Ladies and gentlemen, good day, and welcome to 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Mahindroo. Thank you, and over to you, sir. Thanks, Neeraj. Hello, everyone, and welcome to Infosys Earnings Call for Q1 FY25. Joining us on this call is CEO and MD, Mr. Salil Parekh, CFO, Mr. Jayesh Sanghrajka, and other members of the leadership team. We'll start the call with some remarks on the performance of the company, subsequent to which the call will be opened up for questions. Please 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 and explanation of all 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. We started the financial year with a strong performance in quarter one across multiple dimensions, including broad-based revenue growth, expansion operating margins, strong large deal wins, and strong cash generation. Our revenues for the quarter grew 3.6% sequentially and 2.5% year-on-year in constant currency terms. I'm particularly pleased with 7.9% growth in financial services segment, where we are seeing improvement in client spend in North America. All geographies and most industry groups grew sequentially. Volume growth turned positive after several quarters. We also had an improvement in realization. We had another quarter of strong large deal wins, with 34 large deals at a total contract value of $4.1 billion. Our clients see us as a preferred partner of choice for consolidation, cost takeout, and efficiency programs. This is also a reflection of our leadership strength. With the mobilization of our margin program, we see positive impact on our operating metrics and pricing. This resulted in our margin expanding by 1 point sequentially. Jayesh will elaborate on margin puts and takes later on the call. Free cash flow was highest ever at $1.1 billion. Our employee attrition rate was at 12.7%. We continue to see strong traction from our clients with Generative AI programs delivered through Topaz. Enterprises are focused on their own dataset that can be used in Generative AI large language models. As an example, we are partnering with a telecommunications leader to transform their product engineering practices with AI and to elevate both their customer and employee experience. Another example is how we are optimizing and modernizing IT infrastructure services and transforming the IT operating model with AI for a leading bank. We are helping several of our clients prepare for their AI transformation journey by building strong data foundations with robust cloud capabilities using our Cobalt Cloud Services. Industry analysts acknowledge our leadership in the domain of enterprise Generative AI. We continue to invest in strengthening our AI capabilities and building AI-first solutions for clients. During the quarters, we launched Aster, a marketing suite of AI-amplified solutions for our clients to create brand experiences with enhanced marketing efficiency and accelerated performance effectiveness. Our investment in nurturing our global workforce with AI-first skills and expertise continues, as over 270,000 of our employees are now well-trained in building a wide range of AI-powered solutions for our clients. We are today uniquely positioned as a digital-first, cloud-first and AI-first brand in the market, and our continued differentiation has helped us being recognized among the 100 most valuable brands in the world by Kantar BrandZ. We have also been ranked among the most trusted brands across U.S. and India. Along with our overall robust performance in Q1 and strong opportunity pipeline, we are seeing early signs of improvement in financial services vertical in the U.S. While discretionary spends continue to be under pressure, our highly differentiated offerings around driving efficiencies at scale and transformation capabilities around Generative AI have positioned us well in the market. With respect to our recent acquisition of in-tech, we have received the required approvals and have closed the acquisition. Given our strong performance in Q1 and our current outlook, we have revised our revenue growth guidance for the full financial year to 3%-4% growth in constant currency. Our operating margin guidance for the financial year remains at 20%-22%. With that, let me hand it over to Jayesh to share his update. Thank you. Thank you, Salil. Good morning, and good evening, everyone, and thank you for joining the call today. We entered FY25 focusing on key strategic priorities, including market share gains, to accelerate revenue growth and drive margin improvement through Project Maximus. I'm delighted to highlight results that we have achieved across different business dimensions this quarter, including strong and broad-based revenue growth across all geos and most verticals year-on-year in constant currency terms. Sequentially positive volume growth after several quarters, coupled with improvement in realization. Financial services returned to positive sequential growth after six quarters, with 7.9% growth in constant currency terms. 34 large deals signed during the quarter, which is a record number of deals in any quarter. Large deal TCV at $4.1 billion, including 58% net new. Deal pipeline continues to remain strong. 