Ladies and gentlemen, good day and welcome to Happiest Minds Limited, Q2 FY 2025 earnings conference call hosted by HDFC Securities. As a reminder, all participant lines will be in a 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 the operator by pressing the star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Apurva Prasad from HDFC Securities. Thank you, and over to you, sir. Thank you, Steve. Good morning, and thank you all for joining us today on the Q2 FY 2025 earnings call of Happiest Minds Technologies Limited. On behalf of HDFC Securities, I would like to thank the management of Happiest Minds for giving us the opportunity to host this earnings call. So today we have with us from the company, Mr. Ashok Soota, Executive Chairman, Mr. Joseph Anantharaju, Executive Vice Chairman and CEO, Product and Digital Engineering Services, PDES, Mr. Venkatraman Narayanan, Managing Director and Chief Financial Officer, Mr. Rajiv Shah, Executive Director, Mr. Ram Mohan, CEO, Infrastructure Management and Security Services, Mr. Sridhar Mantha, CEO, Generative AI Business Services, and Mr. Sunil Gujjar, Head of Investor Relations. With that introduction, I'll hand it over to you, Sunil, for a safe harbor and to take the proceedings forward. Thank you, and over to you. Thank you, Apurva. Good morning to all participants in this call. My apologies for a delayed start because of a small glitch. Welcome to this conference call to discuss the financial results for the second quarter ended September 30th, 2024. I am Sunil, Head of Investor Relations. We hope you have had an opportunity to review the earnings release we issued yesterday. Let me quickly begin the agenda for today's call. Ashok will begin the call by sharing his perspectives on the business environment and our results. Venkat and Joseph will then speak about our financial performance and operational highlights, after which we will have the floor open for Q&A. Before I hand over, let me begin with the safe harbor statement. During the call, we could make forward-looking statements. These statements 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. Now, let me pass it on to Ashok. Thank you, Sunil. Good morning to everybody. I'm happy to inform you that Happiest Minds has delivered our best growth results since the last two years. We have had double-digit serial quarter-over-quarter growth, which is 12.7%, and the year-over-year growth is 28.2% year-over-year. The transformational changes we initiated this year are all gathering momentum. These changes include the acquisition of PureSoftware and Aureus, the creation of our Gen AI business unit named as GBS, hiring a senior leader to expand net new sales, which we call as NN sales, and creating six industry groups, each headed by an industry manager. That's a lot of changes, and the full impact of all these changes on revenue and growth will become visible in the quarters ahead. PureSoftware and Aureus teams, now part of Happiest Minds family, are geared up to drive synergies. We will expand into each other's accounts, cross-leverage our complementary skills and capabilities. For instance, we took our Gen AI services to a large global financial services provider who is a customer of PureSoftware. Our award-winning banking-as-a-service platform from PureSoftware, with a very strong brand recall in Southeast Asia and Africa, is now being taken to new markets such as the Philippines. India is a large market and so far unexplored for Arttha, and our combined teams will lead the entry of Arttha into India. Our Gen AI business, or GBS, continues to take rapid strides in building a leadership position by being a thought leader through innovation, strong partnerships with technology tool providers. We see huge potential for replicable sales, and when I say replicable sales, I mean a new class of solutions is becoming available through Gen AI, and you can take that to many customers. We have such opportunities in areas like research, customer service, learning, and contract management. Maninder, our Chief Growth Officer, who joined us in Q2, is now in charge of net new sales and has already built a healthy new logo pipeline across our focus industry groups. We expect many more new logo wins, which will grow as the accounts are transitioned to the respective industry managers. Each of our industry groups are maturing, all of them are, into engines of growth, and you can see from the results that some are already leading the growth, like BFSI and healthcare. We have developed strong capabilities in bioinformatics, which are unparalleled in the industry. With in-house experts on areas like molecular biology, data scientists, engineers, and healthcare domain specialists, we work with some medical research community from prestigious medical institutions in India and abroad. In the reported quarter, a European health research institute chose Happiest Minds to build their AI and ML data platform. In another instance, for a leading medical care organization in India, Happiest Minds will leverage imaging analytics to review medical information and aid diagnosis. These are all very high-end, very specialized areas, which I believe there's probably nobody within the country who would ever be able to deliver because of the expertise we have built up. Let me briefly share my views on the outlook. The results demonstrate our continued ability to continue to manage our business with rigor and discipline in a very dynamic business environment. With the transformational agenda that I outlined, we are very excited about the future, as the outlook has never looked better than what we see today. Before I pass this on to Venkat, let me congratulate him, as he was recognized during the quarter as the leading CFO of the year in the IT, ITeS sector at the CII CFO Excellence Awards for 2023-2024. I'm sure Happiest Minds will continue to be benefited by his leadership, and Venkat, along with his colleagues