Ladies and gentlemen, good day, and welcome to the Firstsource Solutions Limited Q1 FY24 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 touchtone 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, Michelle. Welcome, everyone, and thank you for joining us for the quarter ended June 30, 2023, earnings call for Firstsource. On this call, we have Ritesh Idnani, MD & CEO, and Dinesh Jain, CFO, to provide an overview on company performance, followed by Q&A. Do note that the results, the fact sheet, and the presentation have been in emails to you, and you can also view this on our website, www.firstsource.com. Before we begin this 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. That said, I now turn the call over to Mr. Ritesh Idnani to begin proceedings. Thanks, Ankur. Hello, everyone. Welcome, and thank you for joining us today. I'm happy to state that the performance in our latest quarter was in line with the guidance. This quarter, our revenues were INR 15,392 million, or $186 million, declining 1.6% year-on-year in constant currency. Operating margins improved by 375 basis points year-on-year to come in at 11.7%. The diluted EPS came in at INR 1.8 for the quarter. Our growth strategy, as outlined previously, is centered on three key vectors. One, reduce exposure to macro cyclicality and drive the next phases of growth by broadening our BFS offerings and scaling new segments in healthcare, comms, media, tech, and utilities. Second, drive growth in our chosen verticals by building adjacent capabilities, by systematically adding new clients, and by growing existing strategic accounts. Three, leveraging our digital tools and services to create more cost efficiency and build new digitally-powered solutions, including harnessing rapid developments in AI, especially generative AI. I'm very pleased with the progress that we are making against each of these. Here are some quick updates. We made considerable strides growing our US CMP and Europe utilities client base over this past year and highlighted the FY23 wins in both these segments. These are all scaling well. This is helping us to expand the share of utilities and US CMP in our overall business mix. At the same time, we continue to carefully recalibrate our mortgage business into purchase financing, servicing, and compliance operations, while expanding into new products that reverse mortgages. For this quarter, mortgages was around 9% of revenue, down from 17% a year ago, as we build other BFS segments. Our new client additions remain strong. In this quarter, we added 10 new clients, with 4 in BFS, 5 in healthcare, and 1 in CMP. We expect these new relationships to scale gradually over the next 12 to 15 months, depending on the process complexity. Lastly, our pipeline in digital and platforms, automation and analytics service lines across industries continues to expand, especially in the areas of digital intake, digital collections, and our process automation practice. Over the last 6 to 9 months, generative AI, or GenI, has commanded significant mindshare. We believe this new technology will accelerate the digital agenda across the client ecosystem. We are actively working with our tech partners and our clients to co-create multiple use cases with this new tech. Currently, we have more than 12 implementations in various phases, from proof of concepts to pilots to production across 6 different clients and obviously in-house use cases. Let me highlight a couple of use cases where we have leveraged GenAI and machine learning to develop efficient and cost-effective solutions. In one of our large media clients, they needed to quickly scale native-speaking agents to support sales, but weren't able to achieve the goals due to lack of talent supply. We solved this by implementing an ML-based machine translation solution over chat and email, thus providing services across multiple languages from India. We received over 98% accuracy and comprehensibility of the translated language, enabling customer sat similar to that expected with native speakers, but at a faster pace and obviously at a much lower cost. In another instance, we helped one of our new EdTech clients manage the inbound inquiries by implementing a touchless solution that identifies the customer's intent. Our solution, powered by AI, again, understands what the customer is looking for and puts together a response that is comprehensive, accurate, timely, and actionable. We have reduced the turnaround time from two weeks to one day, helping students of this client meet their admission and other travel-related time-constrained requirements on time. Let me also share a positive update on our top client relationship. I'm pleased to inform that we have further cemented our relationship with this client, and have extended our contract to serve as their primary partner for another 10 years. This is a huge testament of the relationship we have built over the years, and the value we provide to our clients. During the last two years, there have been several strategic changes at our client's end, including change in ownership. Business volumes have been volatile owing to both macro environment and the balance situation in UK. As we all know, technology has significantly evolved over this period. Through all these changes and turmoil, our performance and strategic intent has helped us strengthen this relationship. The client continues to leverage us as their strategic partner for growth as well as change and efficiency. A core part of our strategy for this next leg of our journey is to enable our client to offer cost-effective services from offshore locations. We are in the process of moving a considerable portion of