Ladies and gentlemen, good day, and welcome to the Q4 FY 2021 earnings conference call of HCL Technologies 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. Sanjay Mendiratta, Head of Investor Relations. Thank you, and over to you, sir. Thank you, Margaret. Good morning and good evening, everyone. Apologies for the delayed start. A very warm welcome to HCL Technologies Q4. Trust you all are safe and healthy. We have with us today Mr. C. Vijayakumar, President and CEO, HCL Technologies, Mr. Prateek Aggarwal, Chief Financial Officer, Mr. Appa Rao, Chief Human Resources Officer, along with the broader leadership team to discuss the performance of the company during the quarter and the Q&A. In the course of this call, certain statements that will be made are forward-looking, which involve a number of risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those in such forward-looking statements. All forward-looking statements made herein are based on information presently available to the management, and the company does not understand statements that may be made in the course of this call. In this regard, please do review the safe harbor statement in the formal investor release document and all the factors that can cause the difference. Over to you, CVK. Thank you. Thank you, Sanjay. Good morning and good evening to everyone. Apologies for the delayed start. I hope all of you are doing well. You are safe and good health. At HCL, we continue to strengthen our business continuity program. It's already in high gear across the country, and we are extending every possible healthcare and wellbeing support to all our employees and their family. With that, let me get started with the overall performance for the quarter and for the financial year. As you would have seen, our revenues grew 2.5% constant currency in Q4. If you look at the full year, revenue grew 1.1% in constant currency, delivering $10.175 billion, which is a 2.4% year-on-year growth. EBIT margin was down by 8.3%. It came in at 20.4%, which is a 2.5% below the previous quarter. Similarly, the net income reduced by 24.1%. There is a detailed walk for the EBIT and net income, which Prateek will walk you through in the subsequent slides. Our overall EBIT performance year-on-year, 11.7% growth. Year-on-year net income growth is 13.2%. We delivered one of our highest EBIT performance, which is 21.4%, which is a 180 basis points increase from the previous year. Of course, all of this exclude the one-time milestone bonus paid in Q4, amounting to about $100 million. Just moving on, just to provide you an overview of the business performance. As you saw, we had a positive revenue growth, double-digit EBIT and net income growth in FY 2021. In the first quarter, some of that continued in the second quarter. Our Mode 3, which is the digitization-led revenue, all the new services, as well as our products from Mode 3 revenue grew in double digits. Mode 2 in high teens and Mode 3 in low teens growth. Our growth was very well-balanced across verticals and all the geographies. What is very notable is there is very strong and diversified growth in the services business. The strong pickup in Q4 in the IT and Business Services is led by our great success in digital transformation deals, which is application modernization, vertical-led operating model transformation deals, analytics, cloud migration, cybersecurity, and digital workplace deals. Our application services, which also includes a lot of application modernization work, delivered one of its highest quarter-on-quarter growths in this quarter. Our engineering services continues to deliver decent growth YoY as well. Some of it is impacted due to the COVID impact in some of the segments in which we are present, like auto and aero segments. Products & Platforms continues to exceed expectations and is performing well above the business case. There is a certain segment of products which we see strong potential and healthy pipeline, and we are going to continually invest in those products to ensure the medium to long-term growth is assured. We've had good deal closures in the Products & Platforms business. The pipeline creation through the HCL channel is also strong. Almost 20% of the pipeline of the total business is coming through the HCL services channel. We're also very happy to announce that we had the highest client satisfaction index, which was done through a third-party firm, which we do every year. This is the 11th year running. Net Promoter Score came on top of the previous high that we achieved in FY 2020. This gives you the year-on-year performance and the quarter-on-quarter performance in constant currency. As you can see, IT and Business Services delivered 4.4% growth. Of course, there is about $25 million of revenue, which is from the acquisition of DWS in Australia, which is also embedded in that. Even excluding that, very smart growth. From a Engineering Services perspective, we had a modest growth of 0.7%. Again, we see good traction in the subsequent quarters. The outlook remains very positive. Products and Platforms, quarter-on-quarter is not so relevant in this business. A year-on-year perspective delivered a 20.5% growth. Engineering services declined 5% year-on-year, largely due to the asset-heavy industries that we have. We do believe the growth in that segment has already bottomed out, and we should see good uptick, moving forward. In terms of the overall business, we had a record net new booking of $3.1 billion in Q4, and a total booking in FY 2021 of $7.3 billion. This is all net new booking. This does not include renewals or rate card deals that we have signed, which was also very