Ladies and gentlemen, good day, and welcome to the Infosys Earnings Conference Call. As a reminder, all participant lines will be in 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. Hello, everyone, and welcome to Infosys Earnings Call for Q3 FY 2024. Let me start by wishing everyone a very happy new year. Joining us 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 Q3, subsequent to which we'll open up the call for questions. Please note that anything we say that refers to our outlook for the future is a forward-looking statement that must be read in conjunction with the risks that the company faces. 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 on the call to Salil. Thanks, Sandeep. Good evening, and good morning to everyone on the call. Wish you a happy new year. Our Q3 revenue declined by 1% quarter-on-quarter and 1% year-on-year in constant currency terms. For the first three quarters, our revenue grew by 1.8% over the same period last year in constant currency. We see lower traction for digital transformation programs and more activity for cost and efficiency programs and increasing interest in generative AI programs. Our operating margin was at 20.5%. We delivered this outcome while managing through one-off business disruptions. Nilanjan will provide more detail for this. Large deals were at $3.2 billion. 71% of this was net new. This included one mega deal. With this, our large deal value for the first three quarters stands at $13.2 billion, of which 55% is net new. This is the highest ever large deal value for the first three quarters in the fiscal year for us. We see that with our large deal wins, we continue to win market share and strengthen our position through our leading capabilities in helping clients with cost, efficiency, automation programs, and by leveraging generative AI, digital, and cloud. We have seen impact in financial services, telco, and high-tech segments. We see strength in manufacturing, energy, utilities, and life sciences segments. We are seeing strong traction for generative AI programs, leveraging our Topaz capability. We've integrated our generative AI components into our service line portfolio, creating impact for our clients. We have 100,000 employees trained in generative AI areas. We have developed a range of use cases and benefit scenarios across different industries for our clients. Some of these areas are related to client analytics, process optimization, sales, marketing, knowledge analysis, software development, self-service, and personalization. Some examples of the work we're doing in these areas. We are working with a large global bank to support them in their risk analysis program by using a large language model for them. We are working with a global food supplier to personalize food experience for their customers and to make their operations efficient using artificial intelligence. We're working with a global retail company in defining their AI-first business transformation strategy. Our clients are leveraging all these generative AI capabilities in Topaz, combined with our cloud capabilities in Cobalt, to help them navigate through this current business environment and setting up for the future. Our margin improvement program continues to gain traction. The five pillars, the large organization mobilization, and steady execution are creating impact. Based on the performance in the first three quarters and our outlook for Q4, we are tightening our revenue growth guidance for financial year 2024 to 1.5%-2% in constant currency. Our operating margin guidance for financial year 2024 remains unchanged at 20%-22%. As you probably know, Nilanjan is leaving Infosys at the end of this financial year. I want to thank Nilanjan for the excellent work he has done and the strong position he has put Infosys in. In addition, I also want to thank him for his partnership and his friendship over the past several years. We wish him all the best in his future plans. With that, let me hand it over to Nilanjan. Thanks, Salil. Good evening, everyone, and thank you for joining the call. Coming to our Q3 results, our revenues declined by 1% year-over-year in constant currency. Sequentially, revenues similarly declined by 1% in constant currency and 1.2% in dollar terms. This includes the impact of furloughs and one-offs. Volumes remain soft, coupled with seasonality and normalization of one-time revenues we had in Q2. While the overall environment remains subdued, our large deal TCV is highest ever on a YTD basis. I will talk about the large deals in more detail. Revenue for nine months increased by 1.8% in constant currency and 2.5% in USD terms. We are making steady progress on Project Maximus, the margin improvement plan across 5 pillars and over 20 tracks. This strengthens our confidence that the program will give us the impetus for margin expansion over time. Operating margins for Q2 were 20.5%, a decline of 70 basis points sequentially, bringing the 9-month margins to 20.8%, which is within the guidance band for the year. The major components of Q1Q margin walk for Q3 margin are as follows: There are headwinds of 130 basis points, comprising of 70 basis points from salary increases effective first November, 60 basis points from McCamish cyber incident, which had an impact on both revenue and costs. This was partially offset by tailwinds of 60 basis points, comprising of 50 basis points benefit from cost optimization, including high utilization and lower SG&A, 10 basis points from currency movement. Balance includes impacts of furloughs, offset by higher lead utilization and a one-off benefits, including lower provision for post-sales client support and lower ECL model losses, et cetera. Headcount at the end of the quarter stood at 322,000 employees, a decline of 1.9% from the previous quarter, which is reflected in improvement in utilization to 82.7%, excluding trainees. On-site mix also improved by 20 basis points