Ladies and gentlemen, good morning and welcome to Happiest Minds Technologies Q1 FY 2022 earnings conference call hosted by Nomura Financial Advisory and Securities. 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. Rishabh Parekh from Nomura Financial Advisory and Securities. Thank you, and over to you, sir. Thank you, Lizanne. Good morning, ladies and gentlemen. Thank you for joining us today on Q1 FY 2022 earnings call of Happiest Minds Technologies Limited. On behalf of Nomura, I would like to thank the management of Happiest Minds for giving us the opportunity to host this earnings call. Today we have with us Mr. Ashok Soota, Executive Chairman, Mr. Joseph Anantharaju, Vice Chairman and President and CEO of PES, Mr. Rajiv Shah, President & CEO of DBS, Mr. Ram Mohan, President and CEO, IMSS, Mr. Venkat, Managing Director and Chief Financial Officer, Mr. Aurobinda, President, Operations, & Deputy CEO, PES, Mr. Sunil Gujjar, Head of Investor Relations, and Mr. Praveen Darshankar, Company Secretary and Head of Legal. I would now like to hand over the call to Sunil for safe harbor statement and to take the proceedings forward. Thanks, and over to you, Sunil. Thank you, Rishabh. A very good morning to all. Welcome to this conference call to discuss the financial results for the first quarter ended June 30th, 2021. We trust all of you are keeping well and staying safe. I am Sunil from the investor relations team. Ashok will begin the call by sharing his views on the business environment in the context of pandemic and our results. Venkat will then speak about our financial performance and operational highlights, after which we will have the floor open for Q&A. Before I hand over, let me begin with the safe harbor statement. During the call, we could make forward-looking statements. These statements are considering the environment we see as of today, and obviously carry a risk in terms of uncertainty, because of which the actual results could be different as outlined in the earnings release, which is also available on our website. We do not undertake to update those statements periodically. Let me now pass it on to Ashok. Over to you, Ashok. Yes. Thank you, Sunil. Good morning, friends. While our hearts do bleed for the suffering that COVID has brought, in our industry, we are grateful the demand is back to normal in spite of the pandemic. We as a company did a fair contribution ourselves to help the fight against the pandemic. Amongst other things, we've been driving our own vaccination progress at our workspaces, and as of today, well over 50% of all Happiest Minds have received at least one vaccination. We provided financial support to a leading medical institute in Bengaluru to establish a research facility to fight COVID. We've procured ICU ventilators for COVID patients at a hospital in Bengaluru. We contributed towards the means to The Akshaya Patra Foundation for packed grocery kits for the marginalized and low-income segment of society. Overall, we have collected over INR 2 crore from Happiest Minds, our own promoters' charitable trust, and supplemented by our Happiest Minds team. Coming now to the IT services industry. We continue to benefit from ramped-up technology initiatives of enterprises pivoting themselves to the future. At Happiest Minds, we stay focused and continue to deliver with agility, high-quality outcomes for our customers in their digital journey. As can be seen from our quarterly performance, we have been able to set the stage for a very good growth this fiscal. We are able to attract and retain high-quality talent as we onboarded a net addition of 310 Happiest Minds in this quarter. The Great Place to Work has ranked us as number 21 in India's best companies to work, cutting across all industries, and also 63 of the best places to work in Asia in its 2021 list. If we look at the India list, though Great Place to Work does not make an announcement, we're clearly the best also in IT services. One of our vision statements is Happiest Minds to be known as the company with the highest standards of corporate governance. This vision has guided us over the years, and it is heartening to see that we were recognized as a winner for the Golden Peacock Business Excellence Award of 2021. On 29th August 2021, which is exactly a month from now, we complete a decade of existence as a company. We are grateful to our customers, all of our Happiest Minds, our board members, our vendors, and our investors who have walked with us in this journey. We will move forward to the next phase of the journey with a 10-year vision statement. I hope to share with you the highlights of this new vision with you in our next quarter report. With this, I conclude my commentary. Thank you, and over to you, Venkat. Thank you, Ashok. Good morning to all of you. I trust all of you are safe and well. Happy to report that we have begun the new financial year on a strong and a solid footing. Operating revenues in U.S. dollar terms for the quarter was at $33.2 million, showing a sequential growth of 9.6% and a year-over-year growth of 41.4%. Solid numbers. Would like to add here that our growth numbers are right on top in comparison to other comparable mid-cap companies who have declared their results up until now. All our business units, COEs, geos, focus verticals, have showed good growth, driven by a very strong demand environment. In INR terms, our total income for the quarter was INR 254 crore, versus INR 224 crore in the previous quarter, showing a sequential growth of 13.5% and a year-over-year growth of 35.8%. Coming to margins, EBITDA for the quarter has been steady at about 26.1% in comparison to previous quarters. In absolute terms, that was INR 66 crore compared to INR 59 crore in the previous quarter. Cost pressures on account of wage increases, attritions have been covered up by margin increase on account of revenue growth and continued high utilization. When you look at our EBITDA, key numbers that go into that are, we had a gross margin impact of about 170 basis points quarter-over-quarter due to increased people and other direct costs. While looking