially HPHS, will get back onto the growth trajectory. The ramps will happen and some of the deals that we talked about, they come through. We are also expecting, you know, better fulfillment on the European business. Demand is there, and we hope that we'll be able to eke out more revenue from there on the Europe side of it. Between three businesses, that's where we go from our low side of the forecast to the high side of the forecast. Ankur, am I missing anything? Or Dinesh? Dinesh or Ankur, am I missing anything on that? No, no, Vipul. I think you've covered it. Thank you. Yeah. I think it has been covered very well. These are the main factors too. Thank you. you. Thanks, Dinesh. Thank you. The next question is from the line of Mohit Jain from Anand Rathi. Please go ahead. Sir, one small question on the other income. You told us that there were some earn-outs which were part of reversal during the quarter. If you could give us some more color on which acquisition and how much was reversed, is it one or both clubbed together? Second part was, are we expecting any impairment given your estimates as of today versus when you acquired these entities? Mohit, I think we have considered for both the acquisitions. One of the parameter which is getting crystallized by October, which is just now we closed. The second one is going to be the assessment by September 31st. We have factored in current way of looking what they are going to achieve, and accordingly we have recognized as income. Which is I think value already been given in the note, which is INR 56 crore which we have given in the note already too. No, sir. As far as the individual amounts, like most of them have been reversed or is it only one? We are saying both have been reversed, so if you could give us some allocation like is it broadly should I assume half for each acquisition or how does it work out? It's higher on the TSC, which is your external acquisition is the higher side and collection acquisition is the lesser amount as of today. Okay. As far as the impairment of goodwill is concerned, I think when you acquire, at that time you do the assessment of the allocation of the asset between goodwill and other. With the current assessment which we got, we don't see any risk of being any impairment per se. Because when you acquiring, you also already charging off some of the intangibles there. I think as of today, there's no risk on the goodwill. Looking the year, which is we are forecasting for March, I don't think there'd be any risk on the goodwill side of it. Can you give us some number of how they are trending now in the revised estimate? Like the revenue run rate for these two. In terms of the revenue run rate? The revenue run rate for these two entities, at the time we acquired and now, what is the run rate they are at currently? The historical numbers I think we have, but if you could help us with Q2 number or even expected numbers that you have done there so that we understand in the sense how much decline has happened in these two entities. Yeah. On the mortgage acquisition, you know, obviously you saw that I mentioned we lost about 55% of our core business compared to last year, or we'll lose for it by the end of this fiscal. On the acquisition, we've seen toughness. They had a small portion of fulfillment on the origination business which obviously has been severely impacted. If I was to say from what we acquired to now, I would say we've seen about, I want to say, Ankur, correct me if I'm wrong. I want to say it's about 25%-35% erosion from where they were on the StoneHill acquisition. On the ARSI acquisition, which was legal collection, the fall has been less because, you know, their trends, their falls and rises tend to be more lagged and hence, you know, exaggerated over a long period of time. There we've seen a reduction of about sort of 5%, I would think. The thing is we expected somewhat growth, and it's kind of on the other side. Right. Is it fair to assume that on this, the acceleration will sort of increase as we proceed? Because usually you have a lag between delinquency and before it goes for the legal thing. Mohit, do you think we expect what? Currently you're trending 5% down, because as you mentioned, there's a lag between when the delinquency happens and when it goes for the legal resolution. Should we assume that this 5% gap may actually increase next year? Yeah. Okay. On the acquired portfolio for the big clients, obviously because they're placing less because of the, you know, healthy collection situation, because placements are less, that will be a downside to future growth. Obviously we continue to add new clients on that and, you know, we've done three or four good cross-sell deals there. That will be the upside. I think both those factors will play out differently next year. You're right on the first question. Understood, sir. Thank you, sir. That's all. Part of it we expected, Mohit, on where we land out, that, you know, we were in an environment 2021 we were already seeing lower placements. It's a little bit more exaggerated than that. Right. Got it, sir. Thank you. Thank you. Thank you. The next question is from the line of Shradha from Amsec. Please go ahead. Yeah. Hi, Vipul. Couple of questions. Would it be possible for you to give the run rate of the collections business now and how much are we down in that business on a Y-O-Y basis? Collections run rate. We are about between both businesses combined, we are at about somewhere between 31-32, $32 million. Compared to last year, same time, obviously the acquisition which shares it, but by this time we were about $14.5 million. This is all organic. I mean, 40.5%. That was organic, yeah. Right now. Can you just 32, what is the portion of organic, inorganic business? Just a broad split. Let me see if I have it. I don't have it handy for this. No worries. I'll take it off memory. No, no. I think it's on a Q2 basis, our inorganic is about INR 17 million and I think the core collection business is also about INR 16-17 million. Effectively it's more about more closer to about I