Good day, and welcome to the Infosys Earnings Conference Call. 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. Sandeep Mahindroo. Thank you, and over to you, sir. Yeah. Hello, everyone, and welcome to Infosys Earnings Call for Q2 FY24. Joining us here on this call is CEO and MD, Mr. Salil Parekh, CFO, Mr. Nilanjan Roy, and other members of the leadership team. We'll start the call with some remarks on the performance of the company for Q2, followed by comments from Salil and Nilanjan, subsequent to which we'll open up the call for questions. Kindly note that anything 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 the 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 afternoon, good evening, good morning to everyone on the call. Thank you very much for joining us. We've had a strong quarter in Q2. Our growth was 2.3% quarter-on-quarter and 2.5% year-on-year in constant currency. Our operating margin was at 21.2%. Large deals was of the highest ever for us at $7.7 billion, and 48% of this was net new. Our Q2 large deals include four mega deals. It does not include the MOU we signed and announced for $1.5 billion. We see that with our large deal wins in the past two quarters, we are winning market share in the area of cost, efficiency, automation, and AI. This is a testament to our strong position as partner of choice for clients. With a clear focus on client relevance, as the economic environment changed, we rapidly pivoted from delivering transformation projects to also delivering pro-productivity benefits and cost savings at scale. These large and mega deal wins help us to build a strong foundation for our future. We continue to see the overall environment where digital transformation programs and discretionary spends are low and decision-making is slow. This is impacting our volumes. The adoption of Topaz, our generative AI capability set, is helping us deliver more value and to increase market share. We're currently working on over 90 generative AI programs. Our work is with proprietary and open source large language models. We continue to make investments in generative AI as we look to help our clients navigate the way forward with deep capability. We've trained 57,000 employees in generative AI. We've announced the launch of our compensation review program for all employees, effective November 1. Our margin expansion program is being driven comprehensively across the company. We have 5 areas of focus: pyramid, automation, critical portfolio, indirect cost, and value, and it has 20 specific tracks within these 5 areas. We are delighted to welcome Rafael Nadal and Iga Świątek as our brand ambassadors. We are thrilled to be recognized on Kantar's list of most valuable global brands at number 64. With the continued reduction in digital transformation programs and discretionary spend and the ramp-up of our large and mega deals towards the end of our financial year, we are changing our growth guidance for this financial year to be growth of 1% to 2.5% in constant currency. Our operating margin guidance for the financial year remains unchanged at 20%-22%. With that, let me hand it over to Nilanjan. Thanks, Salil. Good evening, everyone, and thank you for joining the call. Q2 revenue growth was 2.5% year-on-year in constant currency. Sequentially, revenues grew by 2.3% in constant currency and 2.2% in dollar terms. While we saw continued softness in underlying volumes, revenue for the quarter was supported by stronger growth in the balanced portfolio and improved realizations from one-timers. H1 revenue growth was 3.3% in constant currency terms, and operating margins were at 21%, which is the midpoint of our guidance range. Highlight for Q2 was the large deal TCV of $7.7 billion, of which a sizable 48% was net new. Consequently, our H1 large deal TCV is at $10 billion, which has already exceeded the total large deal signing for FY 2023. I will talk about it in more details later. As announced in the previous quarter, we have launched Project Maximus, which is a margin improvement plan across 5 pillars and over 20 tracks. This program has been well received across the organization, and we have been able to identify several new opportunities across the pillars. We have also seen some early benefits in some areas like utilization and optimization of overheads. We remain confident that this program will create a more meaningful impact on operating margins in the future. Operating margins for Q2 were 21.2%, an increase of 40 BPS sequentially, bringing H1 margins to 21%. The increase in operating margin sequentially was due to 0.5% from cost optimization benefits, comprising of higher utilization, pricing, et cetera. 