at the employee-related cost increase, one should also take into account the year-end reversals we had in the last quarter, that is fourth quarter of FY 2021. Improvement in our other income was about INR 6.2 crore, which includes fair value gain on investments of about INR 4.2 crore and a credit of INR 2 crore on account of the settlement of an earlier reported employee discrimination suit in the U.S. We had reported about this suit with lots of details, adequate details in our DRHP and the prospectus earlier during the year. Coming to profits before tax, the same before exceptional items stood at INR 57 crore for the quarter. That was 22.6% of revenues. If you compare this to the earlier quarter, it was INR 49 crore and 22%, and in the same quarter previous year, it was 21.8%. Our financials this quarter has an exceptional expense line item, and this is on account of the fair valuation of warrant liability that we carry in our balance sheet. This warrant liability is on account of payable that we have towards the acquisition for PGS Inc., and it's in the form of an earn-out and carried as a warrant. This amount of $7.25 million, that is the warrant liability original value, this payable bases achievement of certain revenue and profit targets by PGS Inc. business over the next three years. This liability, when we had originally acquired the company, was fair valued as per the IND-AS standards and recorded in our books at about $5.1 million. What is done is we use the Monte Carlo simulation method and look at the probability of payment basis forecast, and it got valued at $5.1 million and recorded as such in the 31 financials. The same accounting standards require us to revalue or evaluate this liability on an annual basis, I would say, basis the performance and prospects of the acquired business. The performance and the growth of the acquired business, which is PGS Inc., has been good or rather it has been in line. To that extent, we have to change our expectations and the valuation of the probable payment. This quarter, we did that, and the increased fair value of warrant liability was about $860,000, and that's about 6.1 crore, which we have taken as a charge to our P&L. What happens is the original liability flows directly into the balance sheet, was recorded at about $5.1 million, and we are revaluing it on an annual basis performance. That was done. The change in this carrying value is then charged to the P&L. Even if it is a debit or a credit, any changes in the original value has to flow through the P&L, and that's what we have done. This has had an impact of approximately 2% on PBT. I would like to add that there is a positive aspect to this because the performance is better, the probability of payment is higher, and which is why the valuation or the revaluation has happened. Coming to our PBT after exceptional item, it was 20.2% and INR 51 crore, which shows a QoQ increase of 4% and a YoY increase of 25.3%. Coming to our PAT, our improving profitability has meant higher effective income tax. We entered the quarter with a PAT of INR 36 crore, which is at about 14.1% of the total income. If I adjust the exceptional item that I referred to earlier, our PAT remains at the same 16% that we showed in Q4 of last year. Item, we are at almost the same absolute levels of profits after tax as in Q4. That is our absolute numbers of profits for Q1 are almost in line with or similar to what we did in Q4. When we are comparing our PATs for Q1 FY22, I would like to caution you that one should be mindful of the fact that instead of a tax expense, we had a deferred tax credit of about INR 9 crore in the same quarter last year. Which is why you see huge swings on the tax provision numbers Q1 of last year versus Q1 of this year. I'll cover some highlights of the quarter. We entered the quarter with 180 active customers, and it's an addition of seven new customers. Our average revenue per customer has increased to $751,000, and this is a metric that we keenly follow and track. Increase in million-dollar customers was by five numbers, which has been a high in the last two years. Addition of seven billion-dollar corporations to our client list. Our financial return ratios of ROCE and ROE continue to be healthy and high at 30.7% and 24.7% respectively. As we have been disclosing earlier, we have very healthy free cash flows. We continue to have that at about 99% of our EBITDA, and that's about INR 66 crore for the quarter. We ended the quarter with cash and equivalent balances of about INR 607 crore. Coming to people, we closed the quarter with 3,538 Happiest Minds. Ashok mentioned that was a net addition of 310. A significant number in the current demand situation that we have or the supply situation that we have. Utilization continues to be a steady 82% compared to the 82.6% in the previous quarter. Attrition has shown a tick. We have moved slightly up to 14.7% on a trailing 12 months basis compared to the 12.4% that we had disclosed in the earlier quarter. We are able to attract and retain talent pool. That is something that we have been happily able to do, which has led to the 310 net additions that I talked about. We continue to make progress on our diversity and inclusion ratios, which at the end of the quarter was at about 25.2%. Coming to the dividends, we had declared a dividend at the 10th AGM held on July 12th, 2021, and that has been paid out, which has been a payout of about INR 44 crore in cash. In summary, a great quarter with high revenue growth, improving operational metrics and profitability. This quarter has nicely set us up for a good year, and our efforts will be to maintain this pace. Improving vaccination numbers around us and also amongst us are slowly blunting the possibility of a third wave and hopefully a return to work from office soon enough. I hope I have been able to give you a good overview of our financials and all of these numbers, including detailed metrics, operational metrics, awards, and other aspects of our business over trends have been put on our website, and I request all of you to go and have a look at that. I open the floor now for Q&A. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone willing to ask a question, may please press star and one on your touch-tone telephone. If you have set up yourself in the question queue, you may press star and two. Participants requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the questions be assembled. The first question is from the line of Rishabh Parekh. Please go ahead. Hi. Congratulations on a strong growth. You keep surprising second quarter in a row. Just I wanted to delve a little bit further in terms of growth. I think since the IPO, we've talked about scaling some of our large accounts. Accounts which have got billion-dollar plus revenues in general. If you look at the growth, it still seems to be driven by the non-top 10. If you look at the tail, we're still expanding on the tail given the customer addition data that you provide. Could you just help us understand the strategy to scale up these customers, the 53 accounts that have INR 1 billion in revenues, how do we scale these customers up to INR 5 million, INR 10 million, INR 15 million accounts? That's one. Then I'll come with the follow-up questions. Joseph, do you want to handle this in terms of our customer profile? Yes. Yes, Ashok, I was gonna answer that. Rajiv can also add. Sure. As you would see, Rishabh, the number of million-dollar customers has gone up this quarter by five. Again, our revenue per customer has increased consistently over the last three, four quarters, and it's currently at $751,000 for Q1. We also added seven billion-dollar customers during the quarter. As you mentioned, the revenue from billion-dollar customers has increased from 37%-39%. Since Atul put out some of the numbers, which shows the trend moving in the positive direction. This is being driven by a very focused effort around getting our domains, our sales, and our delivery to work closely together to strategize on our customers, making the account development plans as the basis for coming up with account strategies, understanding our customers better, and building relationships which are leading. Obviously, the focus is on these billion-dollar customers to make sure that we get a larger share of wallet with these customers. Rajiv, do you want to add anything, Rajiv? I think that Joseph covered most of the data points. In addition, I think over the last 12 months or so, we continue to invest in hiring dedicated set of account managers who look at entire portfolio of Happiest Minds from all three service lines as well as COEs to take single ownership to drive change in the customer environment. The investments on the account managers, supported by the account development plan, and looking at the customer on a global scale, I think will continue to drive growth in the current accounts. I'll just add one point here. You've got some concern about the profile of the accounts. You see, the important thing is we also don't want overdependence on the top five accounts in that sense. If you see that percentage, for us, it's come down from 14.5% to 13.1% in this quarter as compared to the whole of last year. This is in spite of a very healthy growth, even in the larger accounts. That's reflected by the fact that the overall growth rate is so high. Our top five has come down from 33.3% to 30.2%. We think that those are really healthy ratios, which then get reflected by an increase in the percentage for top 10 and top 20. Okay, fair enough. The way to think of it is that we still continue to see customer addition at the tail end. I think in the past there have been instances where we've had to get rid of some of the tail to sort of focus on more quality. The concern here is that we don't end up getting in a similar situation again, is the only point. Otherwise, all well. Okay. That's one. If you look at the last four or five quarters, I think growth has largely been driven by IMSS. IMSS has been substantially higher. If you look at it from an organic standpoint. Obviously, excluding PGS from the DBS contribution. It looks like obviously we've been pretty strong in security solutions. If you could just provide a little more color on what are we doing that's driving that growth, and how should we think about that in the medium term from a mix perspective? Will it be always IMS-driven, or will we continue to sell some of the other solutions which will have a more balanced mix? Venkat, you want to take that? I'll probably add a little bit. Hello, Venkat? Yes, Ashok. Yeah. I said, do you want to take that, and then I may add something. This was on the growth driven by IMSS? Yes. Yeah, because we have had some significant additions, especially in the Middle Eastern markets, which has gone up significantly if you look at in the last two or three quarters. Those additions have largely, I would say, largely come from IMSS, except for one account, which is being handled by DBS, which has come in the last quarter. That's been the increase that you're seeing on a quarter-on-quarter basis. Yeah. If you look at each BU and the way they have grown, each of them have been growing nicely over the last three, four quarters. It's been secular if you see the trend for the last four quarters, Rishabh. Yeah, just to add to that point, Venkat. As you mentioned, security has grown very well. If you see from the last year, it has grown from 7% to almost 11%, and we are making a good stride on security. This is because of new services which are being launched and also a significant increase which is happening with respect to cyber security and identity management. That has fueled the growth as well in terms of security, and we continue to. I'd like to just give you a perspective here. You raised the point that is our growth going to be future IMSS-driven. Actually, you really need to see this number in not just percentage growth quarter by quarter, which is obviously highest for IMSS on the lowest base amongst the three businesses. If you just see the absolute increase, then you find that PES has grown as fast as, or in fact, a little more than IMSS in the last quarter. In absolute terms, PES is still the major