significant in the quarter and through the year. The $3.1 billion booking in Q4 was led by 19 large deals. What's very heartening is these deals are across the segments. We had eight deals in manufacturing, four in financial services, three large deals in life sciences and healthcare, two in consumer goods, and two in tech. It is also quite well spread between Americas and Europe, 13 in Americas and six in Europe. It's worthwhile to highlight, most of these deals are with Fortune 500 or Global 500 companies, where there is significant headroom for growth, paving way for a very strong, long-term, growing relationships. Our strategy, during the mid of the last financial year, given that the demand environment had really become very strong, we consciously participated selectively in deals that aligns with the long-term value creation. The results are absolutely heartening, that we had a well-diversified, very high-quality clients across a lot of digital spend. This is going to be a good outcome in the long run. We are very happy to note that. Several deals, one large deal, probably the largest this quarter, was a Europe-based global energy and utility company, which is carving out of its parent. We are setting up a greenfield digital foundation and establishing an independent IP organization and support to enable their continued business transformation. One of the largest deals that we signed in our Engineering and R&D segment was from a global technology company where we are chosen as a strategic product engineering partner to drive innovation that would steer growth of these products and customer advocacy for their clients. In Germany, we signed one of the world's leading consumer goods company, signed up for Workplace as a Service across all clients service support levels, across their global locations and environments. Here, consumer experience, enabled through automation and AI, was a significant theme. Similarly, in the U.S., a financial services firm, we signed an integrated engagement encompassing application management, application development, and the digital foundation and cloud migration, primarily to transform the client's wealth management business and the application landscape. A U.S. based telecom company, again expanded its relationship with a digital transformation deal in the areas of order management, client experience, secured payments, et cetera, which is again modernizing applications and migrating more and more workloads to cloud. We also recently announced a deal with UD Trucks, which is a Japanese automotive manufacturing company. This is again a carve-out, where end-to-end IT transformation spanning digital foundation, application development, modernization, and digital workplace services. This is just a small set of deals among the 19 deals that we signed. We have a very detailed list of all the deals in the investor release. Almost 17 of the 19 deals are highlighted there. Looking ahead, based on the record booking and the broad-based pipeline, the pipeline at the exit of FY 2021 is the highest. Even though we had very high booking, a lot of it has got replenished with a qualified pipeline, which is slightly higher than what it was at the end of the previous quarter. This augurs very well for the growth in the near term. A lot of it is driven by our Mode 2 services. We do believe our Mode 2 service revenue and Mode 1 service revenue should be equal in the medium term. That's the aspirational goal that we are working towards. For this purpose, we will continue to invest in expanding and investments and solutioning and engineering capabilities in our Mode 2 services. Especially, there are several new areas in the digital engineering space, which is 5G, Industry 4.0, data engineering and softwarization, and certain high growth verticals, which offer a lot of opportunities for our engineering services. In the current market environment, semiconductor, software, automotive are some of the areas where we want to expand. We also launched what we call as HCL CloudSMART to address the INR 300 billion services opportunity related to cloud. Here, while we have very strong ecosystem partnerships and dedicated business units, CloudSMART is an overarching offering, helping accelerating and maximizing business value from cloud in alignment with the industry needs and the specific organizational goals and unique client situations. We want to take advantage of the massive opportunity that is playing out in the cloud space, and this offering really brings together our IT services, our engineering services, our hyperscaler partnerships, and the industry IP that we have in several segments, as well as some of the offerings from our Products & Platforms segment. We are also launching HCL Now, which is really the SaaS version of all the products that we have on the HCLSoftware side, and this is again a very exciting launch, and we are seeing a lot of interest in our customers to adopt the cloud version of some of the products that we have SaaSified in the recent past. All of this is helping us strengthen our partnerships with hyperscalers because they're looking for industry solutions to be coming in from the partners like us, and our investments here are very well aligned with what we want to accomplish. In terms of geographies, we believe there are additional geographies where we are seeing growing demand and a significant adoption of the global delivery model. While we have made investments, we have a country model which is strongly present in these geographies. We think this is the time to double down on some of the sales and marketing investments in geographies like Germany, France, Canada, Australia, and