0.3% from revenue one-timers, 0.1% from rupee depreciation, offset by 0.5% increase due to third-party costs, salary related and other items. Client metrics remain strong, with the number of $50 million clients increasing to 80 and $100 million clients at 39, reflecting our strong ability to mine top clients by providing them multiple relevant services. We are rolling out FY 2024 compensation hikes for employees effective November 1. Headcount at the end of the quarter stood at 328,000 employees, a decline of 2.2% from the previous quarter. Our focus on improving operating efficiencies has resulted in an improvement of utilization, excluding trainees, from 81.1% to 81.8%, which we believe has room for further optimization. Long LTM attrition for Q2 reduced further to 14.6, while quarterly annualized attrition was flat sequentially--flattish sequentially. Fresh free cash flow for the quarter was robust at $670 million, and the conversion to net profit for Q2 was robust at 89%. Our unbilled revenues dropped for the second consecutive quarter, and consequently, this has partly led to an increase in DSO by 4 days sequentially to 67. Consolidated cash and equivalents stood at $4.2 billion at the end of the quarter. The board announced an interim dividend of INR 18, an increase of 9.1% when compared to last year. EPS grew by 1.7% in dollar terms and 4.6% in rupee terms on a year-on-year basis. Yield on cash balances was 6.7% in Q2. ROE was 30.9%, an improvement of over 8% under the current capital allocation policy started in FY 2020. We had an excellent outcome in our large deal wins, thanks to our strong client relationships and the relevance of our service offerings. We signed 21 large deals in Q2, including 4 mega deals. As mentioned, the total large deal TCV was $7.7 billion, with a strong 48% net new. We signed 6 large deals in retail, 5 in manufacturing, 4 in telecom, 3 in EURS, 2 in life sciences, and 1 in URS vertical. Region-wide, we signed 12 in America, 8 in Europe, and 1 in ROW. Coming to vertical segment performance, outlook continues to remain uncertain in financial services. Sector with slowdown in areas like mortgages, asset management, investment banking, cards, and payment. Q2 growth was impacted by spend reduction in some large clients, which was partly, partially offset by ramp-ups of large deal wins in areas like cost optimization and vendor consolidation. We remain cautiously optimistic about medium-term outlook due to the movement to cloud, led by increased need for real-time insights and analytics. Growth challenges in communication sector continue, coupled with increasing OpEx pressures. Risks of inflation, high interest rates, and supply-demand imbalances are creating near-term uncertainties. Delays in decision-making continues. Our strong large deal signings and pipeline will help support growth in medium term. The recent deal with Liberty Global reinstates our positioning as a leader in partnering with clients to provide significant savings as well as innovative ways to transform the landscape. US clients are taking a conservative approach to discretionary spend, and the trend is likely to continue through the year. In energy, spending remains cautious due to the economic slowdown, with focus on cost takeout and ROI. Utilities, especially in North America, continue to feel the pressure from high interest rates, resulting in delays in capital-intensive programs. European utility players are continuing to make investments on legacy modernization. While the external environment continues to be volatile, manufacturing sector continued to show double-digit growth year-over-year in Q2. Our capabilities in areas like digital transformation, cloud ERP, supply chain, smart factory, et cetera, are resonating well with clients, resulting in benefits with vendor consolidation, in turn leading to stronger deal signings. While pressure on discretionary spend continues, there are opportunities in areas like infra, transformation, cost consolidation, et cetera, which is resulting into stronger pipeline. In the retail segment, budgets continue to remain tight, with clients continuing to focus on budget consolidation, cost, and efficiency. Interest on GenAI is growing, and clients are evaluating our Topaz offerings to modernize the enterprise and refactor, reengineer, and deploy code. While we had a very strong sequential growth in Q2, the underlying softness in volumes and discretionary spends continue. We have revised our revenue growth guidance for FY 2024 to 1%-2.5% in constant currency terms. Our deal signing and strong pipelines lays the foundation for acceleration and growth beyond FY 2024. We retain our margin guidance band for the year at 20%-22%. 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 their 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 question queue assembles. The first question is from the line of Brian Bergin from Cowen. Please go ahead. Hi, good evening. Thank you. So I wanted to just start with the growth guidance reduction, and I'm trying to understand if the reduction is more due to the delay of the large deal ramps versus what you had expected three months ago, or if it's more due to incremental volume cuts and other program efficiencies? Hi, thanks for the question. This is Salil. I think it's a combination of those points. There's the way large programs start off, there's delays in starting them. There was also, as we were signing these deals, the cycle was a bit longer in closing them, so that had a bit of slowness. And we are seeing discretionary spend which is coming down, and we saw that continuing on transformation programs being slow, that continuing on in this quarter. So it was a combination of those points. Okay, appreciate the color. Then just on margins, I'm understanding you have the wage increment that you've just announced here, but you also have margin tailwind through Project Maximus. So can you give us some color on where you're finding comfort within the margin range that you affirmed here today? So I know you're roughly at the midpoint year through the first half. Do you expect to be above or below that as you go through the second half? Yeah. So like I said, we had a good quarter two, and as I explained in my margin walk, we nearly had a 50 basis points improvement from our