Ladies and gentlemen, good day. Welcome to the Infosys Limited earnings conference call. As a reminder, all participant lines will be in the listen- only mode. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Mahindroo. Thank you. Over to you, sir. Thanks, Inba. Hello, everyone, welcome to Infosys earnings call to discuss Q3 FY 2023 financial results. Let me start by wishing everyone a very happy New Year. Joining us today on this call is CEO and MD, Mr. Salil Parekh, CFO, Mr. Nilanjan Roy, and other members of the senior management team. We'll start the call with some remarks on the performance of the company by Salil and Nilanjan. Subsequent to which we'll open up the call for questions. Kindly note that anything which we say that refers to our future outlook is a forward-looking statement that must be read in conjunction with the rest that the company places. A full statement and 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. We are delighted to share with you that our Q3 performance was strong with year-on-year growth of 13.7% and quarter-on-quarter growth of 2.4%. This in a seasonally weak quarter for us and amid a changing global economy. We continue to gain market share. Growth in Q3 was broad-based with most industries and geographies growing in double digits in constant currency. Growth in constant currency for nine months of FY 2023 was 17.8% compared to the same period of FY 2022. Our last deal value was $3.3 billion, the highest in eight quarters. With 32 large deals, this is the largest number of large deals in our history. 36% of this is net new. Our pipeline of large deals remains strong. Our digital revenues grew at 22% in the quarter at constant currency and are now close to 63% of our overall revenue. Our core services revenue grew at 2.4%. We are seeing growth both in both areas of our business, digital and core services. This is a testament to our industry-leading digital capabilities, including our Cobalt cloud capability and our industry-leading automation capabilities, both of which are resonating with our clients. Our large deals pipeline is seeing increased traction for automation and cost efficiency programs. Our results reflect our deep-rooted client relationships coupled with client-centric strategy, differentiated digital and cloud capabilities, strength in automation, and the ability to pivot our business rapidly to changing client needs. Our cloud revenues continue to have healthy growth this quarter. Our clients are focused on accelerating their digital and cloud transformation, both to grow and to become more operationally efficient. They trust us to partner with them through the complexities of managing this change because of our differentiated capabilities. Our industry-leading cloud offering, Cobalt, is playing a key role in helping them navigate their digital transformation. Two examples of this. Cobalt is helping accelerate business growth and resilience for a large telco by making their decision-making more data-driven. We're supporting a leading aerospace company by automation of their customer experience area, leveraging a modernized technology infrastructure, driving material cost efficiency. Strong growth as a company by stable operating margin at 21.5%. This was driven by healthy revenue growth and cost optimization benefits. Our operating margins for the first nine months of FY 2023 are at 21%, in line with our margin guidance. Our voluntary quarterly annualized attrition continues to decline steadily. It reduced by 6 percentage points sequentially to well below 20% for this quarter. We are encouraged by the immense confidence and trust our clients have in us. The signs around us around the slowing global economy are visible. Some areas, such as mortgages and investment banking financial services industry, telco, high-tech, and retail are more impacted, and that is leading to delays in decision making and uncertainty in spending in these areas. We are confident that the strength of our digital and cloud capabilities and our automation capabilities will continue to position us well in the market. We're keeping a close watch on the global economy. Driven by our growth of 17.8% in constant currency for the first nine months of FY 2023 and strong large deal value for Q3, we are increasing our revenue growth guidance, which was at 15%-16% earlier to 16%-16.5%, despite the changing global economic conditions. We are retaining our operating margin guidance for FY 2023 at 21%-22%. We anticipate to be at the lower end of this range. Thank you. With that, let me request Nilanjan to share other updates. Thanks, Salil. Good evening, everyone, and thank you for joining this call. Let me start by wishing everyone a very happy and safe 2023. Q3 was another quarter of resilient performance. Our revenues grew by 13.7% year-on-year and 2.4% sequentially in constant currency terms despite seasonal weakness. Most of our business segments and geos grew in double digits year-on-year in constant currency. Specifically, manufacturing grew by 36.8%, EURS by 25.9%, and Europe grew by 25.3%. Digital revenues constitute 62.9% of total revenues and grew by 21.7% year-on-year in constant currency. Core revenues saw another quarter of growth reflecting the accelerated client focus on cost takeout. Client