Ladies and gentlemen, good day and welcome to the Happiest Minds Technologies Limited Q1 FY2023 Earnings Conference Call hosted by IIFL Institutional Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishi Jhunjhunwala, Lead Analyst, IT Services from IIFL Institutional Equities. Thank you, and over to you, sir. Thank you, Faizan. Good morning, ladies and gentlemen. Thanks for joining us today on Q1 FY2023 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, Mr. Ashok Soota, Executive Chairman, Mr. Joseph Anantharaju, Executive Vice Chairman and CEO, Product Engineering Services, Mr. Venkatraman Narayanan, Managing Director and Chief Financial Officer, Mr. Rajiv Shah, President and CEO, Digital Business Services, Mr. Ram Mohan C, President and CEO, Infrastructure Management and Security Services, 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 Kumar Darshankar, Company Secretary and Head of Legal. I'd like to hand it over, the call over to Sunil for safe harbor statement and to take the proceedings forward. Thank you, and over to you, Sunil. Thank you, Rishi. A very good morning to all. Welcome to this conference call to discuss the financial results for the first quarter ended June 30th, 2022. We trust all of you are keeping well and staying safe. I am Sunil, Head of Investor Relations. The financial statements, quarterly fact sheet, and press release are available on our website. The agenda for this call is as follows. 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 a safe harbor statement. During the call, we could make forward-looking statements. These statements are considering the environment we see as of today and 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, and a very good morning to all. I'm happy to inform you that Happiest Minds has begun the fiscal year with very good set of results in Q1. I'm happy also to report that we have shown industry-leading sequential growth in revenues of 6.9% in constant currency. In my prior interactions with all of you, I had shared that in our ten-year vision statement, we have set a goal to become a billion-dollar company by 2031. In line with this goal, based on the growth we are experiencing and continued demand for digital services, we are increasing our revenue guidance for FY2023 to 25%, while also targeting to grow at a CAGR of 25% over the next five years. I would also like to draw special attention to our Q1 EBITDA of 26.4%. The sequential growth of 7.6% is once again an industry-leading number. More importantly, at 26.4%, we are on par with the biggest players in the industry, many times larger than ourselves. I would also draw attention to an index I have been highlighting. That is the year-over-year growth plus EBITDA percent. At 60.9%, we are much higher than all of our domestic peers. We have continuously strived to improve on our corporate governance and reporting practices at the company. Our annual report for FY2022 was our first edition based on the more detailed integrated format of reporting. Similarly, we have included therein our first edition of business responsibility and sustainability report a year prior to it becoming mandatory. We continue to do well on our rankings in surveys conducted by the Great Place to Work Institute. For the fourth year in succession, we have found our place in GPTW's India top 20 best companies to work. This is a validation of our efforts over the years to build an institution which is people-focused with an inclusive culture and a great place to work. The first quarter has set a good base for the rest of the year. We believe technology interventions, including newer technologies, continue to permeate every industry sector or functions within an enterprise. Businesses are reaping the benefits of digital through new revenue streams, providing superior customer experience and driving efficient operations. Our past experience has shown that even during economic slowdown, technology spends remain resilient as they contribute to higher market share, new business segments, cost efficiency and productivity improvement. Accordingly, we remain confident of global demand for technology in spite of macroeconomic situations in various countries, geopolitical conflicts and supply chain constraints. With this, I will conclude and pass it to Venkatraman to give you an overview of our financial and operational finance. Thank you, Ashok, and a very good morning to all. Indeed, we have had a great start to the year and I'm very happy to report a good set of numbers, both on growth and on profitability. We continue to harness opportunities presented to us across all verticals of our focus and the demand we see within them for digital adoption, transformation, security, automation and other core digital offerings. This quarter, continuing the trend up until now, all our business units, centers of excellence, geos we operate in and across all our service offerings, we have seen growth and performance. The fact that we have revised upwards our guidance for FY2023 and our aspirational targets for the five succeeding years is a testimony to this and our confidence to deliver on a fundamentally strong demand environment. Coming to the financial highlights for the quarter, we clocked revenues for the quarter of $42.2 million, showing a growth in constant currency of 6.9% on a quarter-over-quarter basis and 29.5% year-over-year. Operating revenues in dollars grew sequentially by 5.9% and 27.4% year-over-year. The same number in rupees grew 9.4% and 34.5%. Our total income for the quarter was INR 333 crore. Talking about margins, we continue to maintain a strong margin profile and very similar to our previous quarters. Our EBITDA for the quarter was INR 88 crore, which is 26.4% compared to 26.3% in the previous quarter. Growth in EBITDA was sequentially 7.6% and 33% year-over-year. Profit before tax came in at INR 76 crore, 22.7% of total income, showing a sequential growth of 8.2%. Similarly, profit after tax was INR 56 crore at 69.9% of total income, showing a growth of 8.1%. As you will see, we have been able to capture the growth in revenues at profit levels as well. Our cash generation continues to be strong with almost 99% of our EBITDA flowing into our balance sheet as free cash. Cash and cash equivalents at the