Project Maximus on cost optimization. And that gives us comfort for the rest of the year, and that the program is, of course, this is a much longer program, which will take not only into this year, into next year as well. We also realize that we have, you know, apparent inefficiencies. Our utilization is still low, so these will go and help us and of course offset the wage hikes, et cetera. So we have a good program over the next, you know, 18 months to see where we end up. Of course, our aspirations continue to be that to improve margins from where we are presently. Thank you. Thank you. The next question is from the line of Kawaljeet Saluja from Kotak. Please go ahead. Hey, hi, thank you. You know, I have a couple of questions. My first question is, that can you quantify the revenue one-timers? And, you know, are these revenue one-timers in third-party items bought for service delivery to clients, or those are separate? You know, through the week, in the margin walk, we talked about 30 basis points impact on margin from revenue one-timers, so it's going to be around that figure or slightly more than that. So these are largely will fall through straight to margin. What was the second part, Kawal? Okay, the second part of the question is that, can you detail out the verticals to which the mega deals belong? And, you know, the other question related to the deals, is that normally you expect the direction of revenue growth and the deal wins to synchronize, whereas actually they are moving in the opposite direction. So what needs to change for the synchronization to happen again? Yeah. So, Kawal, we don't give out, you know, which segments the mega deals, you know, are falling under. The second part was you're saying, where will revenue and the large deal announcement synchronize? Is that the question? Yeah, yeah, absolutely. I mean, they seem to be moving in different directions. I mean, you know, I mean, with the $7.7 billion, mega, I mean, you know, large deals wins, you would have expected a happier picture on growth outlook, whereas, you know, things seems to have changed there. So, what needs to change for the synchronization of growth and, for the deals wins and growth to happen? Yeah. Sure. So I think, one is, of course, mega deals, as you know, you know, post-signing, they have a runway in terms of, firstly, in some cases, they may have rebadging, so that's the time it takes. Sometimes they have regulatory approval, so you can't even do people transfer. And then, of course, there's a transition period, and then of course, post-transition, then of course, you know, there is a transformation element or a run. So these are all steps in the process, and as you can imagine, being such large deals, these cannot, you know, overnight be, you know, turned on in terms of us taking over the entire landscape, et cetera. So they have to be planned through entirely. And therefore, you know, it takes a couple of quarters before they start, you know, bleeding into the revenue figures. Like I said, this will set us up well for FY 25, fundamentally. And as Salil said, you know, in the near term, in the quarter, there is of course, the underlying volume sluggishness. And of course, we have to, you know, recognize that part as we build in our forecast for this year. Okay. What's the deal pipeline like after the recent conversion of pipeline into a mega deal? So how does the pipeline look like? I mean, is it significantly lighter or does it stay remarkably strong? It's a strong pipeline, of course, with 7.7, and I think it can't, you know, be higher than the previous quarter, but it's a very strong pipeline. And of course, we will continue to have enough in the funnel to, you know, start refilling this. Just a final question on deals. You know, I think the past experience of mega deals and the transition of that into profitability has not been very encouraging. But if I look at your comments and Salil's comments, all of you have highlighted that your profitability aspiration is to improve your profit. You want to improve your profitability. Now, at the same time, you have those mega deals, you know, as well. So how does the profitability dynamics play out, you know, especially given the past context? Kawal, as you know better than anybody else, you know, when we set out the large deal strategy more than five years back, we were close to about 21% margin. We have signed probably $50 billion plus of large deals, and today we are, you know, 21, 21.2. So we've not seen any margin erosion because of the large deal strategy, right? We recognize over all these periods and this experience which we have, we will sign on these large deals. Of course, upfront, they will have margin pressures. And from a portfolio perspective, as you look in the deal tenures, we have our experience to say how we can improve the margin of the deals from day one versus, say, in year five. In a way, that's the portfolio we are able to rotate, go and get deals at the same time, with our cost optimization programs, make these deals, approach portfolio margins. I mean, like I said, the proof of the pudding is in the eating. $50 billion of large deals later, our margins are where they were. Okay. Sure. Thanks. Yeah, thanks a lot. Thank you. The next question is from the line of Moshe Katri from Wedbush Securities. Please go ahead. Hey, thanks, and congrats on very strong TCB bookings for the quarter. So if we're trying to kind of figure out the conversion pace of some of those large