sequentially to 24.4. As mentioned earlier, we continue to improve our operating efficiencies. LTM attrition for Q3 reduced further by 1.7% to 12.9%. Free cash flow for the quarter was robust at $665 million, and the conversion to net profit for Q3 was strong at 90.6%. Our unbilled revenues dropped for the third consecutive quarter, and consequently, this has partly led to an increase in DSO by 5 days sequentially to 72 days. Consolidated cash and equivalents stood at $3.9 billion at the end of the quarter, after a dividend payout of $895 million. EPS declined by 6.1% in INR on a year-on-year basis and grew by 3% in INR for the 9-month period ended. Yield on cash balances was 6.9% in Q3. ROE improved to 31.8%. Large deal momentum continued, and deal TCV of Q3 was $3.2 billion, with 71% net new. Consequently, our large deal TCV is over $13 billion, which is the highest ever for any comparative period. This clearly reinforces our position and strengthens the relevance and strength of our service offerings. We signed 23 large deals in Q3, including one mega deal. We signed eight deals in manufacturing, six in FS, four in EURS, two each in retail and communication, and one in others. Region-wise, we signed 10 large deals in America, nine in Europe, and three in ROW, and one in India. Coming to industry verticals, inflation, uncertain macro, and delayed decision-making continues to impact the financial services sector. With increasing cost pressures, clients remain cautious on spending and are reprioritizing their programs to deliver maximum business value. Topaz is central to our generative AI discussions, which is gaining momentum and use cases around improving customer experience. We also started implementing use cases in some of our clients, focusing on improving client experiences, detecting fraud, et cetera. Overall, while the near-term outlook remains volatile, we will benefit from the recent deal wins and the new account openings. Clients in communications sector continues to face growth challenges, which is putting pressure on OpEx spend. Uncertainty about medium-term spends remains with clients, prioritizing cost optimization and vendor consolidation. Clients are looking at conserving cash, which is visible in delayed decision-making and project deferrals. Our focus on large and mega deals resulted in healthy pipeline and deal wins. Energy, utilities, resources, and services clients remain cautiously optimistic about the demand environment with capex and short-term spend. In energy segment, we are seeing market share gains due to consolidation. Our investment on industry cloud solutions in the energy transition, combined with extreme focus on human experience, have helped us differentiate, win multiple deals, and build a strong pipeline. Manufacturing segment continues to deliver strong performance on the back of new deal wins and ramp-up of earlier large deals signed. Growth was broad-based across Europe and the US, as well as across industrial, automotive, and aerospace industries. While the budget remains largely stable, clients continue to find ways to channel run savings into newer areas like digital, cloud, data, and IoT. Pipeline remains healthy, with emerging opportunities on various fronts in the ER&D space, resulting from increased spending. In the retail segment, cost takeouts and consolidation remain the primary focus for the clients. While discretionary spends remain under pressure, there are pockets of opportunities leveraging generative AI in predictive analysis, real-time insights, and decision support areas. Deal pipeline is strong, though decision cycles remain long. A resilient performance in a seasonally weak quarter and the continued momentum in deal wins, coupled with a very large efficient execution engine, gives us confidence for growth in the medium term. Driven by our YTD growth of 1.8% in CC terms and Q4 outlook, we have revised our revenue growth guidance for FY 2024 from 1%-2.5% previously, to 1.5%-2% in constant currency terms. We retain our margin guidance band for the year at 20%-22%. Finally, I would personally like to thank all the stakeholders of Infosys, especially the fabulous finance team here, for their support over the past five years. As I step down, I look forward to working closely with the entire leadership team over the next few months to ensure a smooth transition. Finally, I wish Jayesh the very best as he assumes the role of CFO from April 1, 2024. 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 on the line of Kumar Rakesh from BNP Paribas. Please go ahead. Hi, good evening, and thank you for taking my question. My first question was- Kumar, can I request you to speak up a bit? Sure. Is this better? Yes. Go ahead, please. Thank you. So my first question was around the new deal wins, which has been pretty strong at $2.3 billion. It's among the highest we have seen in the recent quarters. However, that also implies the renewals have been weaker. In the recent quarters, we have seen renewals to be in the range of $1.5 billion-$2 billion. In this quarter, it was less than $1 billion, and that could also be the reason for the slowdown in the second half, which you are expecting. Now, we can understand that the new deal wins would be lumpy and difficult to predict, but you would have a timeline on the renewals, when they would be happening and what is the probability that you could see winning them back. So, how do you see the next quarter or so panning out from the renewal perspective? Any visibility on that side? Hi, this is Salil. Thanks for that question. I think, my reading of the new large deals win is more along the lines that we are continuing to do well with renewals, and then we've got really excellent net new wins in the $3.2 billion. As we have discussed at other times, the large deals by themselves, the numbers vary quarter-on-quarter. As you know, last quarter was also extremely large number. Having said