Ladies and gentlemen, good day and welcome to the Happiest Minds Q3 FY 2022 earnings conference call hosted by IIFL Securities Limited. Yes, sir. 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 would now like to hand the conference over to Mr. Rishi Jhunjhunwala from IIFL Securities Limited. Thank you and over to you, sir. Thank you so much, Janice. Good morning, ladies and gentlemen. Thanks for joining us today on Q3 fiscal 2022 earnings call of Happiest Minds Technologies Limited on behalf of IIFL Institutional Equities. 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 from the management, Mr. Ashok Soota, Executive Chairman, Mr. Joseph Anantharaju, Executive Vice Chairman and CEO, Product Engineering Services, Mr. Rajiv Shah, President and CEO, Digital Business Services, Mr. Venkatraman Narayanan, Managing Director and Chief Financial Officer, Mr. Aurobinda Nanda, President, Operations and Deputy CEO, PES, Mr. Sridhar Mantha, Chief Technology Officer, Mr. Sunil Gujjar, Head of Investor Relations, and Mr. Praveen Darshankar, Company Secretary and Head of Legal. With that, I will hand it over to Sunil for safe harbor statement and to take the proceeding forward for the call. Thank you, and over to you, Sunil. Thank you, Rishi. A very good morning to all. Best wishes to all for a prosperous and healthy new year. Welcome to this conference call to discuss the financial results for the Q3 and 9 months ended December 31, 2021. We trust all of you are keeping well and staying safe. I am Sunil, Head of Investor Relations. Ashok will begin the call by sharing his perspectives on the business environment and our results. Venkat and Joseph 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. We do not undertake to update those statements periodically. Now let me pass it on to Ashok. Thank you, Sunil. A very good morning to all. I hope you're doing well and staying safe. Just when we were hoping that India had avoided a third wave, the new variant Omicron, with a very high transmissibility, has spread rapidly. Although we at Happiest Minds have a vaccine coverage of 96% with at least one dose and approaching 79% fully vaccinated, we saw a huge surge in the number of infections. Fortunately, almost all of these have been relatively mild, and we have had very few hospitalizations. A few months ago, we had formed an internal task force, which we named as Back to Smiles, and it was to enable the safe and gradual return of Happiest Minds to our offices just as we began this new year. However, since the third wave began to expand, and it posed a threat to the well-being of our teams and their families, we decided to postpone our plans of working from our offices. This will happen, I would imagine, in another quarter now, but it will depend on the situation as it unfolds in terms of the control under which this next wave comes under. The business environment remains buoyant, as can be seen from our numbers. For the quarter and nine months, we have registered industry-leading growth of 45.6% and 43.7% in constant currency. Likewise, our EBITDA is also an industry-leading figure, and on a year-over-year basis, this has increased by 27.8%, and for the quarter and 35.5% for nine months. Our EBITDA margin for the quarter, which is at 26.1%, is comparable to most of the larger peers. Venkat and Joseph in their highlights will walk you through aspects of our demand environment, financial and operational performance. I just want to conclude with a thought. I have never been more optimistic about technology than I am now, and that's fundamentally evident from the way it is helping to change and transform the business environment, globally and is becoming a huge driving force for good, impacting the world in a positive way. Thank you, and over to you, Venkat. Thank you, Ashok, and a very good morning to all of you. Best wishes to all on the call for a very happy and a successful new year. I'll take you through the results for the quarter and also add in some pointers on the nine-month ended period as well. Coming to the results of our Q3, I believe we have declared industry-leading results on both. Growth in revenues and profits and our outlook looks very positive. We closed the quarter with $38 million revenues, which was a growth of 44.2% year-over-year and a 5.5% sequential growth. Interestingly, our revenues in the 9 months that ended on December has surpassed that of the entire previous year. Revenues in rupees was INR 284 crores, showing a year-over-year and a sequential growth of 47.3% and 7.3% respectively. Total income for the quarter was INR 292 crores. I think the numbers gives you a feel for the robust revenue growth we have shown in the quarter. Coming to profits, fundamentals require revenue growth to be followed by profit growth, followed by cash generation. Our EBITDA growth has been very good. EBITDA for the quarter stood at INR 76 crore, which is 26.1% of total income. Year-over-year and sequential growth of EBITDA were 27.8% and 8.8% respectively. On PBT, for the quarter we returned profits before tax of INR 65 crore, which was 22.4% of revenues. This has shown a year-over-year and sequential growth of 22.8% and 10.2% respectively. Coming to profit after tax, as I've said in earlier calls, compared to earlier years, this year and going forward, we have and should be paying full taxes or taxes at full rates as we have exhausted all benefits of brought forward losses and others. Despite this, in Q3 and for the nine-month period ended, we have shown sequential and year-over-year growth in profit after tax, which also reflects in higher EPS. Like I mentioned earlier, fundamentals suggest that revenue and profit growth must be tracked by growth in cash flows as well. Our free cash flow generation continues to be very healthy. It's at about 99.4% of our EBITDA. It was INR 76 crore for the quarter and INR 209 crore for the period ended December 31st. ROCE and ROE capital metrics that we track very closely continue to be strong