end of the quarter was INR 670 crore. Now coming back to free cash and flows, we'll have to see how to present this number for the next quarter given the large purchase of facilities we concluded earlier this week. On the purchase itself, as detailed in our press release, it has been largely funded with borrowings in a manner such that the effect on our P&L is positive, while from a cash flow standpoint it will be largely neutral in the medium term and positive in the long term. Key point of the transaction is that EMI on borrowings and rentals balance themselves nicely, leaving a valuable asset on our balance sheet at the end of the tenure. Our capital return ratios remain healthy with ROC of 39.1% and ROE at 31.5%. These are industry-leading numbers and we continue to focus on them. Coming to some operational highlights, we had 211 active customers at the end of the quarter. Our count of $10 million customer increased by one, taking it to a total of two. Our average revenue per customer continues to increase. It was $810,000 compared to $796,000 in the preceding quarter, continuing to reflect well on our Land and Expand strategy. Number of customers who are themselves billion-dollar corporations has become 56, showing an increase of two from the previous quarter. We ended the quarter with 4,188 Happiest Minds. We expect to onboard, as per our campus recruitment program, about 500 campus graduates in the next quarters, with about 300 of them expected to join us during the first week of August. In anticipation of this large addition, we were slightly slow on the hiring of off-campus and lesser experienced people in the current quarter. Our utilization for the quarter was 79.1% compared to 79.4% in the previous. Our trailing 12-month attrition has inched up to 24.4% this quarter compared to 22.7% in the previous. We continue to work fervently to control this number and not resting. As I mentioned earlier, my personal take is that this number should trend down from the second half of this fiscal. Our Back to Smiles program to welcome Happiest Minds back to offices is progressing well. Currently we have about 40% of our teams working from our offices across locations in Bangalore, Noida and Pune. We intend to operate in a hybrid model which strikes a balance between work from home and office. As mentioned to you in our prior earnings call, we plan to strengthen our delivery channel through expansion of our delivery capabilities across existing centers and Tier 2 cities. In line with this initiative, we purchased a fully built up ready-to-use commercial property with a super built-up area of about 240,000 sq ft in Bangalore for a consideration of INR 101 crore. This increases our seating capacity and will augment our delivery and in-house training capabilities. I've given you all an overview of the financial construct of this transaction earlier. We are adding seats in our delivery centers in Noida and Pune and are making good progress on setting up of our delivery center at Bhubaneswar, which should be completed by the end of this calendar year. In conclusion, the results for the quarter has set a good pace, good base for the rest of the year. We'll be rolling out salary increases covering a large part of our Happiest Minds family effective first of July, and this could have a temporary effect on margins to be made up through volume and value improvements. As mentioned by Ashok and reiterated by me, while we are revising our revenue guidance for FY2023 and growth targets for the five following years, I will continue to hold on to sustainable medium to long-term EBITDA margins of 22% to 24%. With this, I conclude my commentary and hand it over to Joseph. Thank you, Venkat. Good morning and a warm greetings to everybody in the call today. We had a great start to the fiscal year, reporting a solid set of numbers both on the growth and profitability fronts. Our performance continues to lead the industry with these results, demonstrating the relevance of our services and our trusted customer and ecosystem partnerships. Our performance was broad-based, cutting across all markets, services, and industries. The demand continues to remain strong as enterprises navigate a multi-year digital transformation cycle through cloud adoption and migration, data engineering, analytics, and intelligent automation engagements. A major part of the technology intervention happening today, unlike in the past, is not discretionary but imperative. For instance, we have been chosen by a large bottling company in North America as a trusted advisor to help them with the large-scale implementation of business intelligence transformation engagement to drive better business decisions. For a reputed animal management solutions company in the ANZ region, Happiest Minds is providing engineering services to improve animal performance as well as drive better customer experience. Our customers are executing bold programs with accelerated time frames, which often span multiple parts of the enterprise simultaneously. For instance, we have been chosen as a digital technology partner for a large British-based construction and infrastructure company to build an IoT and analytics platform to deliver the data-led insights for improved operational efficiency, sustained competitive advantage, and customer experience. With our specialized offerings of DevSecOps model spanning security, automation, and IT operations, we help our customers move seamlessly to a cloud infrastructure and ensure customer data centers, cloud infrastructure, and applications are safe, secure, efficient and productive. For example, in a recent win with a nonprofit organization in the U.S., we carried out a consulting-led engagement to provide discovery, assessment and design services for the infrastructure migration to the cloud. In another instance, a global tech-led mobility company chose us to provide advice on running, managing, and improving their third-party risk assessment program using next-gen digital tools. Such engagements are a testimony to the confidence that our customers have on digital and more importantly, in Happiest Minds' ability to build, transform, and sustain initiatives which prepares them to be a more resilient enterprise. I would like to now share my thoughts