Japan. While we've seen very good traction, we think the market opportunity is much bigger, so we are going to invest more in these adjacent countries where we want to build our business. We're also looking at expanding into some emerging markets to address some of the IT demands in countries like Brazil, Mexico, South Korea, and Spain. Some of these countries already have a country manager appointed, and we plan to expand our teams in these locations. We are also increasing investments from a geographic leadership and sales teams in some of these geographies. On the Products and Platforms, the business stands validated by better than expected performance in FY 2021. As I said, we are well ahead of our business case as an overall portfolio of all the investments that we made, and we see further opportunities to grow this business. There are two segments that have clearly emerged, which have got strong growth potential. About 75% of our Products & Platforms business has got a very strong growth characteristics, and that is where we are investing, which should help us deliver a double-digit growth in the 75% of the product portfolio in the medium term. The remaining for a sustained portfolio, where we want to sustain these products, optimize our profitability while it would decline in a double-digit manner, in the medium to long term. While there could be a little more decline in this 25% in the current year, which is FY 2022, because there are a couple of products which we've consciously taken a decision to discontinue. We see a demand for talent is very strong, and the adoption of remote work requires a complete rethinking or, I would say, a zero-based approach to talent access and delivery models. We put several special programs in place, to enable hiring, grooming talent, et cetera, and also led by increased offshoring, for which we are not only depending on India. We are looking at additional locations like Sri Lanka, Vietnam, Philippines, where we believe we will significantly scale up in this year and in the next three years. We are continuing to expand on some of the local nearshore centers in U.S., continental Europe, and Australia. These are small nodal centers which will help create the right mind share for us and attract local talent. We already have strong presence in U.S. and continental Europe, but there are a few more locations where we plan to hire over 15,000 entry-level hires during the year, and this is spread across India, U.S., Europe, Australia, Sri Lanka and Vietnam. In terms of outlook, while we had very strong booking and we are exiting with a reasonably good exit momentum, we expect to grow in double digits in constant currency and our operating margins, we expect it to be from 19%-21%. The reason why we've provided a double-digit growth rather than giving a range, you should look at this as a floor for our growth. A lot of bookings that we have done, there is certain amount of execution that needs to happen, which needs to be planned out. We want to focus a little more on booking and the metrics around booking, and we will provide you continuous visibility of booking. We are very comfortable with the net new booking TCV to be announced. In the coming quarters, we will fine-tune it to make it more complete, including renewals, and even some amount of rate card deals. That's where we want the organization to focus, and we want to provide a floor of what the growth expectations will be. From a margin perspective, as you would have noticed, we used to give a range of 1%, now we've given a range of 2%. When we did the planning, we did assume some amount of travel and transport spend would come back. That is baked in, but given the current scenario, maybe that may not happen. However, we want to give ourselves a little bit of elbow room for all the investments that I talked about, because this is not the time to maximize profits. I think the market opportunity is very strong, we want to do everything possible to capture the market opportunity. That is the rationale for a 2% guidance range. With that, I would request Prateek to provide a little more financial details. Prateek, you can start talking and I'll share the. Thank you, CVK. Let me walk you through CVK, the slides just vanished. Yeah. Yeah, it's come back. Can you see it now? Okay. Why don't I use I'll do the slides turning thing. Okay. All right. Perfect. I'll just go through the numbers which CVK has not covered. Revenue growth is something that CVK has covered already. Prateek, you should be able to change the slides now. Yes. I have the control. Can you? Thank you. Okay. Thank you. The EBITDA we clocked during the quarter was $603 million, which is 22.4%. As you can see, it is a reduction on a quarter-to-quarter basis, which I will walk you through the details. By the way, these are numbers which are the published numbers. On the next page, just as a quick glance, are the numbers adjusted without the impact of milestone bonus. Let me go ahead with this one, instead of the previous one, because this is more relevant to my mind. This milestone bonus was a one-time bonus we paid to the employees, 10 days of salary to commemorate achievement of the $10 billion milestone. Without that, the EBITDA is at $703 million, which is 26.1%, which is still a drop of 215 basis points on a quarter-to-quarter basis, and I will give you the walk for that. On a net income basis, we came in at $410 million, which is EPS of close to INR 48, INR 47.9 to be precise. On an annual basis, we did $10.175 billion and EBITDA of 26.7% and net income of $1.76 billion, resulting in that EPS of the same INR 47.9. This is the walk on a quarter-to-quarter