Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jain from Dolat Capital. Thank you, and over to you, sir. Thank you, Aditya. Good evening, everyone. On behalf of Dolat Capital, I would like to thank KPIT Technologies for giving us the opportunity to host this learning call. Now, I would like to hand the conference over to Sunil Phansalkar, who is VP & Head and Head IR at KPIT, to do the management introductions. Over to you, Sunil. Thank you, Rahul. A very warm welcome to all on the Q1 FY 2025 Earnings Call of KPIT Technologies Limited. On the call today, we have Mr. Kishor Patil, Co-founder, CEO, and MD, Mr. Sachin Tikekar, President and Joint MD, Mr. Anup Sable, CTO and Board Member, Priya Hardikar, CFO, and myself from Investor Relations. So, as we always do, we will have the opening comments by Mr. Kishor Patil, and then we'll open up the floor for questions. So, once again, a very warm welcome to you, and I will hand it over to Mr. Patil. So, good evening, everyone. Very happy to take you through quarter one, FY 2025 highlights. So, as our vision statement is really reimagining mobility for a cleaner, smarter, safer world, we have launched during the quarter formally EcoVoyage 2030, which basically KPIT's journey towards sustainability. We have been very mindful on this and have been working on this for many years, but this is a formal launch of our EcoVoyage journey. As you know, transportation accounts for more than 16% of carbon footprint globally. So, this is very, very important for us as well as our clients. The way we are looking at is we have anchored science-based targets for three things. One is what we can do with our clients, how we can help them to reduce their carbon footprint. The second is how we can reduce our footprint on our infrastructure and operations. The third is basically very important and unique, I must say, is all our 13,000 people, how they can really embrace sustainability beyond work in their personal lives also. That's a holistic approach we have taken, and we have made a commitment of net zero by 2030 with clear annual targets. We are very excited about this journey, and it is in line with our vision statement. As I mentioned, this is a very key focus area for our clients also. We actually continue to really work in this area. We are looking at our clients' priority during continues to be bringing sustainable products in the market. The key priorities for them are faster release of features and vehicles in the market. Secondly, substantial cost savings and reduction of time and better leverage of their investments. And third, in order to enable that move towards a central compute architecture that is reliable. So, we continue to work with our clients in these areas. Our growth overall is driven by T25 clients, as we mentioned. And what we have done is, as you know, our growth has been largely driven by top maybe 15 clients in T25. So now, we also see many other clients which are committing themselves for the technology investments and meaningful engagement with us, which is very important for us. And that's why we see continued traction in our T25 clients. The second part is we also are looking at the adjacency, which is into truck and off-highway, which is a very important step for us in order to broaden our growth engine. That we believe that many of the areas in which we are working, specifically into bringing new technologies to passenger cars, while the offerings will be fine-tuned for these markets, these are also very important technologies. And specifically, like truck, etc., we believe that many of these clients will go for autonomous and connected soon. And we have started some of this conversation, early conversation in these areas. We do believe that off-highway continues to be a good market, and they also have similar investments in technology driven by cost efficiency, again, competition with Chinese players, etc. So we believe we can bring those offerings to them as well. Overall, Asia has driven the growth very strongly, with Europe continuing with the growth momentum what we had. We believe that the U.S.A. momentum will come in some time where we are started engaging some of the, as I mentioned, about the long list of T25 in the other part of some of the clients which had not committed. So those clients in U.S.A. Apart from that, many global OEMs are looking at U.S.A. as a market, and that's where their spend would increase, and we would have a role to play, and the U.S.A. market will grow in that direction. So overall, also the adjacencies we talk about, there are many U.S. clients are there, dominant U.S. clients are there. So we believe that the U.S.A. growth in due course will come back. Apart from that, we continue to Chinese operation, which continue to bring focus on China operation. We are looking at a few areas in China. One is what we can do for Chinese OEMs and how we can do it for them. We do have a small presence in China for many years, but now we are strengthening that presence. We are bringing certain products and technologies to these OEMs, which are unique and for them required for their next phase of journey. That is the offering we are bringing out. We are also trying to bring out offerings for them, what they would require for being global companies. Naturally, we are also helping our global clients to scale in China. All these three offerings, we would like to bring the more focus on China. We are making investments in China. I would like to come to people part where our attrition continued to be one of the lowest in the industry in the single digit. We have invested quite a bit in terms of developing the leadership development for our broader set of people so that we can focus on multiple initiatives at the same time. That's what we will continue to do, and we have launched a formal management development program for the next 12-18 months. During this quarter, we have salary increments, and as we have done in the last many years, we continued with our salary increments, some of the best in the industry. We have gone ahead with our increments from 1st July. These are on a higher single digit number. Last but not the least is we have also launched our ESOP program. I think one of the very few companies who have a broader-based ESOP program for key people. That also we have launched a few months back. So that's on people side. On the tech side, I talked about the offerings. I mean, in order to reduce the time to market as well as the cost for the OEMs and help them compete with the China part, we have introduced many offerings which will help them to do it. That's what we have been in a position to bring back offerings which are significant, and we have launched them at different stages with OEMs. We believe in the next few