1% operating margin expansion sequentially. Improvement in operating parameters, including 1.8% increase in utilization and lowest on-site mix in 10 quarters. Highest ever free cash flow generation in the quarter, with free cash flows normalized for tax refunds at 104% of net profits. Fifth consecutive quarter of reduction in unbilled. Attrition has remained stable. An increase in return on equity by 1.5% QOQ to 33.6%, primarily resulting from higher payouts to investors. With that, let me now elaborate with details. Revenue for Q1 was $4.7 billion, up 3.6% sequentially and 2.5% year-on-year in constant currency terms. This included benefit from improved realization from one-timers of 0.5%. Operating margin improved by 1% sequentially to 21.1%, led by 1.4% improvement in gross margins on account of strong operating performance across different dimensions. The major components of sequential margin walk are as follows: tailwinds of 2.2%, comprising of normalization of Q4 one-timers of 1%, 0.8% benefit from Project Maximus, largely from higher utilization and Value-Based Selling, 0.4% from the improvement in realization mentioned above, partly offset by headwinds of 1.2% from higher variable pay, higher leave costs, offset by currency and others. We continue to drive Project Maximus across the organization with strong intensity. Headcount at the end of the quarter stood at over 315,000, with utilization further increasing to 85.3%. LTM attrition was stable at 12.7%. Unbilled revenues dropped for the fifth consecutive quarter to $1.7 billion. Free cash flows for the quarter was highest ever at $1,109.4 million, a sequential increase of 29%. DSO for the quarter was 72 days compared to 71 days in Q4. Consolidated cash and cash equivalents stood at $4.3 billion after factoring in payout of $1.4 billion towards dividend declared in Q4. Consequently, return on equity increased sequentially to 33.6%. Yield on cash balances were at 7% in Q1. ETR for the quarter was 29.4%, which is in line with our expectation for the year. EPS grew by 7% in INR and by 5.4% in dollar terms on a year-on-year basis. We closed 34 large deals with TCV of $4.1 billion. 58% of this was net new. Vertical-wise, we signed eight deals, each in retail and communication, six in EURS, five in financial services, four in manufacturing, two in high-tech and one in life sciences. Region-wise, we signed 21 large deals in America, 12 in Europe and one in ROW. Coming to verticals. BFSI returned to positive growth after six quarters, led by ramp-ups of large deals and absence of one-off last quarter. In the US, we see some recovery in areas like mortgage, capital markets, and cards and payments. Overall, clients still remain cautious on spending and are focusing to deliver maximum business value through deals combining transformation, technology, and operations. Pipeline remains strong, and we are working with the clients to accelerate their adoption of GenAI for modernizing legacy platforms, fraud detection, credit process simplification, et cetera. In manufacturing, growth was broad-based across geographies and subverticals like industrial, automotive, and aerospace. While pressure on discretionary spends persist, we see increased benefits of vendor consolidation, opportunities around resolving supply chain bottlenecks, and rationalizing infrastructure and applications. We see strong interest on GenAI with deep client engagement. Our capability and pipeline in the engineering space will be solidified by acquisition of in-tech, which will help us accelerate the segment growth in FY25. Growth in communication was led by ramp-up of recent large deal wins. Overall environment, however, remains cautious, with continued OpEx pressure and delayed decision-making. Telcos, despite challenges, are navigating their way by focusing on rapid digitization and reprioritization of spends. Uncertainties in retail sector continue, with clients focusing on cost takeouts to fund their business transformation journey. There are opportunities around areas like customer and employee experience, predictive analytics, digital marketing, and landscape modernization. While the pipeline remains healthy, decision cycles continue to stay longer. Environment in EURS continues to be impacted by high interest rates and geopolitical conflicts, which are influencing the spend patterns. While pressure on discretionary spends persist, our differentiation in areas like energy transition, integration business, and human experience is helping us build a strong pipeline. High-tech vertical continues to remain soft. Driven by our strong all-round performance in Q1, improvement in US financial services, strong large deal closures, and in-tech acquisition, we are increasing the revenue guidance to 3%-4% in constant currency terms. We are maintaining our operating margin guidance at 20%-22%. With that, we can open the call for the 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. Participants, you may press star and one to ask a question. The first question is from the line of Ankur Rudra from JP Morgan. Please go ahead. Hi. Thank you, and good to see very good numbers after a while. Just wanted to get a sense of, Salil, you know, what's the breakdown of the very strong momentum this quarter, if you could, between the large deals that you've won over the last year? Any kind of improvement in execution of short cycle business or discretionary business and, you know, potentially better execution? And also, when you answer that, if you can talk about how client conversations are changing, if there's anything turning a bit more positive, and, you know, any change in the momentum on the short cycle deals, but large deals we can see is going on very strongly. Thanks. Thanks, Ankur. The view on discretionary or short cycle, what we are seeing is, in financial services in the U.S., we've seen that shift that we have highlighted, and we saw that during the quarter. Outside of that, the discretionary still remains similar to where we were when we started the year, which is still in a difficult situation. So that's the one that we have seen the change in. The client conversations in general, you know, there's a lot of talk and discussion with Generative AI, but the programs, even though they're not POCs, the actual projects are not