our operations in the UK to various locations in India for this account. This is a big part of the 3% revenue headwind we had estimated at the start of the year. We now estimate the onshore to offshore impact to be 3.5%-4%, including some movements in healthcare and BFS. As a part of this transition, we will now serve complex and sophisticated processes from India. Overall, the underlying portfolio work remains the same, and there is potential for growth. Let me now provide some color on the operating environment. Among our major markets, the UK economy is experiencing a slowdown that has affected volumes across our core portfolio. In the U.S., however, the economy has been relatively resilient. Clients are taking their time to decide on large transformation deals. The positive theme all across is that engagement on cost optimization programs remains strong across industries. Let's talk in detail about the key trends in our industry segment to give you a better color on our growth drivers. Let me start with BFS. Our BFS segment declined by 13.6% year-on-year, primarily due to the mortgage base effect. Presently, the revenues were down 1.5%. Overall, our mortgage business has now stabilized. We believe that the worst of volatility in this business is behind us, and volumes have bottomed out, unless there is a significant shift in the macro environment from here. We continue to engage our mortgage clients in strategic cost-saving programs, and we had a very solid sales quarter. The latest quarter was a good sales quarter. The origination volumes eased up slightly in the last 2 months. Our clients expect refi activity to pick up only after the Fed reverses direction on interest rate movement. Home purchase volumes are steady, but drive in new home project starts by home builders. Purchase demand for existing property in high-growth regions in the U.S. continues to be strong. However, the interest rate swap to higher mortgage rates is a roadblock for sellers. We continue to make solid progress on diversifying our portfolio. Here are some examples. In one case, we used our mortgage quality control as a lead offering to open a large bank in our target account list. In another case, we meaningfully expanded our relationship with a leading originator with extensive presence in the wholesale marketplaces. Our overall outlook for mortgage for the year remained unchanged. In the collections segment, the macro indicators continue to suggest an increase in business activity in the near future. U.S. credit card delinquencies continue to rise and were at 2.43%, versus 2.25% last quarter. Charge-offs were 2.9%, versus 2.54% last quarter, the sixth consecutive quarterly increase post-COVID. Similar trends were seen in the latest earnings of the large U.S. banks. Normalizing for higher seasonality of Q4 of fiscal 2023, we are seeing encouraging trends in this business. We maintain our assessment of gradual recovery in this business through the year, especially in H2. The early-stage collection segment will start to reflect this sooner than the legal collection, which will see an uptick from Q4 of this year, or perhaps even Q4, Q1 of next year. We continue to make good progress in acquiring new clients and cross-selling into our existing portfolio. In this quarter, we added four new clients. Last year, I spoke about our intent to diversify BFS into other segments beyond cards and the mortgage industry. One such area we identified was expanding into auto finance segment. We have seen green shoots of success and have added two new clients, and expanded three existing auto finance clients in this quarter. On the UK BFS, performance remains strong. However, the pace of growth is slower than last year, due to a combination of lower volumes across the industry, given the challenging economic environment, and some movement from on to offshore, which I earlier alluded to. We've added new lines of work across our key relationships, including expanding to collections, as I mentioned a minute ago. The trend of increasing usage of chat instead of calls, service offshore continues nicely. We are pursuing several new ramp opportunities within our existing client set in UK, for which we expect quick closure. These should further augment our growth in H2. For BFS, in summary, our outlook remains steady. We're making good progress in diversifying into new segments. We've already seen success in auto finance, and we are now focused on expanding our DCX for the digital call center and some transaction capability for the U.S. bank segment. Sensitive to healthcare. This segment remains steady. Year-on-year growth was flat in constant currency. As previously discussed, our provider business has been impacted by the public health emergency promulgated by the U.S. government at the start of COVID. After nearly 40 months, the PHE was finally lifted in May 2023. The headwinds from Medicaid, auto enrollment, re-enrollment, et cetera, have now subsided. We expect deal activity to pick up meaningfully. We expect growth in the business to emerge from H2 of this fiscal, as different states and health systems start dealing with the new reimbursement environment. Expanding offshore capabilities in the provider has been a key focus as we build adjacencies. We are pleased with the progress thus far. We've added one new client and one existing onshore client for offshore in this quarter. While these will scale gradually, it will help us create strong referenceable case studies to help accelerate the offshore growth within our existing client portfolio. In addition to this, our overall deal pipeline remains healthy, and we are witnessing an increase in business activities. Beyond