Ladies and gentlemen, good day, and welcome to the Infosys earnings conference call. As a reminder all participants lines would be on the listen-only mode, and there would be an opportunity to you to ask questions after the presentation concludes. Should you need assistance, should you need a 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. Sandeep Mahindroo. Thank you, and over to you, sir. Thanks, Margaret. Hello, everyone, welcome to Infosys earnings call to discuss Q4 and FY 2021 earnings release. I'm Sandeep from the IR team in Bangalore. Joining us today on this call is CEO and MD, Mr. Salil Parekh, COO, Mr. Pravin Rao, CFO, Mr. Nilanjan Roy, along with other members of the senior management team. We'll start the call with some color on the performance of the company by Salil, Pravin, and Nilanjan before we open up the call for Q&A. Please note that anything which we say which refers to our outlook for the future is a forward-looking statement which must be read in conjunction with the risks that the company faces. A full statement explanation of these risks is available in our filings with the SEC, which can be found on www.sec.gov. I'd now like to pass it on to Salil. Thanks, Sandeep. Good evening and good morning to everyone on the call. Thank you for joining us for this session. I trust you and your families are well and safe. We've had an exceptional year and an exceptional quarter. Our year-on-year constant currency growth was at 9.6% for Q4. Our volume growth for Q4 was at 4.6% quarter-on-quarter, reflecting accelerating momentum in the business. Revenue growth was at 2% in constant currency quarter-on-quarter, with one point higher offshore effort mix, lower contribution from third-party deals and our typical weak carrying on in my opening statement. For the full year, our growth in constant currency was at 5%. Our digital business grew by 34% year-on-year in Q4, representing 51.5% of the overall business. Our large deal wins were at INR 14 billion for the full year, a growth of 57% from the previous year, and were INR 2.1 billion for Q4. Our net new percentage for FY 2021 was at 66%, helping us set up for strong growth in financial year 2022. With these exceptional results, we had industry-leading growth in financial year 2021. We continue to gain market share. I'm grateful for the trust our clients have in Infosys as we partner with them for their digital transformation programs. Our growth was broad-based with several of our industry segments showing strong growth year-over-year, and stems from our market-leading capabilities in digital cloud, cybersecurity, and in data and analytics. This is what allows us to be the most critical partner for our clients' digital transformation programs. Our operating margins for FY 2021 improved by 320 basis points to reach 24.5% for the full year. It was also at 24.5% for Q4. Our free cash flow was close to $3 billion, at 39% larger than in the previous financial year. Our cash and balance sheet was at INR 5.3 billion at the end of the financial year. I'm extremely proud of our employees and their enormous commitment, especially during this past year, but in general, across the years. We will launch a second compensation review in a phased manner starting in July 2021. Our employees and our entire leadership team work cohesively and for the benefit of our clients. This approach of One Infosys has really enabled us and enabled the company to have a successful financial year in financial year 2021. Looking ahead, we see continued strong demand from our clients, especially in digital, cloud, and in data, and we have a strong foundation of our large deal success in financial year 21. Hence, our constant currency full year revenue guidance for financial year 22 is growth between 12% and 14%. For operating margin, our superior margin performance in financial year 21 was in part because of improvement in our strategic cost levers and in part because of cost avoidance and deferment. With normalcy returning gradually across the world, we anticipate some of the costs to return. With that, our guidance for operating margin for financial year 22 is between 22% and 24%. In keeping with our capital allocation policy, we propose to increase the total dividend per share by 54% over the previous financial year for a full year dividend at INR 27. In addition, we propose a buyback of equity shares up to an amount of INR 9,200 crores, which is approximately $1.2 billion, through the open market method. With that, let me pause and thank you, and let me pass it on to Pravin for his update. Pravin, over to you. Thank you, Salil. Hello, everyone. Hope you and your family are doing good, safe and healthy. Growth accelerated further in quarter four with year-on-year constant currency growth of 9.6%. Growth momentum was strong across various business segments, with three of them, Financial Services, High Tech and Life Sciences, reporting double-digit growth. Volume growth was strong despite quarter four traditionally being a soft quarter. Most of the critical operating parameters continued to improve during the quarter. Utilization increased further to a new all-time high of 87.7%. Onshore effort mix reduced further to a new low of 24.3%. Subcon costs increased further by 50 basis points due to growth acceleration and high utilization. We won 23 large deals in quarter four, totaling $2.1 billion. Six each were in Financial Services and Retail, three in Life Sciences, and two deals each in Communications, Manufacturing, Energy, Utility, Resources and Services, and High Tech segments. Region-wise, 16 were from Americas, six were from Europe, and one from rest of the world. The share of new deals in quarter four was a healthy 52%. For FY 2021, the large deal TCV crossed $14 billion. Share of new deals within this $14 billion was $9.4 billion, higher than TCV of all large deals signed in FY 