deals that, I mean, I guess at this point it seems that we haven't seen a lot of that conversion happen. But when do we start seeing that reflected in better top line growth? Is the March quarter next year, is the kind of could be the, the quarter when we're, we could actually see better comps for top line growth because of those conversions? Is that the right way of looking at it? Yeah. So there are a number of deals in this pipeline. Some will start in Q4. Some which we signed last quarter have already started coming, a bit of that into Q3. So it is, it's, it's not like one, you know, one day we suddenly have, you know, these 21 deals, which of course have rebids inside. So they are phased, you know, and in terms of even ramp up, you will see it's not that, you know, the run, you hit the run rate, you know, on the day of the revenue booking, right? Some of them take a longer period. So it's a combination of all that. Okay. And these are, j ust to be clear, these are deals that are funded with calendar 2023 budgets. You don't need calendar 2024 budget to continue funding these deals. Is that the right way of looking at it as well? Sorry, can you repeat that? Sorry, I couldn't hear that, Moshe. Yes. So the deals that you've won this year are funded with calendar 2023 budgets. I just want to confirm that, i.e., you don't really need the approval of calendar 2024 budgets to continue funding these deals. Is that the right way of looking at it? Yeah. So it's many of they are already come out of existing budgets, but you know, many of these are actually cost takeout programs in this environment, right? Vendor Consolidation, cost takeout. So actually we are giving money back in a way to the organization, which is why in a way we are winning these deals, right? Yep. Good. And then the final question: Do you have any view, maybe Salil can talk about that, about calendar 2024 budget cycle? That probably should start maybe by next month. Do we feel that the budget cycle is gonna be on time? Do you think there are gonna be budget delays, which is what happened earlier this year? What, what, what are you seeing at this point based on some of the client conversations that you're having? Thanks a lot. Thanks. Yeah, this is Salil. The way we are seeing the client conversations today, we don't see a change that's come about. There's a lot of constraints with clients, whether it's on transformation programs or discretionary projects, which are significantly reduced or slowed down. So that thinking is continuing on. As you pointed out, over the next few weeks, we'll get a better sense if that's changing, either improving or not for the following year. But at this stage, that's the mindset we are seeing. And there's that attention on cost and efficiency, which also continues, as we are seeing in discussion. So the conversations that we've been having over the last few months is the same tone we see as they go into the end of the year for next year's budgeting. We don't see a change in that at this stage. Understood. Thank you. Thank you. The next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead. Hi, good evening. Thank you for taking my question. My first question, Salil, was- Kumar, may I request you to speak up a bit? Your audio is little low. Yeah. Is this better now? Yes, go ahead, please. Thank you. So Salil, my first question was around the volume performance during the quarter. You did talk about that it is under pressure, and last quarter also you had talked about it. So during the quarter, how was the volume performance you saw through the quarter? Was it further deteriorating since where we saw last quarter? And is your guidance implying that there would be further deterioration outside of the seasonality in the coming two quarters? So the volume specifics I didn't share. I mentioned that there was continued constraints or pressure on that. What is happening if you step back a little bit is there's impact on revenue, which is from slowing or stopping of discretionary work and/or the transformation programs. And then we have on the other hand with the large and mega deals some of those starting off that giving us benefit on the revenue side. So there we saw the volume constraint from the first part of that in this quarter. In the coming quarters you know that well we will have in Q3 the usual seasonal impact with the end of the calendar year holidays and so on. And typically for us, for Infosys, Q3 and Q4 are softer quarters in any case. We anticipate that. We don't have a view which is different from that. That's how we are looking at it going in. But these things are changing as we go through each quarter. So we were fortunate. We delivered a very strong quarter, but we are just as we look out, we can see the pressures with the clients, and that's what gives us the reason to be watchful on both those sides. Thanks for that. My second question was, during the press conference, you did talk about that Infosys is working on proprietary large language models. So clarification is, are these models that you are working on Infosys own, or these are for clients, or your ecosystem partners? And what kind of models, use cases, and data set you are using for them? So there, what I was referring to was proprietary models from our partners. So we are not developing a large language model of our own. We are working, as you know, again, there are a large number of these models which are already in the market. Some of them are proprietary, and some of them are open source. We are working with both types of those models. Typically, we are working in what's called the Narrow Transformer approach, which really we start to see data sets which are a little bit more enterprise-focused, which allow enterprise, a large client, to take advantage of that data set for their own activity. And the applications, again, you've probably seen that. We are seeing applications on, of course, software development, on text, on voice, on video. So we are seeing applications today on all of these areas, actually working on all of these areas, and that is for the clients, and then we're doing some work inside Infosys as well, for our own activities. Got it. Thanks. That's very helpful. Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah, thanks. Thanks for the opportunity. The first question is, Nilanjan, in your opening remarks, you mentioned that the mega deal wins and the robust order book signing will help us to accelerate the growth in the beyond FY 2024. So is it fair to say most of the deal wins of this year will have solid support in terms of the growth pickup in the FY 2025? Yeah, I mean, these will translate into revenue one day. So like I said, they will start in FY 25, and like somebody else answered, of course, it's not like on one sudden day, they all start together, so they will have a run up. But absolutely, they are. Some of them will start even sooner in FY 24, towards the second. Sandeep, is your question answered? Thank you. We move to the next question. That is from the line of Nitin Padmanabhan from Investec. Please go ahead. Yeah. Hi, good evening, and thank you for the opportunity. I had two questions. So one is on discretionary spends. Yesterday, I think, your peer had mentioned that they don't think discretionary spends recover even in 2024. Just wanted your thoughts on how are you thinking about this overall? And in the context of this, well, we have seen very strong deal wins this time around, and obviously those are deals that would have been under the hood for maybe the last 12 months, which have all closed. When you look at it going forward, do you think that deal activity per se could sort of slow down? Is there a risk there? Or if you give, give some context in terms of pipelines versus how it was before these deals closed and how is it today. Is there a lot of replenishment that needs to be done to reach back the same level? Yeah, that's the first question. So on the first part, we don't have a view on financial year 2024 in terms of volume and so on. What we are sharing today is what we've seen, for example, in Q2 and what we observe from that, keeping in mind some of the seasonality of this coming quarter and the end of our financial year. On the pipeline or deal activity, as Nilanjan was sharing, we see a good pipeline. Of course, the deals we have closed have come off of the pipe, come out of the pipeline, but it's still a good pipeline for us. There's a lot of interest from clients in cost and efficiency and automation, which is where many of these large and mega deals have come in. There's a good interest in consolidation, which is where some of those deals have come in, and we continue to gain market share in that, so we feel good about it. There is that continuing interest in that type of work. Sure. The second question was, the underlying assumption on the guidance, if I understand right, is that the revenue accretion from these large deals will be very minuscule, this year, and you have headwinds on the discretionary side. The bigger accretion should really happen maybe next year. So this year is very minuscule. That's a very fair assumption? Yeah. So I mean, minuscule can vary. The definition of minuscule can be quite different, but yes, I mean, it's more largely in FY 2025. Absolutely. Yeah. So I meant on a quarterly run rate basis, would it be minuscule, of that coming into the revenue versus what you originally thought? That was the context. Yes. Sure. Fair enough. And lastly, in terms of the headwinds on discretionary, which verticals really stand out in terms of where you're seeing the maximum pressure? That's the last question. Thank you. Yeah, I think it's... We mentioned the three verticals. I think you can see it both sequentially, you can see it year-on-year, you can see it with the peer group. It is financial services, it's mortgage, it's asset management, it's parts of retail, it's communication. And I don't think we are any different from, you know, any of our peers. I think everybody is calling out these three verticals as being soft. Sure. Fair enough. Thank you so much, and all the very best. Thank you. The next question is on the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Yeah, hi. Thanks for taking my question. Salil, just two questions from my side. As we started the year with a guidance of 4%-7% for FY 2024, and we've basically downgraded that guidance second time this time around. So just, I mean, in the last call, this call, we had mentioned that, maybe in the first guidance, there were some assumptions which did not play out, and we were, we had a fair bit of conservative numbers in the 1%-3.5% guidance, which we had given last time. So just want to understand that, I mean, we have been winning good deals all along, especially in this quarter. And as you mentioned, that normally some of the deals are taking time. So if what has changed from the time that we gave the first guidance to this time in terms of the projects that we