the new offshore clients, we've added two new clients for this quarter. In the HPA segment, we continue to witness a slower than expected scale-up of volumes in our recent wins. These delays, coupled with the onshore to offshore movement in some of our processes, are resulting in near-term softness in the HPA business. We strongly believe this is transitionary, and we are confident of getting growth back, as we saw in early parts of last year in this business. To zoom out, our HPHS growth thesis is based on landing and expanding top 10 health plans, expanding our digital intake offerings, and building beta for the beta for the mid-market. We continue to make excellent progress in penetrating and growing top 10 health plans. About 18 months ago, we talked about a digital intake win with a top five health plan in the U.S. We have since closed 3 additional engagements with this client and have a strong pipeline targeted to close for rest of this fiscal. The client rates us as a strategic partner, and this account is now on track to become a top five account for the HPHS practice. This quarter, we added a top 20 health plan to our roster with a significant digital intake win. This deal should add meaningful revenue once fully ramped up. More importantly, a strong execution will pave the way for expansion in other functions for this client. The pipeline for digital intake is strong, with four active opportunities in play with new and existing clients. The progress on this strategy, the YTD wins, and the pipeline give us the confidence for a strong growth for HPHS in H2. Overall, for healthcare, to reiterate, we are focused on reversing the revenue decline in provider and growing our share of wallet across top 10 health plans in HPHS, while strongly executing on the DI opportunities, the digital intake opportunities. We are confident in achieving both these goals. Shifting to CMP, this segment saw 7% YOY growth in constant currency. This is notwithstanding the onshore to offshore movement in our top client relationship. As I mentioned earlier, we've extended the contract with a top client for 10 years. This is a great validation of the working relationship between us for the last 22 years now. Considering the strategic priorities of our client, we are actively balancing the delivery system across onshore and offshore to offer the most cost-effective solution to their needs. Outside of the top client, our growth from, caption remains strong. In a short span of time, we have made solid progress in scaling our EdTech practice. During COVID, as we know, the EdTech companies disrupted the way learning was consumed globally. We saw this as an opportunity to target these companies and help them build better learner experience GOEs. This is a widespread opportunity. We are creating and delivering offerings that enable both traditional and new EdTech companies to focus on providing greater learner experience to improve both stickiness and learning efficiency. We've designed journeys for end-to-end learning and have implemented tech solutions, including GI-based solutions, to provide better access and experience. Our consultative approach has enabled us to win large annual deals that are truly transformative and a referenceable case study for the larger CX go-to-market story. As we speak, we are finalizing a contract and commence hiring for sophisticated operations for a strategic EdTech client. We estimate this will add between $15 million-$18 million in annual revenue, and we expect to go live in Q3 and ramp up by Q4 of 2024, latest by Q1 of 2025, 2025. Finally, I would like to comment briefly on the guidance for fiscal 2024. We remain confident in our revenue growth guidance of 2%-5% for fiscal 2024, with an operating margin range of 11%-12%. This revenue guidance continues to include a headwind of about 3% from last year's base effect in the market business, and a headwind of 3.5%-4% from the onshore/offshore portfolio rebalancing. Let me now hand over the call to Dinesh to give an overview of the financial results. Thank you, Vipul, and good morning, everyone. Here is quick snapshot for financials for the quarter gone by. Revenue for Q1 FY24 came in at INR 15,292 million in rupee term and $186 million. This implies an year-on-year growth of 3.9% in rupee term, and a decline of 1.6% in constant currency terms. On the margin front, operating margin came in at INR 1,789 million or 11.7%, which is up 52.8% year-on-year. Profit after tax came in at INR 1,260 million or 8.2% of the revenue for the quarter, which is up by 48.1% year-on-year. Vipul talked about the extension of the contract with the top client. It is a great outcome for our continued relationship with the client. With part of businesses moving offshore, we should start seeing margin expansion gradually as the transition completes. For this contract, we'll be making an investment of about GBP 50 million. Of this, GBP 9.5 million will be paid in this financial year and balance will get paid in FY25. The total contract acquisition cost will be amortized over the contract duration of 10 years. Some other financial highlights. DSO, DSO came in at 62-63 days versus 60 days last quarter. Net debt stand at INR 7,133 million as of June 2023, versus INR 6,159 million as of March 31st. Increase due to the higher working capital drawdown this quarter, which also led to the higher interest payout for this quarter. On the cash flow from operation in Q1 was lower due to annual pay bonus payouts, higher receivables, and the first tranche of the payment for contract acquisition costs, which we paid in this quarter. We expect this to be normalized by next quarter. Our cash balance, including