Ladies and gentlemen, good day and welcome to Happiest Minds Technologies Q4 FY23 earnings conference call hosted by Motilal Oswal Financial Services Limited. 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. Mukul Garg from Motilal Oswal Financial Services Limited. Thank you, and over to you, Mr. Garg. Thank you, Tanvi. Good evening, everyone, and thanks for joining us today on the Q4 FY23 earnings call of Happiest Minds Technologies Limited. On behalf of Motilal Oswal, 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, PES, Mr. Venkatraman Narayanan, MD and CFO, Mr. Rajiv Shah, President and CEO, Digital Business Services, Mr. Ram Mohan, President and CEO, IMSS, Mr. Aurobinda Nanda, President, Operations and Deputy CEO, PES, Mr. Sridhar Mantha, CTO, and Mr. Sunil Gujjar, Head of Investor Relations. I will now hand over the call to Sunil for safe harbor statement and to take the proceedings forward. Thank you, and over to you, Sunil. Thank you, Mukul. Good evening to all participants in the call. Welcome to this conference call to discuss the financial results for the 4th quarter and year ended March 31st, 2023. I'm Sunil, Head of Investor Relations. We have published our financial statements, quarterly fact sheet, and press release onto our website. Please have a look at it. The agenda for this call is as follows. Ashok will begin the call by sharing his perspectives on the demand 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 consider 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. Let me pass it on to Ashok. Thank you, Sunil. Thank you also, Mukul, Motilal Oswal for hosting this call. Good evening to all participants in this call. I'm pleased to announce that Happiest Minds has delivered outstanding results for FY23 with 23.7% revenue growth and 26.2% EBITDA margin. We have missed our revenue growth target by 1.3%, mainly due to right shifting of some Q4 revenues. This has been more than compensated by delivering EBITDA margin of 26.2%, exceeding the upper band of guidance of 22%-24%. In view of our strong business pipeline, we are planning also a record addition of 1,300 people. Accordingly, we are retaining our FY24 revenue guidance growth of 25%. While Joseph and Venkat will provide you details of our results, I want to provide you a perspective on our results in context of the Indian IT industry and where Happiest Minds is today. Many of the larger companies with whom we benchmark ourselves have reported sharply lower guidances for FY24 and also reported ramp downs in accounts. We have been able to sustain our growth guidance on the basis of a very strong pipeline. The reason is also that the challenge of course is of a different order. If you look at a $10 billion company, to grow at just 5% it has to create more than one Happiest Minds. At our size of about $200 million, to grow at 25% we need only $50 million of new business. This is something which we see well within our reach considering our pipelines. I should also highlight that we've been able to sustain our number one or number two position in comparison with all our peers on EBITDA%, growth%, or on an index of EBITDA versus plus growth on a year-over-year basis. This year, we have chosen the highest levels of corporate governance as our theme for our integrated annual report. At Happiest Minds we have established corporate governance practices well before the company was listed in 2020. Fundamentally striving to function like an exemplary public entity since our inception, we have been able to achieve benchmarks. As part of our vision to be known for the best corporate governance standards, we have made continuous strides to deploy leading-edge technology for the dissemination of information and educating our stakeholders. Through this, we've been able to drive sustained growth and also build a reputation for transparency and disclosure, which is higher than anybody else in the industry. I would like to highlight a few of the recognitions we have achieved for corporate governance and the awards which have been conferred on Happiest Minds. Golden Peacock Award for Excellence in Corporate Governance 2022. ICSI Best Government Company in listed segment for the medium category. ICAI for excellence in financial reporting. You can see we've made virtually a clean sweep of all of these. Happiest Minds stands for excellent corporate governance, and this is a triple confirmation of our disclosure, transparency, and governance practices. Venkat was recognized by CII as a leading CFO for the year 2022 at their CFO Excellence Awards. I was humbled on being conferred ICSI's Lifetime Achievement Award for Corporate Governance. I have accepted this on behalf of all the Happiest Minds who have helped me to create this great institution. In addition, the other area where we are continuously recognized is in the area of great places to work, which Joseph will tell you about. To conclude, Happiest Minds' growth was broad-based with all our business units, operating geos, and centers of excellence delivering excellent results. These results were enabled by the contribution of our delivery teams, technology and domain groups, and the support of all of our corporate functions under the leadership of our executive board. With this, I conclude my commentary and pass it on to Venkat. Thank you, Ashok. Thanks, Mukul and Motilal Oswal team for hosting us on this call. A very good evening to all, and in the next few minutes, I'll take all of you through some of our financial, operating, and business highlights. For the year, our operating revenues have grown about 24% in constant currency. This was slightly lower than the 25% guidance we had provided at the beginning of the year. The surge in vacations in Q3 and right shift in revenues in Q4 were the primary causes for this. Coming to profitability, this is our 12th successive quarter where we have delivered EBITDA of more than 25% and at 26% for the quarter and 26.2% for the year. We have beaten our guidance of 22%-24% handsomely. Looking ahead for FY24, as mentioned by Ashok, we are guiding on a revenue growth of 25%. EBITDA continues to be in the range of 22%-24%. We are looking at a good Q1 based on our deal closures and healthy pipeline. Coming to the specifics on the quarter and the year. For the