have that we are already aware in the instance? Is the discretionary part of that which is being put on hold much larger than anticipated? Is there any one single or a couple of large projects which have kind of stopped contributing the amount that we had expected? Anything on that color would be really helpful. So, there's no one project or one specific client that is where this is coming from. I think as we look at each quarter, we look at the combination of the two streams, you know, on discretionary work and on digital transformation and other programs, how that's slowing down, where it's slowing down, what the volume implications are. And then we look at how the large and mega deals are coming into the revenue stream. And that's what's leading us. As we look out, when we see changes in the discretionary work, or we see some slowing down of decision making for closing deals or slowing down in the start or ramp up, those are the factors that come into play, as we look at the revenue outlook. And then, as we come into this time of the year especially, we look at the seasonality in Q3 and Q4, and how the thinking is in the client buying environment. So that, that's really the combination of things that we do. There's not any one activity which has led to that change for us. Got it. Any specific pockets of weakness which you have seen deteriorate at a much sharper rate than anticipated? It could be maybe vertical wise or maybe a specific domain, let's say, cloud adoption or any other domain, or is it across the board? So the way we see in terms of industries, we have a similar sort of view from last quarter. The ones that Nilanjan outlined within financial services, mortgages, asset management—if you look at high tech, telco, some parts of retail, so those are the ones. We've not seen any sort of dramatic changes in that, but those are the ones that where we see the impact. Got it. Sure. Great, thank you so much for taking my questions, and wish you all the best. Thank you. The next question is from the line of Ashwin Mehta from Ambit Capital Private Limited. Please go ahead. Yeah, thanks for the possibility. Nilanjan, just one question in terms of the third-party buyout items that seems to have added almost $75 million this quarter. So do you see this item sustaining or it kind of falls off? Is this one of the reasons for your weak guidance? Yeah, so like I said, this is sometimes integral to our strategy, as well, because we are doing large-scale transformations and sometimes we have elements of, licenses or software, hardware inside. And therefore, I mean, our guidance takes into account both volumes and any impact of, you know, any of that kind of, the portfolio, the non, you know, headcount portfolio as well. Okay. Okay. And in terms of wage hikes next quarter, what is the impact on margins that you see or the quantum of wage hikes that you're giving out? We just rolled it out. We cannot, you know, say what's going to be the impact, but it's, you know, like we said, it's effective first of November. Okay, fair enough, and all the best. Thank you. The next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead. Hi, thanks for taking my question. First one is that, does your guidance factor in the current environment remaining similar in the next two quarters, or it kind of, you know, further deteriorates from here? Because, it's kind of, implying a decline sequentially over the next two quarters. Just trying to understand what's the underlying assumption on the current environment. I think the way we're looking at the guidance is, in a typically Q3 and Q4 are seasonally weaker quarters, so that is something we factored in. In addition to what I was sharing earlier, the slowing of discretionary transformation and, with the large and mega deals, seeing how the ramp up will look like as it converts. But we've looked at more what we see seasonally a weaker Q3 and Q4 from our historical perspective. All right. Secondly, you have closed a couple of mega deals in the last few months. Now, when you look at your large deal pipeline, how do you characterize this? Do you still have mega deals that you're pursuing, which can close in the coming months? So there we, we've closed four of these mega deals that I referenced earlier. We have a good pipeline. We are not detailing beyond that, the type of deals. What we see is, you know, the deals that we've closed have come up, but there's a huge appetite with clients for cost and efficiency, and those tend to be larger within even our large deals pipeline. So yes, we will see some of those larger deals going ahead. Got it. Last question, to Nilanjan, that the Project Maximus that you talked about, is it fair to say that the full benefit would accrue to the company in fiscal 25, and it just started to kind of trickle into the numbers in recent quarter, but the full benefit will accrue in FY 25? No, so like I said, this is a very complex program. There are a number of tracks, you know, so there are new ideas as we, you know, see, you know, each quarter. So you will see a, you know, impact over, like I said, maybe 18 months, of this program and, you know, throughout as we're tracking it every quarter. And like I said, and sometimes you will see a, you know, faster, you know, benefit, like utilization, for instance, is clearly something which is here and now. So you'll see some of that impact even faster, but some of course take longer to materialize. Thank you. Thank you. The next question is from the