investment, stood at INR 2,210 million at the end of the quarter. Tax rate for the quarter was around 18.9%, which is within the guidance range of 18%-20%. On the forex front, we have coverage of GBP 59.90 million for the next 12 months, with an average rate of INR 102 to the GBP, and coverage of $72.5 million, with an average rate of INR 84.1. For next 12-24 months, we have coverage of GBP 56.9 million, with average rate of 106.7 to the GBP. Dollar coverage is around $2 million, with average rate of INR 84. For more than 24 months, we have coverage of GBP 46.4 million, with average rate of 111.6 to the GBP. In addition, we have also taken some of the option products to increase the better realization on these rates. Let me also introduce Pankaj Kapoor, who has joined us as the Head of Strategy and Investor Relations this quarter. He comes with over 25-year experience across corporate and financial markets. Please join me in welcoming Pankaj, and I know he's looking forward to getting to know all of you in the days ahead. This is all from my side. We'll now open up for the Q&A. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Mohit Jain from Anand Rathi. Please go ahead. Yes, first, good quarter overall. First question is related to the extension of the contract. One was on the margin front. Now that this is moving offshore, how much impact or benefit do you think you should have while we do our calculations on margins and overall deal in the context of the payment that you are making? A similar question, but not related to numbers. How do you... Like, because you've already spent a lot of time with the top, top client, how do you get to sort of sign such large deals, say, 10 years or something, in the current environment? Okay. Hi, Mohit. Look, the sky movement, and as you said, there is an amount of payment that we, we are making as, as sort of investment in the deal. After amortizing for that over the deal term, starting from this year, this deal will be both, will be margin accretive as well as EPS accretive. The moment, you can see healthy margins getting added to the bottom line. How do we sign such large deals? Obviously, look, the percentage of work we do for them is, is a big chunk. This is a long-term relationship that has been built bit by bit across the value chain and across product lines. It's a collection of four or five product lines that we cover. A lot of them are managed sort of reasonably independently, while, while there is governance at the top level. To that extent, as they think of their long-term plans, right, they, they take a long view, right? Even this negotiation and the fact that we kind of do this offshore, has taken us a while to kind of think about it, right? It didn't happen overnight. They tested sort of few things gradually, and we reached this point after several, you know, a longest period of sort of working through the details. The strategic outlook that they took, they looked at for the work that we do for them, I think that is what gives me the runway and the confidence to take a long-term view of the deal. Right? And given the fact that we've already worked for 22 years, it gives the confidence that, hey, I can take a 7, 10, 7-10-year view of this deal. ... even otherwise, right, the large strategic deals that we are signing, as I guess most of the industry, we are looking at a sort of a 5-year plus extension sort of outlook. To that extent, for large strategic deals, I would say this isn't unusual. Okay. In terms of revenue, like, we saw the slight drop in revenue in this quarter. I'm assuming that is on account of the offshore shift that you spoke about. From going ahead standpoint, is that shift more or less done? Should we expect some more decline in revenue from top client varying with electricity stabilize? Sure. Your question on the revenue decline was overall or just for the top clients? For the top clients. Okay. Because overall will come little later, but on the top client side. Yeah. because we are also talking about Yeah, sure. -some shift towards offshore. Yeah. That journey has started in Q1. That's kind of a big reason why we've seen a decline. There is obviously some softness in volumes as well. As I mentioned, the UK volumes or the UK economy is going through some softness, so both factors combined. However, I would also say that a big chunk of the onshore to offshore moment will come through in Q2 and Q3, and then kind of, as per current plans, then it will stabilize. We expect the top line revenue to decline over those two quarters on top of what we saw in Q1. Right. A related question is, like, if we are looking for that decline, which, I assume will impact the telecom vertical or TMT vertical growth at the company level, and your guidance suggests sequential growth from here on. BFSI, you spoke about some softness in UK, so which vertical, are we really positive on here, to deliver a company-level growth? Sure. of say 2, 3%? Yeah. Yeah. We do expect growth from this point onwards, you know, after baking in this decline that I talked about. We expect good growth from our CMP segment, other parts of CMP. For instance, I talked about the large deal in Xcel that we have signed. That will start to go live in October and slowly build up steam for the rest of the year. HKHS will be a good growth driver, given what we've signed and what's under implementation, as well as coming up to closure there. These will be the two sort of relatively chunky growth drivers. As I look at the other three businesses, collection, mortgage, and provider, the big businesses, all of them have had varying levels of headwinds and sort of volatility up till now. That headwind, I think for