metrics continue to remain strong with year-on-year increases in client counts across revenue buckets. Number of $50 million clients increased by 15 to 79. Number of $200 million clients increased by five, while number of $300 million clients increased by three over the same quarter last year, reflecting our strong ability to mine top clients. During the quarter, we added 134 new clients. Utilization excluding trainees reduced to 81.7%, reflecting seasonality and employees joining the bench post completion of their training. Onsite effort mix remains stable at 24.5%. Quarterly analyzed attrition continued to trend downwards and reduced further by another 6% during the quarter. This is the lowest quarterly analyzed attrition in the past seven quarters. Consequently, LTM attrition reduced to 24.3% as compared to 27.1% in Q2. We expect attrition to reduce further in the near term. Revenue growth was 17.8% in constant currency terms for the nine months FY 2023. Operating margin for the same period was 21% in line with the lower end of our full year guidance as called out earlier. Q3 operating margins remain steady at 21.5%. The major components of QoQ margin movement as follows. There were tailwinds of approximately 40 basis points due to benefits from rupee depreciation and cross currency, offset by lower benefits from revenue hedges. 70 basis points from lower cost, from cost optimization, including lower subcons. This was offset by headwinds of 30 basis points from higher SG&A and the balance 80 basis points due to seasonal weakness in operating parameters, higher third party costs, furloughs, et cetera. Q3 EPS grew by 13.4% in rupee terms on a year-on-year basis. DSO increased by three days sequentially to 68 days, reflecting higher billing during the quarter. Our balance sheet continues to remain strong and debt free. ROE increased by 2.2% year-on-year to 32.6%. Free cash flow for the quarter was $ 576 million, a conversion of 72% of net profits. YTD FCF was $ 1.8 billion, which is implying a conversion of 81% of net profits. Yield on cash balances increased to 6.3% in Q3. Q3 marked the 30th consecutive quarter of delivering positive Forex income despite a volatile currency environment. Consolidated cash and investments declined from $ 4.79 billion last quarter to $ 3.91 billion, consequent to $ 1.32 billion being returned to investors towards interim dividend and buyback. We initiated the buyback on December 7th, and till date have bought back 31.3 million shares, worth INR 4,790 crores, or for 51.5% of the total authorization of INR 9,300 crores at an average price of approximately INR 1,531 per share compared to the maximum buyback price of INR 1,850 per share. Coming to segment performance. We signed 32 large deals in Q3, which is the highest ever. TCV was $ 3.3 billion, the highest in the last eight quarters, with 36% net new. Seven large deals were in retail, six each financial services and communications, five each in EURS and manufacturing, two life sciences, and one in high-tech. Region-wise, this splits by 25 in the Americas, five in Europe, and two in the rest of the world. Growth financial services was impacted due to higher than normal furloughs and some specific project closures. Deal pipelines continue to be strong and oriented towards cost takeout and tech cost transformation. Our competitive position in the industry, as demonstrated the past years, remains very strong. Retailers are seeing uncertainty on consumer spending as a result of high inflation, high interest rates, and softer economy. However, at the same time, direct to consumer and digital commerce are opening up many new opportunities on the back of our growing presence in leading e-commerce platforms and, also our very own Infosys Equinox. We had healthy deal flow in the communication segment along with continued steady pipeline. However, cost pressures and economic concerns continue on the client side, impacting discretionary budgets. Energy, Utilities, Resources, and Services segment reported strong growth along with healthy level of large deal wins during the quarter. The deal pipeline is strong and on increasing trend versus the previous quarter, giving medium term growth visibility. Manufacturing segment continues to be robust, supported by healthy pipelines of deals in both traditional and new technology areas. We are helping clients across engineering, IoT, supply chain, cloud ERP and digital transformation, including helping clients accelerate their journey to the cloud. We continue to see caution around budgets and spending for consumers in the high-tech segment, especially around discretionary spend areas. For digital service capabilities in quarter three, we have been ranked as leader in seven ratings for our cloud services, digital engineering services, and Salesforce implementation services. We have also been positioned as a major player in seven ratings for our IoT and engineering, security and automation services. We believe our structural levers for medium to long term growth of industry remain intact, and Infosys is well positioned to support its customers in their transformational journey. With strong r evenue performance in the first nine months of the year. The revenue guidance for FY 2023 is changed to 16%-16.5%. Operating margin guidance band remains at 21%-22% for the year. As mentioned previously, we expect to be at the lower end of the range. With that, we can open the call for questions. Thank you very much. We will now begin the question and answer session. Participants who wish to ask a question may press star and one on their touch-tone phone. If you're using a speakerphone, please pick up your handset while asking a question. This is required to ensure optimum audio quality on the call. Should your line have any disturbance, you may be asked to return to the question queue if you do not have a clear connection. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Moshe Katri from Wedbush Securities. Please go ahead. It looks like Mr. Katri's line has dropped. In the meanwhile, we'll move to our next question. That's from the line of Nitin Padmanabhan from Investec. Please go ahead. Yeah. Hi, good evening, and thank you for the opportunity. My question was around the increase in cost of software packages that's up by almost $69 million sequentially. How should we think of this cost? Do you think it'll this incremental $69 million will be a sticky number out there? Or, do you think it sort of represents a headwind on a going it sort of comes off going forward? Is this, sort of a pass-through in nature? That's the second sort of clarification, on the same thing. Thank you. Nitin. I think these, the $69 million is a combination of software, other deals which we do, which have, you know, DaaS services, et cetera. It could be infrastructure. These are part of our integrated services offering, right? These come with both a manpower component, and sometimes they also come with, you know, an attachment of these services. That's the way do we do it. It's an integral part of our service offering. I think, you know, looking ahead, we'd have to see where we end up for the quarter four. I think this is part of our overall offering, and it's actually giving us traction in the market in many of our service lines. Sure. There is this. It is a pass-through in nature in a way. Is that correct? Basically, at least earlier in the past, you had suggested that the new level would sort of sustain. In the new operating model, this is sort of a sticky thing that continues. Is that fair? Long term? An integrated offering. Like I said, this is integrated with our services offering. They are not just standalone deals we do. They come with the service element as well, right? That's the way you have to look at these deals. Sure. Fair enough. Thank you so much and all the best. Thank you. Our next question is from the line of Bryan Bergin from Cowen. Please go ahead. Hi. Good evening. Thank you. I wanted to just clarify some comments around demand. I'm curious if you would say there's a material change in the way that clients are behaving now versus three months ago when you reported 2 Q. The areas you're citing weakness, I think were the same ones, the pockets of weakness that you talked about. I'm really just trying to understand if you think there's been a real change to spending and contracting there or more broadly the same. Hi. Thanks for the question. This is Salil. What we are seeing today, in addition to what we said last quarter, for example, in financial services, beyond mortgages, we see the investment banking side of our clients as well showing an impact of the economic environment, and in telco, hi‑tech, and in retail in some clients. We don't see a material change, though there are financial services one more area that we see some of the impact coming in on. Having said that, we have, for example, clients in energy or utilities or manufacturing. Those industries are still looking quite strong in terms of their outlook. Okay. Okay, that's helpful. On the large deals, renewals were a big component of that TCV, and you've also cited benefits from consolidation in the commentary. Are you taking any different approach as it relates to proactive renewals to try to drive more vendor consolidation opportunities? In large deals, as you pointed out, we've had a very strong result, $3.3 billion and 32 deals. We see the focus which we had on transformation continue, but outside of the industries that we discussed before, where there's some impact, we see huge cost automation, cost efficiency plays across all industry segments. There we have, we believe, very strong capability, which is helping us. Within all of those discussions, we see areas where there's vendor consolidation. The approach we've put in place is similar to what we've had in the past. However, we see given a market share gain over the last several quarters, many clients are looking at us when they start to narrow their list in the vendor consolidation. Okay. Thank you very much. Thank you. The next question is from the line of Apurva Prasad from HDFC Securities. Please go ahead. Good evening. Thank you for taking my question. Salil, I'm not asking for any guidance for 2024 or ahead, but would appreciate your comments and generally your, the visibility that you have for the year ahead. How different would it be versus typically this time the year? Perhaps any comments on pipeline or pipeline -to- TCV conversion? Thanks for the question. I think, as you rightly said, we are not in a position to provide guidance