at the executive board and other senior leaders, including from the integrated teams of PureSoftware and Aureus, will play a very pivotal role in the exciting phase ahead for Happiest Minds. With this, I conclude my commentary and pass this over to Venkat. Thank you. Good morning. Thank you, Ashok. Let me begin my commentary by sharing the financial and operational highlights for the quarter, followed by the half-year. For the quarter, our revenues in constant currency was $62.4 million, showing a good growth of 12.7% on a QoQ basis and about 28.2% YoY. The growth was driven by a stable pricing environment, higher volumes, and the full quarter consolidation benefits coming from PureSoftware and Aureus. Our total income for the quarter was INR 549 crores, showing a growth of 12.1% over the previous quarter and 28% on a year-over-year basis. We reported an EBITDA of INR 119 crores, showing a growth of 1.3% over the previous quarter and 12.8% over the previous year. EBITDA, as a percentage of total income, stood at 21.7% this quarter. The drop from 23.9% in the previous quarter was primarily due to pay increases that we instituted for most of our people, which was rolled out effective July 1st, which had an impact of almost 230 basis points. The more important aspect is the investment of about INR 9-10 crores that we have made in the quarter in our Gen AI business, which is another 150 basis points. We have also made investments into the new sales engine with Maninder and his team, and that's also had an impact on the financials, on the EBITDA. EBITDA for the quarter adjusted just for the pay increase, and the Gen AI investments would be about 24% +, and like the previous quarter, reflecting the fundamental strength in our business and our commitment to investment in new and current technologies. If you adjust for the pay increase and the investments that we are making as a services company, which gets consistently evaluated on profits into new technologies and expansion to new markets, our EBITDA is slightly higher than the last quarter and maybe even similar to what we saw in the last year. It is pertinent to note that on pay increases, we have gone ahead with our regular cycles, backdrop of many of our peer companies who have either deferred or canceled their regular cycles. So that's something that's in the press. As mentioned by Ashok, we have made significant investments into our new sales force, and that too has, as I said, impacted our margins. Our current sales and sales support team is about 62 +. I'm happy to share that our margins of 21.9%, 7%, is within the guided range of 20%-22% for the year. From this quarter, we have started showing operating profit, which is defined as EBITDA excluding other income, over operating revenues. This has grown from INR 92 crores in the previous quarter to INR 93 crores in the current. It stands at about 17.9% of revenues compared to 19.8% in the previous quarter. The operating revenues take out the slight noise that you can have due to other income. So with this, we are able to even isolate that noise and show you the margins. The drop in operating profit is primarily on account of the same points that I made earlier, which is pay increases, investment in GBS, and the new sales team. Growth in subsequent quarters, both volumetric and in terms of selling higher-priced services like Gen AI and repeatable sales services like Gen AI, we should be able to get back to our earlier levels of profitability. Moving from operating margin to PBT, the meaningful change that has happened is the increased interest cost on account of borrowings made for acquisitions. Non-cash costs, which is amortization of intangibles from acquisitions, continue to remain the same as last quarter. PBT between quarters, despite these changes, remains at about INR 67 crores, so it remains constant. Now that the costs of acquisitions have stabilized, this would be the base for future quarters. We have, from this quarter, started reporting in our presentations the metric of cash EPS, along with the normally diluted EPS, because I believe cash EPS gives an alternate and realistic view of shareholder returns shorn off non-cash accounting charges, which one seems to take in larger proportions as we grow through acquisitions. Our cash EPS for the quarter was INR 6.18 per share compared to INR 6.11 in the previous quarter and INR 5.64 in the previous. Cash EPS for the quarter has just shown a growth of 9.5% YoY. Normal diluted EPS for the quarter was INR 3.29 compared to INR 3.39 in the previous quarter and INR 3.90 in the previous year. Coming to our half-yearly performance, our revenues for the first half of this year was $118 million, a growth of 23% in constant currency. Total income for the half-year stood at INR 1,038 crores, a growth of 24.5% YoY. Just as a number, we have reached the INR 1,000 crore mark by half-year end, and so 2,000 for the year looks par, of course. EBITDA has grown to INR 235 crores from INR 208 crores, showing a growth of 13.1%. EBITDA as a percentage of revenue is at 22.6%, which is in line with our forecast for the year of 20%-22%. Operating margin has grown to INR 185 crores from INR 174 crores, showing a growth of 6.4%. All the reasons shared earlier for the quarter, which are investments in Gen AI business, new sales team, pay increases, have had an impact on margins even for the half-year, and it's despite all of those that we have shown expansion in absolute terms. When we come to PBT, we have taken an additional non-cash charges of about INR 17 crores cash and one-time acquisition cost of about INR 6.5 crores, which is for the half-year. These have pulled down our PBT from INR 157 crores to INR 136 crores. That's because of the acquisition amortization and the one-time acquisition cost that we had in the first quarter. So that's an impact of about INR 23.5 crores, which has pulled down the PBT. Adjusted for that, our PBT continues to