basis on EBITDA margin. As you can see, there are basically four factors here. Wage impact, we had the second quarter impact of all the senior members of the team, and some other parts of the group. The total for the quarter was 60 basis points. The seasonal decline in revenue for P&P, it's basically a seasonality factor. I have a further page coming up explaining this in slightly more detail. It's a seasonal decline which is contributing 73 basis points. The third factor here is really the large number of fresher hiring that we have done. As you can imagine, they are not billable immediately. It takes kind of a quarter in some parts of our business, a little more, to make them productive and billable. That has contributed about 61 basis points, and other investments, freshers and other investments. Forex fluctuations took away another 21 basis points. That's how the 215 basis points is really comprised of. Looking at the cash flow summary, I'll just focus on the FY 2021 while the JFM, the Q4 numbers are given here and FY 2020 are also given here for comparison. I think the numbers to focus on for the year are $2.176 billion of cash profits. Cash profits is nothing but OCF before the working capital changes. That's also the same cash profit translates to cash EPS that we have been publishing for quite some time now. On a OCF basis, operating cash flow, we delivered $2.6 billion for the year. Mind you, this is after the $100 million that we paid out for the milestone bonus. If we were to exclude that from here as well, the number is actually $2.7 billion. When I go remove the CapEx from that, the free cash flow is at $2.34 billion, and we have been clocking at that $2.4 billion for the last few quarters on a LTM basis. If I add the $100 million back again, here it is $2.44 billion. If you look at whichever yardstick you might want to measure as a percentage of net income or as a percentage of EBITDA, these are very healthy numbers for anybody. With that, INR 2.8 billion is the cash on the balance sheet at a gross level. After removing the borrowings of INR 534, it's about INR 2.3 billion. Moving on to P&P, I said I have an additional page. We have said this 20 times in the last, I don't know, five or 10 quarters. It's got its own seasonality. Here you can see both for FY 2020 and for FY 2021, how the numbers have been. FY 2021 Q1 was obviously there was no contribution from the acquisition of those seven products that we did at the end of June 2019. That is the reason for this growth to be so high. Even if you leave that out, I think the important point to note is that even after that, the growth has been very good. Looking at constant currency of 16%, 9%, and 3% sequentially. Sequentially meaning on a year-on-year basis. Even for this quarter, it is a growth of 3.3%, 5.4% on a reported basis in constant currency, 3.3%. That is really the right number to look at. For the whole year, of course, it came in at 20.5%. There was a small impairment charge that we took for one of the products that was under one of the IP partnerships that we did. The charge is a small charge of about $16 million. On an annual basis, it means 16 basis points. On a quarterly basis, it means 60 basis points. Out of the 20 odd product groups that we've either acquired or done partnerships on, this is one of the products out of those 20 which has seen impairment after several years. As we approach June of 2021, it will be five years completion of this new business that we started in June 2016 with the very first deal. To my mind, that's a small thing, and it happens once in a while. The other notable thing during the quarter was the DWS acquisition, which we consummated on 5th of January. Those numbers have been sort of consolidated in this quarter. As far as purchase price allocation is concerned, this table gives you the purchase price. It was a total enterprise value of, if you add the INR 120 million equivalent that we paid for the shares and the borrowings of close to INR 30 million. The total enterprise value was about $150 million. This is how the assets came in, and the rest is, of course, good. This is the last thing that I want to talk about, the tax line item. This has been a bit of a surprise during the quarter because the finance minister in the finance bill went out and took away the benefit of depreciation that was available so far, and that was the law so far that goodwill was depreciable. We had obviously baked that into our calculations, and we were taking the benefit of that as far as tax books is concerned. In this quarter, the FM came and withdrew it from a retrospective effect from 1st April 2020. While we got the benefit for one year, FY 2020, for the FY 2021, right from day zero of FY 2021, we had to sort of write back that benefit that we were taking. That has been the reason why the tax expense has gone up during the quarter. That is just looking at the US GAAP books. If you look at the Ind AS books, there is a big amount of close to $160 million, which is a complete one-time non-cash kind of deferred tax liability that we have had to undertake, put it in the books there, which is not a liability payable to anybody at any point in time. That is what Ind AS and IFRS dictated. It has also caused a large difference of $160 million between the net income as per US GAAP, which did not have to take this silly entry actually. Under the Ind AS literature and we tried our level best to see how we could have avoided this, because this really is not reflecting the reality. At the end of the day, this is what it is, and this is what we had to provide for in the Ind AS books only, not under US GAAP. My last