driver for growth. DBS may have grown a little less, but the prior quarter, it had the highest growth by far. The takeaway from these numbers is that actually we've got steady growth from all of the three business units contributing exceedingly well to, in a sense, our overall targets, and it is not going to be driven by just one BU. Every one of them has a good pipeline, every one has a good potential, and every one in varying times continues to do a higher percentage growth than the other. Okay, understood. Just one last question before I sort of open it up for. For the queue any incremental contribution from PGS this quarter? That's one. Second is, we've seen a sharp increase in other expenses this quarter. If you could just help us understand why that happened. That's all the questions I have. Thank you. Sure. I guess Rajiv can take the PGS, and then Venkat, you can come in on the expenses. Sure. Rishabh, if you look at the PGS acquisition, they were already a customer for us, and we were billing to them. If you adjust for the intercompany billing, the net additional revenue was about $2.9 million this quarter. From a QoQ standpoint, was there anything incremental? I think last quarter we still had about $2 million. You're saying essentially $1 million of additional. $1 million additional, correct? Yes. Okay. Fair enough. I think that Rishabh just read to that from the PGS perspective. I think there were two critical drivers for us to do that acquisition. One is to go after the market with an open source solution to expand the footprint. The second one was leveraging Happiest Minds asset to drive growth in the Pimcore or PGS accounts as well. We've been able to accomplish both. On a standalone basis, we've been able to drive PGS growth, in opening new accounts as well as introducing PGS into our existing accounts of Happiest Minds. At the same time leveraging the assets of Happiest Minds to really drive the overall growth of the account as well. I think that has really helped us. On an absolute rate, yes, there is a growth from $2 million to $2.9 million, but I think the overall growth for the customer has been significant. Okay. Just to clarify, this is the efforts that we've put in to cross-sell and not just onboarding of revenues, right? Is that correct? To that extent, it should be considered organic. Is that what you're sort of hinting at? That is correct. Okay. That is very much correct. Okay. Understood. Just the last question on other expenses, and then we'll open it up for others. Yeah, Rishabh, go ahead. No. Other expenses, Venkat. Why was there a sharp increase in other expenses this quarter? I think it went up from 18.5% to 19.8% as a percentage of revenues. Are you talking about exceptional expense or other expenses? Other expenses. Other expenses. I'll have to give you a detailed breakup, but it's largely on account of In Q4, there were some reversals that happened because you make provisions during the year, and that got reversed. That's about INR 3 or INR 4 crore impact is there. The rest is all catch-up expenses, sometimes of something like a software, Microsoft TrueUp or something that happens. Subcontractor costs which have gone up. Subcontractor cost, which was about INR 26 crore, has gone up to about INR 35 crore. That also gets classified or categorized under other expenses in the SEBI format. Okay. It should be in the employee benefit expenses. We typically put in subcontractors there, right? This is just the other expenses from INR 42 crore-INR 48 crore. Subcontractor has gone into other expenses, and employee benefits are only our employees. Okay. In the classification. Okay. Perfect. We can assume that this can be at a stable level from here on, right? At these levels approximately. Which is why I drew your attention to the EBITDA numbers before the exceptional item. Which is continuing to be at that number of 26%. If you look at it was 25.6% in Q1 of last year, 26.3%, and 26.1% this quarter. While we have been cautioning you, saying that there could be reversals, given that the cost benefits that have come out of work from office, if they're reversed, we will see some reduction, but we have been holding it to the 26.1%. 26% + this quarter as well. Okay. Fair enough. Thank you. Yeah. Lizanne, can we open it up? Sure. Thank you. We'll take the next question from the line of Vimal Gohil from Union AMC. Please go ahead. Congratulations to Team Happiest Minds for our splendid results. Sir, my question was on subcontracting costs model. Basically, you said that this quarter, there were INR 26 crore worth of subcontractor costs, right? That's right. Last quarter, if I remember it, they were around INR 19 crore, if I'm not wrong. 15.15% as of June 30th quarter. Okay. 15.15%, 26%, and 34.9%, or 35% for this quarter, June 30th. INR 35 crore is the subcontracting cost? For the current quarter. INR 35 crore. Okay. That's right. Okay. Subcontracting cost has almost jumped. If I look at INR 35 crore as a percentage of sales, that has jumped by almost from 9- odd percent of sales in the last quarter, that is Q4. It has jumped to 14%. Yeah. 35 upon 224. Yeah. If I were to look at, just going by the strategy, would we continue to sort of look at subcontracting as a delivery medium or we are looking to reduce subcontractor costs going forward and replace it with maybe on-site where the delivery cost could be cheaper? Vimal, this is mostly on-site. Given the current travel restrictions that we have, and sometimes the visa issues, when there is a requirement in Middle East or the U.S., we have resorted to taking people locally from specialized service providers to deliver on our business. I would be concerned if that really hits your on-site offshore mix in terms of revenue contributions, which it does not. We are able to develop or build on the offshore part in line with the on-site part that we have been delivering on. That's one thing. The second thing is I would request Nanda to add here because it's got an interplay with the requirement and the skill sets mismatch and all of those. Yeah. It is Nanda here. Actually, couple of things have