line of Keith from BMO. Please go ahead. Hi, thank you very much. This is Keith Bachman from Bank of Montreal. The first question I have- Sorry to interrupt you. Your voice is a little bit muffled. Can I request you to use the handset more closer to you? Yes, absolutely. So you've mentioned a few times that discretionary spend or discretionary projects are a reason for the revenue guidance and reporting. Can you tell us of what percent of your revenues are, would you characterize as being sourced from discretionary areas? Is it 30% of total revenues, 40% of total revenues? Any rough estimate you could give us on how much of your revenues are generated from discretionary sources? ...Yeah, so we don't really give that number out, you know, you know, in public domain. So I think that's where we are. Of course, you know, generally we have fixed price projects. We are more committed. The T&M side of the house will have a bit of variability into it, but we don't give the discretionary really. Okay. The $7.7, the second question is the $7.7 large deal TCV. Within that number, do the clients have the ability to cancel those contracts? And what is, if it's yes, what's the cancellation rate been over the last few quarters versus historic norms? You see, these are largely signed contracts, so they take time to ramp up. So we have not seen any real, cancellations really, you know. They may take longer to ramp up than, you know, originally anticipated, but there are no cancellations really. Okay. Okay, fair enough. Perfect. And then my last question is, as you think of, emphasis is in TCS and Accenture and other IT services organizations are experiencing challenges with growth, so it's a, it's an industry-wide issue. Against that backdrop, when you think about pricing that your clients are willing to accept, have you seen any changes in like-for-like pricing when you're negotiating with clients for large deals or otherwise? Has that changed at all, or has the like-for-like pricing remained fairly steady even in this weak macro backdrop? Yeah, I think you're right. I think largely it's been stable. Of course, in some quarters you can see, you know, a few clients are coming back and asking for discounts. But I think overall, even if I look back, it has been, you know, in terms of the annual renewals, et cetera, I think pricing has been more stable, you know, over the last year or two years as a general trend, I would think, in the industry. Of course, deal to deal, they are. It gets competed hard. But overall, I don't see a, you know, a deteriorating pricing environment. Okay. That's it for me, Many. Thanks. Cheers. Thank you. The next question is from the line of Yogesh Aggarwal from HSBC. Please go ahead. Yeah. Hi, guys. Just one question on large deals which have been extraordinary, almost 2-3 times of your past run rate. Was curious, what is the share of large deals from existing customers versus new? Can you just give some context there? So there again, we share the net new amount, which is 48%, but we don't share what is from new client versus not new client. Okay. So, sorry, the reason I'm asking is it's very intriguing that clients are not spending on small discretionary projects, but awarding such mega contracts. So is it possible, since this year everyone is cautious, they are just clubbing a lot of smaller projects and awarding in larger deals, which means next year we will effectively have two years of catch up on discretionary spend? You know, some of these deals have been publicly announced. These large programs are a combination of many times a cost or efficiency automation program, and sometimes they're programs which take all of that, let's say, the saving that the client is likely to accrue, and from that fund some transformation programs. So these don't appear from our interactions to be a consolidation of smaller discretionary work. These are large independent programs. And that's why we feel, first, that in that space, which is today really more active, this cost efficiency space, we seem to be gaining market share, and that those with the way they're being set up and what we see give us a good foundation for our future. Fair enough. Thank you so much. Thank you. The next question is from the line of Vivek Gedda from SBI Mutual Fund. Please go ahead. Hi. Thanks a lot for the opportunity. Salil, in fact, based on your comments that you just made, I just wanted to get a sense of the market share gains that you have been talking about, currently because of these large deal wins. Could you give a sense of how these market share gains have been versus the past? Are you seeing quite a bit of acceleration out there, and how to think about it? So there, you know, we are seeing more discussions on cost or consolidation. And when you, for example, have a win, as we've had over the last few quarters in consolidation of partners with a client, there's a significant change that changes the market dynamic within that client. And then we put all of these things together between some of the large programs we run on cost efficiency and then on consolidation. It looks like we seem to be gaining traction. We have a very good capability set on automation, and clients are appreciating that. So that seems to be the reason why we believe or we think that it looks like we're gaining market share in those areas. But is there a way to quantify it from the sense that are you seeing that client budgets are actually not increasing, while you potentially