for the year which starts in April. Pipeline, we have a very strong large deals pipeline. We are feeling good that the pipeline is at a level which is in good shape. We see good traction of large deals, and we've seen more and more sort of relevance connect with our clients on the cost efficiency and automation plays. In the areas, in the industries, where there's economic support, a good traction of Cobalt and the digital transformation plays. The pipeline is looking quite good today, based on what we see in the deal flow. Got it. Salil, you called out IB, mortgage and parts of telecom, hi‑tech and retail, but is there any vertical trend for deals, between transformation, the ones that are transformation in nature and deals that are more on the cost optimization, across verticals? A second part to that is, do you see any moderation in new client acquisition channels, with more vendor consolidation deals happening? This was something which had very strong traction more recently. On the first part, we see some of the growth transformation plays impacted in those industries, that we talked about, for example, mortgage, investment banking, retail, high-tech, et cetera. The cost efficiency plays everywhere. We see that, even, in programs where let's say, in the energy sector or manufacturing. There and in many cases we see essentially clients looking to use the cost efficiency to fund the transformation, because in many cases they still need to drive a digital or cloud transformation to keep their market growth or their client connect, customer connect, going. That's how we see that play right now. Salil, on the other part on the new client acquisition with more vendor consolidation deals. Yeah. There on new, sorry, on new clients we've seen, while we don't disclose the number, we've seen a very good new client acquisition in Q3 and vendor consolidation are discussions where we. There's no contradiction in those two at least. Those are carrying on within our sales expansion. New client acquisition continues to be important as well. Vendor consolidation, what we are seeing is on several discussions, clients are looking, especially if they have six or seven vendors, they want to narrow it down to one or two or three. We are appearing to be beneficiaries in quite a few of those discussions. Got it. Thank you and all the best. Thank you. Thank you. Our next question is from the line of Mukul Garg from Motilal Oswal Financial Services. Please go ahead. Thank you. Salil, to start with on the- Mukul Garg, I'm sorry to interrupt. Your audio's a bit muffled. If you're on a hand speaker phone, please switch it to handset or something or your phone. I hope this is better. Yes, sir. Thank you. Sure. Salil, I had two questions. First on the, you know, the strong TCV wins this quarter. You know, can you at least like, you know, qualify how much of the strength was on account of share gains which you guys have made versus the resilience which is there on the technology spend? Because, you know, if you look at the broader market commentary and, you know, you have also highlighted retail as one of the weaker areas, whereas you got seven large deals in retail. If you can just help us break out these two to get a sense of the deal win momentum. There, I'll start with that. This is Salil. I think, the large deal momentum for us is really a function of what we've seen that we've put in place. We've still is within this mix of $3.3 billion have digital transformation deals, and we have cost efficiency automation deals. What we mean by some of the industry call out, for example, retail or telco, is there are some clients, so it's not everyone in that industry, but there are some clients which are getting impacted by the economic environment. We've been quite focused. We have a broader portfolio. For example, you saw that in retail, we had those large deals. There, it's a mix between transformation and cost efficiency automation. Many times when clients feel an impact of the economic environment, there might be a greater need for the cost efficiency play as well. We are ensuring that both of those engines continue to work well with our clients. Right. You know, another question was on the margin side. You know, you guided for margins, you know, in 21-22 band with, you know, margins towards the lower end. Can you just help us with the, what are the pulls which you are seeing on profitability given that the supply scenario is easing rapidly? Is there some portion of the pressure, you know, which is on account of the higher share of cost efficiency deals which you guys are winning with initial ramp-up cost? Because if you look at Q4, you know, obviously Q3 also had the pass-through business which got impacted. I'm assuming, you know, as Nilanjan mentioned, there was some seasonality into that. Yeah. I think, like we mentioned, the reason for Q3 margins, we've already given the breakdown. As we look ahead to the levers which we have, one is of course utilization, right? You've seen that at I think 81.7%, this is probably. I think at least in the last three to four years since I've been here, has been the lowest. That's one lever which we'll have. As we start putting these pressures onto the production floor, right? You will get a pyramid, automatically a