large revenue projects, and transformation is not so much what we are seeing. So even in the large deals, the vast majority is still, cost takeout, efficiency, consolidation, automation, that, that type of work. And in some instances where there is, these are funded massively through the, through cost takeout, the transformation is. So it's not really big, big, large spends, there. So that, that's, that's how we are seeing, the, the discretionary work at this time. Thank you. And, you know, from here on, are you... I I mean, while you've seen this change in financial services, in your client conversations, do you sense there's anything in particular, clients especially in, you know, maybe the high-tech space or, you know, energy and utility, where you've highlighted, you know, problems still persist, or even manufacturing, which might change the client behavior, maybe not this year, but into next year? What are the main things clients may be waiting for? So there, first one, energy utilities, you know, we, we've had a good outcome last year. We've seen sort of similar discussions now, not, not, not a huge change. Manufacturing, again, good outcome last year. Good will be decent growth. This is just slower than last year, so not like a big, big change there. On high tech, it's still, still difficult, as you point out. I don't know what the trigger could be. Of course, on a macro level, you know, there is, not with client, but generally speaking, a view that, if US inflation and interest rate and all of those discussions change, that will change something, but we don't know, what will that trigger be. Okay, appreciate it. Maybe just one question for Jayesh. Jayesh, you know, great performance on the margins. Could you maybe talk about, you know, how do you think about the percentage from here on? Utilization, especially including training, seems to be high. I guess that indicates fewer trainees in the system. You know, what sort of headwind will we see from there? Secondly, I'm guessing there'll be wage hikes at some point in the next couple of quarters. So how are you thinking about, you know, what will help you, you know, maintain, if not improve margins from here on and extend Project Maximus? Yeah. So Ankur there, thank you for that first follow on. If you look at, you know, the Project Maximus, and we've talked about the five pillars of Project Maximus, many of them are starting to show results. You know, VBS, VBS, which is Value-Based Selling, is one of them. Efficient pyramid, right, utilization and other factors are other part of it. Lean and Automation is the third piece in that. So there are many of these tracks which are showing results, and we still believe there is more meat there. Of course, in terms of if you look at the headwinds, you know, you will have comp, maybe at some point in time during the year, that could be a headwind. We have, at this point in time, not decided the timing, et cetera, of that. So that would be headwind. Some of the large deals that we have signed, you know, the transition and ramp-up of that would be a headwind. So we will have to balance the two as we go through the year. At this point in time, we are very confident of our margin guidance. Appreciate it. Thank you, and best luck. Thank you. Next question is from the line of Keith from BMO. Please go ahead. Hi, thank you very much. First, I wanted to get some additional feedback on financial services. You indicated that you thought that business outcomes or business energy had improved. I just wanted to hear a little bit more about that. It's certainly something we haven't heard from, from some of our software-related companies, but what do you think is the driver of the improvement in financial services in particular? ... So, Keith, if you look at, you know, our commentary on that, we are seeing some recovery in, in US financial services, specifically, in the areas like mortgages, capital markets, and card payments. You know, and the, and the larger clients there. So we are seeing some, some volume coming in and some recovery, some early signs of recovery in, in those areas. Do you think that's Infosys, or do you think that's— In other words, are you winning share in those accounts? Or do you think that's a more broader base in, say, North American banks, that there is a general trend towards recovery in some? So I think it's a combination of various factors. It's where, you know, where, I mean, there are, there are instances where we are consolidating, there are instances where we, we have, won, new and larger businesses. You know, they talked about, some of the large deals wins, also in, in the financial service sector. So I think there are multiple combination of those, those factors in there. Okay. Okay. And then, just on the, the margin guide, in terms of puts and takes, you highlighted some on the previous question, but how is the... You closed the deal with adding, almost $200 million in revenue, on a run rate basis. How is that impacting, margins and/or any other issues you wanna call out, including any comments on, FX impact as you see it today in terms of margins? And that's it for me. Thank you very much. Okay, I didn't get the question clearly. If you could re- How is the M&A, the recent transaction that you closed, how is that impacting margins? And then also, how do you see the exchange rate impacting margins as you look out over the next couple quarters, FX rates? So, Keith, the acquisition that we have done, you know, compared to the size of the company is relatively smaller to have a material margin impact. And, you know, as you have seen from our filings also, the in-tech is coming with healthy margins, and there are opportunities, et cetera, in synergies. Coming to the Forex, the Forex has remained range-bound for last couple of quarters. So at this point in time, we don't really see an impact. But, you know, as you would appreciate, Forex is range-bound. I mean, Forex is unpredictable, and it can have the margin benefit of or impact, depending on which way it goes. But at this point in time, it is remaining range-bound. Okay. All right. Perfect. Many thanks. Congratulations on solid results. Thank you. 