at 32.9% and 28.2%. Some of the other key metrics, more of which you can see in our investor presentation, which has been uploaded in our website are, we have added 11 new clients during the quarter, taking the total number to 195. Average revenue per customer, a metric that we track very closely, continues its increasing trend and now is at INR 794,000 per client compared to INR 683,000 in the previous year. We ended the quarter with $32 million clients and did business with $53 billion corporations. This gives you an indication of the quality of customers that we deal with. During the quarter, we had net additions of 225 Happiest Minds, and happy to say that our family now stands at 4,000+. To be exact, we have 4,021 as of December 31. Our utilization continues to be high and was at 81%, showing a growth of 1.3% over the previous quarter. There is not much change in our geo, vertical, and service offering mix. In a manner of speaking, all of them except for some reclassification are doing similar to previous quarter and quarters. Automation revenues keeping in line with the demand growth stands at 27.1% compared to 24% in the previous quarter. DSO has shown an increase to 93 days. It is a concern. We are focused on getting this back, and we have done well as we see it in January. Attrition is a concern faced both by us and the entire industry. Trailing twelve-month numbers was at 21.1%. My view is that we should see this stabilizing in a couple of quarters. In the meanwhile, while the people supply situation continues to be very competitive, we augment our capabilities through lateral and on and off-campus hires. Demand for IT services, especially for digital transformation, AI, analytics, automation, product engineering support, security services, cloud migration, and the similar, continues to expand rapidly. We see this demand to be secular across geographies and verticals. Of course, there is an accent towards U.S. The most recent NASSCOM report of how the Indian IT industry should go from $190 billion in 2021 to $300-$350 billion in five years reflects this demand, and we are also looking to partake in the same. With that, I pass it on to Joseph to share his thoughts on the business environment. Over to you, Joseph. Thank you, Venkat. Good morning to everyone, and hope you're all staying safe. I would like to thank you all for joining us today and would take this time to brief you all on the market conditions and provide a little bit of highlights on our performance. Demand continues to remain strong, with companies cutting across verticals, accelerating their digital initiatives, and increasing their technology spend. Implementing a well-thought digital strategy has quickly become a necessity for companies of all sizes, which fits very well into the born digital, born agile positioning of Happiest Minds. During the quarter, we saw strong deal wins across all the geos in which we operate, cutting across a wide spectrum of our digital offerings. For example, in this multi-year, $ multi-million managed services deal for a global telecommunications provider with operations in 200+ countries. Happiest Minds has been chosen as a partner in their transformation and operational excellence journey. In another instance, Happiest Minds was chosen to provide end-to-end infrastructure and security services on the cloud for a global EdTech SaaS company. We were also chosen by a leading cybersecurity platform provider to be their engineering partner and co-develop their platform. These dealings reflect to be chosen as a strategic partner for our customers in their experience, data, and cloud initiatives. Our centers of excellence around analytics, AI, IoT, and automation are leading the technology curve and were the engines of growth in multiple customer situations during the quarter. We have been consistently rated as leaders or established players in the magic quadrant of some of the leading industry analysts, including in the leader quadrant of enterprise software and ER&D in Zinnov Zones study for 2021. As Venkat alluded, our delivery engine is resilient and optimized for scale as we continue to attract and retain quality talent. We're extremely proud that the Great Place to Work Institute has rated Happiest Minds as one amongst Asia's best workplaces, and we are ranked number two in the category of Indian IT services by Glassdoor. The conversations with our customers and our assessment of the market indicate a long runway for digital adoption and transformational engagements. We look forward to the next fiscal as we prepare our plans and strategies for deeper engagements with current customers and opening the doors to new logos with our transformational programs. We can now open the floor for Q&A. Thank you very much. Ladies and gentlemen, we will now begin the question/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 questions assemble. The first question is from the line of Vimal Gohil from Union AMC. Please go ahead. Yes, sir. Thank you for the opportunity. Firstly, I have two questions. First one is on growth and one is on one of the data points that you provide. I just wanted some clarity on that. Firstly on growth. You've always maintained that over the longer period of time, you would want to grow at a 20% sort of a growth rate. If I were to look at over the past 1.5 years since your listing, there has definitely been an upgrade in the expectations from Indian IT. Most of your peers are also talking of very strong growth rates over the next 5 years. I mean, is Does that mean that, you know, Happiest Minds will continue to maintain the differential of growth rates over peers over the longer term, given the fact that there has been a material increase in expectations over the last one year? That's question number one. Sure. Can we take the one question and then take the second one after that? Sure, sir. Sure. Absolutely. Venkat, maybe I can just address this in the first instance. Sure. Sure. You know, we can't