pyramid benefit, right? That'll be a, you know, double whammy impact for us. We'll also have subcons. Today we've dramatically reduced our subcons. Literally in three quarters we were 11%+, we are 8.7%. Historically, we've been at 7%. If you look at our pricing has been quite stable and historically, this was one lever we used to always drag down. Repeatedly we used to get discounts on renewals, et cetera. As of now, we haven't seen that at all. We continue to push with clients on where all we can get price increases. These are things, automation in terms of our own workforce, continuing to operate that, and that's a steady lever which we have. We are continuing to see these levers in our armory as we look ahead, and we'll continue to deploy them. Right. Is it fair to assume that, you know, we should see, you know, at least better profitability in the next quarter given that we have a number of levers, you know, with us? We've given a guidance for the year. You've seen, you know, in the first nine months and that should give you a good indication of, you know, a good Q4 beat. Fair enough, sir. Thanks for taking my question. I'll get back into the queue. Thank you. Our next question is from the line of Sudheer Guntupalli from Kotak Mahindra Asset Management. Please go ahead. Good evening, gentlemen. Thanks for the opportunity and congrats on a good quarter. Salil, during some of the previous macro uncertainties like Brexit, within a few weeks of the vote, we had seen some of our large clients canceling and ramping down projects. This time even on the tough comps, the pace of growth moderation is much lower than what many people have been anticipating. Many forward-looking indicators like deal wins, pipeline, and CIO surveys still continue to be very strong, even 11, 12 months into this macro concerns. Having seen the previous three to four macro downturns, how do you nuance the current cycle, especially on the variable of the resilience of IT services spends? Thanks for the question. It's always difficult to sort of compare across cycles. From the perspective of Infosys, my sense is what you mentioned earlier, which is, we are still seeing the pace of change when there is change within an industry or a client, to be not rapid. We are also seeing that the opportunities for cost optimization and efficiency are expanding within the work that we are doing. In many ways, we are in a good position to be able to work on both sides. While it's difficult to predict what the where the situation in the economy will evolve, we feel quite balanced. Our sales team is quite agile. We've pivoted quite quickly and developed various sort of points of view on different efficiency scenarios in different industries, that we feel comfortable that the pipeline will is looking good at this stage, and we will continue to work on that. Sure. Thanks, Salil. Is it a right understanding to say that, we are now in a much better position, to navigate this macro weakness, probably through you know, more than enough compensation from the cost efficiency deals and vendor consolidation deals? Is that a correct interpretation? The way we see it is, we have both components of, at least the two large components of our clients are looking for. We have good industry-leading capability. It's really a function of how, you know, a specific industry or sub-industry or a client will evolve. We have positioned ourselves to make sure that we can support our clients in that area. Sure. Thanks, Salil. All the best for the future. Thank you. Our next question is from the line of Moshe Katri from Wedbush Securities. Please go ahead. Hey, thank you and Happy New Year, and congrats on strong execution in a pretty tough environment. I have a three-part question. First, March guidance upgrade is pretty unusual from a seasonality perspective and given the macro concerns. It seems that you have better visibility. Now, can you share any views on the budget cycle itself? We were kinda concerned over slippages maybe a month or two, budget delays. Are you seeing any of that or you think the budgets will be awarded or finalized as, you know, on time this time? Thanks, Moshe. This is Salil. On the budget, so far, we've seen in some clients and especially in the industries we've called out, some areas where there's been slowness in deciding or some sort of changes, especially on some discretionary work. We mentioned high-tech, for example, or mortgages or bank investment banking. All of those are ones that we mentioned before. We don't see a broad-based change. Equally, we do see good sort of, let's say, behavior with the budgets moving ahead, as in the past, with energy, utilities, manufacturing. It's not like a one answer, but it's a little bit by industry or sub-industry, somewhat different. Understood. In the press conference you mentioned that about 1/3 of your new or 1/3 of TCV came in from new logos. Can you remind us, is this within the range of what you've seen in the past in terms of mix of new logos versus renewals? Sorry. I'm sorry. Are you referring to large deals, $3.3 billion that was 36% net new? That's in the range of where we do some quarters it's lower, some quarters higher, but not this number is not unusual. Okay. The final question is for Nilanjan. When we met in Bangalore