quarter, we reported revenues in dollar terms of $45.9 million. In constant currency revenues, that was a growth of 1.3%. A year-over-year growth of 17.6%. In rupees, total revenues were INR 386 crores, a growth of 3% sequentially and 24.5% year-over-year. EBITDA stood at INR 101 crores. That was 26% of revenues, while showing a year-over-year growth of 23.4%. We've been able to maintain a strong EBITDA profile while taking increases on people costs and absorbing campus joiners and trainees into our fold. Our EBITDA numbers continue to place us amongst the top league of comparable companies. PBT was INR 79 crores. That was 20.4% of revenues, while PAT was INR 57.6 crores and 14.9% of our revenues. Our cash conversion ratio continues to be strong as in the earlier quarters. We generated free cash flows of INR 99 crores, which is about 99% of EBITDA. During the quarter, we raised debt through issue of non-convertible debentures to the extent of INR 45 crores, and we have a pipeline totaling another INR 80 crores, which should be done before the end of this quarter. On our QIP, our board and shareholder approvals are valid till October 2023. Efforts on that front continues. We'll keep you updated on that progress. Our results for the quarter include that of SMI, the company we acquired in January 2023. For the year, operating revenues were 178 million, showing a growth of 24% in constant currency. Operating revenues in rupees showed a growth of 31%. Total income was INR 1,450 crores, showing a growth of 28.3%. We closed the year with an EBITDA of INR 380 crores, which was 26.2% of total revenues, showing a growth of 29%. As mentioned earlier, we continue to be the top league of comparable companies on this metric when taken on a yearly basis as well. PBT for the year was INR 310 crores. This was 21.4% of total revenues, showing a growth of 26%. On PAT for the year, we closed with INR 231 crores and 15.9% of revenues, showing a growth of 27.5%. Suffice to say, revenue growth, EBITDA growth, PBT growth, and PAT growth. EPS for the year was at 16, showing a growth of 27.5%. Coming to our capital return ratios, they are comparable with the best in the industry. Return on capital employed and return on equity were 33% and 28% respectively. We ended the year with cash and cash equivalents of 790 crores, and our DSO was at a very healthy 55 days. That's a build of DSO. As briefly mentioned earlier, during the quarter, we acquired 100% equity interest in Sri Mookambika Infosolutions, Madurai. SMI brings in deep domain capabilities in and around our healthcare vertical and aligns very well with our PES, our product engineering business. Not only that, it also takes us into tier two locations of Madurai and Coimbatore. During the year, we increased our capacity across our offshore delivery centers in Bangalore, Noida, Bhubaneswar, and Madurai. In U.S., we added two new offices in New Jersey and Seattle. We ended the year with 237 customers. That was a net addition of 31 for the year. Our average revenue per customer for the year was at $803,000, which has been consistently moving up, and it was, if you recall, about $630,000 a couple of years back. This is a steady increase and is a testament to our land and expand strategy. Our total headcount at the end of the year was 4,917, net additions for the year was 750. Our utilization for the quarter was at about 74.6% compared to the 80.1% in Q3. As we had mentioned, we had onboarded 250 campus joiners. They have become part of our billable workforce, that was the main reason for this drop on a QoQ basis. For the year, our utilization is at about 78%. As we had mentioned in earlier calls, we were running it at a high 80%, we would like to typically be in the range of about 77%-78%. We are seeing easing in supply side constraints and attrition on a trailing twelve-month basis has dropped to 19.8% compared to the 22.7% in the previous year. We expect this number to further trend downwards. Happy to state that keeping in line with our progressive dividend policy and capital allocation discussions, our board of directors of the company at their meeting held today have recommended a final dividend of INR 3.40 per share, subject to shareholder approval. This would take our total dividend for the year to INR 5.40 per share. Looking ahead, we'll continue to make investments in our people and capabilities. We'll be adding about 450 campus graduates this year. We'll be continuing to expand our delivery centers in India with an immediate focus on Pune and Noida. Thank you for all your continued support, and we look forward to the same during the year. Over to you, Joseph. Thanks, Venkat. Thanks, Mukul and Motilal Oswal for hosting this call. Good evening to all of you. As can be seen from the numbers, overall, we had an excellent year as reflected in our broad-based growth across our business units, centers of excellence and focus markets. The numbers reflect our continued ability to operate on our strengths and to position Happiest Minds as a trusted partner for our customers' strategic initiatives. We had our first $20 million customer created in this current quarter. Our total clients in the $5 million-$10 million group have increased by two to a total of six, and in the $1 million-$3 million category, we have an increase of five to take the number to 13. These metrics validate our effective land and expand strategy. Our internal customer satisfaction survey showed a net promoter score of 60 and an overall satisfaction level of 7.86 on a scale of nine. We believe these numbers to be in the top tier among comparable companies. The results of this survey indicate our efficient and quality delivery, engineering excellence and prudent account management practices. On the people front, we are also delighted to be recognized by Great Place To Work Institute. For the second time in a row, Happiest Minds was recognized among the 10 India's Best Workplaces in Health and Wellness 2022. We continue to receive recognition from GPTW as one of the most attractive employers. We were named among the top 25 India's Best Workplaces in IT and IT BPM 2022, and top 50 India's Best Workplaces for Women, 2022. This recognition, along with the excellent customer survey result, reflects the commitment of each and every Happiest