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 was for Jayesh, just a clarification. So during the press briefing, you talked about 40 basis points of one-off impact in the margin. So can you just help us understand the revenue and the margin impact coming out of that? And I understand it is a recovery which you have made from one of the customers based in India, if that is correct. Thanks. Yeah, so that's right. This is for a customer based in India. It's one-off, you know, in the revenue, and therefore, most of that has flown into margin directly. So, you know, 0.5% on revenue, pretty much impacting 40 basis points on margin. Got it. Thanks for that. My second question was, Salil. For hyperscalers, we are seeing their growth is accelerating. And also, the AI demand, especially for some of the chip makers such as NVIDIA, has been quite strong. So it doesn't seem like the discretionary demand is entirely missing in the market. So is there a transformation in the underlying business mix, which is happening, where possibly discretionary demand, for now at least, is moving towards platform and hardware makers and not coming to services companies? So there, the view we have is, you know, what we saw, and we've highlighted so far the shift in financial services in the U.S. shows that some of that type of demand is coming. Now, we'll wait and see across all the industries, whether it's what you are describing or whether tech services project, discretionary work also, comes back, whether there'll be transformation programs in tech, which will also come. We are definitely seeing, you know, more and more discussions in enterprises on Generative AI programs. Jayesh also shared a couple of examples. I shared a couple of examples. So we do see... And these are not POC, these are actual projects where we are participating. So we do see that. My own sense is this USFS is, you know, one data point. We'll wait and see what some of the other data points look like. Salil, what I was trying to understand was that, is there a decoupling of discretionary demand which is happening, or is this a sequence in which we'll see first the hardware and platform makers getting the discretionary demand and eventually coming to services? Is that a decoupling or a sequence of event which eventually comes to services as well? What do you think would be the chain of events? So, that's difficult to say. So again, it's, you know, just this year, one quarter. What we saw was that in financial services, US, some of that discretionary work is there. Whether it was decoupled or following on from something, difficult to say, but we did see some evidence of that. ... Thanks a lot for that. Thank you. Next question is from the line of Nitin Padmanabhan from Investec. Please go ahead. Yeah. Hi, good evening. Congrats on the quarter. I just wanted your thoughts on one, the financial services space. You did mention that you saw growth from mortgages, card payments, and obviously, capital markets. When you think of the sustainability of the recovery, how should we think about it? Because mortgages, for it to continue to give you a delta, would require rates to come down meaningfully. And from a cards perspective, it looks like delinquencies in the U.S. are rising. So it's like a mixed data point that we see on the outside, but just wanted your thoughts on how are you thinking about the sustainability of the recovery on the financial services space? And then I had one more quick question. So Nitin, there, what we are seeing right now is early signs, as I said, you know, of recovery. Of course, you know, it's early signs, so we don't know how sustainable at this point in time it is going to remain. But the fact that we saw, you know, volume growth after many quarters, we saw, you know, strong growth in our financial services, after, again, six hard quarters. So I think those are the positives that we are taking. We are seeing large deals, both the ones that we are signed and the ones we are there in the pipeline. So all of that put together gives us a little bit of confidence on that. But yeah, we have to see more data points to see how the year progresses. So one of your smaller peers characterized it as financial services who have sort of stalled multiple projects in the past and having sort of not spent for almost six quarters, having to make those spends because that's causing problems. And thereby that's seeing a pickup with short cycle projects on those deals. Would you characterize it similarly? Are you seeing something similar? I wouldn't say that, Nitin, to be very honest. You know, we are seeing this not specific to one of clients. It could be, you know, limited to one of clients. For that player, I can't comment on that, but we are not seeing it, concentrated in one client, et cetera. All right. Lastly, on the guidance. I think if you include the acquisition and normalize the earlier guidance for the acquisition, I think the earlier guidance would have been in the 2%-4% range. Now it looks like they've narrowed it to 3%-4%, including the acquisition on both cases, despite the strong beat in the current quarter. So, is it just that you're being very watchful and careful about it? Or, is there something more to it that you specifically worry about? So, Nitin, there, we don't really break up the