comment on how we will be vis-a-vis other people. Obviously, we don't know how well they're going to perform. The key thing is that if anything, if you will see our growth, while the industry has grown too, I think we must appreciate that industry has done far better than they were doing in the past. At least many of the leaders have moved into double digit numbers. We also have grown much faster than. We've never given guidance, but we said, yes, we will grow it at continuous 20%+. Quite clearly, there's no reason to believe that the gap will reduce, but it is not a formal guidance. Whether we want to set forth a fresh expectation for the next year, then we will certainly take a look at it as we draw closer towards announcing next year quarter one results. In the meanwhile, I think the really relevant number is what Venkat gave in his statement, that in nine months we have crossed the entire year's revenue of the previous year. Perfect. Perfect, sir. My question, the next question was on FY 2023 and your expectations. I mean, how have the client interactions been for you? Any sense on budget? I know it's a bit early, but any sense you can give me over there. Just one data point that I wanted to understand on this, the automation that you give, which is 23% of your total revenues, and that has seen a very sharp jump this quarter. You know, how should we sort of think about this metric? Does it impact your overall delivery? If it is seeing such a sharp increase, how should we sort of think about it? How will it impact your revenues, or will it impact your overall cost of delivery? If you can just, probably help me explain that. Yeah. Sure. Can I just again, very briefly, Venkatraman, get the budget out of the way. You know, we don't really spend too much time trying to visualize what the budget is going to do or not do. Fortunately, it doesn't really have too much of an impact on our business most times. There's typically been very few positive things done or very few negative things done for us either. Government generally supports the industry. Since such a large part of our business is global, it depends much more on the global environment, which we have indicated as being very, very positive. That's evident again, as we've seen in the previous set of numbers. Let me turn this over to my colleagues. Yeah. To answer your questions on automation in particular. Sure. So Vimal, I'm requesting Joseph. He's having some sort of an issue, technical issue. He's getting onto the call. There were two questions. One was, Ashok, I think he was asking more from do we have a, feel for the growth numbers next year given that, Yeah. Yeah. That one, I think Joseph could take it. I think very first pass at this stage. No, we haven't even finished this quarter. That's right. Yes. I indicated that if we want to give a higher guidance. Right. to the next year, I more or less answered that part of it. Right. If Joseph is having difficulty coming on since, you know, Rajiv is also not here to be able to answer the point on automation. You know, if you like, either one of us can take it or break it. Yes, Ashok. Yeah, we have Sridhar and you, and I can also add. Automation as a number. Let me give you a metric. We call it out separately. You have got our entire revenues broken up by the verticals and service offerings, which is how we add it up to 100%. Automation has an overlap with all the other technologies because it's something that we do with existing customers, existing projects, and within the existing technologies. Automation is brought in. That's why it's called out as a separate number. As you rightly noticed and I highlighted from 24%, it's gone to 27%. From a way of looking at the numbers, we look at test automation, digital process automation, security automation, network security automation, low code/no code based development support services. All of this form part of the automation revenue numbers that we call out. I might add RPA, robotic process automation. Yes. RPA also. Digital process automation includes robotic process automation. This is the entire gamut of automation services that are being offered to us, to our existing customers and new customers. There are some customers who we enter into it with automation, and there are others where we get into our existing projects and, improve our delivery through automation processes. The question I think, Vimal, you had was, are we cannibalizing existing revenues? Is that what the aspect of your question was, Vimal? Not really, sir. Just wanted to understand, you know, if increasing your automation revenues does it mean lower cost of delivery in any sense? Should we take that as an indication that, you know, because yeah. If you can explain that. I'm getting Nanda to answer the impact it has on from a delivery standpoint. Maybe, Venkat, we can come in from a margin angle here because that is what they're really more concerned about. Right. Overall, firstly, as you've seen from Venkat's reply, that automation itself consists of five or six different things. You know, all the way from RPA to business process, et cetera. There is a mix in margins even in all those subsegments. Overall, I think the important thing to remember is that I think it is delivering for us. After all, our profit levels today are fairly high, as you can see, compared to even the larger guys. It's delivering for us the margins that the rest of the business delivers. It neither depresses nor increases the margins. Right. When we say that, you know, we are automating something, does that benefit directly go to our client or do we sort of keep some of the benefits? Because if there is no impact on our profitability, then sort of, how do we think about, do we really look at it as a revenue lever, or do we look at it as you know, more of a convenience offering to our clients? Sure. Again, you know, I think when you have changes in technology which become a key part of business, it is not. You know, it's not even revenue