happened, like Venkat mentioned, the on-site demand has increased. We have increased substantially, the number of people we have hired locally. At the same time, the business is increasing on a rapid basis for which we will also have to acquire talent quite a bit. To acquire talent, we have ramped up our talent acquisition team, and that is through a lot of this partner basis, which are kind of temp. As the situation eases out, we will be reducing quite a bit from those teams. On-site will continue to happen, but again, as the travel situation and visa situation eases out over a couple of quarters, we should be able to even take control over that. Also, Vimal, when we acquired PGS business, it had a substantial element of subcontractors, which we are now slowly onboarding them, and we are converting that to our own roles. That's also progress of integration, which is in play right now. That will also happen for quite a few of these partners who are getting billed in customer accounts or projects that point of time. Over a couple of quarters, maybe two quarters or so, we try to convert them into full-time employees. Okay. The other thing, Vimal. Yeah. We need to also keep in mind is that whenever we use subcontractors, especially on-site and even offshore, the key number to look is the margin that you make on that specific person, right? There's enough focus out here to ensure that it doesn't go out of line with the margins that we're getting from our own people. Right. Okay, fair enough. Thank you so much for the detailed explanation. I'm still not clear about the subcontracting cost in the preceding quarter, but I'll take that offline. Just on the growth outlook of FY 2022. Almost 10% growth in this quarter. Even if I were to sort of annualize only this number for the full year, even then we would reach very close to almost 20% growth for FY 2021, which is your stated organic guidance. Would you want to sort of consider changing that 20% number? See, some of your peers have also started growing at that pace, and you have categorically said that we will grow at twice the market rate. Is it that we are being slightly conservative? If yes, what is the source of that conservatism? Vimal, while I'll request Mr. Soota also to add here, I'll just start saying I just want to correct a statement that you made. What we said is we would like to do a long-term 20% organic growth, it was just not for the year FY 2022. While we may be ahead or whatever for FY 2022, given the current numbers and if you do your extrapolations, what we were seeking to communicate was a trend for the medium-term to assign some kind of a longer-term number on an organic basis, Vimal. Sure. From what you're comparing with some of the other companies are there saying, "Hey, there seems to be a huge demand explosion out there," and if you're able to meet the supply requirements of that, we'll be able to grow 20% for the next year. It is more of a shorter-term or an immediate-term kind of a, I wouldn't say guidance, but kind of a directional statement that they have been given. Our directional statement is larger medium-term to long-term. Sure. Actually, Venkat's answer is really saying here we actually haven't given any guidance except long-term. One thing is very evident, that we are running on the basis of the fact that the business is growing, certainly in context of demand being exceedingly good. There is the net addition. I think that is actually your best expectation of looking at where we think we are heading. We're not giving any formal guidance. Those numbers are the highest we've ever had. Even if we sustain just the current net addition level right through the year, we'd have increased our numbers and therefore the total billable numbers very significantly. The other aspect that I want to highlight is I think different entities use different definitions of organic growth. To my mind, the right way of looking at it is we did the acquisition of PGS in Q4 of last year. Right through this year, for the first nine months, we should treat the PGS numbers as inorganic. Some team may actually choose to say, "Okay, after one quarter it's become organic." Then only in the last quarter we will add that element down also as organic growth. Sometimes those percentages can get confusing based on that definition. I think the best guideline you have towards where we are heading is not things like pipelines and stuff like that. A pipeline, it's a very mixed thing. You don't know what is the probability of somebody getting an order and how long that pipeline will stretch. The net people addition is a here and now number which you can look at and start projecting our growth. Great, sir. Thank you so much for improving my understanding on that. Sir, just one more question. You said that there were some reversals in the last quarter in the other operating expenses which were not there this quarter. If you could just help me understand, again, in slightly more detail as to what are these reversals, and are there any other costs that you would want to highlight in the other costs that have come up in this quarter? No, not really, Vimal. It's essentially we paid variable pay basis certain targeted profits that one achieves. You have to make those provisional numbers. We keep on accruing for it on that basis every quarter closes. At the end of the year, you get a fix on that number, and then you have to true it up or correct it. That's what happened. That will be INR 1 crore or INR 2 crore, INR 3 crore number impact. Second large item that comes to my mind is Microsoft licenses. You start calling off licenses or true it up as we do. Because of the such high number of additions that we have, we have to make certain estimates, and then once the quarter closes, you get to know what the exact impact is. There will be some reversal on account of that. You typically tend to see this a little bit of these reversals in the last quarter of the year. Last year, we have always been saying that on the variable pay, we did not have that provision or payment for the first two quarters of last year. If we look at it, that