most of them, are pretty much gone now. In fact, some element of tailwind building up for collections. We'll see how the mortgage kind of builds out. Then the big friction for provider, which was the PHE, et cetera, is gone. I think we'll expect steady growth in all these three segments. That's kind of the environment that we look at, for us to kind of get confidence on, sequential growth from this point onwards, leading up to the, the guidance that we give. Right. Last is on margins. We have done, say, guiding for the, I'm taking the apparent for convenience, say, we are close to 12% odd. Now, as you mentioned, business is stabilizing. Where do you think we can operate in a, in a steady situation, given that offshore shift is likely to increase for the company? Because historically, we have been in this range, at the EBIT level for, for quite some time. Do you think, there is a chance that, margin structurally may go slightly higher versus what we've done in the past? For now, we're keeping the 11% to 12% outlook. We have some, some obviously some investments also lined up, given GI and other things, on the horizon that we need to kind of play with and kind of stay on top of. As I've been saying historically, that outlook remains unchanged. That once this year kind of gets to a steady state, we should start to see that 25, 30 bits improvement year-on-year. That still remains the medium-term goal. And I think at this point, even with this offshore shift, we'll continue to look at sort of rebalancing the portfolio, right? I've been talking about growing other nearshore locations, Philippines, Mexico City, South Africa. That's our focus, to continue to grow that portion of the portfolio. For now, the margin outlook is sort of this 11%-12%, and then from that point onwards, improving by 25, 30 bits a year. As a follow-up, so the nearshore locations you count in onshore when you report the percentages, or is it counted as offshore? They're counted offshore. Okay. Great, sir. Thank you, and all the best. Thanks, Manu. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants in the conference, please limit your questions to three per participant. Should you have a follow-up question, please rejoin the queue. Thank you. We'll take the next question from the line of Manik Taneja from Axis Capital. Please go ahead. Mr. Taneja, I have unmuted your line. Kindly proceed with your question. Hello? Please proceed, sir. Yes, sir. You're audible. Hello? Hi, am I audible? Yes, sir, you're audible. Please proceed. Thank you for the opportunity. Vipul, I had a couple of questions. Question number 1 was with regards to the consolidation that we've seen amongst the mega customer care companies in the course of last 12 months. How do you think this impacts the landscape for mid-sized players like us? That's question number one. The second question was with regards to the significant offshore shift that almost the entire customer care industry, since we've been talking about over the course of now, now 12, 15 months, and we are seeing this change significantly. How should we be thinking about our margin outlook, given the fact that we should also be benefiting from such a significant swing in terms of offshore delivery? Sorry, Manik, the second part was CC landscape change in the last 12 to 15 months from what technology? The first question was with regards to the consolidation that one has seen amongst the mega customer care companies. Yeah. What was the second part of that question? The second question was with regards to our margin outlook. Now, we can- Margin. The, the sense that we are giving, essentially, is that margin expansion should be far more gradual. While from some of our bigger competition or bigger peers, we are seeing much more confidence in terms of margin improvement. What's, what's, driving, the, the status quo from our end? Yeah. Okay. The big call center consolidation that we've seen, or at least announced, you know, it, it is interesting. These guys serve big volume industries, right? Tech, retail, you know, communications, energy, government as well. They run sort of global portfolios serving multilingual. I think that, that race to kind of be bigger and broader and serve all geographies, all languages, I think that seems to be the primary driver. As opposed to that, our primary focus is more niche, heavy domain-focused call centers, right? Whether it's healthcare, whether it's mortgage, whether now targeted parts of tech or EdTech, the learner experience that we talked about. Even for, even for our CMP clients, we work with a few, but we work across more sophisticated sort of client acquisition, retention, you know, those kind of chains, right? Rather than just sort of the, the vanilla services. I think we're talking slightly different markets there. Clearly, we don't operate at that level of scale or that level of multilingual capability. To that extent, I don't, I don't think or worry about the impact from those big mergers. In fact, some of the conversation that we've had in the last few weeks with a couple of clients, is that the larger clients, especially the mega, mega clients, the tech ones, they kind of worry a little bit about the, the concentration risk such, you know, mergers can present to them. To that extent, there might be some opportunity for them to expand their portfolio of suppliers, so that they're not exposed to a few very large providers. We'll see how that plays out from a concentration standpoint. On the margin, I think clearly last year was an aberration, right? We had the, the massive revenue shock from mortgage and the collections not kind of kicking in like normally it does. This year we come