or margin or cost. I think it's an absolutely fundamental requirement for being in business. If you've got a segment which is growing at this rate, you have to stake your claim to be there, and we're happy that we're there and with such a good percentage margin. I'm not sure. You see the other people don't call out their numbers. I have no idea where they are. We believe in a disclosure which gives you all of this data in a very fair granular fashion. It's an imperative part of the business. It's like saying when testing was coming up, does it increase or decrease or do or interoperability came in? These are all extensions of the way technology has evolved. Got it. I think what you're trying to say is if at all we were sort of hypothetically if we were lacking here, it could probably have hit our margins. Since we've sort of been ahead of the curve and in sort of getting it up to speed, our margins are sort of where they are today. Would that be a fair understanding? Well, it becomes a standard part. There may be some parts which you appreciate one thing, that issues which typically get you higher prices. AI could be one such area, for example. It'll also have higher costs because this search for talent is so much more in those areas. All of these numbers balance each other out. We are giving you so much detail on revenue. I don't think we want to split our horizontal data into that sort of granular thing, and it's not also easy to do so. Overall, it's an integral and key part of the business, which is growing, developing, and certainly not depressing the margins, keeping up and coping up with the very fact that we are able to sustain the margin levels that we have in our business. Sir, Ashok, I just wanted to. Yeah, sure. Please. I just wanted to also add that, you know, there is a revenue impact because many of these engagements that Ashok and Venkat are talking about, whether it's the business process or in the RPA space, they are new engagements. They're opening new logos for us. And as Venkat said, once we get in, we're able to cross-sell and expand our presence out there. So there is a, you know, huge impact from a revenue standpoint, and also the way the customer starts viewing us since we are helping them with some newer and emerging technologies. Fair enough, sir. I think I'll join back in the queue. Thank you so much, and all the best. Thank you. The next question is from the line of Arun Kapoor from Morgan Stanley. Please go ahead. Hi. Hi, Ashok. Hi, Venkat. Good numbers, and congratulations. I do have couple of clarifications that I would like to seek. One is on the attrition point that you mentioned. It's rising from 14%, I think couple of quarters back all the way to 21%. I do see that the utilizations are also high at about 81%. The margins, which is our typical barometer, the way we look at it, utilizations are high, margins also tend to rise. When I look back from those two quarters back to now, it seems the margins have not really moved as much. The attrition has spiked up quite a bit. Are you guys seeing a significant cost pressure and hiring pressure coming in from the bench and adding to the supply there? I am quite cognizant that you said this could be something which will get addressed in the next couple of quarters. What are we looking to do over there in order to bring this impact as you know into control as soon as possible? Maybe you can answer that, and then I can move to Skimmer. Joseph, you want to go ahead with that? Sure. Yes, Ashok. So, you know, similar to the other companies, not only in the IT industry, but across the board, there is an acceleration and, you know, as they call it the great resignation, right? We've felt some of that impact and, you know, we're taking multiple steps to address this. We've really increased our people engagement activities. We have interim wage hike that we've provided to some of our folks, looking at multiple factors in October. We're also looking at how we can, you know, provide learning and growth paths for our people so that they continue to be excited and engaged. In terms of, you know, trying to manage the margins, we're looking at how we really do. You know, there are few levers that you have around, you know, managing your bench, making sure that, you know, you have a well laid out matrix for salaries and hiring. We feel, you know, confident that the steps that we've put in place will allow us to sustain our margins. Just to add, you can see that there have been balancing factors. I mean, obviously, in spite of the pressures that Joseph talked about, through a mix of things, not just utilization, the business mix margins have been sustained. Right. The other thing we're doing, if I may just add, the other area that we're taking a close look and we are working on is going back to customers, engaging with them, and getting some, you know, getting rate hikes from a pricing standpoint to offset some of these, the impact from higher salaries. This is again a work in progress and something that, you know, we've had some success working with some of our customers, and we intend to continue doing this in a very focused manner. Understood. Additionally, what I would also like to understand, obviously your revenue growth is continuing to be quite superb. No concern over there. Flow-through to EBITDA level. I understand the taxation part and so on, so maybe not, wouldn't go down to PAT and all of that. Flow-through into EBITDA is still showing some sort of a pressure. Or if I'm getting the read right. Are we seeing cost pressures having increased, and will they continue to be like that? What are your thoughts on that as well? Something that will be really interesting to know. Venkat, you should handle this one. Yeah. So, Arjun, as I've been mentioning, these cost pressures are primarily two right now. One is attrition related, and the second is acquisition of people. These are the two cost pressures. We are managing these using the other levers that are