2020. Client metrics remained robust, with 100 million client count increasing to 32, an increase of four year-on-year. We added 130 new clients in the last quarter. Net employee addition during the quarter was over 10,300, and share of women employees increased to 38.6%. Voluntary attrition for IT services, calculated on annualized basis, increased to 15.2% as demands for talent increased. We have implemented salary increase effective January 1st, 2021, as mentioned by Salil already, the next cycle will kick off from July 2021 in a phased manner with the start date of July 2021 for majority of our employees. Moving to business segments. Financial Services continued to record industry-leading performance, with growth momentum improving further. In the last few quarters, we have seen strong demand uptick in areas that banks have had to significantly invest in post-COVID, such as customer experience transformation, front-to-back digitization, mortgages transformation, call center technology and operations, lending services, as well as higher investments in large end-to-end digital transformation programs. In FY 2021, we have won 25 large deals from this segment, including six in quarter four, which provides a solid base for growth in the coming year. Sequential improvement continued in the Retail segment, along with improvement in deal activity. While many of the sub-segments in retail remain challenged, we see opportunities in areas like infra and apps modernization, adoption of microservices architecture, cloud strategy and workload migrations, and cybersecurity. Given the pace of recoveries in second quarter of FY 2021 and net new large deal wins in H2 of FY 2021, we remain optimistic about this sector as we look ahead into FY 2022. Communication segment weakened marginally in the last quarter. However, with the deal wins, we expect the performance to improve in the coming quarter. Digital-led transformation, consolidation, 5G, edge computing, cybersecurity, next-gen technologies like AI, IoT, will be the disrupting themes in CMP. Energy utility resources and services vertical remained soft for most of FY 2021 due to constrained spend in the oil and gas, travel and hospitality, and resources sector. However, we see signs of stability returning to various sub-segments given some of the recent large deal wins and quality new account openings. We see opportunities in the areas of cost takeout, vendor consolidation, cloud-led transformation and asset monetization, smart grid initiatives, and Uberization of services. We have a strong deal pipeline despite pressure on discretionary budgets in some of the impacted customer industries. Manufacturing was one of the most adversely impacted sector because of COVID. While automotive and industrial segments are emerging strongly as the economies open up, aerospace sector will take few quarters to get back to previous capacity. We are seeing significant traction and momentum as evidenced by the new wins throughout the year, including the largest-ever deal in Infosys history signed in quarter three. We are very positive on the sector on the back of strong relationship built during the pandemic and continued net new wins throughout the year. Even as the effects of pandemic continue and as companies emerge from crisis, our pipeline in the sector is strong and we are confident of gaining market share. Infosys BPM has grown at double-digit rates with clients investing significantly in digital transformation to enhance efficiency, effectiveness and experience in business processes within their enterprise and global shared services environment. A lot of this growth is driven through combined IT plus BPM deals, captive carve-outs, vendor consolidation and managed services. The digital portfolio contribution to overall revenue increased further to 51.5% in quarter four, with robust growth of 34.4% year-on-year in constant currency terms. In FY 2021, digital revenues have grown by 29.4% in constant currency terms. We continue to expand these digital capabilities, especially with Infosys Cobalt cloud portfolio. In the last quarter, we announced a partnership with LivePerson for conversational AI to help brands manage AI-powered conversation with consumers and employees. We also launched Infosys Cortex AI first, cloud-first customer engagement platform and Applied AI Cloud built on NVIDIA DGX A100 systems. We completed a definitive agreement to purchase assets and onboard employees of Carter Digital, one of Australia's leading and award-winning experience design agencies. In quarter four, Infosys was ranked as leader in nine services-related capabilities across Digital Pentagon areas by industry analysts. With that, I hand over to Nilanjan. Thanks, Pravin. Good evening, good morning, and thank you everyone for joining the call. We entered FY 2021 with three focus areas, operational agility, liquidity and cash management, and cost takeouts. We maintained razor-sharp focus on each of these areas throughout the year, and our FY 2021 results are a testimony to that. We closed the year with 5% revenue growth in constant currency terms and 24.5% operating margins. This was backed by our largest ever deal closures of INR 14.1 billion, a growth of 57% year-on-year, 29.4% growth in digital revenues, improved operating parameters with both utilization and offshore effort mix at all-time highs of 84.7% and 74.2% respectively. Operating margins for FY 2021 increased by 3.2% over FY 2020. As mentioned earlier, this was due to combination of factors comprising of strategic cost levers, cost leverage and other cost benefits, some of which are expected to normalize ahead. Record free cash flows for FY 2021 of approximately $3 billion, an increase of 38% over FY 2020, were driven by strong focus on DSO and CapEx optimization. DSO for the year was 71 days. We had a specific focus on CapEx reduction during the