that, we have on the renewals, a clear sight of what's coming up. We're also benefiting in many of these areas from consolidations, which Nilanjan referenced, and also where we are seeing our clients are seeing opportunities for cost and efficiency. All of that gets combined with the renewals coming along at regular cycles. Got it. Thanks for that. And my second question was around GenAI. So you have talked about almost 100,000 new employees being trained on GenAI, but can you quantify or share some insights on the client engagement side? Anything that you can quantify, number of projects that we are working on or the amount of deals that we are winning, anything that we can start tracking on that side? So there, we are not, at this stage, sharing externally, any views on revenues or projects and so on. To give you color, what is happening today is, almost every discussion with clients involves some element of generative AI. And what we have now developed through Topaz is a set of areas where there's benefit cases, use cases, scenarios where there's impact, where we're working across a large number of clients on those in different scales, where there are some which are more pilot, some which are programs, and that's the three examples that I shared. We've also developed strength across a number of large language models where we've trained our teams, and then on how to leverage data sets. Our focus is very much on large enterprises who are our clients and the data sets within those enterprises, depending on the usage of where that large language model is to be applied. We have a very strong business in data and analytics, which becomes the foundation for this generative AI work. Then we are working to make sure that the benefits are felt across all of our service offerings, so we can start to see in new discussions with clients, productivity benefits which are downstream, coming from this generative AI. At this stage, while we are not externally quantifying all of the elements I referenced, that's the sort of color we are seeing across a large number of discussions. Thanks for that, Salil. Thank you. The next question is from the line of Nitin Padmanabhan from Investec. Please go ahead. Hi, good evening. Thanks for the opportunity. Congrats on the strong deal wins. So I think, first off, Salil, anything that you have seen versus the previous quarter in terms of client behavior, that would sort of suggest green shoots on the discretionary side? Or do you think that will continue to be under pressure for some time? The second question is for Nilanjan. It appears that we'll exit the year with margins lower than last year. Do you still believe that margins could be better next year, you know, versus the current one? We sort of highlighted that as sort of an aspiration at the beginning of the year. So just wanted your thoughts on how one should think of that at this point in time. Thank you. Thanks. Hi, this is Salil. In terms of the client discussions, we have not seen some sort of significant change in one or the other direction from what we were seeing last quarter. So some of the digital transformation work or some of that type of programs are where clients are not putting focus or attention. Whereas the cost and the efficiency and now even consolidation, we are seeing more and more of that, which is what we were seeing last quarter as well. So in that sense, we don't have any change that we have sensed at this stage. So Nitin, on the margin question, I think you've seen this quarter as well, the underlying margins, excluding the one-offs, are quite resilient. And we've talked about in our Project Maximus, this is nearly the third quarter, and a lot of work has been going on, and we are seeing the benefits of that, and you can see that in our commentary as well. And we are very confident about the overall margin outlook. Of course, we won't give a number about next year, but really the multiple number of tracks around value-based selling, around efficient pyramid, around automation and GenAI, I think they all working well. So I think that gives us good optimism over the medium term in terms of our margin structure. Perfect. Thank you so much, and all the best. Thank you. Next question is on the line of Moshe Katri from Wedbush Securities. Please go ahead. Hey, thanks for taking my questions, and congrats on strong bookings for the quarter. First question, any color on the ongoing budget cycle for calendar 2024? Do you think budgets will be on time? Do you think budgets will be delayed? Any color there on that one? Thanks, Moshe. This is Salil. On the budgets, we have seen first, as we saw our Q3 end of the year quarter, the furloughs were in play. We're seeing that coming into play in the Q1 of the calendar year, so our Q4. The budget decisions are ongoing, and as you know, well, these will go through the early part of this month. So nothing from that, but we don't see any change in what we were seeing in terms of behavior from the last quarter, where budgets would suddenly have a different direction. So at this stage, looks like it's similar to what we were seeing, but everything is not yet closed out from our discussions on the budgets. Understood. And then looking at the deal flow, the large deal flow that run through calendar 2023, there are some concerns that they're not converting, some of these are not converting on a timely basis. Has that changed in any way in terms of conversion some of these deals, and when we could start seeing that inflection point in revenue growth because of those deals converting? Thanks a lot. On that, the way we see the revenue flowing, again, as you're aware, the large deals are obviously giving us a foundation, especially the net new and renewal for future revenue. And at the same time, we are also seeing impact where the digital programs are not moving or digital programs sometimes are being stopped. So that combination is what, you