are, or, you potentially are winning more deals versus what your peers are? Difficult for us to say on a sort of macro level. But I think generally speaking, the client budgets, at least we don't see those increasing at this stage. Got that. Secondly, I also wanted to get a sense of the tenure of some of these large deals that you have won, and in the context of how it has been historically. So while there have been, it's probably logical to expect that these are long tenure deals. But if you could give us a sense of how ACV growth has been versus, let's say, TCV growth. So, there, you know, some of them, with the disclosures we've done, have that information. But we don't, generally speaking, share that information for the aggregate, and certainly, not vis-à-vis what was going on in the past. But for the specific ones where we've had the disclosures, we've shared that information. Got that. Just lastly from my side, I just wanted to also get a sense on this third party item bought out, which almost increased by $75 million. However, we called out that one time revenue bumper that we got was 30 basis points, which is relatively lesser than what we see here. Is that different items, and how to think about that? Absolutely. They are different items. And then again, the margin walk, I also talked about the one-time having a positive impact and the, you know, the license sales, et cetera, having a third-party cost, having a downward impact on margin. Yes, they are different. Got it. Thanks a lot. Thank you. The next question is from the line of Abhishek Kumar from JM Financial. Please go ahead. Yeah. Hi, good evening. Thanks for taking my question. I was also trying to deconstruct this quarter's growth. It seems to me there is a volume decline, just going by the headcount decline and small increase in utilization. So, is it, you know, the realization which has helped us or, you know, some of the one-time which you mentioned, and it has been asked in the previous questions also? Or is it that, you know, some of the smaller deals, like $50 million, less than $50 million, which you don't disclose, the growth, uptick in those deals or, you know, kind of inflow of those deals has, has kind of dried up significantly, which is basically resulting in mega deals needed to kind of, you know, sustain the volume growth. So, as I said in my opening remarks, we are continuing to see softness in the underlying volumes, and the revenue for the quarter was supported by stronger growth in the balance portfolio and improved realization from one-timers. Okay. So my question also was, you know, while I know we don't give the numbers out, but the contribution of the less than $50 million deals in our revenue contribution or pipeline, how has that changed? You know, the reason why I'm asking is, it seems that without the mega deal or large deal ramping up, there is the same pressure on margins, and these deals could be, it could be difficult to time when really these deals will ramp up. So in the absence of that, the contribution of smaller deals, has that really kind of changed as a proportion of, you know, revenue over the last few quarters? Yeah. So we don't give out this information. Sure. Okay. Thank you and have a good day. Thank you. The next question is from the line of Apurva Prasad from HDFC Securities. Please go ahead. Thanks for taking my question. Salil, I had a question on the headcount, which, how should we really think about that progressing over the next few quarters? It's been down 5% over the past three quarters, with utilizations that have been flat. How should we expect that to play? Yeah. So you have to triangulate, of course, volume, attrition, new hiring, and utilization. I mean, the broad message is that, you know, even with the utilization increase today to 81.8%, we still have headroom to improve the, the utilization further. So that should give you a sense of things to come. And of course, we can need to monitor overall volumes, et cetera. So there is enough headroom, and this is helping us in margins, like I said in the beginning, right? This is at a margin lever, which we can use. Right, and secondly, any vertical call-out in the one-timer in revenue that should affect you earlier? . Apurva, do you have any other question? Apurva, your line is muted, I guess. Do you have any other follow-up questions? Sir, there seems to be no response from the current participants. Ladies and gentlemen, that would be our last question for today. I now hand the conference back to the management for their closing remarks. Thank you, and over to you. So thanks, everyone. This is Salil. Thank you for all your questions and the interactions. I just want to close on a few points. First, we've had an incredible quarter on large and mega deals, really, with $7.7 billion, the largest we've seen in the company for a quarter, and this gives us a good foundation for the future. The quarter itself was great in terms of sequential growth and operating margin. We've got a comprehensive program on margin expansion, which is in place, with several large components and tracks running across the company. And we continue to invest in generative AI, where we're making great connects with clients, especially leveraging Topaz. So those really are the main points from us. Thanks, thanks very much again for joining in for the call. Thank you very much, members of the management. Ladies and gentlemen, on behalf of Infosys, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.