page. Okay, sorry. My last page is the reconciliation. I'll come to that in a second. This is just a quick recap of the bond issuance that we did. We finally got ourselves two ratings, one by S&P, which you are aware of, and we also got Fitch, two raters. Both of us rated us A- with a stable outlook, and that's one of the highest credit ratings and the highest-rated issuer out in the international debt capital markets. We raised about $500 million for a period of five years, and this is listed on Singapore Exchange. We did get a very fine pricing as you can see from the data provided here. This is the last page I was talking about. This is basically a reconciliation of the US GAAP in INR crores versus the Ind AS. The three highlighted blue bars is what you need to focus on or rather four. Revenues, there is no difference at all. It's the same INR 75,000 odd crores. In the EBITDA, as you can see, there is a difference of INR 719 crores, which is coming entirely from how Ind AS treats all the leasing charges versus US GAAP. As you can see, the Ind AS EBITDA is always about a percentage point higher, which is this 719 odd. It's kind of slightly lower than 1% at this point in time. EBIT kind of more or less matches up because the same reversal happens at the depreciation level. There are some other small items which make the reconciliation. The big item this time is this INR 1,174 crores which I spoke about a few minutes back, and that is really causing the big difference of INR 1,290 crores. This is really the bulk of the difference being caused because of that deferred tax liability that we had to create under Ind AS standard. That's all I had, and over to you, moderator, for Q&A. Thank you very much. We will now begin with the question- and- answer session. A nyone who wishes to ask a question, please press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Anyone who would like to ask a question, please press star and one at this time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ankur Rudra from JP Morgan. Please go ahead. Thank you. Thank you for the detailed presentation and the increased disclosure this time. CVK, could you give us a sense of how this, the order book you have this time, how does the spread look? Is there any one or two very large deals which skews the mix, or is it evenly spread? Also as an additional question, thanks for your commentary. Can you give a sense of your participation rates in application and digital needs have gone up significantly in the last year or so? Ankur, as I said, it is well balanced, the 19 deals. There are two deals with $250 million plus, two deals, and several hundred million and 50 million plus kind of deals are there. It's not concentrated with one mega deal. That's also a good part. That's a broad-based momentum across multiple geographies with some sizable deals, which are very good from a long-term perspective for us. In terms of duration also, I don't see too much of a variation. Most of them are either three-year or five-year deals, there isn't a seven-year or a 10-year deal in this. That's one perspective that I can provide. In terms of the business line, of course, there are at least four deals which are integrated, which has between infrastructure, digital foundation, and application modernization and cloud migration kind of programs. Two carve-outs, which is M&A kind of deals. One we already announced, which is UD Trucks, and another one, which is again the largest deal for the quarter, which is again a Europe-based utilities company. That is also digital foundation and application modernization and CloudSMART offering. One of the largest deals for engineering services was, again, product sustenance. It's more of a cost and trying to build more innovation and customer advocacy kind of deals. It's very well-spread, high-quality deals in very high-quality large clients. That's the best that I can share now. Sure. Thank you. Ankur, I just want to add and clarify, lest it cause some confusion. The M&A or carve-out that Vijay spoke about is at the customer end, not at our end. Understood. Thank you. I was just going to ask for a follow-up from there. Clearly very strong bookings this time, also, as you highlighted, the duration is not very high. Looking at the exit rate of new deals booked this time, the guidance of double-digit growth or even at least a double-digit growth looks a bit light and easy to achieve. Are there any headwinds if, for example, the net impact of the P&P decline that you alluded to? Is that something you've baked into this guidance? Is that why you're not quantifying at a higher level than this? I think from the services business, both IT and Business Services and Engineering and R&D Services, we are seeing a very strong outlook. Products & Platforms, as I said, 75% of the products we feel confident of a strong growth. 