know, gives that revenue outcome. At this stage, we have no specific sort of external view on, you know, what will happen in the quarter. But, overall revenue guidance for this financial year, which is only one more quarter, gives you a sense of how we are feeling about that. We will see, because a lot of the large deals, as they start to build up and when sort of the digital capabilities start to have a more sort of interest with clients, we will start to see that change, I'm sure. Thanks a lot. Thank you. The next question is on the line of Ankur Rudra from JP Morgan Chase. Please go ahead. Hi, thank you. Salil, could you elaborate on what you've seen the client spending sentiment has been, A, on projects that have already been signed, let's say, in the last nine months or so on the cost take out side, and B, on incremental signing of, you know, smaller projects? Because we can see on large projects, but we don't have a visibility on how your small projects are doing. Sure. So, on the client spending, where clients have signed recently in the last 3, 6, 9 months, that spending is going well, both on cost and other projects, incremental projects, as you were describing. On things that were more in the past, that behavior on the cost has continued. On the incremental projects, we have seen even in the past quarter, some impact. But what has been signed recently, we see those proceeding as per what they've signed. Understood. And I mean, I think you've mentioned several times on the call that there seems to be, you know, delays in revenue recognition because of project you know, reprioritization. Is there a way of maybe estimating this for our benefit, for investors' benefit? Like, for example, how much of, you know, fiscal 2023 or the last two years, total contract value or signings may have been impacted because of change in client priorities? Or alternatively, you know, how much of the signings have been shrinking every quarter? There's been one back with new project signings for you to stay at the same place. So we are not in a position to share that externally. We have a view on what we look at in terms of wins, execution, and large deals internally. There are also other programs, some small, some mid-sizes, which go up and down. And so that whole internal computation is something which we work with, but is not something which we have in the past or going even today, sharing externally. I understand. I wanted to color it as opposed to maybe a quantification. Yeah. So same, I think at this stage, you know, the outcome is what we have. We've not given any more on that in terms of color as well, Ankur. Understood. Maybe moving to margins, just one question. You know, obviously, this quarter, if I take out the impact of the ransomware incident, it appears that margins are, would have been up by 60 basis points. Is that right? Number 1. Number 2, if you could elaborate where we are on the various Project Maximus levers, and where is the remaining support, let's say, over the next year or so? Yeah. So we've given the margin walk in the initial script, and quite clear about the one-off, the salary, et cetera. From an overall Maximus, like I said, there are a lot of tracks which are currently in play. Utilization is one you're seeing. In fact, that's the biggest one. Straight up in your metrics, you can see that and how that's flowing into margins. There are other internal, of course, programs on the pyramid. A lot of work there. On-site, offshore, this is the first time we've seen some positive movement after a lot of quarters. On automation and GenAI, a lot of work going on now with GenAI coming in. There's additional sort of levers available to us, more than the traditional automation which we used to do. Pricing has been much better. There's a lot of work happening on value-based selling, and in fact, that's also reflected in overall RPP, that we are seeing a much more stable pricing underlying pricing regime, and that's something which we are pushing on. So I think all the levers are in play. We have quarters where we are able to squeeze more and many new ideas, I think, with Project Maximus, which have come into the fray as well looking at large programs and whether we can early on get into, you know, a margin improvement program rather than what was originally budgeted during the, say, the bid phase. So there's a lot of stuff happening, and I think we are already seeing the early results. A quick follow-up, if I can. There's some concern that some of the cost takeout contracts won in the last nine months may drive some margin headwinds. Is that something that, you know, should impact on a portfolio basis next year? Well, that's something we've always talked about. We, you know, we have a portfolio of, you know, contracts in the first, second, third, fourth, fifth years, right? So there, while new contracts come in, which are initially potentially at lower margins, at the same time we have, you know, contracts which have been going into a steady state. Some of these questions were raised two, three years back in one of our segments as well, and you've seen the improvement in that segment, particularly over the period of time, where it's nearly closer to the average, you know, margin for the company. So that's something which is, you know, something which we've, you know, really fine-tuned and, you know, mastered over the few years. So in that sense, that's always built into our projections and forecasts. Appreciate the color. Thank you, and best of luck. Thank you. Thank you. Next question is on the line of Bryan Bergin from TD Cowen. Please go ahead. Hi, good evening. Thank you. First question I have is demand by geography. Can you talk about pipeline and client spending plans across the US versus Europe? Maybe also based on what you have in backlog. I'm curious if you think the recent trend of North America weakness being offset by solid Europe performance is