grow and expand in absolute terms. Here is why I said the cash EPS number gives a clearer picture of our financials and growth. Cash EPS for the first half-year stood at INR 12.34 compared to the INR 11.83 in the last year, showing a growth of 4.5%. EPS for the first half was INR 6.68 compared to the INR 7.92 in the previous year. Switching gears to some operational metrics, our DSO on a consolidated basis stands steady at 83 days. Cash on our books stands at about INR 1,470 crores. We continue to report solid cash conversion ratios, and our half-yearly free cash conversion was about INR 232 crores, which is about 98.4% of EBITDA. Return on capital metrics of ROCE and ROE are at 23.1% and 13.5%. We closed the quarter with 6,580 Happiest Minds, and during the first half, we had 144 campus joinees or Happiest Minds join us on campus. Trailing 12-month attrition has inched up slightly to 14.4% from the 13.5% in the previous quarter. Our utilization during the quarter was 76.3% compared to 78.2% in the last quarter, and the dip primarily is because of the campus hires and Gen AI continuing to be in the 20%-25% utilization as in the previous quarter. We ended the quarter with 281 customers, $59 million customers, $82 billion customers, or customers who have got revenues of more than a billion dollars, and average revenue per customer of $842,000. So if you look at all these metrics and take it together with a repeat sales of 95%, it gives you a fair handle of the solid ground that we are currently on. Coming to our acquisitions, we have made satisfactory progress in integrating the acquired entities, driving operational synergies, ERP, people and process integration plans, and various other back-end support systems, which are in advanced stages of completion. Progress on these are tracked and measured regularly. What is more important is the integration at the sales and delivery customer upsell cross-sell standpoint, all of which is happening at a very fervent pace. As of today, we have about 700+ open positions, and this is in anticipation of both a demand build and existing demand from our customers. We are building capacity across our delivery centers in Bangalore, Pune, and Noida, and we have added about 500 in the first half of this year, and we are looking to expand into a larger delivery center in Hyderabad. We have signed up for a 120-150+ center in Hyderabad, which should also become operational during the third quarter. Finally, in line with our progressive dividend policy, the Board of Directors of the company have recommended an interim dividend of INR 250 per equity share, INR 250 per equity share. The record date for the payout has been fixed as November 6, 2024. The cash dividend will be INR 38 crores, very similar to the interim dividend paid out in the last year. Coming to the outlook for the rest of the year, we are hopeful of meeting our revenue growth projections of 30%-35% for this fiscal. We are beginning to see positive changes in the demand environment, and like the rest of the industry, expecting to see a fill up in the fourth quarter. While Q2 is a quarter with pay increases, which I talked about, Q3 is one with lesser number of working days due to vacations and furloughs by clients. We are also likely to see a small amount of the pay increase for the leadership team. Coming to margins, both of the above, the lower working days and the leadership pay increases will have an effect, which we will address in Q3. With this, I conclude my commentary and pass this over to Joseph. Over to you, Joseph. Thanks, Venkat. Good morning to all the participants in the call. Building on a strong and transformational Q1, we have delivered yet another quarter of strong performance across all fronts. The results demonstrate Happiest Minds' commitment to customers, to deliver value at scale, our ability to keep ahead of market and technology shifts, add value to our customers' transformation initiatives, and be the partner of choice in their strategic imperatives. Our results and growth have been well-rounded, with all geos and verticals demonstrating excellent performance. We have expanded our base of deep client relationships through our strong account mining practices and proactively anticipating the needs of our customers. We received an industry-leading net promoter score of 65, extending the impressive NPS scores that we have received over the last few years, which is a validation of the commitment of our Happiest Minds to our mission of happiest people, happiest customers, and the drive to deliver value in our execution. During the reported quarter, our $3 million-$5 million customers have increased by four to a total of six, while average revenue per customer ticked up to $842,000. We work with 59 customers who contribute more than $1 million in revenues, up from 58 last quarter. We work with $82 billion corporations, which offers us scope to increase wallet share and drive growth through the efforts of our newly formed industry groups. I would now like to share some interesting work that we are doing with our customers. Our rich experience in mobility analytics and IoT allows us to combine machine-generated data with human insight to help develop products that re-engineer businesses to drive effective outcomes. In the reported quarter, this new win entails Happiest Minds to provide consulting-led solutions to develop a unified IoT platform for a North American-based energy tech company. Customers are seeking to reinvent their business and looking at new ways of working by leveraging AI technologies to drive productivity. For a European Health Research Institute, Happiest Minds is building their AI/ML data platform, leveraging advanced analytical techniques to help them discover new paradigms. Our IMSS business enables agile infrastructure through a consult, transform, and manage approach in hybrid and multi-cloud digital environments. I'm happy to share that during