Minds to our vision of happiest people, happiest customers. I will now talk a little bit about some of our wins during the reported quarter. For a large edutech company which supports learners and institutions, we were chosen as a strategic partner to provide a broad range of digital engineering services. In the reported quarter, a large loyalty program provider in the ANZ region chose us to provide consulting, support and implementation services to enhance security and privacy environments around their data and cloud. We have been chosen to provide engineering services leveraging 5G for the connected car program of an Indian-headquartered global automotive company. We continue to make investments in technologies which are either becoming mainstream or will become mainstream in the next two-three years. These include generative AI and ChatGPT, Metaverse and Web 3.0, analytics and AI, low-code, no-code applications and quantum computing. We believe that ChatGPT and generative AI will be transformative and offers huge potential and opportunity for technology service companies like us and to our customers. We have initiated a task force under our CTO to look at building solutions on ChatGPT and develop use cases for different verticals, and are already in discussion with multiple customers to help them leverage this technology. On the environmental, societal and healthcare commitments front, Happiest Minds sponsored 1.9 million meals for school children under the Akshaya Patra program during the year. Since our inception, we have contributed 6 million meals. We also partnered with an environmental agency to plant 163,000 tree saplings. Happiest Minds also partnered with an NGO to extend medical support to underprivileged young children between one to 15 years of age battling Type 1 diabetes. I'll talk a little bit about the current demand environment. During the quarter, we saw an improvement in business sentiment as customers digested various macroeconomic and geopolitical factors into their plans and budgets. Decision-making that typically would have happened in December around budgets got pushed out into Jan-Feb, resulting in revenues getting right-shifted, as pointed out by Ashok. Our pipeline exiting Q4 is very strong, with several large opportunities in an advanced stage of the sales life cycle. We have already seen a couple of large deal closures in the first half of April, leading to a good start to the fiscal. The areas where we are seeing spend are all strengths of Happiest Minds. Migration to cloud, modernization of legacy application and platforms, monetizing data by building customer data platforms and applying analytics, AI to turbocharge analytics initiatives, automation of various processes to extract cost savings, and leveraging IoT to increase connectivity and data collection. With this, I conclude my commentary and open up the floor to 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 and one on their touch-tone telephones. 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. The first question is from the line of Vimal Gohil from Alchemy Capital. Please go ahead. Thank you for the opportunity, sir, and congratulations on an excellent quarter and very heartening to see the guidance. The first question is on guidance itself. If you could just highlight how much of this 25%, how much of that will come from inorganic initiatives, if at all? Because if I were to look at the ask rate, that comes very close to 8% every quarter. Just wanted to get a sense on any inorganic acquisitions that are being built in. I have one more question after that. Thank you. Sure. Vimal? Vimal. Vimal, thanks for your question. You know, one thing I should clarify that even if you see the year which has just gone by, actually 98% of our sale growth has been all organic. When we give a guidance, we actually really, in a way, stick out our neck and say whether we do an acquisition or don't do an acquisition, we'll achieve that. The current guidance is based on the fact that we've got a good pipeline and therefore we expect we'll achieve the number. Does it mean there'll be no acquisition which will happen? Maybe, we can't factor that in because acquisitions are uncertain, they're very lumpy, and you don't know when you'll do a deal. We haven't done much, as you know, in the last three years. In one sense, we can congratulate ourselves because valuations have come down and we'll get cheaper, opportunities. We are very selective and therefore in that process, when we get the acquisition, we'll achieve it. If we do or we don't do, our guidance remains 25%. Right. Understood, sir. Thank you so much for that. Sir, one question on this whole debate around this. One of your closest peers, EPAM on Friday highlighted the discretionary spend almost drying up with some of their clients and the industry. How do you look at that environment? Your guidance clearly indicates that there is no dearth of work. There are two very, very opposing views and the market for cost takeout projects seems to be heating up. Right. How are we positioned over there? Thank you. Sure. You know, I'll pass this to my colleagues to answer, but I think the essence of this is this. One, we are not seeing any decline or something in the growth available to us. That's one. Two, you know, we're in a digital business. It's not that we don't do take cost takeouts for our customers, but we are transforming their businesses at all times. The third is of course to be a little humbler about it, is to say that, look, the challenge of a $10 billion company to grow at even 10% or 5% for that matter, means virtually growing another Happiest Minds. We've got to get only $50 million of business. With our organization, with our field force, with our leaders, with our COEs, with all of them, I say that we have no difficulty in getting to that capability and level. I can get both Joseph and maybe Rajiv to add to that. Just a couple of additional points, Vimal. The first point is, you know, what we are seeing is that the areas that we are working on the digital initiatives of our customers, they're not discretionary anymore. They are core part of the technology that they use to deliver services to their customers, to engage with their customers or to provide services to their