back in December, you pointed to pivot in the nature of the new deal flow towards, as you said, cost optimizations, vendor consolidation. Obviously this is what you're saying. Are these deals typically less dependent on clients' budgets given the fact that you're kind of taking over a specific function with the objective of kind of reducing delivery costs? Is there any difference in profitability levels here in terms of these projects versus some of those projects that you've been doing in the past few years? Thank you. On that, I think, the way you describe it, these are not fully correlated with the budget of a client. In many instances, these are areas where, given the evolving economic situation, clients are looking to reduce their tech spend across the enterprise, in many cases use some of that savings to fund transformation programs. It sometimes gets coupled with a vendor consolidation. Let's, you know, there are clients who may have five or six vendors, and when we benefit from the consolidation, we see tremendous efficiency that can be created. Our automation tools become quite useful. We've typically had automation on our ongoing programs, which give an annual benefit. When we see something of scale where we've not been involved earlier, we have an ability to provide a much greater benefit. In aggregate, the profitability of these deals is within the range of the rest of our company. Especially as we more and more over time leverage the automation tools and our capabilities, we see these becoming stable, high profit deals. That's very helpful. Thank you. Thank you. Our next question is from the line of Pankaj Kapoor from CLSA. Please go ahead. Yeah. Hi. Thanks for the opportunity. My first question is on the smaller deals which are less than, say, $50 million TCV. If you can give some qualitative color on how your win and pipeline in that basket has been moving. Is it higher, lower versus, say, what it was six months back? On that, thanks for the question. We don't typically disclose much about those deals. Overall, we have a good, healthy pipeline where we publicly disclose more about the larger deals. Understood. Salil, my second question is on these cost takeout deals. Can you give some sense on how the pricing in such deal is behaving? Are you seeing the pressure there more than normal, either because clients are pushing for more discounts or because of competitive intensity? There. The pricing in Q3 we've seen quite stable within the mix. We've not seen a change. Typically, it's really a function of, you know, what type of focus that clients have, which industry they're in. We've not seen, at least in Q3, in the deals that we have closed, in the discussions we've had, a big change on that. It looks stable at this stage. Understood. Thank you and wish you all the best for 2024. Thank you. Thank you. Our next question is from the line of Ankur Rudra from JP Morgan. Please go ahead. Hey, thank you, and congrats on the headline, strong numbers there. Just a couple of questions I wanted to understand, Salil, a bit better. I think one of the comments that you made earlier, and I'm gonna try and puncture this question a different way now. You mentioned in previous calls over the last year that the mix of deals was changing in favor of smaller deals. You know, that was showing up in strong growth despite headline TCV declining. A-Ankur- Do you think that's still the case or has that changed? Ankur, can you hear? We couldn't hear anything, Ankur. You'll have to go on a handset or something. We couldn't hear. Your voice was very muffled. Okay, is this better? Yeah. Okay, thank you. I was saying that, you know, I'm gonna try and puncture this question in a different way. You'd mentioned in previous calls that the mix of deals was changing in favor of smaller deals, and, that's why the headline TCV was declining, but growth was still quite healthy. This time, of course, both have done well. Do you think the mix of deals is still the same as it was in the last year before this quarter? Hi, Ankur. Thanks. This is Salil. I'm not clear on the mix of deals from the previous discussions. Just looking backwards, we see the mix of deals remaining in good shape across the board. There are some quarters in which there are, you know, a disproportionate number of larger sized deals. In general, we don't have a pattern in that, at least that's evident in Q3 here. Okay. All right. The next question I wanted to check, Salil, again, was on the U.S. business. The headline growth seems to have sort of slipped down to close to, you know, low double digits, whereas the previous growth has been led by very strong performance in Europe and manufacturing. Do you worry about the U.S. business is sort of slower than Europe, which is not the case with the rest of the industry and many of your peers? There, Ankur, our view is, you know, we've had a very strong growth in U.S. at over 10% in Q3 constant currency. Europe of course has been a standout in the growth that we've had. We've seen the traction, the pipeline, the work remains pretty strong as we've described earlier across the two dimensions, transformation and cost across the geographies. If you look at the economic situation, we do see the European side a little more impacted, but we see good