was something, given the whole pandemic situation, the entire industry was kind of trying to see how to optimize on the cost situation. To that extent, the variable pay was not accrued, nor was it payable. As things stabilized, we realized that Q3 onwards, that the demand is picking up despite the pandemic and work-from-home situation is seemingly working well. To that extent, we have to come back and start. Somebody needs to go on mute. Yeah. What's happened, Vimal, is those are those little cost elements which one does make certain estimates and then trues it up by the end of the fourth quarter. We are also now trying to see how to make sure that that's also straight-lined as far as possible. Right. Sir, just one clarification. The variable expenses that we have, those are the part of other operating costs, is it? No. Variable pay for employee goes into employee benefit expenses only. Okay. Fair enough. Yeah. Sir, last question. How many specialist account managers have we hired over the past one year? That would be my last question. I'll come back in the queue after that. Joseph, you want to take it? Yes, Ashok. The approach we've been taking, Vimal, is while we do bring account managers on board, we also have some of them look at leveraging their existing customer connects to get some new logos as well. Overall, in the last one year, we would have brought on board at least seven to eight people with strong account management capability. So seven to eight people- We continue to look out for people. We will continue to look out for people and bring them on board. We want to operate in a flexible manner. If you do bring an account manager on board and we see that they're generating strong prospect pipeline, we will let them run over there, because at the end of the day, we want to look at how we allow the person to grow as well as the benefit we get to the company. Right. Sure. I could add, because we are really trying to see how we are expanding our capabilities in terms of bringing in new business. I would also add that the way we've been adding domain heads is really very important, because that's the thing which then increases the capability of the field to go and close business. We've done a lot in that area. We had added retail last year. We are in the process of adding certainly one, I would imagine, in this quarter itself as a healthcare domain head. Ashok. One, Arun. If the second one is also lined up, that's fine. I think we've made the offer too. Yes, Ashok. Ashok. Yeah. You've made the second offer also? Yes, Ashok. Okay, very good. We'll add two more domain heads. That's a really crucial part of both our strategy as well as our growth drivers for the future. Great, sir. Congratulations once again, and all the very best for the rest of the year. Thank you. We'll move on to the next question. That is on the line of Mr. Arun Kapoor from Morgan Stanley. Please go ahead. Hi, this is Arun. Congratulations on very good results. Just wanted to understand a couple of things. One, in terms of your client adds, $31 million customers, so that's five more than what you had last quarter. What is the trajectory that you guys are looking at from this perspective? How are we thinking about doing this from a next two to three year perspective? That's my first question. Second, in terms of verticals that are there, I see a big dependence on, or big increasing concentration in EdTech. That's been a bit of a contentious sector, at least from a Asia aspect. In terms of EdTech, High-tech, and retail, the three big sectors that you have, how are you thinking about your concentrations on these, and where do you see good growth from an India aspect that we can Or are we also starting to look out more towards the global players, to power our growth ahead? These two points, please. Thanks. Sure. I'll just take the first question and pass this on to both Venkat and, sorry, to Joseph and Rajiv for the part on the specific verticals. You asked us how we are projecting the growth of our million-dollar customers. All I would say is that we don't project it, just to be clear. Otherwise, we'll be giving you a forward-looking number. We have targets. We've got goals. We're saying that our average sales per customer must keep going up, and you've seen a very healthy trend on that. We are pleased with the increase that we got in the number of million-dollar customers. I don't think that that in itself is always going to give you the picture of growth. If, for example, our number of $500-$1 million customers also increased significantly, plus the million-dollar customers moved increasingly into $3 million-$5 million range, I think that's as important for us as saying, "Hey, how much is that $1 million number going up?" Overall, all of those parameters have shown a very healthy trend. We hope to be able to sustain that. On the verticals, let me get both Joseph and Rajiv to get back to you. Sure. Thanks, Ashok. Just to add one more point to what Ashok made. The executive board and even the senior leadership, they all have objectives on, and goals for moving accounts from one bank, 1 million to one to three, three to five plus. It's a very focused effort, there's a planned effort going on. Talking about EdTech, you mentioned that are we going to go global? As you would see, majority of our revenues come from. In fact, all our customers in the EdTech space are in U.S. They're all global players. What we're seeing is that this is a vertical where there's lot of investment going on, whether it's K-12, higher ed, professional courses or even corporate learning. There's lot of investment going on for several reasons. One, I think the pandemic has really made many of these institutions realize that they've not adopted some of the digital technologies. Second is a major push away from paper. There's a lot of data and AI technologies getting consumed and the user profile is changing, and the demands from users are changing. It's more on mobile, on your devices, and therefore they have to make the investment. We are seeing quite a lot of investment happening over there. Even in India, you'd