back to normal margins. Even with the move that we are talking about, right, with a large client and a couple of smaller clients in healthcare and BFS, if you look at our onshore-offshore mix, it is still broadly 70/30, right? Our intent is to slowly and strategically move our clients as well as new deals with a heavy offshore build, right? That should help the margin. You know, as this movement starts, and it starts to attract some other results, we'll give you better guidance in terms of how you see that. But please do keep in perspective, it is still 70/30 onshore/offshore, while what you might be comparing it has very different sort of portfolio mixes. So within that reality, we do think we can eke out this 25, 30 basis every year, for now, from this 11%-12% guidance. Sure. Just to prod you further on the margin outlook. From a segmental margin standpoint, we saw the big drop in terms of BFS margin through the course of FY23, and have seen recovery over the course of last couple of quarters. Should we see the segmental margins on the BFS side go back to the 17%-18% levels, over the course of next 12 months? I don't know where they'll go up, but we'll definitely continue to see improvement. Clearly, as our mortgage volumes had dropped, there was a significant impact on their margin, given the scale. We made great progress in the last two quarters, and we feel confident that over the next two quarters, we'll continue to eke out sort of more margin from, from mortgage. I think collections is in a good run, especially with the increasing share of digital. Our diversification into banking is still relatively sort of young and nascent. Right now it's all about market share and landing accounts there. You know, we'll kind of deal with sort of margins once we have a critical mass there. Overall, directionally, we should see positive, continued positive movement in BFS and margins. Sure. The last bookkeeping question was with regards to our healthcare business. We could provide a split of the HPS and the healthcare provider business, both for FY23 as well as for Q1 FY24. This quarter, we were at about 55, 45. 55 HPSs, 45 providers. For full year, last year, we were. Let me just pull it up for a minute. Our full year number was kind of in the same, same ballpark, maybe sort of a percentage movement here or there for the full year as well as for this quarter. Thank you, and I'll get to you, TJ. Thanks, Manik. Thank you. A reminder to all the participants, anyone who wishes to ask a question, may press star and one now. We'll take the next question from the line of Dipesh from MK Global Financial Services. Please go ahead. Yeah. Thanks for the opportunity. Couple of questions. First, I would just want to get sense about the new service offering, which we, I think, highlighting over the last few quarters. Progress made on those things. First of all, trust and safety standard offering, which is for content moderation, which we are highlighting for the last couple of quarters. Second is fincrime, so financial crime operation. If you can provide some sense about overall market size, how we plan to play in these things, and what kind of, let's say, three-year, five-year kind of time horizon, scalability of some of these offerings. Second question is about the guidance asking rate. If you can run through us what would be the asking CAGR, base on 2 to 5, which we require for next three quarters? Last question is about the finance costs. Finance costs seems to have increased substantially quarter on quarter. If you can give some sense what led to that increase, and whether it is here to sustain. Thanks. Hi, Dipesh. Dinesh, do you want to answer the question on why, why the finance costs is higher this quarter? Yeah. Dipesh I think finance costs have 2 components. One is that normal on a borrowing, the interest cost which we pay, and the second is on a accounting on a leases. Because as your facility, your interest cost and the depreciation gets clicked on the lease rental. This year there is no material change in a finance cost purely on the borrowing. There is a borrowing increase, there is a slight increase. Interest rate still remains between around 5 odd% for our borrowing, that not significantly change. I think larger component is as we are growing the offshore book, we have a new centers coming into. That place, when you do the capitalization of those centers, the interest component is higher in the initial few years, and then it's reduced it. I think that is the larger piece. We see that next quarter onward it will be normalized. It will not be at that high level. Hope that answer your question? Just on the number of center, let's say, the way we report in section. India center. India center and those data, it is showing one reduction rather than one increase. From 11, now it is showing 10. Yeah. There is a reduction and there is a increase. The previous old center, which was in the process of going out, that has gone. Net is the decrease, but the overall, we have added three center in this quarter. On the new offerings, the base, trust and safety is a big market, right? It has come up in the last five, six years, maybe a little bit longer. Varying estimates span of about $5 billion. Up until, I would say, 2021, middle of 2022, it is growing strongly, north of 20-some%. Obviously, since the tech slowed down in H2 of, of last calendar and this year, that growth rate has come down. We still believe that the market is ready for maturity. It has done the first wave of offering, right, which is just pure content moderation. Now, beyond the big platform company, we see the uptake of trust and safety by a varied users, and far more