available. Something which is utilization. That's at a high of 81%. Ideally, we would have liked it to be 79, but there is a management of that happening. Rate increase that Joseph just mentioned. There is also the geo mix play that comes in to help sometimes, on-site requirements, opportunities, mixed with subcontractors. The levers that are available to manage some of these costs are there with us. But I do see that there could be an impact. Like you rightly said, the flow-through could get impacted. Not much of it is known right now. Whole of last year I've been talking about COVID-related credits which could reverse once we get back to normal ways of working. This normal ways of working is also not happening that soon. I've been holding on to a 22%-24% kind of range on EBITDA taking into account not only the COVID-related credits going back, travel coming back, maybe a lot more of pre-sales travel happening, sales travel happening. All of that is what I keep looking at. Surprisingly, it's not happening. What's hitting us is the attrition. A gets replaced by B. The attrition for the time being, the cost of attrition and acquisition, we are able to manage it with the other levers that I mentioned. Foreign currency fluctuation and credits that we get is also a factor. In the past, Indian IT industry has always managed to get about 2%-3% benefit from there. We continue to get that. We don't know when that can reverse, hedge policies that we follow. I hope it's a long-winded answer, but it's not a very easy thing to pinpoint saying, yes, the acquisition of people pressure will hit you, and it will flow into the bottom line. It is. Your assumption is absolutely right, but there are other credits that keep coming in. Understood. Venkat, when you think about this as you know, because we are growing from a much smaller scale becoming bigger, and obviously we tend to compare you guys to the foreign peers that are there that face probably lesser pressure on at least the attrition side in cases as well, get easier acquisition, so to speak. Are we seeing that transition happen for us wherein we are increasingly seeing. Ideally, we would be wanting to see less of this pressure coming through, but it's still coming through. Are you guys looking at it as something which is becoming a structural thing, or is it something which is not really structural, these are near-term fluctuations and you're probably going off the curve as far as attraction and retention is concerned? You know, Venkat, if I can just very quickly take that because in a manner of speaking, you've answered and we, the main thing really out here is that we are actually running at way above the levels that we've actually said would be our long-term target. You might say with respect to that long-term target, we've still been able to retain, let us say, the pluses that all these factors in the business have led us into. If to a certain extent, I'm not saying it's going to happen, I think because these guidances are higher than they were projected towards, we are well-equipped to be able to handle the changes that will come about. I'm not saying they'll go down. I'm also not saying they're going to go up. Very difficult to take them above the current levels that they are. We certainly will, and we are not going to either sacrifice margins for growth. Many of these things can happen. I would say that to the extent that we're well above the numbers we've been actually committing, we've got the cushions to be able to meet some pressures which will come through a variety of ways which can't be quantified at the moment. It may be, an acquisition may have a marginal impact on your weighted average acquisition. Further pressures on talent may have some further thing. The cushion is pretty good. We've never targeted to say that we're going to deliver 26% or 27%. Right. All right. Thank you, Ashok. Back to you. Thank you. The next question is from the line of Rishi Jhunjhunwala from IIFL Securities. Please go ahead. Yes, thanks for the opportunity. Just first question, sir, on the nature of deals, right? We have gone through the pandemic and what we could read initially were that companies were taking up large transformation deals and hence a lot of mega deals were announced across the board. Incrementally, what we've been hearing from your peers also is that the deal sizes have become smaller, but the velocity has gone higher. Can you throw some light on the changing nature of deals and does that put you competitively in a better position given the kind of offerings that you have? Sure. Can we get Rajiv to take this? Yeah. Ashok, thanks, Rishi. Thanks for the question. I think that if you look at what we had highlighted, that our strategy has been always land and expand into the customer account and continue to drive a larger digital transformation. Obviously that due to pandemic, there are a lot of re-engineering of business models, et cetera, has set in place. We see more and more initiatives undertaking by the customer. That's the first part. The second one is the nature of the deals itself. As you saw that, when we were talking about the digital process automation, the automation revenue itself, our ability to take engagements to drive that large transformation, be it from the analytics perspective, be it from the IoT perspective, be it from industrial domain perspective and geographical perspective. I think from that perspective, as the business models continue to evolve, the size and the nature of the engagements and deals are changing. You're absolutely right. I think the large mega deals are not coming through, but at the same time, there is a sustained level of transformation that's going on in the customer environment, which provides a sustained level of growth as well as revenue for us. Thank you. The other question is a little bit on pricing. Given the kind of work that you do, you know, one would assume that probably you guys would see any kind of pricing upticks in your