likely to continue, or whether that may change as you go through fiscal 25? Thanks, this is Salil. On the geography, as you point out, we had good, good growth in Europe in Q3, weaker in North America outcome. In terms of pipeline, we don't share the pipeline split by geography. We do see our large deals that Nilanjan shared by geography in good, good momentum, at least on the large deals on both US and European side. But we don't sort of specifically call out pipeline or outlook by geography within our business. Okay. Any reason that the current growth trajectory should change near term, or should it remain somewhat consistent? So there, if you look at, you know, our guidance for the remaining... For the full year, which is for the remaining quarter, it's for the entire, entire business, and we don't have, like, a specific view that we share externally on the U.S. or Europe there. Okay. Okay, follow-up on the third-party items. So another uptick here, just I think over 8% of revenue now. Can you talk about whether you expect third-party items to continue to rise as a mix of revenue, or may this start to come down as you go forward? And deal composition potentially change? I'm just trying to think about sustainable level here as this has moved up meaningfully over the last couple of years. Yeah, so as we've talked about this before, you know, as we are involved in larger transformation deals, longer term transformation deals across the entire IT stack, you know, infra, cyber, application development, data, I think many of these are bundled deals which have software, hardware elements in it. And in a way, that's also giving us the benefit of taking these larger deals off the table. And at the same time, we are able to manage our margins as well. So we have to be able to navigate both the impact of this. So we have no number in mind to say that this is where we target or this is optimal level. As long as we are able to get incremental market share and, you know, get our margins in line, which is what Project Maximus is also about, I think we are, you know, comfortable with that. Okay. And just, last one for you, just on the talent resourcing plans. Can you just give us a sense how you're thinking about resourcing plans near term? I know it was down again sequentially about 2%. I'm just curious if you've kind of reached a stabilization point. Yeah. So we still have a lot of headroom, and we've talked about it, you know, in fact, the last two quarters that our utilizations are still quite low. We've operated at much higher utilizations, 84%, 85%, and then of course, in the COVID years, maybe 87%, 88%. So that's one, and we are still below 84% as we speak. We also have a, you know, on-tap demands, fulfillment from our, you know, fresher model. So we can absorb, you know, freshers in very fast, because we don't have to now just go for colleges and wait for the annual cycle. Now we have a source of supply from off-campus as well. And with attrition slowing down, there is a lot of talent, even from a lateral basis, available across, you know, the country as well. I don't think that's a big concern for us. Okay. Good luck to you, Nilanjan. Thank you. Thank you. Thank you. Next question is from the line of Keith Bachman from BMO. Please go ahead. Hi, thank you. I wanted to ask a couple of questions, if I could. First, on pricing. You mentioned specific segment of pricing, but I wanted to ask about A, pricing on renewals. Are you seeing pricing pressure that's different from past cycles at the time of renewals? And then also, you had good deal signings for large deals. I wanted to, if you could address pricing for those large deals and how that might be impacting your margins. And then I have a follow-up, please. Yeah. So I think, in fact, we've seen much better pricing stability over the last few years. And in fact, we are also very conscious with our internal value-based selling program, that we are not leaving any pennies on the table when we are going after deals, because in this business, we want to make sure that, you know, we are not leaving a lot of dollars on the table. So I think there's a lot of work happening there. But overall, from a competitive positioning, pricing really has been stable across, and I think that's reflective of the cost pressure that people are, you know, are also conscious of their margins, and where they are. So in that sense, there's no more concern. We, of course, have the one-off, et cetera, specific clients, specific segments, where they are in trouble, and of course, they may want to rebate some of that. But, overall, it's not been something which is really concerning us in that sense today. Okay. Then my follow-up relates to duration. This was asked a little bit differently earlier in the call, but as you're getting good signings of large deals, is the duration of those large deals extending so that investors should be thinking about the book to bill being a bit longer? So we don't give out the duration of the deal wins. So we have, of course, deals which come with longer term periods, and some of our, you could see some of the announcements we have made, but nothing specifically whether they are, you know, going up across, we don't comment on that. Okay. Well, then maybe I could sneak in one more. As you just look out over the next couple quarters, if you could just help us... We're not—I'm not asking for guidance, but just the puts and takes on margins that we should be thinking about. You've already said that, you know, utilization perhaps is a source of, at least I heard it, is potential margin upside as utilization goes up. I would think that wage pressures would be less going forward, but not sure how mix fits into that. But anything you just want to highlight beyond the March quarter, but just the puts and takes that we should at least be considering as we're creating our margin profile over the next, call it, four or five