sophisticated and far more targeted use case- usage of trust and safety, from, from privacy to ads integrity. Obviously, even government starting to look at it from a, from a different, different angle, that they kind of look at it from a content standpoint. We are still early in the game. We've come into a mature market, but we do think there is room, there is room to bring in a, a, a partner-driven or a tech-forward sort of solution there. We've had couple of small but sort of symbolic wins. We have a, we are kind of still building up our pipeline on this market. Still very early, but it's a long game. As you said, if you take a four, five-year view, the threshold generally, rule of thumb that we use, is that if you're starting a new practice, in five years, we should see like a $50 million sort of outlook for that business, right? That's more from an aspiration standpoint. We're still early in this, in this game. This year is a year when the PNS market itself is kind of relatively flat, as most tech companies have recalibrated their, their stuff. I think this year will be a year when, you know, existing players will be aggressive, deal making will be more price driven, and we'll see sort of how much we want to play and how aggressively we want to play out there. FinCrime, starting with banks and then potentially going to more the, the, the fintech-oriented payment products, that's a market which has grown really rapidly in the last 2 years. Earlier from an AML, KYC, and now increasingly from an online payment and a fraud standpoint. Our mainstay there today is an extension of our DCX offering, where from our call center experience, we're getting into more fraud-oriented, more specialized calls there. We've had great success in UK, where we work with now four of the top banks. That offering is what we are now, as we kind of start to enter the US banking market beyond mortgage and collection. This is one of the, the, the more mature offerings that we are taking up and building the, building the pipeline and interest in that market. I don't have very good estimates from different areas, but from what I, what I've seen, the estimates for this market also range from between $2 billion-$4 billion. There are a variety of ways in which customers are doing some very heavy system plus kind of offerings, right? X-plus offering to more to more scale or more operational offerings, where we're trying to play from a call center, which is identifying, solving, and even servicing sort of those related calls, and then working our way backwards into the left side of the process. That's on that. Then I already offered comments that EdTech that we've been on it for the last 12 to 18 months, we've had very good wins. I think this large win that we just announced kind of validates the thinking that we've had of entering this segment. Now we have a pretty healthy portfolio, now some meaningful revenues as well to kind of play with and kind of take the next level of sort of GTM focus for this, this particular market. As far as, as far as year-to-year growth, we do expect sequential growth. We expect that Q2 will be relatively modest growth, given the higher impact of the onshore to offshore, and from there on, the growth will accelerate into Q3 and Q4. That's how we currently model to kind of get to our guideline that we have. Understood. Just one question about this EdTech deal. Now, if I look on non-top client, exposure to CMT, it seems to be almost one-third of the revenue coming from this single client kind of thing, once it, start getting ramped up. What would the mix in this, non-sky thing, if you can provide some sense, EdTech, obviously, whether it is fairly concentrated, it seems so far, if you can give some color, which area we are and how we expect, some of those segment to grow for us? Thanks. You think within CMT, what is the share of top client? Then what we have to go coming up? Yes, the top client is obviously we report, so we can calculate. For the remaining pieces. Yeah. of the business, how it is divided? The remaining CMT is, we have a growing, I'm gonna say about, about, I don't want to say one-third, more closer to one-fourth sort of U.S. portfolio that we have built up on that. This is without the EdTech, sort of the new growth that I talked about. Within that, there is a decent concentration of, of clients on the U.S. side. UK, obviously, is a big one and a few small ones. EdTech, once it builds up by Q4, I think we'll be in a better position to kind of tell you in the overall CMT scheme of things where it will land. I think we need to think a little bit about this before I, I give you the answer. I can give you more directional answers, and if you want to double-check on any of that, on the CMT side. Maybe we can take it later. Thank you. All right. Thank you. Dipesh. Thank you. The next question is from the line of Shradha from AMSEC. Please go ahead. Yeah, hi, Vipul. Congrats on a good execution. Couple of questions. First is on the decline in the collection that we saw. Can you quantify what was the extent of decline? Because we understand that Q4 is a seasonally strong quarter. From that base, what was the kind of decline that we saw in Q1? Your voice faded off a little bit. I'll try to answer. Tell me if I don't. Collection, we know that Q4 is seasonally high quarter for tax. This fourth quarter was not as high seasonality as we saw in the past, but there was still an impact from seasonality. Legal collection is still taking its time to build up. There isn't a decline, but legal collection from where it was in Q4 to Q1, it was relatively flat. Early stage collection, barring the impact of seasonality, was solid. Right. The