year. Although there was some increased technology-related CapEx, largely to support remote working, we continue to optimize on CapEx related to physical infrastructure creation. CapEx for FY 2021 reduced to INR 285 million compared to INR 465 million last year, despite the higher technology-enabled spends. Consequently, FCF conversion as a percentage of net profits was 113.4% for FY 2021 compared to 91.8% in FY 2020. FY 2021 EPS grew by 12.5% in dollar terms and 17% in INR on a year-on-year basis, driven by strong top line and margin expansion. Return on equity for FY 2021 improved by 1.6% to 27.4% over the last year. Coming to quarter four performance, we saw another quarter of revenue acceleration with growth accelerating to 9.6% year-on-year in constant currency terms. After absorbing the effects of salary increase across job levels, operating margins in Q4 stood at 24.5% versus 21.1% in Q4 FY 2020, an expansion of 3.4%. This compares to operating margins of 25.4% in quarter three. The sequential margin movement is primarily due to a 1.3% impact due to the compensation increases rolled out effective January 1st. A 0.3% impact due to increase in G&A costs, partially offset by lower lease costs, improved operating parameters and cost optimization and other one-offs. Our balance sheet continues to remain strong, liquid and debt-free. Cash and cash equivalents increased further to INR 5.28 billion at the end of FY 2021. Yield on cash balances continued to decline. The yield was approximately 5.1% in quarter four compared to 6% in quarter three. Quarter four also marked the 23rd consecutive quarter of positive Forex income, despite significant currency volatility across the globe. As you know, we have been increasingly emphasizing on total shareholder returns and increasingly aligning our executive compensation to TSR creation. I'm happy to share that TSR for our investors in FY 2021 was in the top quartile of our peer group and ahead of market indices. In line with our capital allocation policy of returning 85% of FCF over five years, the board has recommended the following. A final dividend of INR 15 per share, which will result in a total dividend of INR 27 per share for FY 2021 versus INR 17.5 per share for FY 2020. This is a 54% increase in dividend per share for the year. Buyback of equity shares of up to INR 9,200 crores through open market route post approval of shareholders in the AGM. Final dividend along with share buyback would lead to cash payouts of INR 15,600 crore excluding taxes in the coming months. Another step to demonstrate our commitment of consistent TSR generation for our investors. This would mean total payouts of approximately 83% of our FCF for FY 2020 and 2021 through dividends and buybacks, compared to the 85% over five years that we announced during the rollout of our capital allocation policy in July 2019. Coming to guidance. With the strong exit momentum and the ramp-up of landmark large deal wins, we have built a solid base for double-digit growth in FY 2022. We expect FY 2022 revenues to grow by 12%-14% in constant currency. Operating margin guidance for FY 2022 is 22%-24% after considering the impact of compensation reviews, transition impact of large deals, and partial rebound of costs like travel, et cetera. With that, we can open up the call for questions. 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 the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions queue assembles. The first question is from the line of Ankur Rudra from JPMorgan. Please go ahead. Thank you. Good to see the progressive capital return policy announced. I just wanted to check on your visibility for the year ahead, say, compared to earlier pre-COVID years, FY 18 and 19. How is it different compared to that? Are you baking in any level of conservatism, perhaps into the range based on supply pressures you alluded to and perhaps normalization of signing momentum we have seen earlier in the year? Thank you. Thanks, Ankur. This is Salil. In terms of what we're seeing in the demand environment, it's one of the strongest demand environments that we've seen for a while. The revenue growth guidance at 12%-14% gives a very clear indication of the comfort we have in the growth outlook. In terms of supply pressures, yes, there are always supply pressures across the market. As we had shared earlier, we recruited over 20,000 people from campus in the FY 2021. The plan for FY 2022 is at about 26,000 today, which could increase. We have overall capacity with what we see both in college hiring and lateral hiring to fulfill this demand. Overall, we feel it's extremely strong growth outlook, and we feel comfortable at this stage to conclude the fulfillment as required for this demand. Thank you. That's fine. Thank you. The next question is from the line of Diviya Nagarajan from UBS. Please go ahead. Thanks for taking my question and congrats on a good year in a very difficult environment. Two questions from my side. One is, how should we think about normalized growth rates for you from here on? I know this year you've guided very strongly, but there are some spikes coming in with some of your large deals, specifically your largest ever deal. Except it looks like you're looking at much more subdued sequential growth rates compared to what we saw in September and December. How should we think about that? That's question one. Two, in your margin guidance, how should we think about progress? We normally have a pattern to margins where you have wage hikes impacting and then things pick up. How should we think about the seasonality of margins going into this year? Again, specifically Q2 is when I believe your largest deal is also ramping up. You just talked about additional wage hikes as well. Should we expect a slightly different seasonality in Q2? How should we think about that, please? Thanks, Diviya. This is Salil. I'll