25%, there is a decline in characteristics, and we have retired a couple of products. At this point, we have penciled in a low single-digit type of growth in the P&P segment. That's how the numbers will pan out. Understood. Just last follow-up for Prateek. Prateek, the margins this quarter in P&P or Mode 2, was it largely the impairment charge? If I take that out, on a YoY basis, the margins are sort of flattish? Actually, Ankur, if you just do the math on a quarter-on-quarter basis also, the drop in the P&P margin is about INR 40 million, out of which revenue is a seasonal decline. It's just seasonality. There's nothing more to be read into it. That's about INR 18 odd million. Impairment, as I discussed, is about INR 16 million. That comprises INR 34 million, leaving just a small increase of INR 6 million, which has been building the sales and marketing and other parts of the business. So it's really not a surprise. Understand. Thank you for the color. Best regards. Thank you. The next question is from the line of Pankaj Kapoor from CLSA. Please go ahead. Yeah. Hi. Thanks for the opportunity. Vijay, my first question is on the investment that you plan to do. I was just trying to figure out, are you looking at this as more of a one-time investment? Any quantification you have in mind that what could it be in terms of the scales? From a medium-term margin outlook perspective, then, does it mean that once this investment is done over maybe, say, a year or two, we can go back on a higher margin trajectory? Yes. I think I talked about many areas of investments into geographies and Mode 2 and talent and locations and all that. You should consider it like 100 basis points kind of an investment. Then, of course, some of that investments have happened in the last three, four months. A little bit of that could be in the run rate, but from a full-year perspective, it will play out, it will magnify. I think some of these geographies, we are seeing strong momentum. As we scale up revenues, that will automatically pay for itself. I don't see this like a permanent thing. There are certain geographies where we want to expand, and they're not random geographies. They're geographies where we are seeing a lot of traction, and there is good acceptance. We have some marquee clients, so there is a great way to expand. It should, if you take the next year or FY 2023, FY 2024, I think this should not really be a headwind from a margin perspective. Understood. My second question is on the dividend that we declared. Just wanted to have some broader thoughts on your capital allocation policy. Is there any kind of a thought process in terms of the way you are looking at it as a percentage of maybe profit or as a percentage of free cash flow like many of your peers have? Any thoughts around the mode that you may have in mind? You think a dividend is a more preferred route, or you will be open to exploring other options as well? Yeah. Prateek, if you can take that. Yeah. Sure. Pankaj, thanks for the cue on that one. I should have covered it without even the slides. As we mentioned, the dividend for this quarter declared is INR 16 per share, 16, and we had declared two, four, and four in the previous three quarters. That takes it up to a total of 26. The 16 really is broken into two parts. One is just like we gave the employees 10 days of salary as a commemorative mark just to mark the milestone of $10 billion. We are doing the same with the shareholders, INR 10 per share, as a mark of that milestone. The rest INR 6 is really the new benchmark that we are setting going forward, instead of the INR 4 per quarter that we paid in the last two quarters. Before that, we were paying INR 2 per quarter. We have increased it now to INR 6 per quarter. That is what we intend to carry on into the four quarters of the next year and beyond. We'll again look at it next year-end as and when we get to that. Understood. Just one last small clarification, Prateek. Given the kind of adjustments that you've done on the tax side, any sense in terms of what kind of a tax rate should we be looking at? Last quarter you had spoken about it going down to around 22% kind of a level. Now with these changes, what is the new ETR that one should expect? Thank you. Yes, Pankaj. As far as ETR is concerned, our reported ETR for this year is 21.9%, but that does have the benefit we got for FY 2020 in this year. If we normalize it comes to about 22.5%, taking away that benefit of prior years. Against that 22.5%, we expect next year to go up to 24.5%, give or take 50 basis points either which way. The range for next year, financial year FY 2022, should be from 24%-25% odd. This is about one percentage point higher from the midpoint of what I had told all of you last quarter. I had mentioned 23.5% and because it was still an interim kind of working, I kept a ±1% on that. From that perspective, the range has changed from 22.5%-24.5% to now a narrower range of 24%-25%. Got it. Thank you and wish you all the best. Thanks, Pankaj. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants, we would request you to please limit your question to one at a time. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Diviya Nagarajan from UBS. Please go ahead. Thanks for taking my question. CVK, I was curious about your earlier comment about not the time to maximize profits, and I'm also trying to reconcile that with your 100 basis points of investment that you talked about. Kind of wondering what that comment really means, if you could add some color to that. What also happens to the operating leverage that you get in the business this year? There's also a currency tailwind that we're starting the year with. Could you just kind of lead us through where you're thinking about this, please? Yeah. Definitely there is an operating leverage in some of our core geographies and some of the scaled-up areas of capabilities. But in the given circumstance, I do think expanding our presence outside some of our strong geographies, which is U.S., U.K., Nordics, is a very good investment. We're already seeing the success of that in France and Germany. A little more emphasis on a few more geographies, and some geographies where we really don't have a country sales presence, we are trying to expand this. The second element is on our engineering services. While we have a strong leadership position in engineering services, there is definitely significant shift in technology, which is what we are now calling