new wins as well as the volume from big clients helped steady. If I take out the seasonality impact, we're happy with sort of where the core or the early stage collection landed. Did that, did that answer your- Would it be possible for you to quantify the revenue for both the quarters in collections for us, Q4 and Q1? We are -- we're starting to give more vertical level from this quarter or this year onwards. We're trying to kind of focus on BSS, healthcare, and CMT and kind of give you at that level, but happy to give you more qualitative comments, if it helps. Sure, sure, sure. Another thing is, this extension of relationship with the top client for another 10 years. Does it come with any increase in commitment of annual budget from this account? If yes, is it more because of, they're shifting from in-house to outsourcing, or is it more as a result of share or volume share gains from, from other, vendor that they have been working with? Yeah. You know, they, they obviously are a client corporation in multiple businesses. At this stage, where we have started off is that there is no capacity reduction. It's the same capacity despite the movement that will run. Now, this is a very dynamic portfolio across product lines and across the life cycle, from acquisition to service, to retention, to, right, even collections in some cases, right? In that life cycle, number of variables keep changing. From a strategic direction of how they run the business, obviously, they are also into a cost-efficient environment. You know, as we've moved, they have also done some retooling of their core portfolio themselves. At this stage, we continue to expect incremental growth opportunities as we've seen in the past two years, right? Some programs come in some kind of as volume drop-off or as campaigns fade over, some volumes go away. We are fully on the table with them on every set of their annual as well as their quarterly strategic plans. There is no thematic at this point to say it'll go up or down. It'll be constant and incremental growth opportunities will come as their priorities kind of change and they adapt to it. That's where we kind of understood each other's sort of business requirements, and we'll play with. Okay. This is the last question. I know it's too early to call out the impact of generative AI, but a larger BPO company has called out that they expect a 20% cannibalization impact over the next three years because of GenAI. How do we see net-to-net, GenAI impact on our business? Look, it's very topical, you know. We don't spend a day these days without talking GenAI five times, and all of us are experimenting at home, and all of us are experimenting in businesses, right? From trip planning to how to make decisions to sort of how to respond to chats. I think personally, it's very early. Market is still in the phase of testing out different things, of taking the technology and bringing into the enterprise world. All of us are testing our pilots, and those pilots give us a point of view to say, "If I take 100 people to do this chat and then I put GenAI, you know, I could do this with 80." Yes, we could get to those pilot-level sort of, you know, estimates of productivity or, or human either effectiveness or reduction. To extrapolate it across the portfolio, I think that's a fallacy that we saw during the time of RPA launch as well, like six and eight years ago. Everybody thought if you can get 30% in one, one process, you could get 30% across the entire operational estate, but that, that never happened. I'm, I'm very circumspect of sort of giving that sort of estimate. At this stage, everybody wants to experiment. New specialized partners are emerging every day who are bringing LL, LLM specific to an industry or mortgage, as opposed to collections, as opposed to healthcare, right? In the vein of the, the regulation requirements of each industry. Right now, the focus is to test it out, see how it works, and then see how, you know, see sort of how much materially you can implement and how much you can squeeze out. Also keep in mind, demand keeps changing as well, right? With GI, our patterns as consumers will also change. There is a demand side and there is a supply side effect in there. Between the two, I, I kind of hesitate to make a long-term prediction yet. Got it. Just if I can squeeze in one last question. In the healthcare segment, we reported a 4% decline. So is it more to do with the HPHS or did you see some weakness even in the provider segment? Provider was very seasonal. There were one or two programs which will come to an end, there was some decline from there. Thematically, as I said, providers being set for sort of steady growth as market activities pick up and as, as more deals happen, we pick up. HPS had more declines, again, partly some because of one or two accounts that were coming to the end of their implementation phase, especially the BPaaS account that we had. There were some minor volume sort of corrections in one of the accounts. It was more where we expected growth to come in faster. It's kind of running behind from a deal closure. That's kind of what's impacting it more. Yeah, I had more, more index to HPS than providers for this problem. Yep. Shradha, does that answer your question? Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Over to you. Great. Well, thank you everyone for your engagement, for your great questions, and your continued support. We look forward to coming back and reporting Q2 to you in a few months' time. Thank you again. Have a great day ahead. Thank you very much, sir. Thank you. Thank you. On behalf of Firstsource Solutions Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.