see there's a lot of investment happening in the EdTech space. High-tech continues to be a vertical that continues to attract a lot of investment because it provides the basis or the bedrock for all the other industries to do their digital transformation. Our focus on Product Engineering Services will help us over there. Another point I wanted to make before I hand over for retail to Rajiv, that if you look at all our verticals, even though the percentages may change, we've had all our verticals show some growth to good growth. It's across the board that we are seeing traction with customers. Rajiv, over to you to talk a little bit about retail. Yeah. The retail world, once again, same thing as Joseph, that all of our revenue comes from all across the globe. We have hardly any revenue coming from India, from the retail space. Quite diverse. U.S., Europe, Middle East, we continue to grow based on our PGS acquisition. At the same time, I think that COVID has really helped, in a way, to retail customers to relook at their business model itself. Closing of physical stores, personalization, digital investments, investment in smarter technologies, et cetera, I think has really helped customer relook at the entire business model. Our continued focus on digital side, supported by the strong COEs that we have, I think that we continue to see larger growth. That gets reflected in the numbers itself as far as overall percentage revenue coming and increasing significantly from previous quarters as well. Of course, we should add that this year, in this quarter in particular, the sharp increase in retail as a percentage is largely due to the PGS addition also, where a number of their customers were in that space. Therefore, it looks like maybe EdTech and High-tech have all gone down a bit. In reality, it's just one adjustment taking place in percentages. As Joseph pointed out, every single vertical has actually shown a growth. Got it, sir. Thank you very much. Thank you, guys. Thank you. We'll move on to the next question. That is on the line of Mr. Vimal Gohil from Union AMC. Please go ahead. Sure. Thank you once again. Sir, my question was now on, over a period of time, as in when we keep entrenching into our clients. What are our thoughts on going deep into consulting? We've been very strong, as we know, on the IT services front, digital services front. Are we looking to push the pedal on consulting and moving up the value chain especially with our existing clients? If we are going to do that, how are we going to compete with the likes of your own stated competitors like EPAM, Globant which are leaders in this space and are growing exceedingly well. Would you be able to do that at respectable profitability levels? Some thoughts on that. Thanks. Can I request you to put this question up to us in the next quarter also? I'll tell you why. See, we have a very significant part of our sales comes from what we call is consulting-led. Just like we have IP-led is 10%, which is much higher than any other company. In consulting-led also, we see a large percentage. However, the difficulty in talking about this is that everybody's definition of consulting-led will be different. So I think it's important. We are doing a very detailed exercise to classify the nature of our consulting-led business into different categories. Based on that, once we've got that definition clear amongst ourselves, and we're debating it even with the board, we will start including it even into our fact sheet, which we don't do as of now. At that time, we'll set ourselves goals for that area also. Basically, the number is much higher than you might think. It's not going to be new competition that we will be encountering as a result. That is great to hear, sir. Thank you so much for the clarity. That's all from my side. Thanks a lot. Thank you. The next question is on the line of Dipesh Mehta from Emkay Global. Please go ahead. Thanks for the opportunity, and congrats for strong performance. Two questions. First of all, can you provide some detail about deal intake, kind of deal intake which we are seeing, how the deal size are changing for us, whether we are seeing material uptick in our size of the deal and tenure of the deal perspective. If you can provide some perspective about how the demand environment is shaping up. Secondly is about the BFSI. If I look over last couple of quarters, BFSI remains soft for us. If you can provide outlook on that particular. Thanks. Sure. I think I can get all the three BU heads to respond to that question. Rajiv, of course, will touch specifically on BFSI because it's a part of the DBS BU. Joseph, you want to start again? Yes, sure. I'll tee off, for sure. As I mentioned earlier, Dipesh, the demand is strong across, as Ashok has indicated. I think we're fortunate to be in an industry where the demand has been increasing in spite of the pandemic. This is cutting across all the verticals that we have, and it's also reflected in the fact that even though percentages may vary, all the verticals in absolute terms have shown little to a large growth. Again, if you look at cutting across all geos, we are seeing increased growth. I already talked about from a DBS perspective, EdTech and High-tech. If you look at media and entertainment is another area that we are focused on. Here we are seeing lot of investments going into streaming services, into using more of analytics. If you look at industrial and manufacturing, a lot of the focus has been on increasing connectivity, implementation of IoT architectures, and again, using data. One common theme you'll see across all the industries that we are operating in is the need to use analytics on top of data. There's also a lot of automation that's happening, and that's the reason two years back, we created our digital-first automation COE in addition to the analytics AI and the IoT COE, which are our engines of growth. With that, I'll hand it over to Rajiv. Thanks, Joseph. I think that from the demand growth perspective, I think that we are continuing to see higher and higher traction as well as the size of the SOWs that we