guidance into, you know, what is organic and what is through for a specific acquisition that we have done. Having said that, you know, if you look at our filings, the in-tech revenue for the last year was EUR 170 million. I mean, we just closed it, so we'll only get part of that revenue. So you can do a back of the envelope calculation, and the rest of it is going to be all the factors that Salil talked about, you know, the Q1 performance, including large deal wins, the volume and U.S. financial services, while the discretionary still continues to remain challenging. So perfect. That's all from my end. Thank you, and all the best. Thank you. Thank you. Next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Yeah. Hi, good evening. Thanks for taking my question, and congrats on a very solid start to the financial year. So there's two questions from my side. One is, we have seen that, I mean, all the, almost all verticals have done really well for our quarter, but for the retail sectors. I think retail sector is something which is plaguing the almost entire industry of your peers also have kind of spoken about it. What is the outlook on this sector? I mean, what do you think the clients are waiting for to restart their spends, and where could those spends be coming in, in terms of the domains that we are looking at? And then I have a follow-up question. So Vibhor, I think it's a sectoral challenge at this point in time. The whole sector is going through challenges and, you know, it's not specific to us. And, you know, as Salil was mentioning earlier, one of the factors could be, you know, U.S. interest rates recovering, et cetera. But it's hard to predict what will lead to recovery in the sector at this point in time. So, I mean, just to, drill a bit little further on that. What exactly is... I mean, so we know that, macro overhang is on most of the BFSI companies and all. At this point of time, any specific thing that you think could be a trigger, apart from the, I mean, of course, the interest rate that you mentioned, that could possibly see these companies, reverting their spend, or difficult to call out that again? So retail typically has higher exposure to discretionary as well, right? So and that is going to be linked to, the macro environment, largely, Vibhor. So, you know, I think that would be one of the key reasons. Otherwise, you know, outside of that, we are we are winning, deals. If you look at this quarter also, we have, we have won eight, large deals in, in retail as well, but the discretionary spending has to come back. Got it. Got it. My second question is, I think, at the end of the last quarter, we had mentioned that we are expecting the first half to be better than the second half. Any change in that outlook, given the deal win in this quarter has been quite strong? So, if those were to slightly ramp up in the second half, would it be correct to say that maybe we can expect second half to be slightly better than what we were expecting it three months ago? So we've got two parts there. We still continue to believe our first half is going to be better than the second half. And I think Q1 is just a testimony of that from that perspective, you know, we've delivered from there. Of course, the fact that we have increased guidance is also, you know, a proof that we are seeing the three quarters better than what we envisaged earlier. Got it. Got it. Great, thank you so much for taking my questions, and wish you all the best. Thank you. Thank you, Vibhor. Next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead. Hi, thanks for taking my question. So, Salil, the first question is, on revenue. It looks like- Gaurav, sorry to interrupt you. There is a slight disturbance from the line. Can you speak through the handset? Yeah. Can you hear me better? Yeah, go ahead. Yeah, Salil, the first question is for you. On revenue, it looks like it has surprised you positively, which is why you've raised the guidance. So is it led by the ramp-ups on the deals happening faster than you expected? Is it led by leakage in the discretionary improving compared to the last few quarters that you have seen? So, this is Salil. The way this quarter has gone, what we have seen is, the volumes have been strong. We've then seen that change in the financial services in the US, which has given us more positive outcome for the quarter. Then, some of the work that we're doing in terms of working with our clients on value and pricing has also translated overall into the mix for our revenue. And then, the way we saw the outlook, you know, as we did some of the large deals in this quarter, which was a good outcome, that gives us a little bit more visibility into the year. So all of those things led us to look at this as being a stronger outcome. Got it. Any reason to believe that this momentum could decelerate in near term? Any data point to suggest that? Or, as of now, you would expect the momentum to continue from a near-term perspective? So what we have done is, we've taken what we have seen in this quarter, across the different industries and service offerings, and then, put in, you know, as Jayesh shared, what, what is more typical, which is our second half is usually, lower than our first half. And with that, we have created the outlook for the year. But, we, we didn't take into account any other, trigger, beyond what, what I just shared. Thank you. Last question for Jayesh. What would be the incremental levers for margins from here on? Utilization is near peak, subcon has already stabilized. Just trying to understand, what, what could be the additional levers over the coming quarters? Thank you. Look, if you look at there, you know, again, across, all the pillars of, Maximus, there are multiple of them