start on the first part and Nilanjan will comment on the seasonality of the margins. In terms of what we are seeing in terms of the pattern or steady state growth, today our focus really is on this financial year and the growth guidance of 12%-14% for this year. We currently see demand in very good shape. It's of course a function of how that demand plays out. As you pointed out, in the last financial year, we had 5% growth in an extremely difficult year where we've seen many within the industry shrinking. We believe we are gaining market share. We believe we are the industry leading growth at this stage. With what we see in the guidance, if the demand environment stays the way it is, and there's every indication that it will, given the broad economic recoveries in most of the markets that we serve our clients in, we anticipate that this looks like a good demand environment for some time. Our guidance is only for this financial year. Pravin, over to you. Sorry, Nilanjan, over to you. I think, Diviya, we don't really give a color on the trajectory of the margin. It's the guardrail for us, like we mentioned, between 22-24. We have factored in the second wage hike from 1st of July, so yes, in quarter two, you may see some margin pressure there. Later on in the year, there is of course, some things like travel, et cetera, will open up. Underlying all this, of course, we continue to work on our strategic cost levers which are each quarter in terms of the mix and the pyramid and the automation. That's an underlying cost which we keep on neutralization, which we keep on happening. I think, like I said, 22- 24 is a comfortable range which we operating in and have factored in the increase of cost of travel and the wage hike. Thank you. The next question is from the line of Moshe Katri from Wedbush Securities. Please go ahead. Hey. Thanks for taking my question. Salil, I have two points related to the quarter and maybe one that's more broad based. Any specific call-outs on Q4 sequential growth numbers? Obviously, there's a delta here between volume growth that was very strong and the actual sequential growth. You mentioned a 100 basis points expansion in offshore mix, which probably has some sort of a cannibalizing impact. He also said something about less contribution from third-party deals. Maybe you can specify on that. I appreciate the fact that quarterly bookings can be lumpy. From a broad picture perspective, can we get some color on pipeline trends directionally? Are we up? I think that could be kind of helpful. Thank you. Sure. Thanks for your questions. On the quarter four, as you pointed out and I shared in the earlier statement, the volume growth was 4.6%, where the revenue growth constant currency was 2% quarter-on-quarter. We saw about one point increase offshore effort mix, as you rightly indicated, that would show up in the difference between volume and the actual revenue. Our third-party deals are deals where we work with third-party hardware, software partners. Those deals typically have a cycle that we've seen across the quarters in the past year. In Q4, it was somewhat lower than what we had originally anticipated, most of them coming through in Q1. Then there's typical seasonality that we've seen over the years, in Q4, with what we've shared. That came into play a little bit. However, the demand outlook for us remains exceptionally strong. Our large deal wins with 66% net new for the full year last year, gave us a very strong base for growth for next year. 12%-14% is a strong guidance for us for growth for next year. On the second one, Nilanjan, do you want to go ahead on that one, please? What was the- Moshe, can you repeat the second question? Yes. The second question was more about bookings and appreciate the fact that these can be lumpy on a quarterly basis, but just to get a grasp, a better feel on bookings maybe from a pipeline perspective, maybe we can get some color on that. Directionally, have you been able to replenish a lot of the pipeline that turn into bookings, and are bookings up year-over-year? Just to get a feel on where we are directionally. Let me start that. Sorry, Nilanjan. On the pipeline, then Pravin, if you want to add anything. On the overall pipeline, first the bookings, we had INR 2.1 billion of large deals in Q4, which is a very strong, healthy mix, over 50% net new. We consider that, of course, the INR 7 billion of Q3 was incredible, but that's not a sort of a sustainable rate in the way we look at our business. The pipeline is, yes, starting to get replenished quite well after an exceptional set of large deal wins. We see the pipeline coming back robustly. We see good demand again across different industries. We feel quite good going into this financial year that both the deals we've closed will support the revenue growth, but equally, the pipeline will also start to come back and give us good traction for large deal wins in financial year 2022. Thank you very much. Thank you. The next question is from the line of Apurva Prasad from HDFC Securities. Please go ahead. Right. Thanks for taking my question. Salil, just to probe further on the medium-term outlook that you spoke earlier. I would imagine improving visibility on medium-term, with a greater sense of scope from enterprises as they are accelerating the digitization milestone plus vendor consolidation and improving pipeline that you mentioned. What are your thoughts beyond FY 2022 and your confidence of keeping on to a double-digit type of a trajectory? Also, is the FY 2022 revenue guidance imply a higher offshore component? Does it mean better volume growth compared to the 12%-14%? On the multi-year view, the overall theme for us is we see very strong demand from clients, good traction on the cloud, good traction on data analytics, very good work on AI automation, good traction across cybersecurity. All of the elements