think INR 33 odd million is the run rate. The $17 million business has come down to $14.5 million on a Y-O-Y basis? Sorry, $14.5 million have gone up to $17 million, right? Gone up. 14.5 up to 17, right. Okay. Yeah. Right. Within mortgage, what is the split of servicing and origination now? you know, as I said, the servicing business has held up strong. There have been some reductions as clients pull back insource, right, then they have reductions on that. despite that, the mix is now closer to, like 35%-65% between origination and servicing. Servicing has also declined on a Q-o-Q basis. On a Q-o-Q basis on absolute dollars? Yes, it has. Right. Did I catch you right when you said that you had earlier? No, go ahead. Finish your question and then I'll answer. Did you indicate that you had earlier expected mortgage to bottom out in 3Q and now you expect that to get extended by another quarter or so? Yes. Yeah. I think given the way the market is sliding and given the Fed has very unambiguously said that they'll continue to raise interest rates until they have a better handle on inflation and unemployment rates starts to, you know, go up. Given that, the market is now expecting that the interest rate hike will continue into calendar 2023, and hence it'll continue to dampen the mortgage market from where the earlier expectations of the market were. Mm-hmm. Right. Just one last bit on the CMT bit. Most of the IT services companies have sounded a bit cautious on the traditional media company's IT budget, but we seem to be maintaining a relatively positive stance on our growth prospects on CMT. Why are some divergent views here from what the IT services companies have been talking of in some CMT verticals? I wouldn't know specifically, but I could offer you some broad comments. If you look at our portfolio, obviously our large client is a big component and we have good visibility on where we land on that client in the next two quarters and going into next year. The digital media business as well as the US comms business that we're building is relatively small and I think on a small base, we expect we'll be able to eke out good expansion and sort of a new business there. Our tech business where obviously this has become a big part of the market over the last sort of five or six years. We obviously have a very small base and we only have upside. The bigger players with large portfolios, maybe they have challenges on how that portfolio plays out when the tech companies start to kind of look at, we've seen all of them getting very cautious in cost and margins and stuff like that. I think that's my sense of what could be the divergence. You are not seeing any signs of concern in your top account in CMT? No. Apart from the delivery or the fulfillment challenges that you've spoken about. Exactly. In fact, we are seeing good signs of more offshore growth there, primarily driven by the fact that the clients, our key clients also realize the tough market condition in the UK. Right. Sure. That's it. it. Thanks, Vipul. Thank you. Thank you. The next question is from the line of Chirag Kachhadiya from Ashika Institutional Equities. Please go ahead. Sir, I have only one question. Can you give some outlook on attrition trend? Mr. Kachhadiya, the audio is very low from your line. Please use the handset. Now it's proper? Yes, sir. I would like to know your outlook on attrition rate and when you feel that it will soften. Sorry, outlook on attrition rate and when do we think? Sorry, what? Can you repeat that portion? It will come down, I mean, in meaningful way. I think attrition, we've seen, moderation of our attrition onshore, especially. This is outside of the capacity reduction that we've had to do in the mortgage business. This is purely voluntary attrition. We've seen a good 5-point reduction quarter-over-quarter on that. We've seen a minor creep up in the offshore attrition, as the market continues to be strong offshore for BPO, right? Manik earlier asked about the market is strong, demand environment is strong. We're seeing growth there. I think, for the rest of the year, I think we'll see, similar trends. I don't expect material movement, down or up in this market for the remaining 2 quarters. We should be in this broad range of 50s and the 40s for onshore and offshore respectively. By the way, this isn't our. I think this is fairly in the middle of where the market operates for our kind of services. Okay. Thank you, sir. Thank you, Chirag. Thank you. The next question is from the line of Manik Taneja from JM Financial. Please go ahead. Hi. Thank you for the call opportunity. Just wanted to confirm on the aspect of the implied asking for second half with regards to the guidance that you provided of -2%-0% growth for the full year. Does the math imply close to about 0.62% or 2% CCGR through 3Q and 4Q? Manik Taneja, I lost the last sentence. Can you repeat that, please? Yeah. Actually just wanted to clarify one thing. With the outlook that we have provided now for the full year of -2% to 0% kind of a growth in CC terms for the full year. I was just checking if that implies about a 0.62% or 2% CCGR through 3Q and 4Q. If that arithmetic is correct. Yeah. As I said to the previous question, at the low end it will be flat to right Q3 and Q4. At the high end, I think Q3 will continue to be flat, but we expect good upside in Q4 from pickup in collections, healthcare and Europe. Yeah, pretty much the growth will be sort of back-ended in Q4 at the high end of our forecast. Sure. Thank you. Thanks, Manik. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Vipul Khanna for closing comments. Thank you. Thank you again. Thank you for your interest. It's been a tough quarter, but I'm very encouraged by sort of the growth adjacencies that we've been investing in, the wins that we've had. As the economic environment moderates, we should see better times. Thank you for your continued interest, and you guys have a great evening. Thank you. Ladies and gentlemen, on behalf of Firstsource Solutions Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.