are firing. Value-Based Selling, we have seen, you know, as we talked earlier, we have seen improvement in realization. So that's one lever we do have, we continue to have. We did talk about hiring some freshers as we go, you know, through the year, so that would help in, getting some better, role ratios or, better, role mixes, et cetera. Nearshoring, you know, lean automation. So there are multiple levers we still have, to, you know, improve or offset the headwinds. The headwinds that we see today is, as I said earlier, again, is, you know, comp, which is, which decision we'll take, as we progress through the year. And, the ramp-up of the deals, won, you know, towards the end of last year as well as, this quarter. Thank you very much. Thank you. Next question is from the line of Bryan Bergin from TD Cowen. Please go ahead. Hi, good evening. Thank you. First question I had on is on Generative AI. Can you provide some detail on how Gen AI may be impacting your delivery, productivity, and whether it may be changing any nature of the contracting conversations with clients yet? Thanks. Thanks for the question. On delivery and Generative AI, so what we have done, we have taken all of our service lines and start to put in place the impact of Generative AI and broadly AI into this, and that change is ongoing. A lot of it has happened. Where we are seeing some of the benefits on delivery relate to areas, for example, software development or process optimization. There's also a large benefit on productivity for more customer service type of areas that we have already demonstrated proof of. We don't have a lot of footprint on that within our current mix, but we know for new work, that's something that is being discussed with clients. In each of these for the contracting, the way our clients are looking at it within their own enterprise, on their own data set, when there's a client where we see and where they have, let's say, for software development, a single uniform approach across the whole company, which is not that frequent because of acquisitions and different decisions in different divisions and departments, then, the range of benefits is potentially higher, and the contracting discussions are around what of those benefits will accrue with the client. So, a lot of these discussions are in that spirit. There is some benefits that accrue to us and some to the client. But there are very few clients within their own data sets which have large, consistent tech landscapes, which can give, you know, the full benefit of Generative AI right away. Many clients also need their data infrastructure to be put in place, where sometimes that is not in place today, between structured and unstructured data. So we the work actually starts with building a data program when they're able to spend that on a data program, and then to have the cloud capability in place so that a lot of, part of the data, part of the apps are on the cloud for the client. So the discussion is typically on, here's the roadmap for Generative AI in an enterprise, given the landscape of tech, and here are the first steps: data and cloud. And then here's something that can actually deliver impact today, which could be more, let's say a smaller area of the company. But these are all discussions which are done, which eventually relate to how contracting is done. Okay, that's helpful. Thank you for the color. My, my follow-up is a clarification just on the one-time item. I I think you cited 40 basis points quarter-over-quarter op margin benefit and a similar revenue impact. Was that expected in your prior guidance, or was that a surprise or a new item that wasn't expected before on the plan? That wasn't expected in our guidance. That was a new item. Okay, thank you. Thank you. Next question is from the line of James Friedman from Susquehanna International. Please go ahead. Hi, good evening, and let me echo the congratulations. Salil, in terms of banking, is the improvement contemplated to continue? In terms of what, sorry? James, sorry to interrupt. Please ask again. Can you speak a little louder, please. Oh, I'm sorry. In terms of the banking vertical, the BFSI vertical- Thank you. Is the growth contemplated to continue? So what we see today is this change in the U.S. financial services. We don't... The way we've constructed our outlook is we are assuming that that will be the way it will progress. So we have not assumed that it will change. We've not also assumed that it will become much larger. We've not also assumed that this will move to some other geography in financial services. So we don't know, but that's what the assumption is in into our guidance, although client discussions seem to indicate that U.S. financial services, we will have this sort of a traction. So that's the way we've built our outlook. Got it. Thank you. And then in terms of Europe, it has been an important source of growth for the company this cycle. Could you unpack some of the trends that you're seeing in Europe? On Europe, so what we are seeing is different things in different places. So for example, in the Nordic countries, we've had good traction over the last few quarters and even a little bit before, in how we've engaged with clients, and we've seen some good expansion of our large deal programs. We've seen some of that in Continental Europe broadly. If you look at some of the large deals across telco, we've seen that, a different type of a positive traction in Germany, where we are seeing some of our local Europe competitors are having more constraints and where we are benefiting from those constraints as we are expanding. So it's different in different geographies and our focus... or even industries. Our focus has been to be a little bit more fine-tuned into