employees. Therefore, you know, they need to sustain these platforms, these applications, the analytics that they've already built. Sorry, It's not discretionary in nature. The second is, as I highlighted in my commentary little earlier, we've seen a good build-up in pipeline in Q4. you know, as we speak, in the first half of April, we had a couple of closures which are already contributing significantly to the Q1 growth. We see the pipeline moving faster than it did maybe in Q3 or the earlier part of Q4, which is giving us the confidence to provide this guidance. Rajiv? Vimal, I think that, if you look at from the industry perspective, right? Customers are looking for two ways of managing their business, right? One is their revenue growth, and the second one is becoming more profitable. Within that context, I think that we do implement digital-ready platforms to help them become operationally efficient, to take out the costs. Give you an example that we have invested significantly in the low-code, no-code environment, and we have grown quite a bit over the last year. That helps them with getting their platform built faster. At the same time, helps them reduce their long-term maintenance costs as well. From that perspective, there is a cost take-out, play that you can talk about, but it's becoming more and more efficient. At the same time, the spending itself is also getting reprioritized. Related to BFSI sector, while there was more focus on risk and compliance, it's moving more into risk and control. There is more and more operational risk, there is credit risk, et cetera. The spends are going up in that segment as well. Overall, we continue to see growth as Ashok, Joseph, Venkat highlighted. The pipeline is strong. We continue to make impact in the customer environment for them to really both help them grow their revenue, at the same time become more efficient. Understood, sir. Thank you so much. All the very best. I'll come in the queue. Thanks. Thank you. The next question is from the line of Mukul Garg from Motilal Oswal. Please go ahead. Thank you. Just a follow-up, you know, to Vimal question. You know, when we are talking about the demand environment, you know, you mentioned that there was a bit of a right shifting which happened this quarter. Any sense whether that is something which is more industry specific, you know, and also in terms of, you know, the pipeline which you are seeing, are you seeing different, you know, kind of client behavior across industries? It was a bit surprising to see your growth in high-tech this quarter, because that's one area where a lot of companies are highlighting concerns. If you just give some sense on, you know, how we should think about different industries moving forward. Sure. You know, I'll again begin this and pass it on to my colleagues. You know, the first thing, Mukul, is that after all what is the right-shifting we are talking about? It is really 1%. After all, we're that close to our guidance for the year. That's literally because as the year began, a few entities have not cleared their budgets or frozen their budgets, and therefore not released new orders. It's nothing dramatic in terms of saying, "Hey, there was a downturn," or some segment is slowing down. It has nothing to do with any of that. That we are saying you will see reflected in the fact that we are sustaining our guidance for FY25. We don't give quarter-wise guidance, again, hopefully you'll see numbers which might reflect a little bit of that right-shifting also there. With this more details, I think I'll again pass it over to Joseph and Rajiv. Sure. Sure. You know, just reflecting as you asked the question about if there's anything specific industry-wise, and, you know, some of the revenues or opportunities that got moved out or delayed, they cut across industries, so I really wasn't able to draw any correlation to a specific industry, Mukul. I think it was more of customers waiting till the, you know, last minute to make sure that they're factoring all the factors that are out there and developments into their budgetary decisions. I think that's what was driving this. Yeah. The same, like Joseph said, I think that we haven't seen any specific incident of any industry segment that has shifted. I think a couple of examples that I can provide is that one of our customers had a delay in launching their own platform, right? Which affected us in really going after and implementing in some of the customer environment. That has nothing to do with budgetary or whatever, but at the same time, they wanted to include some of the newer technology tools in their newer platforms. That just delayed some of the revenue recognition that we were planning to get as well. Overall, there is no shift. Ram, if you want to add. Even in the case of infra and security, that's what we have seen. We have seen a couple of right shifts, but that has got nothing to do with any business environment or market situation. It is more on the timing of the RFP. There was some delay in the RFP. There was some delay in terms of the meetings which our customers had in terms of deciding on the RFP. Those were the reasons what we are seeing a right shift, and it has got nothing to do with the market condition, at least in the infra and security side. Just talking about high-tech, you know, the most of that, as Venkat pointed out, SMI is aligned with Product Engineering Services, and most of the revenues is in the high-tech segment, which has contributed to that increase in the high-tech segment. Otherwise, you would have found the numbers to be consistent with the other verticals. Sure. Just a follow-up to this. You know, is it fair to imply, given your excellent guidance, that the visibility, you know, on the demand side, continues to remain as strong as what you guys have been seeing for last, you know, two years? Again, the associate addition and the plan seems to indicate that the visibility is quite good. Would love to hear some thoughts on how the demand visibility is out there. Sure. I'll take a first shot at it and then let my colleagues jump in, Mukul. If you look at the demand environment, as I said, it continues to be promising and strong. What is giving us the confidence to provide this guidance is that many of the deals that we have