quarters. Yeah. So I think one of the earlier questions was on this, and, probably I talked about in Project Maximus, as well. I mean, there are other benefits which, we don't factor in into any of our models, really, for instance, operating leverage, right? You can see the impact of, SG&A benefits on operating margins, you know, when, when we are growing in, you know, the twenty, during 2021, 2022, 2023. So that's something which automatically flows into the P&L with growth, all right? And in a way, it gets reversed. The operating leverage works against you, when revenues are down. So that's something, you know, from a pure margin perspective, which, you know, flexes. Secondly, I think, similarly on the currency, we don't build in anything into our, you know, programs, and that also, you know, comes in future, as well, but it's not part of Maximus. Of course, there are things out there, you know, how what the expectations of dollar movements are. So these are some things more extraneous, as well, which can impact, but we are more confident of what we are able to control within the 20 tracks of Maximus, and we've talked about that. ... Okay. All right, thank you. Thank you. The next question is on the line of Jamie Friedman from Susquehanna International Group. Please go ahead. Hi, good evening. Nilanjan, in your prepared remarks, you expressed confidence in growth in the medium term. I was just hoping you could unpack that a little. When you say medium term, is that just a comment about the fourth quarter, or is that longer in duration? Yeah, medium term is medium term. It's definitely more than the fourth quarter. Okay. Thank you. And then, also, Nilanjan and Salil, I'm trying to reconcile when Salil observes the strength in the TCV at a record in nine months. But Nilanjan, you used the word subdued in your prepared remarks. It seems like you're saying it's hot and cold at the same time. So I know these are where many of these questions are going, but how can the weather be both? Hi, this is Salil. Maybe the way that we are thinking about this, we can share with you. The large deals really give us good confidence of revenue over the next several period in terms of the wins, both for net new and renewals. And the comment, which was more around subdued. We look at it from a perspective of where we see less activity on digital programs, and less activity on some of those type of projects, where that takes away a little bit from the revenue. So that's the sort of balance in our mind. One of them giving us that revenue outlook, and the other, where clients are under constraints on their own spend, reducing some of that. And that's how we see the balance on that. Hopefully that clarifies the comments. Thank you, Salil. I'll drop back in the queue. Thank you. Next question is on the line of Sumeet Jain from CLSA. Please go ahead. Yeah, hi. Thanks for the opportunity. Firstly, wanted to ask around, you know, the one-time loss, what you had around McCamish. Are you expecting it to reverse back in Q4 and include it in your guidance, or will it reverse sometime in FY 2025? No, this is one time. There is no reversal. Got it. And secondly, wanted to check around your platform business. I mean, we have seen for the last two years, there has absolutely been no growth in that particular business. But although we keep seeing deal wins around your Finacle platform with various regional banks in the Middle East geography and other regional banks in North America as well. So can you share any plans to grow up that part of the piece, where we have seen the other SaaS companies globally have actually seen a lot of traction post the GenAI offerings and their solutions? Yeah. So I think, we continue to do well. I think Finacle business continues to, motor ahead. It's a very nice deal wins across. And, you know, overall platforms, you know, is a more generic, usage and, I mean, we track it across various things, but Finacle actually overall has been doing very well. Any reasons for the platform business to be flat over the last two years? So, I think we can get back to you on that. Okay. That's all I had. Thank you. Okay. I think, I think, Sandeep is just prompting me that we also use it for internal productivity as well. Okay. For services. Okay. Got it. Thank you. The next question is from the line of Yogesh Aggarwal from HSBC. Please go ahead. Yeah, hi. Just one quick question. The employees, number of employees are down 7% year-on-year, but the total wage bill is up around 1%-2%, which means that the wage bill per head is up around 9%-10% year-on-year. So I would have assumed that the pyramid would have kicked in, in a slower growth last few quarters. So, any particular reason why the wage bill per head has gone up so much? Thanks. Sorry. I think one of the things is that the comp increase also has happened this quarter. And of course, in the initial part of the year, we had, you know, more lateral movements coming in in the top end of the pyramid. So, but I think in the recent, if you see the latest quarter, you will see a reversal of that. I think the employee costs have come down, I think, in this quarter as well. So I think you will see that trend reversing. Great. Thanks. Thanks, Nilanjan, and all the best for your future endeavors. Thank you. Thank you. The next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Yeah, hi. Thanks for taking my question. So just, I know, Vibhor, please use your handset. There is an echo in the line. ... Sure. Is it better now? Yes, please go ahead. Yeah, thanks a lot for taking my questions. So sorry, just a bit, just a question on the deal flow number. I know we've already had a bit on it, so but just wanted to take a bit of feedback on we know this quarter was basically on the softer side, both in terms of seasonality and probably for those being hired in the last year itself. But the overall demand environment that we are looking at, both, let's