the quarter, we won our single largest multi-million-dollar deal to provide cybersecurity services for one of the largest pharmaceutical contract manufacturers. During the reported period, we launched Happiest Minds Secure 360, a Gen AI-powered cutting-edge solution designed to deliver unmatched speed and precision in identifying and responding to cyber threats. This solution enables organizations to address even the most complex and unprecedented security incidents at 3x the speed of traditional remediation processes. During this quarter, Happiest Minds was chosen as a strategic cybersecurity partner to oversee end-to-end design and implementation of cybersecurity programs for one of the largest banks in India. We're talking about our generative AI business unit, which is enabling companies to accelerate their digital transformation by leveraging the power of Gen AI. Our 120 Gen AI specialists, along with the larger 350+ AI specialized workforce, are working on 25 different projects as we speak, with several of these POCs moving to production and starting to deliver business value. Happiest Minds is also co-creating solutions with our customers in the areas of employee productivity, audio sentiment analysis, information retrieval and contextualization, and persona-based virtual engagements. Botgage, our Gen AI low-code, no-code test automation platform, streamlines and automates the testing processes, enabling rapid development cycles and enhancing software quality. Happiest Minds is a proud member of the Microsoft AI Partner Council program, a recognition of our AI expertise and our commitment to driving digital transformation through Microsoft's AI ecosystem. For large beverage makers, we are leveraging Microsoft Azure AI to implement a Gen AI solution to drive workforce efficiency and improve utilization of customer-facing assets. For a world-leading digital twin platform in the energy sector, Happiest Minds was chosen to drive their Gen AI innovation aimed at speedy data collection and retrieval. Faster collection and retrieval means the possibilities of speedier resolution and lower downtimes. An innovator and technology leader, Happiest Minds is also rapidly adopting Gen AI internally to drive productivity. We have identified a list of areas and use cases across various corporate functions and have put together a plan to execute on these use cases, which is being driven by our GBS business unit. For instance, our recently rolled-out Smiles Bot has been trained on our people, policies, and contextually retrieves and answers queries and questions related to our HR policies. Our talent acquisition teams are piloting the use of an in-house developed Resume Matcher, the Gen AI-based solution that automatically matches the job description to matching profiles, enabling recruiters to source profiles faster. Talking about our acquisition, we have established joint go-to sales with PureSoftware and Aureus teams, with focused effort on cross-selling both ways. This initiative is being led by industry group heads who are working closely with the Aureus and PureSoftware sales and delivery teams to ensure expertise is leveraged both ways to serve our customers better. For example, we were able to take our Gen AI services to a large global financial service provider who is a customer of PureSoftware. The sales teams on both sides are very excited about the value proposition of the larger Happiest Minds entity and are striving to spread their wings into each other's accounts. During the quarter, our award-winning platform, Arttha, was implemented for an Africa-based market leader in logistics and supply chain. Coming to the demand environment, we are seeing customers continue to leverage a wide range of digital technologies to reinvent their business and drive productivity and growth. While geopolitical uncertainties continue, the continued good performance of the U.S. economy, the resolution of the U.S. election arrived at a decisive manner, and the cut in interest rates are acting as a tailwind, encouraging customers to start planning new transformation initiatives for 2025. We're already seeing trends of this in sectors like BFSI and capital-intensive sectors like manufacturing, and expect other verticals to demonstrate a similar behavior. Customers continue to look for ways to leverage their data using analytics and AI, while using Gen AI to bring in operational efficiencies and drive revenue growth. Our expertise and ecosystem relationships, with significant investment and early leadership positions in promising technologies like Gen AI, AI automation, IoT, and other digital technologies, will help us capitalize on these opportunities that we expect to come our way. With this, I conclude my comments. Venkat, we can open the floor for Q&A. Thank you. 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 telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use the handset 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 Apurva Prasad from HDFC Securities. Please go ahead. Hey, thanks for taking my question and good show on margins. So I had a question on the H2 outlook, which you partly gave, but just to understand, if I look at the growth guidance, even at the lower end of 30%, that translates to over a 6% sequential growth the next two quarters. So I wanted to understand if that visibility is there in terms of deals, SOWs, especially as Q3 will be having furlough and working days impact. Venkat? Hello, Venkat. Did you get the question, and are you getting to respond to it? Yeah, yeah. Sorry, I was on mute. I was on mute. Sorry. Sure. Apurva, thanks for asking. Yes, that's the number that's out there. We realize that there is going to be that amount of increase, amount of work that needs to be done to convert that number or reach that number to 30%. Today, we are at about 23.24% in dollar terms, our constant currency of about 24.2%. So there is that growth that we have to bring