closed or are in the pipeline are quite large in size and spanning across quarters, which ensures that we have visibility of revenues into the entire year. You know, if we continue converting some of the opportunities that we have, it will contribute to this growth that we have been talking about. From again, on the demand side, we haven't seen much of a drop. If you look at how we approach the customer, right? It is about helping them put together the proof of concept, start with the consultative engagement, help them really drive the outcome. Everybody in the customer environment that we have today continues to look at what business outcomes are we driving. From their perspective, I think that we haven't seen much of an impact from the demand market, and that's why we are quite optimistic about the guidance that we have provided as well. Sure. My second question was on the sales investment side. You know, there was a slight moderation this quarter. How should we think about, you know, investment into SG&A for FY24, especially given the aim to deliver a 25% growth in a tough year. Are you still kind of penciling in a 22%-24% operating margin, you know, easing off from, you know, this year? More because, you know, of the growth aspirations or, you know, is it something which will stay around current levels? No. The 22%-24% has been the guidance that we've given over the last two years, and we're holding onto it. Like I've been mentioning, the year before last it was COVID, and we had credits and that came in as a good surprise. Last year, we had a benevolent exchange rate scenario between US dollar to rupee, which helped us. Right now, we have considered those, both of them have kind of played out to its full. We have taken into account those factors and also the investments that like you said, that need to be made in technology competence and sales, as required, domain heads as required. That's why we are still maintaining the 22%-24% guidance, while obviously the intent is to continue to do better. I'll just add one more point. I think that if you look at over the last six months, we have added quite a bit of sales capacity and capability in the U.S. market. We're hiring quite a few hunters. I mean, significant number of hunters in the U.S. market. We continue to add more and more capabilities on our business analyst community as well. We continue to enhance our technology architecture pool as well. We continue to look at all aspects of how do we really approach the customer and how do we really put together a value proposition for us to convert the deal. Sure. Thank you so much. I'll get back into the queue. Thank you. The next question is from the line of Deepesh Mehta from Emkay Global. Please go ahead. Thanks for the opportunity. Just 2 questions, data related. How much SMI acquisition has contributed during in Q4? Related is about how many employees get added because of the transaction? About $2.4 million is what it has come in from the SMI acquisition for the quarter. Like Ashok mentioned, 98% of our business is organic, and it's less than 2% which has come from SMI for the quarter. On the people side, I think we have added 381 people including- Eight. 381 people, including the non-billable people also. Including non-billable. Yeah, non-billable people into our headcount from the acquisition. If one adjust SMI acquisition this quarter, organic number appears to be weak. Even on YOY basis, your revenue growth likely to be slipping to closer to double digits, around 10 odd%. Just want to understand now if one look organic performance seems to be slowing down. Now you are guiding for acceleration in organic revenue growth. Can you provide what is changing compared to, let's say, last couple of quarters? If you look at how Q3 went, we had clarified that we had that vacation impact which had come in. That was one impact. When it came to Q4, it was that right shifting which has happened, which is what Ram Mohan, Rajiv Shah, and Joseph Anantharaju talked about. We made up a part of that through the numbers that have come from acquisition of Sri Mookambika Infosolutions. It was not that we had mentioned that 25% growth guidance for the current year was fully, completely organic. We had said that we didn't have anything. The earlier quarters, we didn't have any on our radar on acquisition. We hold it as growth from either way. We'll do the growth. At the end of the quarter, there came this nice acquisition which fitted very well into our business, and that's how we went ahead and closed that. It just... That's the same reason why I talked about how our Q1 pipeline looks like. The confidence that Q1 numbers... That we have ahead of us as we stand in May, that gives us the confidence to give us an outlook based on Q1, Q2, and for the year. The key thing to remember is that we are saying our guidance is there quite irrespective of whether we're doing a acquisition or we don't do, because we can't predict that. We have taken the confidence of saying that we'll do the 25%. That's why we are giving that guidance. If we get a guidance where acquisition, it changes the numbers, that's also well and good. If we don't get it, we should still target to get 25% without that. Understood. Thank you. Thank you. The next question is from the line of Faisul Hawa from H.G. Hawa Company. Please go ahead. Faisul Hawa just went for a mask. He will come back in within 5-10 minutes now. Sure. Okay. Participants, if you wish to ask any questions, please enter star and one. The next question is from the line of Dinesh Gudge from Technowell Web Solutions. Please go ahead. Dinesh, your line has been unmuted. Yeah, yeah. Please proceed with your question. Yeah. Congratulations, Happiest Minds team on achieving a greater Q4 result. Your hard work and dedication has clearly paid off. Dinesh, your voice is not clearly audible. If you can speak with a handset. Yeah. One second. It's okay now. We could make out. Yeah. Go ahead, Dinesh. Hello. Am I audible now? Yes. Yeah. Much better. Hello. Yeah. Go ahead. Yes, please go ahead. Hello. Am I audible now? Yes. Congratulations, Happiest Minds team on achieving greater Q4 results. This success is well deserved. Keep the excellent work as on going on. I have one little question about Happiest Minds utilization