as Mode 2 digital engineering services. Very similar to how the other Mode 2 services helped us scale and create a significant mind share and very good traction. Like now our application services, led by our digital capabilities, is really doing extremely well. We want to create those opportunities and give ourselves a little bit of elbow room to invest there. When I said about not the time to maximize, I think it's really a reflection of there are opportunities, and this will really help us deliver stronger growth in the mid to long term. I hope that clarifies. Yes. Thank you. Just as a quick follow-up, these investments, would you categorize them or characterize them as preemptive, or would you characterize them as a need of the hour? Most of them are proactive. Except the talent-related, some of the investments we believe are addressing some of the emerging demands. I mean, we have freshers are scaling up, including in different geographies. Some of that creates upfront costs, which will get rationalized as we move forward. That's very helpful. I'll come back in the queue for follow-up. Wish you all the best for the rest of the year if I don't get another opportunity. Thank you. Thank you, Diviya. Thank you. The next question is from the line of Sudheer Guntupalli from ICICI Securities. Please go ahead. Good evening, gentlemen. Thanks for taking my question. Extension of the prior question on margin guidance. Our normalized EBIT margin guidance plan used to be 19.5%-20.5% before acquisition of IBM products. With their integration, we were expecting a step jump in overall EBIT. Came in COVID, which brought some of the transient tailwind state offshoring, higher utilization, so on and so forth. We do acknowledge that some of these may be strictly ephemeral in nature, and there may be a need for higher investments. However, if you look at margin guidance plan of 19%-21%, it's weaker than even pre-COVID and pre-IBM acquisition levels. How do we reconcile the profitability trajectory with these tailwinds related to IBM/COVID on one side and your guidance on the other side? Yeah, I think the right way to look at it is at a gross margin level, it continues to be a good outcome. There are some areas where we want to proactively invest. While a lot of saving related to the pandemic is sitting in our FY 2021 margins. In our planning, we've already assumed a certain amount of travel, all of that. Maybe some of them may not play out. That added to the investments that we've planned. We start getting to a slightly broader range, which is also the industry practice which gives us a little bit more elbow room to do all the right things that is required. Sure, CVK. Just one follow-up. In one of the recent industry forums, you made an interesting point about industry revenue potentially doubling over the next three to four years. HCL being one of the key leaders in the industry, we would have anticipated HCL to outgrow the industry or match the industry growth levels. Our growth guidance seems to be a little behind. How do we read this disconnect? Are we being conservative at this juncture or is there a context to it? Sudheer, I think you should interpret that comment, and as it was said, it is a long-term outlook for the industry, and it was an industry forum, and I want to just leave it there. Sure, CVK. Thanks and all the best for the rest of you. Thank you. Thank you. The next question is from the line of Ashwin Mehta from Ambit Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. CVK, you did talk about investments on the digital engineering services side in the ER&D piece. What is our mix as of now, approximately between core engineering versus digital engineering? In terms of our outlook for ER&D, would you think that will grow at company average or because of the fact that there is exposure to aero, auto this might grow slower going into the next year as well? We expect our engineering services to be growing at the company average services growth rate for sure. Right now, the mix of digital engineering services is small. I don't have an exact quantification. Maybe in a future opportunity to interact, we'll provide you a little more color. Definitely the potential in some of these areas are good. We're already doing a lot of work in this area. It is just that there is a little more attention and little more proactive investment will help us execute well as well as drive growth in the future, mid to long term. Okay, thanks. Just one clarification. In terms of the impairment that you've taken in the Products & Platforms space in this quarter, is the revenue impact of that kind of already there in our numbers? Secondly, out of the remaining portfolio of around 25% of the business where we are seeing declines, is that kind of taken care of in our expectation of, say, low single-digit growth in the Products & Platforms space for the next year? Yes. Ashwin, that is all factored in our projections. Just to provide a little more context to this impairment, if we wanted to optimize cost and deliver more contribution margin on this to avoid an impairment, we could have very well done that. We do believe this is a very strong product. There is a very strong outlook. We decided to invest a little bit more, which is why the contribution margin comes down, and impairment. It's a conscious call and if we really wanted to avoid, we could have very well avoided it. We think it's the right thing to do from a overall product portfolio perspective. Okay. Just one last small one. In terms of the next year margin guidance, have we baked in wage hikes for the next year? Yes, of course. Yes. We have a wage cycle which starts in July, and