traction on the pipeline on both sides. We've had a very successful Europe program over the last 18, 24 months, and that's also helping us with the growth in this quarter. Understood. Ankur, just to add, I mean, out of our 32 large deals this quarter, 25 are actually in the Americas, so- Okay. I think just to reassure that we have a very strong pipeline there. Understood. Maybe a last question for here was on pricing and contract profitability in the projects you're winning right now, especially the large number of big deals this time you signed. How is that trending? Is that improving, staying the same or, you know, maybe becoming a bit lower than before? These are for the new deal signings? Yeah, the new deal signings this quarter. How is that trending versus before? I don't think anything unusual. Yes, absolutely new deals. I mean, since many clients want productivity, efficiency is upfront, so we always see that, you know, the initial part of these new deals will be lower than portfolio margins. Like we have shown in the past, you know, at the same time our existing deals, tenured deals are reaching higher profitability and that offsets some of this pressure which is coming from the newly signed deals where margins will typically be lower. Nothing unusual, on the trends. Okay. Appreciate it. Thank you for the color and best of luck. Thank you. Our next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Hello. Yeah, hi. Thanks for taking my question and congrats on a solid quarter. Salil, my questions, I have just two questions. One, I wanted to basically get an idea on, I mean, we've seen attrition coming down in this quarter, quite sharply and as you mentioned in your opening remarks as well. I mean, do how do you see the trend of this attrition going forward, of course downwards, and how do you believe the benefit of this could actually percolate to our margins? Again, not asking for a sort of objective guidance of a number. But in terms of the direction, do you think it is going to aid our margins? Do you think most of the impact of this is already built into the numbers that we have currently? My second question was mainly on the geography of Europe. Just wanted to pick your brain on how the conversations with the clients are happening in that part of geography. Specifically, if you could maybe break up between continental Europe, Eastern Europe, and maybe U.K. Which pockets of those geography do you think are looking more softer or is there more of delayed decision making in that part of the geography? Okay, I'll take the first one on the lower attrition. Absolutely, we are seeing this coming down. L ike we said, even in the future, in the next quarter, at least until what we are seeing the latest initial figures. We are seeing this coming down. Absolutely this should have a positive impact on margins. I mean, during the year, you know, whether it was stretch hiring on laterals, whether it was the compensation hikes we did. You know, that really impacted our year-on-year margin story. As looking ahead in attrition, as an impact both of the macroeconomic and also of the internal policies we are doing in terms of promoting within, et cetera, should benefit us looking ahead. On Europe, I think the way we see some color f irst 25% of our business is Europe. There are a few countries... In the countries we operate in, we see some slowing. Some economic impact in Germany. There is some in the U.K. Less so in the Nordic countries at this stage. Overall, the coloring is a little bit more by the industries that we mentioned earlier in the call, which are across sort of on a global perspective. Relatively, Europe seems a little bit more impacted today than certainly the U.S. Got it. Got it. If I can just maybe drill down just a little bit more? Any specific color that you can provide on European retail and European manufacturing segments? There, we don't necessarily provide that much sort of granularity. The sort of same comments on a global level on manufacturing that we mentioned earlier. For energy, which is looking stronger, and more sort of, let's say attention to the economy, on retail, in this case. Got it. Got it. The softness in retail, do you believe it is as of now confined to the retail stores and would maybe percolate and can you with your, in your discussions with clients, do you see percolating down to the CPG companies and probably other ones as well? Or as of now it's limited to the more of the retail stores that we're talking about? Within retail, we've not called out any specific sub-segment at least in our commentary. We've not gone down to that granularity in our public statements. Got it. Great. Thanks for taking my questions, and wish you all the best. Thank you. Thank you. Our next question is from the line of Sameer Dosani from ICICI Prudential Asset Management. Please go ahead. Thanks for the opportunity, Salil. Just one question around Europe again. If I look at your commentary around regions in North America versus Europe looks more cautious overall. If I look at performance for last few quarters, I think Europe has been performing better than North America as a whole. Do you think this impact of, you know, the cautiousness is yet to reflect in the numbers and you would see more, you know, this growth