on the demand environment based on conversations with customers. The demand continues to be strong and the market is convinced of the value digital brings to the table. Our conversations with customers don't indicate a curtailment of spends or postponement of projects. However, concerns on prolonged geopolitical conflicts and macro uncertainties have been expressed by a few. We strongly believe in the promise digital holds to transform the way we live and interact, and our unique positioning as a born digital, born agile company, which, put together, is a potent force for enterprises to unlock value through their engagements with us. The revised guidance which Ashok alluded to reflects this confidence. With this, I conclude my commentary, and we can now open the floor for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Chirag Kachhadiya from Ashika Institutional Equities. Please go ahead. Good morning, everyone, and congratulations on a robust set of numbers. I have a few questions, sir. Since listing, you're delivering a good set of growth, since 2020, I want to understand which underlying sectors and the verticals you feel will, going forward, support this aspirational 25% CAGR kind of growth for next five years and also for the next 10 years you set a vision of that a billion-dollar enterprise kind of entity. I want to know more on that. Okay, that's a very broad question. Now let me start with the longest term, where we said it's a $1 billion target. It's obviously not an overly grandiose target. In itself, that it requires this 25% compounded growth. When you therefore see the underlying factors, obviously, the one point that we keep stating is the fact that we've had a past trend for over three years, and then you're really projecting from the strengths. The second one is the continued momentum on digital, and the fact is that we're the only 100% digital company amongst the domestic players. They are what we call as the EDG companies. Looking at their growth also indicates that there is headroom to continue to grow faster. Having said that, I should also highlight, even if their growth is higher than ours, our profitability is way higher. So, we have actually got the right combination with a view to being able to support that growth, because you can never get growth at the cost of not making very good margins. In the end, that's what the market is also going to assess you upon. So I would say these three or four, and then a few fundamental philosophies of the company. We're always on the forefront of new leading technologies. So when something comes in, market starts developing for that, we get onto it on the ground floor and start building capabilities which we can then take to our customers. Okay, sir. Just one more clarity on the same line. Like, whatever order or contract we're receiving from the customer, what proportion is from annuity or longer, more than one year kind of horizon? If any bifurcation you can provide. Actually, Venkatesh, I think we don't really nowadays report that. I can give a feel and flavor, but really maybe both you and Joseph may want to add to that. Sure. You know what typically happens is that in the IMSS business, when you do sign a contract and you're supporting somebody's security or infrastructure, all of those are multi-year engagements. Whether position is such or not, they will invariably continue. The second aspect I would say here is that even if the order is not indicated as being annuity, the fact is that you build long-term relationships. If you see all of our customers, I would imagine something like 80% or 90% come from customers we've had for several years. Because after all, our repeat business is now running at above 90%. Therefore, we have longevity. We've got customers who go all the way back from the year that we started. To my mind, that is the real definition of annuity rather than saying, "Here, contract was signed," and saying it was for three years. Because you may sign a customer relationship, then you take on projects, and the business continues to grow through the series of projects. Of course, then you continue to sustain applications. In a sense, if you ask me all the business, barring the accounts which either we walk away because we want to keep on improving and move away from smaller accounts or the odd account which has no further requirements, if you really look at the essence of the business, I'd say all of it is annuity. Okay, sir. To achieve this kind of growth, is there any acquisition strategy put in place that we may acquire a certain company going forward to bolster the revenue target? Sure. Well, you know, it's not that this year's guidance is based on that. Let's be clear. We've always stated that acquisition will be an important part of our strategy. It would certainly be an important part of our $1 billion goal. At this point of time, we are sticking with this. We are not making a distinction between organic and inorganic growth. There is no immediate acquisition which you could say we are ready to close in the next three months or more. Beyond that, I would say that yes, of course, acquisitions will be there. We keep looking for opportunities. We're very selective about what we will go ahead with, and therefore it's not included in these. Not per se included in the numbers when we made the guidance. Okay. Sir, if I see your employee strength is relatively lower compared to the other, tier two and tier one companies. Are we going to aggressively do hiring, going forward to meet with the turnover and all, guidance and all? Sure. Joseph, you want to take this on? Yes, Ashok. We, you know, have beefed up our talent acquisition team and being very aggressive in bringing talent on board. We have a campus batch of around 300 people that would be joining us in another three weeks time. We expect this batch and this set of people to help us with our growth for the next 6-12 months. Each of the BUs and the centers of excellence are taking responsibility for bringing more talent on board and also upskilling and multi-skilling our people because a part of being able to meet demand is ensuring that we have people who are able to work on multiple platforms and technologies so that it brings some flexibility into our ability to execute