in which we build capabilities, we feel comfortable that clients are moving ahead quite aggressively in those areas. We don't, however, have a guidance or even an outlook at this stage, which is multi-year, as you know. We have the one-year guidance in terms of revenue. Everything we see indicates that the buying from clients is fairly strong. Really it's more a function there of the overall macro in terms of GDP. If that holds up multi-year, that will still give us a good outlook. At this stage, we see good demand, good pipeline, good traction. Nothing to change anything in the way we are seeing business. Of course, the guidance is only for one year. Sure. Just the second part of that, is there a higher offshore component built into that guidance for FY 2022? There again, sorry, I didn't address that. We don't specify the volume component in the guidance. We do have a view once we complete the year, we will have a look at it, but it's not part of our overall guidance on the volume, which will be split in terms of the revenue for next year. All right. Finally, how do you expect the core to deliver which has declined almost double digit this year? Your views on that. There, what we are seeing is large enterprises are looking at their core estate and applying tremendous automation to it and looking for efficiency. Our own approach is to help them achieve that automation, that efficiency, and that benefit, which they're then taking and investing in their digital growth agenda items. We continue to see that sort of a movement. Again, we don't have a specific guidance on the evolution of the core for the full year, but that's the broad trend we've seen in the past few quarters, and we continue to see that going ahead. Thank you. Thank you. The next question is from the line of Pankaj Kapoor from CLSA. Please go ahead. Yeah. Hi, thanks for the opportunity. First question, Salil. Are you seeing spend coming back on the discrete longer-term payout kind of deals or projects, or do clients continue to spend more still on those cost takeout, cost savings, cloud migration kind of projects? Second question is that how do you see the mix in your pipeline in terms of, say, less than INR 500 million TCV and more than INR 500 million TCV kind of deals? On the first part, I think there's both types of work that you referenced, the cost-focused work, the efficiency-focused work, and also the digital transformation type of work that we get from our clients. If you look back in financial year 2021, if you look at the sort of work we announced that we're doing with Vanguard, it's a digital transformation that starts from the business, looks at technology, and looks at operations. Equally, we are doing other programs with other clients which are more focused on cost takeout and some even on consolidation. They're quite well-represented in what we are seeing in the outlook today. In terms of the size, we don't specifically comment on the breakup of the pipeline. Having said that, the pipeline, the actual wins last year were quite well distributed, and the pipeline has a similar type of distribution. Of course, as Pravin mentioned, last year we had one specific deal, which was the largest in the history of the company. Those are deals which happen every now and then, so those are not really predictable in that type of a horizon. Understood. I have just one more question for Nilanjan. Nilanjan, do you see any impact of the recent tax changes that are proposed in the U.S. impacting your effective tax rate in the coming years? Thank you. Yeah. As you know, again, this is just proposals, and there's some papers out. This, of course, has to go through both the Houses, Senate, and Congress. There are two things, of course, a lot of people are talking about. One is, of course, the minimum alternative tax, which is largely for U.S.-based corporations who have international subsidiaries. That's a different impact and doesn't impact us. The other, of course, is the rate increase which they're proposing on corporate tax itself from the 21% to 28%. Having said that, most of our operations are run through a U.S. branch. We don't have a U.S. subsidiary through which we run most of our operations, therefore, increase in any tax rate there. One is, of course, you will get a set-off in India from a foreign tax credit partially. There can be a minor impact if there's any flow-through over and above that. Like I said, we run it through a grant structure. Therefore, the impact will be less. Understood. Thank you. Okay. Thank you. The next question is on the line of Jamie Friedman from Susquehanna. Please go ahead. Salil, in your prepared remarks, you had mentioned cost avoidance and deferment as sort of instrumental in 2021 narrative. I was hoping you could elaborate on that. I wasn't sure if you were referring to the cost within Infosys or on the client side. Is that what you mean? No. Yeah. I think, like we've been over the last four quarters, if you're in the calls as well, right? Last year, as COVID hit, we were very clear looking at the volatility and uncertainty in the economic environment, that we had to do certain cost postponements. For instance, salary hikes, which were due in June of July last year, that was postponed into quarter four. We just announced that in the beginning of January. That was one of them. Even the promotion cycles were delayed in FY 2021, when we started that only in Q3. Similarly, things like recruitment, et cetera. That was one part of it. And those are the costs which will come back now in FY 2022. The full year impact of the compensation hike of quarter four will be felt into FY 2022. We've also just announced that we will look at another compensation cycle commencing 1st of July. That will impact three quarters of FY 2022. Those are the cost deferrals that I call. There are other cost reductions like travel, et cetera, and