percentage. In Q3 '23 it was 80.1%, whereas in Q4 '23 it is now 74.6%. Can you please put some light on it? Thank you so much, sir. Nanda, you wanna take that question, Nanda? Yeah, sure. All right. We had hired around roughly 300 odd trainees last year. They came in and joined us in the month of August and September, and they were tagged as trainees and their training got over in the month of December. They were not counted on the utilization, billable utilization because of that. They moved into bill people for Q4, and that's where there was a drop in the utilization numbers. Okay. Thank you. Thank you. The next question is from the line of VP Rajesh from Banyan Capital Advisors. Please go ahead. Thanks for the opportunity. My first question is more of a clarification. When you are guiding for 25% revenue growth in FY24, should we just assume that that's going to be all organic and anything that comes on top from an acquisition or, more of those, that will be on top of that? No, no. We are actually being silent on acquisition, which means we are saying we want to make a commitment to the market. We don't know whether we'll do an acquisition or we won't do an acquisition, we'll commit the 25%. I think that is the exact statement. Okay. Given the confidence you have, around this guidance, are there any multi deals, in your pipeline that is, driving this guidance? Sandeep? Anything in the pipeline. As I mentioned, earlier, Rajesh, the pipeline is... you know, we've seen a build-up in the pipeline, as the quarter progressed, Q4, and this has continued into Q1. We had several closures, as, you know, as pointed out in our press release, as well as, you know, as I mentioned earlier, all in areas that customers will need to sustain for a long period of time. You know, we're helping them with some of their core digital platforms. This gives us a long-term visibility. Again, as I mentioned, we've already had a couple of closures from the pipeline that we had in the first half of April that will provide significant revenues in Q1 itself. We have visibility in... all the way into the year on these projects and initiatives. This has given us the confidence. You know, the conversations we've been having with our customers, the kind of opportunities or needs that they've been discussing with us, this is what is giving us the confidence to commit to a 25% guidance. That's helpful. My question was slightly different. Just, what I was trying to understand is that if there are a few large deals, which are, driving this growth guidance or this is like business as usual, a lot of small and medium sized deals in the pipeline, which is giving you the confidence. That's what I was trying to get- Sure. -clarify. Maybe I didn't clarify properly. We do have several large deals. Some of them closed in Q4. A couple of them have closed in the first half of April, right? We are in the process of ramping up all of these opportunities, and that's what is giving us the visibility to provide this guidance along with, you know, the business-as-usual kind of deals that we are getting. Got it. Last question is on the margin now that the cost pressures are seem to be coming down in the industry. Your, your guidance of 22%-24%, are you sort of doing any investment, that's why you're being conservative on the guidance? If you are going to grow at 25%, one would expect that your margins will also expand. Yep. While there is an overall improvement in the attrition in people and supply scenario, you know, we work on specialized technologies, there is a demand for those people. Maybe earlier, a gentleman or Mr. X would have had five offers. Today, he is having two offers. That's the way I would look at it. For good people, there is, I think, a good demand. The other thing is, you know, when things get a little murky in the market, people also tend to stick on and not move. Then you need to do that much more of work to get them to move. These are the reasons that really come into play when you are discussing compensation and similar with prospective candidates and employees or Happiest Minds. That continues from similar to last year. This year we are also adding 450 campus joinees. It was 250 last year. Now this is that number, including trainees, was 300 last year. This time it'll be 450 plus another 50 trainees. That'll be about 500 people. We have not... we are going to stick to those commitments, and we continue to honor them. If you look at it really, there is a good pipeline, which also means that we'll have to look for those people who can help us deliver on our commitments to our customers. That will mean that the cost pressures may not be as bad as it was, maybe a couple of quarters back, but it is going to be there. You should also consider that I'm not going to get that headroom or that tailwind that I had from the dollar rupee, you know, dollar versus rupee. There was a depreciation of almost 8.4% last year. That's not going to come through this year, right? We'll have to plan for that as well. Understood. Thank you. That was helpful. That's all. Sure. Thank you. The next question is from the line of Sumit Jain from ICICI Securities. Please go ahead. Yeah. Hi. Thanks for taking my question. I hope I'm audible. Yes, very well. Okay, great. Actually, first question is on your guidance. Can you quantify the size and the nature of the deal what you have won, which is giving you the confidence of a strong growth in Q1? Because typically, you know, whichever companies have reported till now, all of them have been guiding for a significantly weak Q1 because of the banking crisis and the various other reasons we are seeing at a macro level. Can you quantify the nature of the deal, what you have won, in which area it is and how it will impact, which industry, which service line it is? You know, Sumit, I think the way to answer this one is that maybe some of them who've been dealing with the banking industry, you know, traditional banking industry in particular, they're the ones who got most impacted because the whole environment there has slowed down and there's a lot of cautiousness. We are lucky that none of them were our customers. Another type of environment which got affected are some tech companies, but our tech growth is very strong and has always been for that matter. We didn't have, for example, Twitter as an account. Now, when you look at it, I would say it was the absence of negatives, because other than that, we are not projecting anything different from the past. We're saying we grew 24% last year. We'll grow 25% this year. The overall pipeline is strong. It is really continuing to grow in the segments where we are strong, increasing our presence in segments which we were not relatively strong in the sense had not taken off, but we're now expanding. Healthcare is one such area. It'll suddenly appear on the radar as a specific industry which we will start reporting on. It is things like this which are adding to the momentum and giving us the confidence to say that, yes, we can sustain these numbers on a larger base. Right. If I can add just one more thing. I think that our whole strategy has been learn and expand, right? 