and deliver. Okay, sir. Thank you. Best of luck. Thank you. Thank you. The next question is from the line of Rishi Jhunjhunwala from IIFL Institutional Equities. Please go ahead. Yes, thanks for the opportunity. A couple of questions from my side. One of the key questions that are there in investors and analysts minds is, you know, we are looking at a scenario where by the end of this year or early next year, we'll see, you know, developed market macro becoming weaker. There are a lot of concerns in terms of how IT spending will, as a result, play out, and within that, will there be a significant impact on discretionary spending. Given that, the kind of work we do, which is more at the forefront of digital transformation, how do you think, you know, some of these macro drivers might play out in our favor or against us and how should we prepare when we, you know, look at the growth playing out for the next four quarters given the strong guidance you have? Sure. You know, I actually touched on this, Rishi, in my opening statement where I said, firstly, based on past experience, there's no better thing than seeing what has happened in past slowdowns or recessions. I don't think this is going to be like many of the other things where you really get into bad recessions. Yes, there are concerns on macroeconomic, but what we've always seen is that IT demand actually gets even higher when there's a slowdown. This is even more so in the digital age, because at that time, people might have been saying, "How do I improve efficiency and productivity through IT?" Now IT is opening up new markets, new business segments, completely new business lines. In that sense, we don't see these factors really having an impact on overall growth. In a manner of speaking, it's not just that we've given high numbers. I think they're very realistic numbers. It's just that we've articulated what we are logically heading towards, and we said the market should know this. But there is a positive trend even in most of the others in terms of their growth projections. Overall, not concerned. How do you prepare? I think that's a part of everything we do, whether in good times or bad, you always be prepared for the future. You're always working. I would. In fact, I say in good times, you prepare for the bad, and the bad times you prepare for the good. That's a part of business strategy at all times. Very clear, sir. The second question is on hiring, right? While you touched upon you know beefing up the talent acquisition team and looking to hire a lot more. What we are also possibly undergoing today is you know a lot of your some of your peers who are you know the closer peers of yours, like EPAM, are aggressively hiring in India as a result of the kind of situation they have seen in their operational geographies. So is that making hiring the right kind of talent a bit more difficult for you, given that you directly have similar kind of capability requirements? You know we should be aware of in terms of how it could potentially increase the replacement cost for us? Joseph, again, to you. Sure, sure. So, Rishi, so far, you know, we've not seen any change. The market for talent has been, you know, quite hot, and it continues to be hot. We've not seen any shift in the last 6-9 months after the development with EPAM and the others that you referred to. What we are hoping for is, you know, the next three, maybe as Venkat mentioned in the second half of this year, with the campus batch coming in and the peak of the demand that we saw last year moderating, we should see the talent situation and the recruitment situation become better, and that's what we are anticipating. Because of the EPAM and the, you know, other competitors, the situation they are facing, and they moved to India, we've really not seen any direct impact that we can correlate, at least from a recruitment perspective. Sure. I could just add to what Joseph said. You know, we are going to set up a major center in Bhubaneswar, which will start becoming operational from October. The moment you open a new location, you will definitely get a certain peak of talent, which is happy to be living around those areas because you choose places with good talent. That's certainly going to add to it. I would even say our expansion in Bengaluru, in Electronic City, where the largest center for us today is Marathahalli. There's a lot of residential accommodation which has come up there. You will attract people who would say, "I don't want to necessarily go and work elsewhere, but this is a convenient location to me." I'd say this expansion in our geographical presence is also going to aid our ability to add to our numbers. All right. Thank you, sir. I'll fall back in the queue. Thank you. The next question is from the line of Vimal Gohil from Alchemy Capital. Please go ahead. Yes, sir. Thank you for the opportunity. It's extremely heartening to see you create the guidance, not only for this year but for the next five years, given the macros that you're in. My question is around that guidance and the long-term strategy of the company. We all are aware of, you know, the advantages that the entire IT sector and for Happiest Minds is getting because of the whole shift to cloud and the whole technology spending getting reoriented. My question is likely more long-term in nature. What after that? I mean, how will your the service delivery is of course going to change. Probably we will require. We could probably be requiring more consulting capabilities to be added because most of your application development, et cetera, all of that will happen on cloud. How are you looking at that? Plus, you know, just an extension to the previous question. You know, how will you make sure that your annuity business doesn't sort of lose relevance in that space? That's question number one. I have just one follow-up after that. Okay. That actually sounded like two or three questions, but let me take them up. Then I'll pass some of this over to Joseph. You know, when you talk about, I hope your annuity business doesn't slow down, there are two responses I have to that. One is, if you look at our annuity business, after all, these are things which keep businesses running, and there's an element in that annuity. When I'm saying