part of that will start coming back as the world opens up, probably closer in the second half and travel looks better. Of course, for the first half, we don't see much of a change there. These are what we're calling costs coming back and some of the tailwinds in last year becoming headwinds. Of course, underlying that, we have an underlying cost optimization program around our strategic levers of on-site, offshore mix, around the pyramid, around automation. We continue to press on every year as well. Got it. Thanks for that clarification, Nilanjan. Thank you. Welcome. Thank you. The next question is from the line of Sudheer Guntupalli from ICICI Securities. Please go ahead. Good evening, gentlemen. Thanks for giving me this opportunity. First question, Nilanjan. Between the three options of open market buyback, tender buyback, and dividend, if I were a shareholder and of course, subject to our individual tax understanding is that the tax transmission loss on open market buyback is higher than in the other two cases, given the applicability of CG. Just curious on the thought process of returning this INR 90 crore-INR 100 crore capital through open market route and instead of, let's say, tender or dividend route. Will this be a recurring mechanism? Like I said, we are completely guided by our capital allocation policy of returning 85% over the five-year period from FY 2022- FY 2024, and that talks about a progressive dividend policy and supplanted by buyback or dividends, any special dividends. I think consistently the message back from the market and investors has been, they don't prefer one-off special dividends. They would like to see a consistent progressive dividend policy, underlying dividend policy, and backed by, like I said, these one-offs. The board considered the buyback as the best way to return, and now versus open market and tender. Of course, the reasons for them are different. Of course, in tender, you are committed to a maximum price, as well, in fact, a premium which you actually lock on to, whereas in an open market, you are committed only to a maximum price, and you buy over the next few months, subject to the maximum as well. The opportunity for EPS accretion is, potentially, we are seeing going by the past trades we have done, is higher in case of an open market. As regards to the tax implication, we understand that SEBI has now mandated the stock exchanges to indicate, even in an open market, the benefit in terms of buyback because the company will pay buyback tax. In the hands of shareholders, the SEBI, I believe, has told the stock exchanges to indicate deals where the company is buying back these shares. That was available in the tender offer previously. I believe SEBI has now rolled it out across common, but we don't have any notification, but this is our informal understanding. Sure. You meant to say, Nilanjan, that capital gains will not be taxed in the hands of shareholders. Is that correct? That's what we informally understand. We don't have anything in writing. Yeah. Thanks for that. The investors will have to see that. The investors will have to see their individual cases. We can't comment on that. Sure, Nilanjan. A follow-up question is that tender buybacks have been very effective price-signaling mechanisms in case of Infosys itself and some of our competitors earlier. On the other hand, open market buybacks have a typical defensive connotation, where the objective is more price support rather than price signaling. In that defensive context, actually, the maximum buyback price of INR 1,750 looks very aggressive. Just clear from the thought process of arriving at this 1,750 number, should this be read as a management signal like in a tender buyback? We are just looking for next stop buffer because markets are being very volatile both sides and this is a long-term process of six months? Yeah. As you know that this is the maximum price, unlike in a tender where you actually give a premium and commit to the premium, this is the maximum price. This gives you a headroom. From the date of announcement, there's a process where it will get approved in the shareholder meeting sometime in June. Then the open buyback will offer. The runway over this price is over the next maybe seven to eight months, which is a much more longer. That's the headroom which we created. Of course, the board also looked at any possible EPS accretion, et cetera, while deciding this price. Sure. Thanks. That's it from my side. Thanks for giving me the opportunity. Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity. My question is what further to Pankaj has asked. If you look at the FY 2021, you guys have set up a large threshold in terms of mega deal wins. Do you believe, in FY 2022, looking at the pipeline, you are not actually disappointed in terms of the mega deal pipeline shaping up as a whole? Hi, thanks for the question. This is Salil. The pipeline is looking in good shape today. The pipeline has been replenished, as we were discussing earlier, from some of the wins. It's always difficult when you're looking at one which is the largest win in the history of our company. Having said that, we feel quite comfortable that the overall pipeline is in good shape, and we'll continue to create market share gains by winning a large percentage of the digital transformation programs. Okay. Second question to Nilanjan. Do you believe, Nilanjan, FY 2022, the large deal ramp-up cost as a headwind could be higher than FY 2021? It may be almost similar, and this may not be an incremental headwind to the margin in FY 2022? Just a follow-up on attrition. Despite giving a wage hike starting from January, 500 basis points increase in the attrition looks higher because seasonality in terms of higher education generally comes in Q1, Q2. What has led, despite the wage hike, with such a high increase in the attrition? Yeah. Quickly on