that market, and then try to get the benefit of it. Got it. Thank you, Salil. I'll drop back in the queue. Thank you. Thank you. Next question is from the line of Sumeet Jain from CLSA India. Please go ahead. Yeah, hi. Thanks for the opportunity. So firstly, I wanted to check, you know, in your previous guidance of 1%-3% you gave in April, was in-tech acquisition part of that guidance? Sumeet, this is Jayesh here. We had clearly called out at that point in time that in-tech acquisition isn't part of it, because, I mean, it was pending approval from various regulatory authorities. Right. So maybe in-tech acquisition now being closed and the 50 basis points impact on revenue in India business, can one assume these are the two primary factors for your revision in the guidance? Not necessarily. Again, as I said, we don't break out our guidance between, you know, the in-tech and non-in-tech from that perspective. But, if you look at, you know, the numbers that we printed, when we announced the acquisition, in-tech revenue was around EUR 170 million, and it's only going to be part of the year, considering we just concluded or closed the transaction. And there are other factors, you know, our Q1 performance, volume, financial services, growth, offset by, you know, the continuing softness in the discretionary part of the business. Got it. That's helpful. And secondly, I wanted to check, you know, in your cost line items, the third-party items bought for service delivery is significantly down this quarter, almost 1 percentage point of your revenue, and are also down on an absolute level. So can you just give us a sense as to, you know, from the bookkeeping perspective, how to look at this line expense item going forward? So guys, Sumeet, you know, as we have said earlier as well, the third party hardware, software cost is an integral part of, you know, many of the large deals, where we take over turnkey projects from the clients, including technology landscape of theirs. And that is therefore dependent on the kind of deals and, you know, how the ramp-up or ramp-down of this deal depend. Deals happen across the quarter. So it is going to be, to that extent, dependent on, which deals and, how it ramps up and down. Got it. And lastly, just on the India business, can you give us a sense what kind of project it was? Because it's a pretty sharp jump we are seeing this quarter. So any large deal ramp-up we are seeing there or some government contract? What exactly is the nature of this one-time impact? So, Sumeet, there, first of all, the India business is, is relatively much smaller, so anything, that happens in that business, shows up in percentage terms much larger. But having said that, it was one-time impact on one of our India clients, you know, and it's one-off, so I think we should just take it as one-off. Got it. Thanks for the opportunity and all the best. Thank you. Thank you. Next question is from the line of Kawaljeet Saluja from Kotak Securities. Please go ahead. Hey, hi, thank you, everyone. You know, great to see a well-rounded performance. Congratulations. Just a couple of questions. First is, for Jayesh. Jayesh, you know, that 40 basis points recovery that you see, does it show up in either ECL or provision for post-sales client support or you know, it's just basically a direct flow through to... from revenue? It's 40 basis points, 50 basis points on revenue, Kawal, which is impacting 40 basis points on margins. Okay. And, you know, basically, does it tie in with provision for post-sales client support or that's something which is separate? No, it's separate. Okay, got it. Yeah. Second thing is wage revision. You know, I mean, the, I guess the cycle, got, I know cycle of wage revision was changed last year. You know, do we get back into wage revision, cycle, which is a lot more normalized, which is let's say starting second quarter, or that's something on which you have not taken a call yet? So if you recall, Kawal, last year we did our wage revisions in effective November. So at this point in time, we haven't really decided. We are evaluating, considering all the factors that we always consider, you know, including the inflation, including when was the last wage revision, taking the environment, the macro environment, as well as the peer practice. And we will take a call, considering all of these factors. Having said that, as I called out in our margin walk as also, you know, we have increased our variable pay during the quarter versus last year as well as last quarter. Okay, that's very helpful. Final question, you know, is, Jayesh, for you and Salil. Both of you have articulated the fact that you want the profitability to improve in the medium term, and then there are a number of structural levers that will be utilized to drive that expansion. I mean, what kind of an environment and what kind of levers, you know, does, you know, one need to see, you know, to gain that directional comfort of profitability improvement, you know, from here on as such? So, Kawal, if you, if you look at our margin walks across the last three or four quarters, you know, since we launched the Project Maximus, you would see consistently the contribution from the Project Maximus across various pillars, you know, from L&A, I mean, L ean and Automation, from Value-Based Sellings on, you know, on the pyramids, et cetera, things like that. So you will see, I mean, you have seen that and our endeavor is to continuously focus on all of that. But at this point in time, they are offsetting the headwinds to a large extent. The endeavor is to, you know, more than offset the headwinds in the midterm Okay, cool. Thanks, yeah. Wish you the best. Thank you. Next question is from the line of Jonathan Lee from Guggenheim