in. Because we had acquired PureSoftware and Aureus, we had baked in a certain expectation coming in from Arttha Banking. Arttha Banking, it's a product, that award-winning product, banking platform that is there. The revenue flow from there tends to be lumpy, so we have got a very good pipeline on that front, and there is expectation to close at least two large deals in the next two quarters. That's one. The second is, yes, we had taken a little bit of an aggressive position on the growth coming in through cross-sell and upsell because that's the only way to drive integration. There is no way to acquire companies and say, "You achieve your numbers, we achieve our numbers," kind of a thing. So there is a significant element of cross-sell and upsell that's there on both sides, and we are seeing quite a bit of traction happening. The third upside that we are really looking for are some of the large deals that are in the pipeline. Joseph did allude to one large deal. We did add two significant $5 million run rate customers during the quarter. It may be five or slightly below five, but we have added, during the half year rather, two $5 million clients, which we are expecting to handle, and the fourth is the Gen AI POC to work, steady stream of work, repeatable sales is what we are looking for. These four have been baked in, and finally, we have the new sales engine firing. Maninder has joined them, but there has to be a certain amount of fairness you can expect from just about joined, but while that be so, he is also contributing quite a bit to the pipeline. And Venkat, can I just add? Excuse me a second. I'll just add to what Venkat just said, and I think you've given a very good comprehensive response. I'm just asking you, Venkat, a question here. Would it be fair to say on that question which said that we'll have a 6% average needed in the next two quarters, that Q3 will be a little lower and Q4, where the bulk of the benefit of some of the large deals, including even that bioinformatics deal that we are working on, they will start generating revenue in Q4, and therefore, clearly, Q4 will be better than Q3, heading towards on a grand total basis along the lines you've indicated. Would you say that's correct? That is absolutely right, Ashok. So Q4 is where we are looking at both of the Arttha Banking license deals also. Sure. Okay, I'll turn it back to you. We got that. And just on the point of the seasonality, I wanted to understand PureSoftware and Aureus through the quarters, what's the normal seasonality? Does it tend to get stronger in Q3 on Arttha? What we have seen as a trend is Q4 tends to be the best quarter because that's when budgets get released across the... It is about a six-month to nine-month sales cycle, and it is a term license kind of a structure. Q4 is when [it happens] last two years. Last year, for sure, we saw that. This year, as well as we go through the financials, that is what we are seeing. Q3, Q4 is when the sign-offs happen. To be very honest, as a services company, some of this, we had our IP and IP-linked sales in the past. About 10% comes from that sort of a business. The pure product business and the lumpiness is something that we will now start seeing as this starts growing. We'll have to plan to see how that can get factored into our revenue projections and flows. Got that. The other question really I had is trying to get a more medium-term view on with the restructuring done on the industry groups, the verticalized structure with the investments that you called out earlier in building the sales engine. I'm trying to understand the opportunity in the large client cohort versus the mid-market client segment over the medium term. How can sort of that revenue per client number look like over the next few years? Joseph, I guess you could take that. Yes, yes, sure. I was just about to. So our goal in creating the industry group and then in sales was to ensure that we bring in more focus, specialization, and accountability to both of these functions. And the charter for the new logo sales team has been to pursue larger deals and to target more of larger customers. We do have $82 billion customers that I already talked about, but I feel that going forward, we should be targeting more of these companies so that the initial deal sizes themselves pick up and become larger as this group starts functioning. At the same time, the industry groups that we form, the industry group heads, will be working closely with our account managers and client partners to further expand into our existing customers, especially the large customers, and increase our wallet of share, which should also, again, start driving growth. Both of these, I expect, will lead to, over the next few years, an increase in the number of million-dollar customers, $5 million customers, and $10 million customers, but at the same time, driving up average revenue per customer. Got that. Thanks a lot. I'll get that in the queue. Thank you. Before taking the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Chirag from Ashika Institutional Equities. Please go ahead. Yeah, I have a couple of questions. So as we aim for a $1 billion kind of top line post FIA 30, what is the thought process on this onshore-offshore mix? Because if I look at it from an industry perspective, the companies which have crossed those milestones and have a relatively high base of revenue, the mix is around 60/40 or so. Question number one is that. Second, our margin is relatively higher on EBITDA if I consider it from effects of big hike impact and all. Going forward, as we're aiming for such a high growth, more than 20% for next four-year, is there any impact on margin and all, or we will go in line with what industry standard is at comparable to the other similar size of company? But the ad tech vertical, when you think that we're back to the normal growth trajectory, yeah. You've asked lots of questions in between, so