the large deals, we mentioned in FY 2022, there will be actually a headwind, like I mentioned in my opening commentary. There will be some marginal initial headwind as we ramp up on the large deals as well. That factored into the margin. Nilanjan, do you believe that could be incremental versus FY 2021, or it's almost similar to FY 2021? No, since it's going to impact my margins for next year, on a year-on-year basis, so in a way, it's incremental. Okay. On this, this is Salil here. On the attrition, there are two factors. One is, of course, growth has come back after the first quarter of last year. Due to pandemic growth was very subdued, but since then the growth has picked up, not only for us, but for competition as well. Second one is, the growth also is largely in India. Offshore onsite percentage has decreased dramatically for us. Now onsite percentage is 24.3%, and it was around 27% four quarters back. It's a combination of both. One is the growth itself has picked up, and on top of it, most of the growth volumes are happening in India. Consequently, there is tremendous demand for talent and that's resulting in higher attrition. Okay. Thanks, all the best for the launch. Thank you. The next question is from the line of Rishit Parikh from Nomura. Please go ahead. Okay, thanks for taking my question. Just one from my side. Obviously offshoring as you said has improved significantly over the last year, right? If you could just help us understand the more longer-term impact on revenue growth and margins as a result of this. That's one. Just a second piece as an extension of the earlier question. Corporate tax rate increased in the U.S. from 21% to 28%. Do you see any impact on the budget? It's a long time away, but any earlier indication that you can provide, will that hurt budget sentiment in general? Thank you. Thanks for your question. This is Salil. Let me start. I think as you pointed out, we've seen a shift in the onsite-offshore mix, especially in the last year, as Pravin and Nilanjan were sharing. It's a huge shift for the last few quarters. Looking forward, in the medium term, it's difficult to say. I think there are several factors which will support it because it enables really the remote working to be applied in a broader context. There are other factors where there's a lot of digital transformation work that we engage from our digital centers, from our digital studios, and then our proximity centers that we built in Europe and the U.S., and those have huge amounts of demand as well. We don't have a sense today what will be this outlook going forward. There are both sides of what this can look like. At this stage for this financial year, given where the COVID situation is, my sense is, at least in the first few quarters, we will continue to see what we've seen in the last few quarters. In terms of the client spend, we have not seen any impact at this stage on the client IT spend with respect to the tax change. As Nilanjan was sharing, once the concept becomes converted into whatever regulation that is being put forward, we'll see if that affects it. At this stage, we've not seen any change from clients. Do you foresee a potential impact or still very difficult to say, given we're in the upcycling from a tech perspective? We don't have a way of understanding whether there'll be impacts from that specific point or not. However, the overall theme is very positive in terms of tech spend, as we were discussing in an earlier question response. There's huge amount of interest from clients on digital transformation, and we see that our market share is improving, and we have more and more connects with clients that we are gaining growth momentum on that basis. Okay, thank you. Thank you. The next question is from the line of Ashwin Mehta from Ambit Capital. Please go ahead. Hi. Thanks for the opportunity. Yeah, just one question. What's the currency assumption that we've taken for our margin guidance? We just give our overall margin guidance. We don't really say on how we model the currency. I think that's something which we historically do. Okay. Would it be more on a constant currency basis or say, compared to last year, or how should we think about it? Margin is always on a reported basis. All that is factored into our margin guidance. Okay. The second question was in terms of attrition. Typically, we've seen historically a bump up in terms of attrition once the salary hikes are rolled out. How should we think about the near-term trends in terms of attrition? In that context, how are we looking at utilizations which are running at historical highs? This is Pravin here. Given the high demand situation, attrition will probably be around this level for the next couple of quarters or so. On the utilization side, we are recruiting aggressively. We are also making hires from the campuses and so on. As we start getting in such off freshers into the mix, the utilization will come down. The current utilization of 87.7% is very high and not what we are comfortable with. Over the quarters, it will trend down. That's our plan. Okay, fair enough. Thanks a lot. All the best. Thank you. The next question is from the line of Mukul Garg from Motilal Oswal. Please go ahead. Thank you. J ust wanted to dig in a little bit on the margin guidance for FY 2022. Besides the impact of wage hike, how should we see the potential shift in subcon expenses? In Q4, it was running at a five-year high level despite continued increase or shift to offshore and build-up locally in U.S. Will there be a material change in the cost of third-party items for clients in FY 2022? It was around 3% level in FY 2021. Yeah. I think the subcon cost increase is largely coming out of the higher demand environment, like Salil said, 4.6% demand. Unlike in the past, we've seen also a subcon increase more towards offshore because of this higher demand and