contract first ahead of many of your peers who are probably you know, doing more of you know, legacy or migration work. We have already started seeing some of that playing out. Could pricing be a big factor going into the next 12, 24 months, in terms of uptick for your revenue per customer or revenue per employee? That is one. Also a big cushion to your margin. What was the last sentence you said? So- I didn't... Yeah. I You said pricing is a factor for next 12-24 months, and then after that, the very last sentence. Yes. I was asking, sir, if it can provide an uptick to your revenue per customer or revenue per employee metric, and also to your margins or support to your margins. Okay. Venkat, do you want to handle that? Yes. Like I mentioned, Arjun, there is pricing. The ability to get a price increase related to what our attrition is or the demand or the particular technology that we deploy on a particular project is there with us. Don't want to say that it's inelastic, but it's largely because customers have been with us for a very long time, and the approach would be to go sit with them in discussion, get those price increases to mitigate any of the cost increases that we talked about. Yes. The second aspect is, certain newer technologies come at a higher price. Like Ashok mentioned, we evaluate those in line with our overall gross margin targets that we have at the BU or at the technology level, at the COE level. That's maintained and managed at that level, Arjun. Thank you, sir. Thank you. The next question is from the line of Dipesh Mehta from Emkay Global Financial Services. Please go ahead. Yeah, thanks for the opportunity. I have a couple of questions. First starting with supply side management. If you can help us understand how we are taking lateral versus fresh or any change in our strategy in the mix which we plan for next few quarters and last few quarters, any change we have made. Second question is about subcontracting costs. Can you share the percentage of revenue paid out this quarter? And any change in on-site offshore in terms of utilization of subcontractor? I have third question, but answer these two questions, and then I can proceed. Thank you. Nanda can handle that, no? The supply mix. Yeah. Hey, this is Aurobinda Nanda here. Thanks for the question. From a supply side perspective, we have been focusing, like as Venkatraman Narayanan said, we've been focusing more on the lateral hires since the beginning of the organization, Rosetta. Given the kind of pressures that we are in, last year, we continued on the same approach of going to the off-campus mode and continue to hiring people. What we have made a change recently is we have also started visiting campuses this time, and we have been also hiring people from there. In essence, we have doubled down on our approach of the off-campus mode, going into finishing schools and hiring freshers from there, as well as going into the in-campus mode and also hire people from there. Majority of those people will be joining in the coming year, fiscal year. Quite a few of them have also joined the current year. That benefits we will be seeing in the next couple of quarters. Subcontractor charges as a percentage of revenues was about 12% this quarter. Last quarter it was 13.1%, and the same quarter last year was 9.6%. Effectively, it's now come off the peak of about 12%-13%. The drop of 1% I understand is because we had a few subcontractors on-site roll off. If you have about 4 or 5 of them roll off as well, you could get an impact which also reflects on the on-site offshore revenue mix that you'll see for us. In fact, we've been consistently at a percentage, but this time offshore has become 85.6% or something. It's because of that. What rolled off in off-site, we have made up through offshore. We have got a very strong talent acquisition team for on-site or U.S. Europe onboarding, and they are managing any of those requirements that are coming closer to the client. Understood. One follow-up on the supply side. Can you share, let's say, what will be the freshers intake in this first nine months? Let's say we need around 1,300, 1,400 people cumulatively in nine months. Out of that, what would be the fresher addition? The fresher addition will be close to 500 people. When we talk about freshers, we kind of hire 2 kind of people. One is people with, like, 0 years of experience, and then also we also hire people from the industry who have, like, less than 3 months of experience. I'm combining both of them and saying that it is 500. Understand. Last question which I have, which I want to get some clarity about the reporting which will be, we give onsite-offshore revenue mix, and we also give headcount mix. If I look last five quarters, onsite-offshore headcount mix will remain largely stable, but we have seen significant change in onsite-offshore revenue mix while your utilization is largely reported stable. If you can help me reconcile these metrics. Thank you. If you want a reconciliation, we can get that to you separately. It's fine. It's because of these changes in the subcontractor mix that you see the numbers versus revenues happening onsite-offshore. No issues. I can take it off here. Thank you. Yeah, sure. Thank you. The next question is from the line of Aditya Grover from HNI Investor. Please go ahead. Hi. Thanks for the opportunity. My question first is regarding the change in the composition of million-dollar- Hello. Am I able to hear? Speak a bit louder. We are not able to hear you. Oh. Am I audible? I'm better now. Oh, yes. It's better now. I want to understand the change in the composition of million-dollar customers, particularly in the $5-10 million and $3-5 million categories, and whether that has affected your revenues or if this change is just temporary in nature. I'll come to second question afterwards. The million-dollar customers, you will see it's a slight moving up and down the metrics a little, because we report this on a run. There are two