sign, as well as the engagement that we have. I think that continues to grow. At the same time, as I highlighted earlier, that I think that a lot of customers had a chance to rethink about their own business model, which has created a significant set of opportunities for us to look at their digital transformation. Overall, from the size of the deal as well as the pipeline and our ability to look at the entire ecosystems from product development to expansion, from Digital Business Services to Infrastructure Management and Security Services, where the customer is looking at transforming the entire digital ecosystem. I think we are well-placed for acquiring larger and larger piece of the customer spend. Specific to BFSI, I think your observation is very valid, and it's been somewhat steady at a number. Over the last 18 months or so, when we started getting into BFSI, our approach to the market was to partner with digital-ready platforms and how can we take those digital-ready platform applications to the customer environment. That has proven successful as far as utilizing the existing assets that we can partner with to take into the customer environment, be it in the mortgage area, be it in the lending area, be it in the retail banking area. It was really the approach that we had taken. We have really proven ourselves and investing in hiring the domain head along with additional set of capabilities, additional set of business analyst consultative skills, and I think you will see that number continue to grow for us as well. Your observation is valid, that it's been remaining steady, and I think that's the approach that we took as far as just taking a third-party application which was digital-ready to implement in the customer environment. Okay. Ram, since you don't have verticals per se, you may want to focus on this aspect of the question, which was on, are the deal sizes growing? Yeah. Just to add to that, Ashok. On the infra side and the security side, we are seeing an increase in the deal size. Now, what is happening is some of the projects which we took from the migration perspective in the infra space, specifically cloud migration, is moving into annuity-based management deals. Similarly, in the security area where we took some projects like IDM implementation or a GRC, is now moving into more managed security services. Consistently, we are seeing an increase in the deal size as we are moving forward. Also, one other significant thing which has happened is the percentage of fixed-price projects have also increased from last quarter to this quarter, if you see, from 22% to 26%, which is also a very good indicator that we are moving more and more into annuity-based fixed projects. Good. Thank you very much for detailed explanation. Thank you. The next question is from the line of Jenil Jain from Omkara Capital. Please go ahead. Yes. My question was along the EdTech vertical, which as we see, is the largest component of our revenues. As the pandemic opens up and as we see vaccinations progressing, how do you see the EdTech vertical moving going forward? Are these numbers currently that we have sustainable or if things open up, should we expect a decline in the revenues coming from the EdTech vertical? Joseph. Joseph, will you take this one? Sorry, I was on mute. I was on mute, sorry. Jenil, the way we would look at it is that, I suppose the reason you're asking this question is if schools open up and students start going back to school, would that reduce the need for digital investment? I think most of the institutions have realized that you will continue needing a mix of digital and in-person. Even if you're having students in classrooms, there's a fair bit of activity that happens, whether in terms of assignments or assessments that are digital. Many of them have, even in classrooms, they move to a digital form of learning. Therefore, that investment that's been made already is something that universities and schools will want to leverage. Our discussions with the EdTech companies that are our customers and prospects is that they have multi-year road plans based on discussions with the end users, the colleges and the schools, of how they want to use technology to improve both student experience, remediation for students, helping students on a better path, and also to get a better understanding of their school or university and run that better. We expect the investments to continue into the medium-term future, at least. Okay, fair enough. Thank you. All the best for the year. Thank you. Thank you. The next question is from the line of Nikita Mehta, an individual investor. Please go ahead. A very good morning to all. Congratulations for stellar performance. I'm totally novice to this area. Anyways, I am quite convinced what you guys are doing is excellent in terms of business. One thing which comes to mind is the share pricing. Based on whatever I have been following in this company, I have been invested in this company, and this is the second phone call I am attending. My question is, in terms of the exceptional high pricing and fluctuations, do you feel it's a normal thing or there can be some problems in that area? Hi, Nikita. This is Venkat. Our position on this would be that we do not comment on the price movements on our share price because frankly, we are focused on the business, putting out results which we believe are helpful in creating long-term value for the shareholders and also building a growth company here. Really, no comment on the share price, Nikita. Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to Mr. Venkatraman Narayanan for his closing comments. Thank you. Thank you all for attending our conference call for the first quarter. It was really insightful, the questions that you've asked. Request all of you to please go to our website and check out the investor presentation that we have. Do write to Investor Relations at Happiest Minds for any further questions, and we'll be happy to answer them. Thank you. Thank you. Ladies and gentlemen, on behalf of Nomura Financial Advisory and Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.