requirement, not that much on site. Of course, as now our recruitment engine kicks in, we get more attrition in pipe into control, looking at also the wage hikes as we see paring that down. This hopefully over the next few quarters, we can start moderating that as well. In the other part, regarding the third-party costs, I think they're very small in the overall mix as well. Really no color on where that will go. It's a very small part of our revenue mix. Sure. Salil, qualitatively, you have been repeatedly mentioning that the demand environment remains one of the strongest in a while for you. Now, if the broader macro environment holds on, and again, I'm not asking for a guidance, you think the opportunity for growth remains as strong as what you are seeing beyond near term? Or do you think scale at some point of time will start becoming a constraint? Yeah. Again, as we discussed earlier, the guidance is for this financial year. The demand environment and the technology spend is really very strong. There's also a lot of large enterprises are shifting their tech spend to improve connects with their customers, improve their supply chains, improve connects with their employees. It's becoming, in addition to cost on their PL, an investment as well. That gives us a lot of confidence that the tech spend on digital with large enterprises is looking very robust. All the capabilities we have built over the past several years positions us well to continue to benefit from it. Overall, my sense is this is a good environment. We are well-positioned in that space. The connect with clients on digital technology spend is in a very good place for Infosys. Sure. Thanks for answering my question and best of luck for FY 2022. Thank you. Thank you. The next question is from the line of Ritesh Rathod from Nippon India Mutual Fund. Please go ahead. Yeah. Can you speak something, are there any areas of spend which got cut back in post-COVID or pandemic and which has yet not come back, which can come back in coming years? This is particularly in key large verticals. Sorry, I didn't follow it. You mean from a client spend perspective or own internal spend perspective? Client spend perspective. In your key large verticals, are there areas of spend which got cut in pandemic, and which has yet not come back, which you think can come back in coming years? There, and Pravin might add, as Pravin had shared earlier, the several industries, for example, retail and manufacturing, saw some very early impact in Q1 last year. Almost every industry has each quarter improved their positioning, their spend. At this stage, most of those are back. We had overall a low or minimal exposure in that sense to some of the travel hospitality areas. Those will probably come back, but we don't have exposure to them. From our own industry exposure, most have come back through each quarter of last year. Pravin, if you want to add anything, please. Yeah, I think Salil has probably responded to the question. The only thing is, as you said, in some sub-segments we continue to see some distress. Even in those cases, clients are looking at some kind of spend, just from a resiliency perspective, and also in terms of coming up with new ways of engaging with the stakeholders, right? Even in those cases, the spend is coming back. Like for instance, in manufacturing, I talked about the sub-segments. It was one of the verticals which was majorly impacted. In the last couple of quarters, we have seen some spend come back, both in industrial and automotive segments. Whereas aerospace segment continues to be distressed. Our sense is it might take several quarters before we see normalcy in aerospace. Similarly, in the services side, travel and hospitality will probably take some time with multiple waves of pandemic happening. Even in those cases also, there is some amount of spend coming back as compared with what we saw three, four quarters back. Maybe your outlook on pricing, particularly within the digital segment, given the kind of value addition you are giving to the client, if you can give us, not next year, but more on a medium-term, is there a possibility of getting a better pricing year-on-year going forward? Let me start and then Nilanjan might also add his color on it. We think the digital capabilities that we are providing and working with our clients are really high-end and high quality. We are working with our clients to ensure that that becomes more and more visible. Over time demonstrate that value, which can convert to something on the pricing. As you pointed out, this is more a medium-term view for us as we start to demonstrate more impact on the digital areas. Anything you want to add, Nilanjan? No, I think you covered it well, Salil. Okay. Thank you. That's for now. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Hi. Thanks for that. Thank you everyone for joining us. We are extremely delighted with the full-year performance in FY 2021. 5% growth, which we believe is industry-leading growth in this market. Very strong margin performance for the year. All of our parameters, including free cash flow, dividend, share buyback are all pointing to extreme care and concern for the business, our clients, employees and shareholders. Looking ahead, we feel this is a strong year for us. 12%-14% growth, a really repositioned business focused on digital services where Infosys is recognized for these services. A strong outlook on margin of 22%-24% for the full year. Look forward to that being the foundation of yet another successful year for our clients, our employees, the company and the shareholders. Thank you everyone for joining, and catch up at the next quarter. Thanks everyone for joining us on this call. Look forward to connecting. Thank you very much, members of the management. Ladies and gentlemen, on behalf of Infosys, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.