maybe if we can split some of those into one by one. Let me just take the very first one on onsite-offshore, then I'll pass this over to both Joseph and Venkat for some of the other aspects. When you talk about our onsite-offshore ratios, actually, we're very pleased with that percentage. I mean, of course, we'd like to get more because it drives more revenue. As you've noted, it helps improve our margins. It's also giving much higher value to the customer because, after all, we're bringing down the cost of their project. It's also an indication that, in contrast with other people who've got a 60/40 ratio, we are actually delivering more volume and proportion. If you take like for like, we're delivering lots more volume because we're charging at a lower rate for the offshore. And so therefore, we're not. The reasons why we want to increase on-site is to get more consulting-led business out there and use it as a front-end for generating more business, which we finally drive offshore. So it's a good healthy mix we have. We're not upset about the fact that somebody's 60 or 40, and we are 15 and a half down to 11.4 this half-year simply because even our new acquisitions have got a very large proportion of offshore. So it's a good healthy place to be in. But let me pass this over to either Joseph or Venkat for answering some of the other questions you asked. The second question I'll take on the margins part. This is what I alluded to. Typically, you have a pay increase cycle, and then you have dollar-to-rupee changes, which can go either way. That's how the industry has been buffeted by ups and downs on the margins other than certain other aspects like sales and delivery kind of a thing. So margin prediction, according to me, is the most difficult part. So to that extent, we are expecting to continue this margin range of 20%-22% in the medium term. That's the question that you had in mind. But yes, the question is how much of that we should invest into our business for the future. And we have said this in the past, we will not hesitate because of margin constraints or margin that we have to show in investing into new business, which you are now seeing that we have taken. So restructuring into verticals, getting a new sales engine, and investing into Gen AI, doing the acquisition for both capability reach competency. All of these need investments, and it has a certain margin impact on the financials, but we are not hesitant. Looking to evaluate the longer-term strategy and go ahead and make it, but even with all of that, the focus will be to make sure that we are in the 20%-22%. We pool all stocks to make sure that the efficiencies of the pyramid is there. Integration brings you certain size and scale so the base increases, but at the same time, there is possibility to bring down certain costs, common overlap costs, cross-sell, upsell so that we get more bang for the buck. These are the areas that we are focusing on, so if you look into our financials right now, half-year over half-year, you will see elements of all of that coming out, which is what I said. Some of this really gets muted or gets covered by lots of things that are happening, but you adjust it for all of the points that I mentioned. You will see certain benefits. Again, looking a little into the future, maybe a platform like Arttha will require more investments. It's just not that it's completely ready. It's a plug-and-play situation. You have to continue to make that investment to make sure that it becomes $40 million, $50 million, $60 million, whatever the roadmap for that product is. And one should not hesitate to do that if there is a market potential and there is a reason to make that investment from a long-term financial standpoint. But yes, I do understand in the short term, medium term, quarter over quarter, there could be those ups and downs. But we'll rather explain it to the investor rather than not make the investment. Can you just repeat the last question, Chirag? Yeah. Your outlook on ed tech verticals? Sure. So if you look at the tech vertical, on a quarter-on-quarter basis, it has shown growth, right? And so what we've seen is that it's tracked the rest of the company performance. But if you look at the sector as such, you have to break it up into three segments. The first is higher ed, then you have K-12, and then you have more of professional education. And what we're seeing is that out of these three, the higher ed segment has got impacted by some structural challenges that you're having, especially in the U.S. market with the number of enrollments coming down and universities being under cost pressure. And that's getting reflected in some of the business and traction that higher ed companies are getting. K-12 has performed well, but I think it's a slightly cyclical business because there's an upgrade, and then for the next few years, they tend to leverage some of the investments they've made. The area that we're seeing a lot of improvement and investment happening is in the professional education space. As you can see, there are a lot of new technologies coming in. There's rapid evolution in how people need to constantly keep updating themselves. And this is leading to multiple opportunities in the market that customers are stepping in or existing customers are extending their products. And we are focusing more on this segment to get more traction and grow this segment. Thank you for detailed explanation of all this. Thank you so much. Thank you. Participants who wish to ask a question may press star and one. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one at this time. The next question is from the line of Apurva Prasad from HDFC Securities. Please go ahead. Yeah. Thanks for the follow-up. This is on the GBS unit. I'm trying to understand how are the conversions that you're seeing from pilots to production. Then what's the size of the GBS in terms of resources that are currently there, and what's the expansion planned here, or perhaps in terms of customer coverage? I'm basically trying to understand with the investments that you're making in this, what's the scale that is being targeted here over the medium term? Sure. Sridhar, I guess you'll take this. I will add a little bit to what you're going to say. Sure, Ashok. Thanks for the question, and I'll break it into two, three parts. The first one is the POCs to orders, right? Of course, by being constantly working with the digital technologies, we always understand it will take a few quarters for the customers to do the prototypes and then move them into production. So broadly, the kind of work we are doing is working with the digital products and platforms to add generative-oriented features. Those are moving to the production much faster because they want to sell as part of either their SaaS solution or as part of the product generative features. However, the place where things are taking a little bit more time is on the IT organizations where selective use cases are moving from the POCs to production, whereas the other low-priority use cases are staying in the POCs, probably being deferred by a quarter or two, and then they would like to take it forward into the production. That's how the market is moving, more like a technology as well. Certain platform companies and IT organizations with critical use cases and slow movers for waiting for the ROI to be. The second part of the question is in terms of the team size and the competency that we have. When we formed the GBS as a separate business unit, a few strong leaders from the organization we pulled out and put as part of the core team, and then we went through the market and also hired additional people. And as Joseph mentioned as part of his earlier note, we have at this point in time 120 people who purely work on generative-based projects, which are supported by 350+ AI and analytics centers of excellence so that the projects that have the dependencies within generative-based AI, etc., we can bring them together. Now, in terms of the last point on how we are seeing the work and the investments and the business growing. Now, of course, we continue to proactively develop our own use cases and repeat solutions, as Ashok mentioned, because we're getting a new kind of opportunity where semi-finished Gen AI solutions can be taken to the market. Ashok already shared four distinct examples. Now, the other area we are looking at is our internal strong solutions like Arttha, right, which are addressing various banking-related functions. Of course, they can benefit significantly from Generative AI. So we'll add the way we are adding Generative AI features to the customer's products. Very similarly, we'll add to the Arttha platform and other IPS and solutions we have also. Very good. Sridhar, I guess you've covered a lot of what I had wanted to say, but I just, Apurva, highlight this point on replicable sales. I had mentioned, for example, that we've got when a new application comes up, the moment you do one customer, you can begin to say, "Can I take the same application to multiple ones?" I identified four areas in my opening talk, which had research, customer service, learning, and contract management. I believe in almost all of those, we've already got our first customer. Now we begin to look for multiple ones. I'll give you an example of research. If we're doing a research application for an R&D organization, actually, there must be at least 30 research organizations we can take them to. In India alone, I'm talking of. Supposing we don't do 30, maybe we'll do eight or 10. Now, that repeat customer makes a lot of difference, a much quicker sale because we've been able to demonstrate that it has worked for somebody. And the margins will keep improving on those sales because now your own incremental cost, you've still charged the customer the same amount. These won't be giant-type orders, but if you then take eight such orders, then it becomes a very healthy order and executable with a really high level of efficiency as we go ahead. Thanks for the explanation. And just finally, a couple from my side. The on-site resource reduction was fairly steep this quarter, and we also saw T&M go up substantially. Any explanation for this? Yes, sir. I think if you look at it overall, as Ashok pointed out, of course, both Aureus and PureSoftware are mostly offshore-centric, and that has led to a drop in the offshore on-site ratio. And the other thing that we're also seeing is that given some of the budget constraints, customers have been trying to get better bang for the buck and leveraging offshore more. I think the COVID-induced remote working has also given customers more comfort and got them used to having larger teams offshore and doing some of the work that they wouldn't have done earlier offshore, which gives them the benefit of managing the budget better. These are some of the trends that we've seen. Yes, sir. Apurva, sorry. I thought I had to interject. I think there is a typo in the numbers, Apurva, because it is 211. It is showing 412. So it's a typo error on the face of the financial metrics. If that's what you're referring to, we'll have that checked and corrected. But just to continue, it has remained the same quarter over quarter in terms of revenues and in terms of headcount because we looked at the daily MIS and stuff. It's the same. But Joseph, just to give you the number, from FY 2024, 211, it has gone up to 412 as per our PPT in FY 2025 Q1, and then come down to FY 2025 Q2 to 274. So that is something which is not right. We'll check it again back to you and update the presentation. Thanks. Thanks. Good catch also. Well, thanks for that. And Venkat just finally, on margins, puts and takes for the next two quarters, part of wage increase for senior leadership. I think that should happen Q3. But generally, from here on, if I look at this as a base level, how should