annuity is really, let's say it's our infrastructure security in the broader sense. Then, or in the more conventionally accepted sense, let me say. But security is everybody's concern every day in and day out, and that need is not going to go down. The environment is getting even more challenging by the day for that. That won't slow. If you look at the definition I really gave in response to the first question on annuity, I said, if you look at people's businesses, you know, how a contract is structured is not relevant. It's how long relationships last. They're all annuity businesses. We got 90% of our business coming from repeat customers. Obviously, it is those customers carrying over year after year after year. That's one. Your question on consulting is really very relevant, and I believe it's a very important part of our strategy. We've done a lot of work on it, and I'll ask Joseph to amplify the approach. Maybe even Rajiv may want to add to what we are planning on the consulting front. Sure, Ashok. Just to add to what Ashok talked about the annuity revenue, Vimal. With most of our customers, we become an integral part of the platforms and the applications that they're building. These don't, you know, finish. They have a life of their own, and you continue adding features, you continue reimagining them. Their customer requirements keep changing. These become multi-year engagements. For instance, one of our largest customers, we started around the same day ten years back, and we are still working with them. It's a multi-million-dollar customer, and we have several such customers. We see them as annuity revenue. In terms of consulting, you know, there are two aspects. It's what's next, right? From a technology perspective, as again, Ashok mentioned, we continue looking at the next set of digital technologies which will change the customer's you know roadmap, IT landscape. We continue investing in them, whether it's blockchain, metaverse, Web 3.0. We have a CTO organization that's building POCs that is understanding the underpinning of this technology. Already working with customers to get a few of the use cases out. On the consulting, that's a very relevant point. We've started building depth in our domains, and we have multiple domains in which we have domain heads that have come on board in the last couple of years. They've been hiring domain experts who can sit with the customers, have an understanding of the customer's business, and able to understand their business objectives and translate that into their technology roadmap or other initiatives that need to be kicked off. We started also tracking the consulting-led revenues and reporting it starting this quarter. This will be a number that we will be closely looking at as how we can increase it, because that will reflect the value that we're adding to our customers and participation on the business side. Good. Thanks. Rajiv, you want to add anything to that? No, sir. No, Ashok. I think Joseph covered both the technology consulting as well as the non-consulting side of it, and which plays a critical role in us building the capabilities within the organization as well. I think Joseph covered the cusp. Okay, thanks. You said you had a follow-on question. One more question. You just on trying to sort of correlate your hiring number. Does this? Because, of course, we've hired quite aggressively in the past few quarters. Given the hiring that we've done this quarter, does that build into you know the future a bit more non-linearity in our revenues? Is that the case? Do you believe that the hiring that we've done in the past few quarters will sort of suffice at least for you know the next, maybe the next couple of years or so, especially in the case where attrition is expected to come down? Lastly, just one more thing on when you say acquisitions, they will be an important part. What's gonna be our inherent philosophy there? Are we looking at more consulting, more technology-led assets, or are we looking at vertical-specific capabilities? Sure. Once again, you know, you have a knack of saying, "I have one more question," you ask three of them. Sorry. That's your four objections. We are happy to answer all. Let's start with your last one. You know, there's a broad range of requirements that we could fulfill when it comes to acquisitions. Therefore, it's not that we'll do A versus B. It could be technology for a new technology which is evolving and where it's far better for us to, you know, accelerate through the process of an acquisition than doing everything ground up. We'll keep building capabilities, but sometimes you take a leapfrog with this. Second could be, as you said, vertical. Again, when you look at the verticals, there's a requirement in each. It's a question of looking at the business which we are seeking to acquire and how it shapes up. Therefore the choice at times is confusing because we've got to see how well it plays for us as a company across multiple parameters, and we examine that very carefully. Yes, the answer is it could be both. It could even be a third type of category, which you've got technology which is all horizontals, verticals which are largely domains, and it could also be more consulting-led type of capabilities. It could be anything. It just really depends on the given fit of both the company and the business with our thing, and obviously certain fundamentals in terms of size. We are no longer going to look at small companies. Not that we've done any so far. We will up the ante in terms of the size of entities that we would look for. That's one. Your other question on are we, you know. You know, there are two, three questions even within that one question. You said, is there linearity? One of the questions, sir, was on non-linearity, so. Yeah. I'm coming to that. You said, does our hiring indicate that there'll be either non-linearity or otherwise? The fact of the matter is, you know, the approach on linearity versus non-linearity, our numbers are, let's say, based logically on what we feel we need to be able to grow, to be able to meet customers' demand without excessive lead times and getting started in projects. You know, on a calculated basis, we'd like to bring down our utilization levels from about 80% to maybe 77% to 