say, in terms of the cost takeout deals or the discretionary spends or the, or basically the different verticals that we're looking at, is there any change in the overall demand environment that we are looking at from, let's say, three months ago, I mean, when we met for the second quarter results? How do you see this playing out over the next couple of months as clients get into their budget cycle and any specific verticals or pockets that you might want to call? So, you know, the thing that we've observed is as we look at a large client base, the way clients are behaving in terms of spend, we've not seen a change in the way they're looking at it. So we still see, you know, what we were discussing earlier on digital transformation programs being more impacted, where cost efficiency being much more in play. There's also more consolidation that we are seeing, and that was coming through in the past quarter as well. And then there's a lot of interest in almost every conversation we have, where generative AI is part of the mix. So in that sense, I don't have a feeling that this is, there's a change that we are seeing. Now, this is also the start of the financial calendar year. We will get a sense, you know, fairly quickly here, how people, our clients are looking at their spend. And as we come to the end of our financial year and as we plan for next year, that'll give us, let's say, more view into that spending pattern. Got it. Got it. And in terms of the deal flow, I mean, the deal wins that we had in the first half of the year, were very rock solid, deal wins. Any color on, let's say some of those deals are getting into execution mode, driven by the conversation with your clients? How is the, I mean, so is, are we seeing incremental, some, basically, let's say, intent from the clients on, starting those deals, which were maybe a bit delayed on that side, or anything, any color on that, that we have seen incrementally over the last three months? So there, we've seen, essentially in this last three-month cycle, the deal starting or ramping up being as, as we'd anticipated. So nothing has changed in the, in this three-month cycle. There are places in some of the large deals where, there's need for incremental work, which is also starting to be visible, which will hopefully flow through. So there has been no, no delay that we've seen. In fact, we've seen more of those on track in, in, in the last three months. Got it. Got it. Thanks for taking my questions, and wish you all the best. Thank you. Thank you. The next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead. Hi, thanks for taking my questions. The first question is with respect to the mega deals signed in 2Q. The transition period was expected to be a little longer, and some of them were supposed to come into revenues in the fourth quarter itself. So is the expectation remaining similar on that, or has anything changed with respect to the transition period and flow-through of the revenue? There, as we had shared previously, it was towards the end of the year, and that's where we are. So we don't see that changing, yeah. Got it. Second question is with respect to the underlying sort of leakage in the business on small deals, discretionary spend, that has been continuing now for some time. How do you characterize your 3 Q versus, let's say, 1 Q and 2 Q? Has the leakage remained largely similar, or has that kind of come down compared to the pace that it was kind of leaking in the first two quarters? So that, let me sort of try to give color in the way we look at it. In the last quarter, so in the last three months, we have not seen those things change in direction. They appear to be stable or similar. Is that the similar thing built in your outlook for the fourth quarter as well, when you tightened your guided band? At this stage, that's what we've put into the Q4 outlook, yeah. Got it. Last question is on the margins. Given that you will have some bit of more headwind in fourth quarter, because there will be full 3-month impact of the wages that you have provided for in this quarter, your margins probably will have some more headwinds. Plus your implied guidance, you know, points to sort of, again, weak revenue trajectory in the fourth quarter also. So no major massive operating leverage per se. It's just that you're exiting the year with margins closer to the lower end of the guide. Is that the bottom for the margins? And given the Project Maximus is underway, from here on, the margin should only be going in the upward direction. Is that the way to look, look for it? I'm not specifically looking for fiscal 25, but just trying to understand, is that the bottom for the margin? Thank you. Yeah. So in Q4, I mean, it will work out of Q3 as well, and there are puts and takes in Q3. And like we've said, Project Maximus continues to deliver very strongly, and, you know, in our overall, commentary, we've talked about the optimism in the medium term for our margins, coming out of Maximus. Thank you. Thank you. Next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah, thanks. Thanks for the opportunity. Most of the questions have been answered. Just wanted to understand this 60 BPS impact on our cybersecurity. Is it possible to break down in terms of revenue and cost? And is it fair to assume the impact which could have been there because of the cost, will actually no longer be there, it would be a tailwind in the fourth quarter? Yeah, I think, firstly, we won't, can't split it, but both these are one-time impacts, right? The loss of revenue and the cost impact. So this was like the puts and takes. So this is going to in Q4, as we see it now, this is not gonna be there. Okay. And so even the revenue will come back in the fourth quarter, right? Yeah. So as you know, I think in the statement, you have seen that the systems are back substantially by the end of December, right? The system's up and running. So, I think that