Securities. Please go ahead. Great. Evening, and thanks for taking our question. A lot of moving parts here- Jonathan, sorry to interrupt you. May I request you to speak a little louder, please? Hey, great. Good evening, and thanks for taking our questions. A lot of moving parts here on the margin side. Can you remind us how we should be thinking about seasonality through the year, especially as you think about the impact from Project Maximus and large deal ramps? So margin, on Jonathan, margin, one of the headwinds would be comp decision as and when we take. There are seasonalities in our business model, which is furloughs that impact us in Q3 and Q4, that also impact both, you know, pricing to some extent and, and margin therefore. But those are the large seasonalities that we have in our model. Outside of that, our margins are going to be dependent on, you know, our acceleration on Project Maximus, as well as, you know, the, the revenue and volume growth, which helps us, you know, flattening our pyramid and, therefore, benefit from the pyramid. I appreciate that color. And second, can you help us think through what's contemplated in your outlook, both at the low end and at the high end, as it relates to vertical performance based on, you know, expected large deal ramps or what's in your pipeline? Jonathan, sorry, your question didn't come across as clearly. Would you repeat that, please? Can you help us think through what's contemplated in your outlook as it relates to vertical performance based on expected large deal ramps and what's in your pipeline, both at the low end and at the high end of the range? So, Jonathan, it's very difficult to call out which vertical performance will end up to low end and high end of our range. I think we run various models internally to get to the margin band. Some of them, you know, get us to the lower end of the band, and some of the assumptions will get us to the higher end of the band. I don't think there is any secular segment that is going to drive either ways. Got it. Appreciate the color. Thank you. Thank you. Thank you. Next question is from the line of Girish Pai from BOB Capital Markets. Please go ahead. Yeah, thanks for the opportunity. The 3%-4% guidance, if I do my math, comes to about 1%-1.5% CQGR from here on. It seems way too conservative because that also includes the in-tech acquisition. So are you assuming that the 2H FY25 is gonna be pretty bad? So, Girish, there, let me give a little more color, you know, on the math. If you look at the first quarter, our year-on-year, year-on-year growth has been 2.5%, and 50 basis points, as I said, of that is one-off. So that's, that's the first point. We have always maintained that our H1 is gonna be better than the H2, and that, that the guidance bakes in on that. And then there is in-tech. So, you know, all of that put together makes up for our guidance of 3%-4%. Okay. The next question is on U.S. Financial Services. Do you think this is more a Infosys specific situation, or do you think this is much more broad-based that the other vendors who have U.S. Financial Services exposure would also be doing well? Or this is something very specific to you? So this is Salil. So difficult for us to say, like, for the other companies. We can see that some of that benefit on financial services, in cards, in payments, we see some of the benefits which came through with some of our clients, but I, I'm not able to tell if it's just Infosys or not. We do feel we have a very strong set of capabilities, you know, from digital, cloud, Generative AI, cost, and efficiency. So we do see, you know, much more connect with clients, but difficult to say for the others. Okay. If I may squeeze in one last question. Salil, you mentioned that interest rates are one factor which could probably be driving demand. So are the customers looking at the start of a cutting cycle, or are they looking at a certain level of Fed funds rate before they kind of start spending in a much bigger fashion? So there, I think my point in the prior comment was more on what is the macro environment. So first, we don't know, you know, if that's sort of a trigger or it's not a trigger. We are typically seeing the large digital programs, the large programs, even now with Generative AI, our clients are still not ready to launch on them. So, you know, the sort of more specific point you make, difficult for us to take a view on that. Okay. Thank you very much. Thank you very much. Ladies and gentlemen, we'll take that as the last question. I will now hand the conference over to the management for closing comments. Thank you. So thank you everyone for joining us. It’s really wonderful to get all the questions. We are delighted with the strong first quarter growth, margin, cash, large deals, volume. So very, very good to see that outcome for our business. We have a good outlook, so the change in guidance gives a sense of what we see in the outlook, 3%-4% growth. We hold the margin 20%-22%. Good to see, you know, financial services in the US have that change. We feel extremely strong in what we are building in Generative AI, and we can see the traction to that in the projects and programs we’re doing. And we believe we are well-positioned, you know, really as a company where we are benefiting from a variety of areas, whether it's in digital, whether it's in cloud, whether it's in technology transformation or cost efficiency. All of these are something that we can support our clients with, and we remain well positioned to do that, through this year and the future. So thank you again for joining us, and catch up at the next quarter call. Thank you very much. Ladies and gentlemen, on behalf of Infosys, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.