78%. That may not be stated here as a goal for you. Obviously, when you're running at those levels, it takes you sometimes a little time to be able to respond to each and every demand. We'd like to get better and quicker off the block. We've figured out the total number of people who we require based on which we have drawn up the hiring plans, which have been shared with you by Joseph and even also with Venkatesh in his opening statement. However, non-linearity is a function of multiple things. Let's say that's a process in which the whole company, and the whole industry continues to work on in varying degrees. Actually, if one had to address that in a very big way, I think we probably need a separate session just to answer this question on non-linearity. I'll tell you one important area for us as a company, and that is what I'll call as replicable sales. You spot an opportunity, and this is where our domain heads are coming in, who Joseph talked about. You spot one opportunity, execute a sale on that front, and then you see how can I take that solution over to multiple players. That is where it really then gives you very good non-linearity. There are many other ways, and many companies are working on those ways. All right, sir. Thank you so much, sir. This was very helpful, and all the very best for the rest of the year. Thank you. The next question is from the line of Abhishek Bhandari from Nomura. Please go ahead. Thank you for the opportunity, sir. Thank you for the, you know, long-term guidance. It is very encouraging. Ashok Soota, I just wanted to understand what kind of sales changes have you started making to achieve this goal of, you know, becoming almost, you know, 7-8 times from the current levels in next 10 years? That's the first part. The second part, again, a related question. Do you think the current organizational setup is, you know, scalable to achieve the goals or do you need to make, you know, any incremental changes, you know, the way you are structured right now? Sure. You know, your first question, I will turn it over to Joseph and Rajiv, and even maybe Ram, if they'd like to address it regarding sales and setup. On the organization setup, let's be clear that the key for us, and we've stated it repeatedly now, the key for us is the executive board. The executive board has always got an eye for the future, and that's what they're working towards. That's what they're planning. Obviously, the short-term results, it's not even short. I'd say it's a three or four-year period ever since the day the executive board came into existence, that you see the continuous uptick in our results. You would say it's certainly working. The very fact that all the objectives, and in fact, the very fact that we've drawn up a ten-year vision indicates that we are really planning and looking towards the future. We are also saying that the industry ten years from now may be looking very different from the industry today, and that is what the executive board is working towards. We don't see any need to change that structure whatsoever. Now, underneath, you may keep strengthening, and adding new domains or adding whatever. What changes we want to make to the sales, organization, let me, pass this over to, first Joseph, then Rajiv. If Ram, you would also like to add, by all means. Rajiv, wanna go first, Rajiv? Yes. Look, I think from the sales structure perspective, there are three ways that we look at, right? We have a strategy of Land and Expand, which is really driven by our account managers and account management structure. They have all the supporting structure to help them grow, which they integrate the entire service offering of Happiest Minds to the customer. The second part of it is the new logo acquisition, which is a dedicated set of hunters who really go after and acquire logos of consequence. Right? The third component of the sales structure is the partnerships, right? How do we work with the larger technology players or consulting or services organizations for us to deliver that. I think the basic structure of account management, new logo acquisition, partnerships will not change. How do we continue to keep them relevant with new sets of technologies, new sets of tools, new sets of offerings in the marketplace, is going to be really the key for us to achieve the growth aspirations that we have as an organization. Yeah, that's very good, Rajiv. I don't know whether either Joseph or Ram have anything specific you want to add. Yeah. I just wanna add from the infrastructure perspective or security perspective, it is important to note that, you know, the customers give their valuable assets, their security needs to organization like Happiest Minds. It is not easy to, you know, get that immediately. Our strategy is in terms of consulting-led, you know, assignments. Because we start with the consulting, we prove how we can deliver and slowly build the trust to the customer and then, expand. Land and Expand strategy in the, infra and security space is very important, and that's how we are structuring our sales in terms of moving more and more towards Land and Expand strategy. As Ashok mentioned, it is more annuity-based business which happens in, infra and security space. Land and Expand is a very important strategy, and that we adapt in all geographies. The second important thing in infrastructure and security is in terms of partnership. That is another area, a partnership of consequence, right? I mean, it should be in the area of strength for us, and those are the partnerships and those are the alliances which we are gonna do. With that help of the technology, we are gonna grow into the new accounts where we can go and start. As Rajiv said, it is typically Land and Expand, new logo acquisition and alliance and partnership, but it is different for each of the business units in terms of how we adapt. For example, even in terms of geography, for the next couple of years from the infra and security space, we are gonna put more trust on United States area. Like that it changes a little bit in terms of each BU, but by and large, these are the three strategies which we adapt. Okay. Just take the next question, I guess. Thank you very much. No, I think the organizational part, I think broadly covered, I think both