last year there was a three-month delay. This year we expect to provide them wage hikes as per the regular cycle, and that impact is factored in in our P&L. Okay. Thanks a lot. All the best. Thank you. Thank you. The next question is from the line of Ashish Chopra from Kotak Asset Management. Please go ahead. Yeah. Hi. Thanks for the opportunity. Just a couple of quick ones from my side, CVK. Firstly, with respect to the investments that you mentioned around digital engineering and perhaps some new geographies, how are you thinking about the build versus buy route over here? Do you think that the inclination to maximize the time to market may lead you to some acquisitions there and this could be embedded in part in the margin guidance? See, I think, for example, in countries, we're always looking for opportunities for acquisition to expand in some geographies where we want to. Like Australia, we did. We did a small one in Germany two years back. At least Germany is definitely helping us in a significant way. For Australia, it's early days. We look for opportunities, but sometimes these things don't happen in a time-bound manner. At least we are ensuring that we are doing all the right organic investments in these areas. The same is true with some of the digital engineering. If we find the right assets, we wouldn't hesitate to acquire. Obviously some of them, the valuations are high, and our ability to kind of get all the right outcomes, that also takes time. That way, I think we are better off doing organic investments and growing some of these areas. Where we already have capability, it is just a little more emphasis and a little more proactive build-out to ensure we're able to address some of the demand. Got it. Just lastly from my side, in the past couple of years, we've seen the fiscal year starting on a relatively softer note because of some of the productivity clauses coming in in the larger engagement. Do we expect a similar kind of a trajectory and seasonality this time around as well? Could it be a year where the seasonality would be more or less in the products but services could be by and large? I think there would be a little bit of that seasonality which will play out in Q1. Nothing out of the way, I would say. Okay. Thanks so much for taking this. All the best. Thank you. Thank you. The next question is from the line of Kawaljeet Saluja from Kotak. Please go ahead. Hey, thank you for giving me the opportunity to ask a question. It seems that there have been plenty of questions on margins so let me add one or two ways. CVK, normally you expect companies to fund investments in service lines, geographies through their normal operations. Is there any specific reason why you have called this out? Is there in any sort of way an acknowledgment that you have under-invested in the business overall, which is causing this additional investment into FY 2022? If not, normally investments signify that once they start paying off, it leads to a material change in growth trajectory. Just wanted your thoughts on what is really investment versus spending. Yeah. I think, Kawal, on the geographies, I think every year we were trying to pick up a couple of geographies and focus on. That's how we've always looked at it. Three or four geographies we pick up as a three, four-year strategy, that's how the whole Nordics we've kind of reached a very strong leadership position. Similarly, some other geographies like South Africa and things like that. Some of these geographies we started and we are seeing good results, so we are stepping up the investments. That's how I should see. Obviously, every investment that we make, we feel accountable for delivering returns, but not necessarily from the same year. We think if you take a two - three year horizon, they would pay for itself and they would kind of deliver company-level profits, some of these geographies. On the capability side, we've very strongly invested in Mode 2 on the IT and Business Services. Maybe on digital engineering, maybe we could have done a little bit more in the past. We still think the timing is right. We can do some of these things, which will help us to get a little bit more market share. Some of this will definitely reflect in growth as we move forward. Okay, thanks. CVK, the second question is on engineering services. This is a huge opportunity. Post-COVID, for some of the companies globally as well as in India, there seems to be recovery in engineering services. Somehow for HCL Tech, the pickup seems to be a little bit sturdy. Any reasons? When we move to FY 2022, how should we look at this particular business segment performing? Yeah, Kawal, I think it has definitely bottomed out. As we had said earlier, the high tech and communication, even this year, there was a positive growth. The asset-heavy industries is where we had a steeper decline, especially some accounts in office automation and aerospace. We see that those things have bottomed out. Next quarter onwards, we should see a good growth in engineering services. That's what our expectation is. Okay. Fantastic. Thanks a lot, and all the best for FY 2022. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. C. Vijayakumar for closing comments. To close, thank you for joining. We've delivered very well in a pandemic year. We are doing all the right things for our business to continue to be an industry-leading franchise. We look forward to connecting with you in the coming quarters. Thank you for your interest, and thank you for joining this. Thank you. On behalf of HCL Technologies Limited, that concludes the conference call. Thank you for joining us, you may now disconnect your lines.