trajectory would be a little more affected going forward? Your thoughts around that. Thanks. I think on Europe, there is two different things. We've had a very strong Europe program, both on transformation and cost over the last 18, 24 months. Some of that comes through in the benefits we see even in this quarter. The commentary or the view is more to share what we're seeing just in the economic activity. Again, you know, we see the coloring more by industry, which is a little bit global, as opposed to just specifically across the board in a geography. The outlook, I mean, do you think the outlook that you're giving will reflect in the numbers in the end of or in the next few quarters? I mean, because, till now it has been an outperformer versus our overall portfolio. Thanks. There, you know, we've given a view on outlook only up until March this year. We will come up with guidance for the next financial year at the end of this quarter. Okay. That's all myself. Thanks. Thank you. Our next question is from the line of Girish Pai from Nirmal Bang Equities. Please go ahead. Mr. Girish Pai, could you please unmute your line and go ahead with your question? As there's no response from this connection, we'll move to our next question. That's from the line of Rahul Jain from Dolat Capital. Please go ahead. Yeah. Hi. Thanks for the opportunity. Firstly, you know, we commented that manufacturing is doing well for us, but actually the vertical is doing exceedingly well in European region where it's up 50% YoY, but it's much weaker in the U.S., where it's up 7% YoY. What is that we are doing so well in Europe? Is it led by a few very crucial deal, or it's more holistic and why it's different in the U.S.? Thanks for the question. Within a industry, we don't typically comment on a client or multi-client level activity. We do have a good traction as you pointed out within our European business in manufacturing. Okay. Another thing was on digital revenue. For the quarter, it's up 17% YoY or let's say CC would be 20% or 21%. This is like, slowest ever since we've been giving this time series on digital revenue. Is this a bit worrying or is it more because of the furlough and other factor? There, it's partially due to some of the changes that we were discussing earlier on, where in certain industries and sub-industries we see much more attention to the economic environment. There we see the some of the digital or transformation work being slower where we see much more focus across the board on the cost and automation plays. Got it. Lastly, if I can. The margin impact furlough was too high in the quarter. How has this shaped up in the current month? Are these clients resumed to normalcy now or the pain remain extended in Q4 as well? Yeah. We'll have to see how it goes. It's a bit too early to say what's going to be the Q4 outlook on that. Okay. That's it from my side. Thank you so much. Thank you. Our next question is from the line of Girish Pai from Nirmal Bang Equities. Please go ahead. Thank you for the opportunity. I just wanted to understand, with cost optimization deals more in the pipeline or, and in the TCV, has the average deal tenure gone up in the last couple of quarters? Thanks for the question. We don't typically comment on the deal tenure in terms of public statements. Okay. You said that the third party items have given you a lot of traction in terms of getting these. Now, the number has gone up from about less than 2% of revenue to almost like I think this quarter is, in this quarter it's come to almost like 2.5% of revenue. Do you see this number going up, in the coming quarters and years? Like I said, we, our offering is quite holistic. In some cases like I said, it's, the many of the cloud-based deals come with services. They could be licenses, they could be DaaS services. More and more integrated deals and when you go to IT as a service, you know, which is really sort of very holistic. You could see this. I mean, this will vary from quarter-to-quarter. You could have some quarters which are up, but there's nothing to say that in the long run where this is going. It's a bit early to say that. Okay. Lastly, from a competitive landscape perspective in the vendor consolidation deals, who are the ones losing out? Are these the global MNCs or these are typically Tier 2 vendors? Again, on those, we don't specifically comment on where we're getting the benefit of the consolidation. We are seeing some benefits coming through with large clients. Well, thank you very much. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference back to the management for closing comments. Thank you. Thank you everyone for joining us. This is Salil. Fantastic to have our Q3 close out. 13.7% growth, 21.5% operating margin. $3.3 billion in large deals. Very, very happy with that outcome. We can see guidance increase on our growth for that. And we can see both sides of our business on transformation, digital work and core services, cost automation working well. We feel good with the current environment and how we can play and support our clients on both sides. Thank you all for joining us and look forward to catching up during the quarter. Thank you. Thank you. Ladies and gentlemen, on behalf of Infosys Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.