the gentlemen covered it in detail. Thank you. Thank you so much. Thank you, Ashok. Thank you. Thank you. The next question is from the line of Dev from Invest Yadnya. Please go ahead. Hello. Good morning to all of you. Thank you for providing me opportunity. Congrats for Happiest Minds for producing good results once again. Sir, I wanted to ask you that in infrastructure services you say that you have multi-year engagements. Can you throw light on how are the contracts in the other business units like Product Engineering Services and Digital Business Services? Joseph, Rajiv, you want to handle that? I think in varying degrees I've answered that for two different questions. Rajiv, go ahead. Yes, look, I think that Joseph. Sorry. Go ahead, Joseph. Go, Rajiv. Go ahead, please. Yeah. If you look at what we do for the customer, it's really driving the digital transformation in the customer organization. I think Joseph touched upon this earlier. Where we look at helping them build the next generation platform, help them integrate and expand, and help them run the digital-ready application, right? From that perspective, when you look at the entire ecosystem of the digital transformation journey that we take upon along with the customer, it is somewhat of an annuity-based business, right? Because one set of objectives, building the platform to integrate with something else and running it's an entire ecosystem, and it is very much a long-term relationship. If you look at where we get, we have close to 91% of our revenue, which is a repeat customer, right? Joseph touched upon it earlier as well. To me that is really annuity type of a services. The Product Engineering or Digital Business Services, it is really annuity because it's a long-term relationship to drive the 2- or three-year program with the customers as well. Joseph. I think you've covered, Rajiv. The only other point I wanted to add was the average revenue per customer. It's another key number, has been consistently increasing and it's increased from $796K to $810K during the quarter. That's the other number that we need to also keep a close watch on, which is reflective of the repeat business. Sure. Yeah. I think the point that Joseph brought up earlier about platforms is very key. You know, once you have actually created a platform for one of the customers, what happens is newer and newer applications come on which that platform can support. I think that's a big difference in what you see as the old days and the new days. Because today literally everything is platform-based. Okay. Sir, I have one more question. You have told that organic versus inorganic growth, but you haven't given bifurcation. At least for the next five years that you have told about 25% CAGR. Can you give some rough idea o rganic will be how much and inorganic will be how much? That's an impossible question to answer, and neither would we want to answer it even if we knew it. Because how can we tell you that? We're dependent on the opportunities we'll get. We are confident we'll grow, and we are not making a distinction. Suppose if for any theoretical reason we don't do any acquisition, we're still sticking by our guidance. Okay. Let's see how it goes, and then we'll determine that. Okay. Sir, you do not provide TCV value, so would you like to provide in the future? What is that again? TCV, that is the total? Total Contract Value. No, no, we don't provide it because frankly, I'm not even sure why you need to do it. We don't give even a pipeline data for that matter, and neither do we intend to share that. Okay. Thank you. Thank you, sir. Thank you. The next question is from the line of V.P. Rajesh from Banyan Capital Advisors. Please go ahead. Yeah, hi. Thanks for the opportunity and congratulations. Two questions. First one is regarding the margin guidance. If you can just elaborate, you know, as the margin is currently 36% and the range you have given us 23% to 23%. Sorry to interrupt you, Mr. V.P. Rajesh. The audio is not clear from your line. Please check. Hello. Is it better now? Yeah. Hello? Yeah. It's better now. Great. My first question is that, with respect to the margin guidance and the current margin, that delta of 300-400 basis, if you can just explain where that is going to go. Are you just investing more in new facilities and travel, et cetera? Just if you can give some color on that. Hey, Venkatraman Narayanan, for once there's a question for you. Yeah. Yeah, Rajesh, yeah. As you must have heard me while I did the opening remarks, I'm still holding on to the 22% to 24% margin. In transparency, we have our margins numbers include other income as well. So if you know that EBITDA number, we have been including other income. This quarter we have had some fluctuation in other income, given the way the interest rates have moved, and the way, you know, it got made up partly through exchange variation, which was in our favor, and the volume growth that we have shown. There are a little bit of. I would say there are some bit of these changes which we would like to make sure that we don't go wrong on that, and which is why I've been always guiding you to a careful number or a long-term sustainable number between 22% to 24%. Also the second thing is we have got some of the with Back to Smiles, which is we are welcoming Happiest Minds back to our offices. We will see some of the cost benefits that we had seen in the last one and a half to two years, reversing, you know. We have to expand our facilities. The additional cost will also add to the P&L. Travel costs, like you rightly said, would go up. It was about half a million INR a quarter, and it's likely to come back to those numbers slowly. With all of this, I don't want to pitch at the current margin rate of 26.4%. More importantly, next quarter we have a pay increase. The pay increase that's coming up, like I said in the remarks, in the commentary. That's also something that we have taken into account given the attrition scenario and the demand for talent. It would have a marginal impact. I hope it's marginal. That's also been accounted for when I gave you that 22% to 24% number. Thank you. That's very helpful. My second question is for Ashok Soota. I believe I was reading somewhere that you have launched a wellness company as