part goes away. Okay. And Nilanjan, for two months of wage hike, 60-70 BPS wage impact looks slightly lower. So is it almost 100% of the eligible employees have been covered? And is it fair to assume the wage impact would be much lower in the fourth quarter because it would be one-month impact? Going to be a one-month impact, absolutely. And every time we do a wage hike, we look at, of course, the competitive scenario, we look at the market, attrition, you know, employees, tenure, you know, what are the pay point grids. So it's a very complex exercise, and based on this, we think, you know, what we have rolled out, and it's of course, you can see the attrition figures are also good. Okay. Okay, and last question, Salil, I think in one of the responses you said the furloughs in the December quarter may continue in the March quarter. Is it, I have heard correctly, or I have been mistaken? So, what we saw is the... My point was, in Q3, we had the furloughs, and that is a seasonal impact. In Q4, we typically see a little bit of that always in our business in Australia, and that's really the reference I was making. Okay. Okay. Thanks and all the best. All the best, Nilanjan. Thank you. Thank you. The next question is from the line of Kawaljeet Saluja from Kotak. Please go ahead. Hey, hi, my question is for Nilanjan. Nilanjan, you know, the margins for this quarter, is it based on your normal variable compensation provision, or is that something which has taken a hit in this quarter? Yeah. So, Kawal, we don't talk about the, you know, variable pay. Of course, I think in the next few, there'll be enough news in the papers about that, but we don't give any commentary on variable pay. Yeah. I mean, I think it will make its way to the media after a month, so might as well talk about it now, Nilanjan. We never confirm at any case. Okay, got that. Yeah. All the best in your future endeavors, Nilanjan. Thanks, Kawal. Thank you. Next question is from the line of Manik Taneja from Axis Capital. Please go ahead. Hi, thank you for the opportunity. Just wanted to understand, over the course of last 9-12 months, the industry has been complaining about, the leakage on the existing, projects as well as, non, extension of discretionary projects. Are you seeing any change on that front? That's question number one. The second question was with regards to the expansion in terms of captive centers, and we continue to see news flow on that front. Any comments from you, from you on that front? Thanks. I think, on the first part, our sense is, you know, in the last quarter, so in this Q3, we've not seen any change in the work on those projects. That's had essentially a similar type of a trajectory. On the captive centers, there typically we see that anytime there's new sort of technology shifts, whether there was a digital or cloud or generative AI, there's ... There's definitely more interest in some clients building out captives. Equally, as technologies age, we see some clients are looking to exit and especially to be more optimized. And we've seen that in several of our large deals. If you look back over the last several quarters, we've had deals where, in addition to the transformation, we've taken on the task of optimizing pre-existing captives and so on. So we don't see a change. It's just maybe it's that new technology moment where we see the activity. But we also see a converse activity of things which were, let's say, set up five, seven, 10 years ago, which are going through that change or decline in that situation. Sure. One last question from my end. We've been seeing our headcount reduced for the last several quarters. Any sense on how we should be thinking about the optimization on this front, given the kind of deal wins that we've had in the last three quarters? Yeah. So I think, I've mentioned that a couple of times. You know, utilization is something where we have headroom, so the decline in headcount really doesn't concern us too much. And both from availability of talent to ramp up, we now have a very strong, you know, off-campus program. This is something, you know, over the last three or four years, we've perfected post-COVID, and that's really on tap without having to, you know, give out demand, you know, requests to colleges one year in advance. And of course, from a lateral perspective, like I mentioned, with the market being soft, there is, of course, talent available, even laterally. So, in that sense, we are very, very comfortable with any volume requirements and ability to fulfill. Sure. Thank you, and all the best for the future. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing remarks. Thank you, and over to you. Thank you. Just first, everyone on the call, thanks very much for joining us and for your questions. I want to just summarize with a few points. First, we're very excited with the large deals at $3.2 billion, 70% net new. It really shows the foundation of what we see for the future. Very, very happy with the strong margin and also for our extremely strong margin improvement program that's in play. Our generative AI work is really pervasive. It's across all of our client discussions in our service lines, and we believe we're building extremely deep capability within our Topaz set of capabilities. We see continued strong focus on cost takeout, consolidation, and we have extreme strength in that. We feel good that that will continue... If that continues, we have a good, good play into that. And then finally, we feel good overall about the resilience of our business, given the quarter, and the seasonality that we had and the overall economic environment. We feel really good about the resilience of our business and the future. So thank you, everyone, again, and look forward to catching up at the next quarter call. Thank you very much, members of the management. Ladies and gentlemen, on behalf of Infosys, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.