methodologies of reporting million-dollar customer. One is on a trailing twelve-month basis, and the other is on a run rate basis. We have adopted a run rate basis of reporting. When you take a run rate basis, you can have slight changes because something which moves from one bucket to another. This time, let me use the word unfortunately, you had one slide down from each of the category by one. That's the only reason why it's gone down. The overall number of customers has gone up. Let me. Underlying statement is no concern because of that. All right. Great to hear. Second question is how are you tapping the opportunity of emerging technologies, including blockchain, cryptos and Web 3.0? What are your future plans regarding it, and how strongly are you venturing into these areas? While we have got COEs which are completely focused on the new age technologies, emerging technologies, I would request Sridhar and Joseph to add to this. Sure. Thanks, Venkatraman. This is Sridhar. Of course, each year we look at the new set of technologies that are coming in and what can be future growth engines. As the market picks up some of these technologies, potentially they can translate into centers of excellence and we can form them. That way when we look at the blockchain for example, I'm just using that as an example since you mentioned it, right? We have been actually working on multiple use cases across different verticals, not the typical financial kind of vertical. Slowly we are bringing the distributed ledger as a part of the core architectural component with many of our customers. Now we started actually looking at the implications of blockchain in the related new technologies that are coming up. We want to continue making more investments like NFT and Metaverse powered by blockchain and implications of blockchain and some of the newer technologies that are coming up. However, these will be. Of course, I used one as an example. There are multiple other technologies also we keep looking at and make those investments. As the market picks up and beyond the 3-4 customer implementations as we grow, we will be converting or creating new centers of excellence around that. All right. Thank you. Thank you. The next question is from the line of Divesh from DS Investment. Please go ahead. Yeah. Hi, team. Good morning. Congratulations for good set of numbers. Just quick question connected to your strategy which you called out about land and expand. You know, specifically on digital projects, consulting is a key skill set required to make the deals and the conversation happen. I just wanted to get a flavor that what sort of consulting skills we have in-house, or how do we sort of include in that part of the value spectrum, right? Again, I guess, Rajesh can handle the part on consulting skills. Thank you for the question, Divesh. If you look at our model itself, land and expand is critical component and supported by the COEs that we have. On top of that what we have added is industry groups, which includes our domain consultants to business analysts, et cetera. There are two sets of consultative skills that we have in the organization. One from people who understand the customer's business environment in domain consulting part of it. Other one is the technology consulting part of it, which includes understanding newer technologies, et cetera. We do have- That level of capabilities within the organization. The second part of our consultative approach to the customer is also we partner with major sets of corporations, right? We work with technology partners, we work with some of the third-party players as well, in bringing the right set of skills and capabilities as well. We have in-house both domain as well as technology consulting, along with architecture consulting. As and when the need requires, we partner with some of the third parties as well, for us to drive the larger digital transformation in the customer environment. Great. That makes sense. Thank you for that. Another one was more around, you know, we all know that technology is expanding faster than we would like, you know, to cover all of the areas. I think in the previous answer it was mentioned that once we have two, three customers, we sort of look at the COE build-up around that. I just wanted to get the rationale because in a normal sense, I would assume that, you know, we sort of do a market research, do a GTM or dipstick and then sort of build the COE and then win the customer. It sounds a little, you know, halfway, right? Where it will be once we have few opportunity wins, then we scale this COE. Is there thought process that I'm missing here, if you can help me understand? The way I would put it actually is, you know, when we see some new technologies, they get incubated under the CTO's umbrella, right? You do a deeper study of the technology. You typically build a few POCs, a few solutions, and then work with the verticals to take it to market. Now, the pace of adoption could vary. You know, and I'll give you the example of blockchain itself. Our first customer was four or five years back, and if you see, barring a few areas, the broader acceptance of blockchain has not happened, right? Till you have enough customers, you know, where you can convert it into a center of excellence or a practice, it continues getting incubated under the CTO's organization. We continue investing in it. All the technologies that Sridhar talked about, you know, whether it's robotics or whether it's NFT, Metaverse, blockchain. All of these are, you know, getting incubated under the CTO's umbrella. You know, once you have enough market adoption, we would then build, you know, proper practices or centers of excellence. You can say that there are people already working under the CTO's umbrella, but we'll master it and scale it once you have more customers. Another example is IoT. You know, that's how we initially started, and within a couple of years of building our first IoT platform and getting the first