we look at margins for the next two quarters? That's what I said. Hopefully, we have when I say margins, I'll now restrict it to EBITDA and operating margin first. EBITDA and operating margin should be stable except for the wage increases, and we should see upsides. The dollar rupee is a little bit of a joker in the pack, but hopefully, we have covered that for the next 12 months or 9 months on average with proper hedges, and Arttha Banking, while it has got that lumpiness in terms of sale, it also contributes to margin, so I'm giving you all the pluses, the optimistic side. On the minuses, it's a senior management wage increase that we are talking about and some more investments into newer technologies that may be required because if that has to be done, that has to be done, including investment into Arttha. So for example, if Arttha has to be sold in India, it requires a little element of investments. We'll go ahead and make it. I don't think that's going to stop us from anything is going to stop us from doing that. So on the minuses, that's what I see. But like I said, it's a very, very tricky situation on margins because of all the things that happen simultaneously. And now that we are with humbleness, I say we are a much larger company running at about a $280 million run rate, etc., run rate for the year. It's becoming that much more finer to maintain and predict margins with a greater level of accuracy than the 20%-22% that I'm giving out right now. Got it. Got it. Thanks, and wish you all the best. Thank you. Thank you, Apurva. Thank you. The next question is from the line of Vidyadhar Ginde from Bank of India Investment Managers. Please go ahead. Thank you. Good morning. In this first quarter, I think we were told that the hits from the amortization increase and intangibles were INR 6.8 crores and INR 1.3 crores for part of the quarter. And for the full quarter, it's going to be INR 19 crores. But in Q2, the EBITDA has gone up by just INR 1 crore. So just trying to understand what's changed. Yeah. So Vidyadhar, thanks for asking that question. It's an accounting thing. So if you noticed, we had about 15 days to close the books after integrating PureSoftware and OSS last quarter. So it was, I would say, a literal hurry to get the valuation. So we closed it, and we set provisional valuations and went ahead and closed the books. After that, we did an extremely intensive exercise for about one month, got multiple experts looking into the valuation, the allocation of PPA, and looked at what the industry practice is. And that's what we have done in terms of the allocation of PPA, the Monte Carlo simulations, assigning probabilities for earnouts and all of that. And we relooked at that provisional valuation. And after getting one report, maybe actually we talked about two, three valuation experts and revalued the whole thing and have now plugged in the final valuation number, which is what is the number that you see. It has an impact on two aspects. One is there is an amortization and one is an interest. And both of them, one offsets the other. So last quarter, it was for 48 days. This quarter, like you rightly said, is for 90 days. The number remains the same given all the real-time value that we get. So what was earlier guided to be 19.1 crores for the full quarter is now going to be what? What's that number now? It will be 14. Now, what you see in Q2 is for the full quarter. But as I said, at least the amortization, which is the bigger part, is up by just one crore. So it looks like 8.3 has gone to 9.3. That's right. So 9.3 is like the sustainable quarter. Is that correct? No, no. Why don't you look at the half year? In the half year, last year, we had 11 crores. We have the amortization and unwinding costs coming from two acquisitions, which are PGS and OSS, sorry, and SMI. So that's for the last quarter. Some of them will trail off. In the current quarter, in Q1, for about 50 days or 48 days, we had INR 14 crores with amortization and unwinding of all the four companies of PureSoftware, OSS, and the two other companies of SMI and PGS. In Q2, it's the same. The only difference is in Q1, you had 48 days for the large two acquisitions, whereas in Q2, you have the full impact. But Q2 has not gone sequentially. You would have expected a sequential increase to about INR 19 crores. It has not happened because we relooked at the provisional valuation that was done in Q1. So the EBITDA, which you have in this quarter, is a sustainable one. That's right. INR 14.06. The other thing that we have in light of the 2024 acquisitions. In fact, it will go down because I am expecting one or two to trail off. The Pimcore intangible write-off was done over four years, so that's almost done for four or five years because effective useful life is also something that we have to evaluate. PGS, Pimcore was over five years. SMI was over six, seven years. PureSoftware, the assessment that has been done is eight years, PureSoftware and OSS. So Pimcore will slide off. So it will only improve in maybe Any way that it affects? The 14.06 will actually reduce by a couple of crores. Okay. Okay. But that is from FY 2026, is it? Yes, yes. From the first quarter. So Q3, Q4 is similar to Q2, and then next year, what tail of costs should be? That's right. Okay. Thanks a lot. Thank you. No, just before you sign off, that's the reason why we have started calling out cash EPS because for a smaller company related to our size, these charges can have an unnerving impact on your PBT and financials. So one needs to be aware of that, and that's why the cash EPS. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to the management for their closing comments. Thank you all for joining us today. We thank HDFC Securities for hosting for this call. We look forward to interacting with you. You can reach out to us on ir@happiestminds.com. Good day. Good day, everybody. Bye. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.