well. How will that change your time commitments towards Happiest Minds? Could you say that again? I'm afraid I never heard. Can you repeat that? Because sound once again is got muffled. Oh, okay. Is it better now? Yeah, now it's better. Okay. What I was asking is, I believe I read somewhere that you are launching a wellness company or nutritional company. I forget exactly which category. No, it's called Happiest Health. That's a different issue altogether. It's not a nutrition company or anything. It is called Happiest Health, and it focuses on providing knowledge for both health and wellness. Right. My question was that how does that changing your time commitment towards Happiest Minds? Sure. You know, I have sent a mail to some of our stakeholders so far because we are really only very gradually increasing the numbers that we sent out in terms of mails to our audience in Happiest Health. There are two very important things I want to highlight here. One, I think is that firstly, it makes no difference on the commitment. I continue to be executive chairman here. I am not on the rolls of the other entity at all, so I'm directing it like a mentor. That's one. Second thing is, I think it's very important when we said that the executive board is really the key driver for our ten-year vision, that I also give them a little space to continue to work out all their daily things. There's a certain amount of things which in any course of time any executive should do, is to say, "What can I keep on passing on for people to do?" Therefore not get involved in such. You might say into operational or even strategic areas which can be taken care of by this leadership, which is very doing an admirable job, our executive board. I will point out a third thing. Actually, I've created two entities in the healthcare space. One was my completely not-for-profit research center called SKAN, which was launched last year, and is working on really leading-edge technology areas, which require everything. Today, you can't do any work on any front without spending 10% to 20% of that money, particularly in research on IT. Happiest Health itself, and we've been talking of platforms, and so who's created that platform on the basis on which we have just recently launched Happiest Health? We've been talking of any of these streams. I don't have to give them an order which says that it'll last for three years. That's in effect, the wrong way of looking at businesses. One thing will lead to the other. This platform will support multiple applications. Two things are happening here. I must tell you first that every work that we are doing in either SKAN or Happiest Health, through Happiest Minds, is all done under a board-approved arm's length agreement, so that there's no favor to either side. It must be fair. It must be in line with the margins that the business gets, for doing comparable work elsewhere. That's point number one. Point number two, you can see very clearly how this work will add to the potential or potentially will add huge amount of capabilities for, with this other spin-off benefits, for Happiest Minds in terms of the healthcare space. So you might say it's a complete win-win for both parties. Since you're really coming into this from, a Happiest Minds angle, I say it's a huge new capability opportunity which can get replicated, for other, entities in that space for the healthcare domain. Great. Thank you. That was my question. That's all. Thank you. The next question is from the line of Saurabh Thadani from IIFL Institutional Equities. Please go ahead. Hi, sir. Thank you for the opportunity and congrats on a good set of numbers. I had one question on the vertical-wise performance for the quarter. While our growth has been pretty broad-based, the high-tech vertical has seen two straight quarters of sequential decline. Just wanted to understand a bit over here. Is this driven by some project client-specific project completions, or is it more of broad-based slowdown related to the normalization of growth that's above the hyperscalers? Joseph, you want to take this up? Yes. I have a feeling the answer is more lying in absolute numbers have not gone down, but you can just cross-check that and communicate. Sure, sure. I think you're right. The absolute numbers are almost the same between Q4 and Q1. There's a marginal variation. There are two. I believe you would have expected a growth, right? There are two reasons why we didn't have that growth. One is one of our customers where we were doing a Pim core implementation, we are close to completing it, and this was a fixed price, and therefore, you know, there's a little bit of a drop-off while we figure out what to do next with that customer. The second, one of our customers is a late-stage venture-funded company, and they're a little cautious on their spend. When they saw the macroeconomic situation, the geopolitical situation, they did take a step back and reduce their spend a fair bit. What we are seeing is that same customer is coming back now because they have new customers coming on all the time and, who are asking for additional features and functionalities. Having worked with us, you know, we've been with this customer from day one. You know, we've been the original engineering team. They had just a CEO and CTO. They have come back to us, and we should see an increase and expansion in this account. Next quarter, we should see the high-tech vertical show percentage as a revenue growth as well as an absolute growth. That's very helpful. That's it from my side. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Rishi Jhunjhunwala for closing comments. Yeah. Thank you. On behalf of the entire IIFL Institutional Equities team, we'd like to thank the management of Happiest Minds Technologies for giving us the opportunity to host this call. I'm going to now pass it over to Sunil for any closing comments. Thank you, Rishi. Thank you all for joining us today. We thank IIFL Institutional Equities for hosting this call on our behalf. We look forward to interacting with all of you. You can reach out to us on ir@happiestminds.com. Thank you. Thank you. Thank you. Thank you. Ladies and gentlemen, on behalf of IIFL Institutional Equities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.