couple of customers, we saw a rapid adoption and we spun it off into a center of excellence. Okay, great. Thanks. That answers my question. Thank you. Thanks a lot. Thank you. The next question is from the line of Arun Kapoor from Morgan Stanley. Please go ahead. Hey. Hi again, guys. Venkat, from a taxation perspective, the base is now normalizing. Fair to say that from next year onwards, we will be on the right base, and thereafter, you know, with the growth and the profit growth, they should look more in line with each other? That's right, Arun. We are already a full tax-paying company now. All credits of the previous years, quarters have been finished. We should hopefully, unless we get some new credits, which looks not very possible right now, but yes, we should continue. FY 2022 base is completely clean, right? Almost all clean. Yes. FY 2022 would be the fair base for 2023. Got it. Got it. Because if you had looked at the previous year, the base had adjustments of deferred tax, and there were also the brought forward benefits that were there. Typically, when there is any acquisition, there can be some impact, but other than that, on an organic basis, you are seeing the normal trend from here. Understood. In the customer mix, there's been a slight reduction in the 5-10. There's been a little bit of movement between 1, 3, and 5, those buckets. Could you just give a sense of exactly what's happened there? Is this something we need to think about or worry about? No, no. That I just answered. Venkat, if I can just barge in here. Sure. Actually, Venkat answered this with respect to another question which came in. You know, I'll tell you that number because again, as he highlighted, you could look at it from a run rate basis on the basis of which we've reported. You can also look at it on the basis of our 9 months, which I don't think we report externally, but that data's existing today. If, for example, if you look at that cumulative number, the 3-5 has gone down by 1 number, but the 5-10 has gone up equally by 1 number. These are balancing factors. Overall, if you ask me, the number of million-dollar customers is increasing in a way that is very, very positive. When we see overall year-ending end numbers, then we will find that, you know, those little marginal things that we've talked about have got adjusted. We are also moving towards perhaps looking for our first set of customers going downstream, which would be above. Certainly above INR 15 million as of today. We don't report that category, but we've already got a customer in that category. The overall trend on that is exceedingly healthy. Understood, sir. In a way, what I understand is it's better to look at annual snapshots than quarterly snapshots here, because here I'm guessing you're analyzing the quarterly run rate. Analyzing. for that movement. Both of them have their own value, you know. Sometimes it's good to look at both sets of data, but obviously we don't want to confuse the market by reporting much more than we are already doing, which, to the best of my knowledge, is far more than what anybody else does. Fair enough. As far as you are concerned, your concentration is primarily on these annual snapshots of how the customer is trending on a per customer revenue basis. Sure. Understood. Thank you, sir. Thank you. Before we take the next question, a reminder to the participants, if you have a question, please press star then one. The next question is from the line of Mr. Baswas, an individual investor. Please go ahead. Hi. Thank you for the opportunity. Quick one question related to revenue across geographies. I can see revenue for Europe and rest of world is considerably less compared to U.S. and India, if you say. Is it because the focus is not there or this is because something else? That's a good question. You know. Really good. I'll go. Go ahead. I'll take that, Ashok. Sure. The reason why you see that revenue decline in Europe is because in Q2, for one of our large customers, we had a fixed price engagement that came to an end. There was a little bit extra revenue recognition, and there was a little bit of delay in, you know, getting back to the same kind of run rate for the follow-on projects. That's the reason why you see that drop in the European market share. Overall, I would like to, as I stated earlier, we are seeing strong market traction across all our geos. If you just go back to the new logos in Q3, three of them were from Europe, actually. That reflects you know a strong market demand out there. Okay. Thank you. That's it from me. If I just add something here as well. Sorry, Mike. This is Rajiv Shah. I think that if you look at the data over the last two years, our Europe revenue, which was hovering around 6% or so, going up to close to 10%+ now, right? The Europe revenue in terms of percentage for the company, as our revenue has grown, has grown significantly as well. The two-year trend has been in very positive direction, and we have significant focus with a large set of customer engagements as well as deals that we have signed with the senior leadership team in place in Europe as well. Sure. It's a good point, Rajiv. Thanks. Thank you. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to Mr. Rishi Jhunjhunwala for his closing comments. Thank you, and over to you, sir. Thank you, Janice. On behalf of IIFL Institutional Equities, I would like to thank the entire management of Happiest Minds to give us the opportunity to host this call, and all the best for your upcoming quarters. With that, I'll just pass it on to Sunil. Sunil, over to you. Thank you all for joining us today. We thank IIFL Institutional Equities for hosting this call on our behalf. We look forward to interact with you. You can reach out to us on ir@happiestminds.com for any further questions. Thank you, and stay safe. Bye-bye. Thank you, everybody. Good night. Thank you very much. Thank you. On behalf of IIFL Securities Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.