92% of our business comes from repeat customers. Based on where our customers are and where their spend desire as well as the initiatives they have, I think that gives us a good visibility going forward as well. Got it. What risk do you see to this guidance if the macro situation deteriorates in U.S. or Europe particularly? Do you think there will be any risk to this guidance going forward or probably in the second half? Also, how are you factoring in the growth during the quarter? Are you seeing a ramp up in the second half of the year? At least all your competitors who are more banking focused and maybe high tech focused are clearly guiding for a ramp up in the second half after a slowdown in the first half. Are you also factoring in any pickup in the second half, or is it going to be a steady growth every quarter? If you have to answer it, Ashok. Sumit, the way to look at it is, repeat business at 92% continues to be strong. Like Ashok mentioned, the 25% growth would be exited with about 177 million-178 million, would be about $42 million-$43 million in terms of additional business that needs to come. You're looking at new business of about 10 million, balance coming from existing business. This is the overall structure, 10 million-12 million coming from new business and about 30 million coming in from your existing customers and pipeline. If you ask me about the risk, it will be with respect to our existing customers and something not going, you know, south with them because that especially will not give you time to quickly book, build and bill and also recognize. That's the risk that we see. What's happening is we're looking at our Q1, we have looked at our Q2. We know where our current pipeline is going to take us and where our customers will take us in the next 2 quarters. That's the confidence on which this 25% number has been given out. If you ask me what's the risk, it is customer specific because you've got $43 million customers and, you know, $120 million customer, X number of $5+ million customers kind of a thing. We are in discussion with them and constantly building up our supply to meet their requirements. Like Ashok mentioned, in high tech, one large company, if they had Twitter as an account, as a customer, if that goes down south, it's going to impact you. There is a element of luck that we have had until now. Just to... I was talking about this when COVID hit, our exposure to travel and tourism was 0.5%. We thank our lucky stars. Anyway, after that came the next question of why aren't you in Ukraine? Why aren't you in Eastern Europe? Frankly, we were looking at Europe and then suddenly Ukraine war happened. We weren't there. Again, thanked our lucky stars. Now, last year, BFSI, the banking and the traditional BFSI got hit. We had about 10%. Our business in BFSI is not a traditional banking. It's about mid-size banks or large-size banks. They are looking to change their, the way they do banking and the way they digitize themselves to do better banking, especially security kind of work and all of that. This is not discretionary. It has absolutely required amount of work that needs to be done. We didn't get hit. Third time lucky. These are things which we have to keep looking out in our IPO document. You know, number 1 risk is obviously customer risk or geography risk or currency risk. Those are the risks that we have to obviously keep in the back of my mind. You know, guidance typically does not take into account something which has not happened as of today. Something really untoward. Well, you know, there's always a high probability of one risk or the other coming and hitting you in this world. That's a fact. Though you can't say that I can pinpoint that this or this will go wrong. For example, nobody anticipated COVID, nobody anticipated Ukraine. Nobody anticipated that all these banks will suddenly fail. Yet the probability of something happening is high. That is true. We better always be aware and be nimble to act when such an event happens. Just adding a couple of additional points to what Ashok and Venkat mentioned. One is we talked about many of them have the you know, growth in the second half. We've made sure that we've not backloaded our growth and that it's been fairly uniformly distributed with a little bit maybe front-loaded actually, you know, because we wanted to make sure that we don't put too much pressure in the second half of the year. The other point is, you know, if you look at our percentage of India revenue is at 16%, among the highest of all Indian IT service companies. We're doing this business at a good margin and at the rates that we want to do business at, that I would like to do business at. This market is growing and there's quite a bit of demand out here. As you see cutting across industry vertical, whether it's banking, whether it's industrial, manufacturing, pharma, there's fair bit of auto, there's fair bit of demand out here. All of them are embarking on digital initiatives. We will focus more on India. That will act as a de-risk to, you know, anything that happens in, let's say, Europe or in U.S. Got it. Thanks for addressing my question. My second question is around your M and A strategy. Can you elaborate on your M&A strategy? Will it be driven by scale or around capabilities or entering into a new geography? Can you please elaborate on that? You know, we've sat together as a executive board and come up with several criteria for our acquisition. As we've said, you know, we want to acquire a company that is mostly, if not purely digital, that's profitable. We don't want to get into a turnaround kind of a story. Along with that, we want to make sure that we get a strategic differentiator. We would like to get a company that would give us depth of capabilities in a certain vertical, in a technology where we are light currently or give us entry into a few large accounts in specific areas that we are targeted. That's what we are looking to do with each and every M&A candidate. We weigh against these characteristics, look at their profitability profile, the growth that they've had, and then take a decision because we want to make sure that we get this right and, you know, don't have it as, you know, a drag on our performance. Got it. Thanks a lot for addressing my questions and all the best for future quarters. Thank you. Thank you. Thank you. The next question is from the line of Faisal Hawa from H G Hawa & Co Please go ahead. Sir, we are giving a guidance of 25% in rupee terms. Last two-three years, we are almost doing, you know, like 35%-40% revenue growth. Are we being a little more conservative than necessary? That's one. Yeah. Faisal, we are giving a guidance in constant currency. In dollars. Okay, dollars. $27. Okay. Yeah, yeah. Whereas it's the rupee which has been growing at 30%, and that's also thanks to the way it has moved versus the dollar. Yeah, even INR we are growing almost like 38%-39%. Yes. Yes, yes. That is true. That's true. You feel that the rupee dollar e-equation being in our favor, we could actually, you know, continue with that kind of solution? That won't happen this year. That won't happen. At least, yeah. We're not budgeting for it. We're not budgeting for it, Faisal. Sir, our capacity utilization of people is falling. Any trend that could be read into it? It has fallen. That's what I was saying earlier. It has just fallen for this quarter. Okay. It's something which is a little out of... You know, as Sandhya had pointed out earlier, you know, we inducted around 320 Happiest Minds from campus in August, and they were undergoing training till January. They were not included in the billable headcount, which we base our utilization on. These folks came into the billable headcount number in February. That's why you see the drop in utilization. On the other hand, what you see is over the next few months, as we get these people billed, they would all contribute to revenue while the cost would remain the same, which would give us a little bit of advantage or leverage from a margin perspective. Also improve the utilization. Yeah. sir, how do we see, you know, the opportunity, you know, of Edutech playing out? Because a lot of these players may not be now having the funds from VC or PE funds to really fund their further projects. Will that still continue? Because that's a fair, a fairly big segment of our revenues. That's one. secondly, sir, I mean, we are getting projects, you know, from across the board. You know, I mean, it's so many verticals. I mean, where do you see, you know, the, you know, big traction coming from? Sure. If you look at Edtech, Faisal, we don't work with any of the startups. Most of our customers except one, and that also is a large B2B education provider who's based out of India. Therefore, they're pretty stable from a financial perspective. We don't have any other customers in India. Even in U.S., we don't have any startups in the education space. They're all companies that are either public or owned by PEs. So the cash and other things, they're well-funded, so cash is not an issue. Many of them have been running strategic initiatives, and I did mention a couple of them in my commentary about the wins that we've had. They're pretty large wins, actually. They're all significant wins. We continue to see a decent pipeline in this space because there's a lot happening actually. You know, the way students, the expectation of students, what professors want out of their systems and technology they have, all of that is changing. The education technology providers have to keep adapting themselves as well. Since we are one of the fastest adapters to new technologies, how fast do you feel that we can adapt to, you know, ChatGPT to actually automate most of our software solution than really, you know, let go of a large part of our workforce? Or retrain them? That is not a feasibility right now. You know, if you look at ChatGPT, There are maybe some industries where you could have them replacing people. In the technology space, it's more of a enabler and a product, productivity enhancer. It'll help make the life of a developer a little easier and help them look at some of the more complex challenges that they have, look at how to add more value to customers, and ensure that the quality of whatever technology, code, platform they build is better. That's the advantage that you'll get from a technology perspective. Are we already, you know, looking at retraining people to, you know, use ChatGPT as a, as an enhancer and, you know, really cut down on the hours that we take to complete any kind of a project? As we speak, we have couple of task forces. One is looking at more of from a customer perspective, how we can adopt this technology well. We have a few POCs and solutions that we built. We have identified use cases specific to each domain, and we're in discussion with a few customers to help them adopt this technology and leverage it. From an internal perspective, we've been looking at Copilot and Codex, which are more oriented towards the development environment, to see how we can leverage these internally and maybe even for some of our customers to enhance productivity of developers. All this is work that's underway. Thank you very much for, you know, such reassuring answers. I really appreciate it. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Sunil Khandelwal for closing comments. Thank you for joining us today. We thank Motilal Oswal Financial Services for hosting this call on our behalf. We look forward to interacting with you. You can reach out to us on ir@happiestminds.com. Have a good evening. Thank you. Thank you. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.