years, this will amount to a significant opportunity for us. Apart from that, we continue to grow in our normal areas such as autonomous, electrical, connected, etc. In the electrification area, while many companies had a clear focus on EV, and we do believe that EVs will continue to grow in due course because of the reduction in the cost. We naturally help OEMs to reduce their cost for the EVs. There are other areas such as hybrid, etc., which are also gaining new programs in this area. Apart from the traditional conventional powertrain, which some clients, some in passenger car and some naturally in commercial car, continue to launch, and we would help them in those areas. On the AI side, we have taken very concrete steps, and we are looking at AI in multiple ways. One is in terms of improving the productivity as an organization. The second is in terms of improving the productivity in software development life cycle. The third part is in terms of how we can create differentiated offerings for our clients and make it really bring efficiency to the client's offering and help our clients to be more efficient. These are the areas which we have taken concrete steps in terms of technology, and we continue to invest into technology more and more. Lastly, coming to our performance during the quarter, our revenue grew 4.7% quarter-on-quarter. In the year-on-year, we grew by 23.1% growth led by, as mentioned, about certain geographies like Asia and middleware and power train. Net profits have grown year-on-year 52.4% year-on-year. It includes INR 396 million of one-time gain, and that has happened because of two things. First is we have transferred certain IPs to QORIX last quarter. At that time, QORIX was our fully-owned subsidiary. Now that it is a joint venture, so according to we got the credit in some way in the books of 50% of the value of the IP. That is one part which is really a very natural transaction in due course of business. The second is while QORIX was our fully-owned subsidiary, all the expenses we were incurring were written off in the books of accounts. As it became a joint venture, these expenses, I mean, that much assets and liabilities mainly, and the expenses got allocated to the joint venture partner. That is the second benefit we have got. Net of tax, basically, it is INR 396 million, which is part of INR 2 billion + profit during the quarter. As we move forward in this year, we would like to reiterate our guidance which we have given at the beginning of the year. We would like to also mention that next quarter, basically, we would have the increment impact as well as the ESOP impact, which will be for the full quarter. Last quarter, it was only for two months. So overall, the impact will be 2.8% during the quarter. But as I said, we reiterate our guidance for the year. Thank you, and we are open 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 the touch-tone 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- and- answer assembles. Our first question is from the line of Chandramouli from Goldman Sachs. Please go ahead, sir. Hi, good evening, and thank you for taking my questions. And congratulations on the completion of the JV with ZF in QORIX. My first question is just around the JV. I think you mentioned that most regulatory approvals are now through. JV has also ZF has also contributed their share of investment. So just trying to understand where we are in the process of building some of the middleware offerings. Are we working with any clients as we speak? And also, approximately when we think we will launch some of these offerings to some of our critical clients? Is there any sort of interest that key clients have exhibited here? Any color around that would be super useful. Absolutely. So thank you for this question. I think we are very excited about the QORIX proposition to the industry. See, during the quarter, actually, we have become part of the Eclipse Foundation, which is a very important foundation for the industry. So basically, QORIX becomes a part of this foundation. We have also agreed to open source some part of the software, which is very important for the OEMs because, as you would recollect, the many OEMs wanted to develop their software and operating system on their own in order to have better control on the software. This gives a lot of comfort to the OEMs. The way we had planned that maybe in the next less than 12 months now, because we have been developing the software, we would have our product ready, and it would go through, I would say, the whole testing and integration for the OEMs by the end of the next year. We already are engaged with a couple of OEMs and working with their production programs for the end of the next year. We are already engaged with a couple of clients in our core plant. Got it. Got it. That's useful. My second question is specific to how you've been performing in Asia. I think when we look at the disclosures by the various Japanese OEMs, it seems that companies like Toyota and Honda have committed to 30%+ electric vehicle R&D growth over the next couple of years annualized. So just trying to understand some of this performance in Asia. Is it largely ramp-up of existing work with Honda, or could you give us more color on if you're working with a broader range of OEMs across the region beyond some of the Chinese efforts that you mentioned? Obviously, we are at tremendous growth on the back of Honda over the last several quarters, and it will continue. On top of that, if you look at Asia as a market, there is business in Korea, there is business in India, and there is business in China. These are the countries that are driving our business. We believe that the Asia growth going forward would be broader and more broad-based across these four countries. We are also seeing that besides pure manufacturing of vehicles in Thailand, the OEMs also want to do some design and engineering work in Thailand from hedging perspective. We believe that that work with our global OEMs will be able to do in Thailand. We look at growth coming from five countries across our T25 clients. To your question about specific focus on Japan and its investment, obviously, we are working with two OEMs at this point, and I think there is interest from the third one as well. We believe that the growth in Asia has been high, and it will continue to be on the higher side in the foreseeable future. Got it. That's helpful. My last question is just specific to the margin performance this quarter. I think when we had guided at the start of the year, we had guided to 20.5% + EBITDA margin versus the previous year 20.3% and the previous quarter 20.7%. We've done 21.1% this quarter in spite of a couple of months of ESOP headwind. I just want to understand if you were to piece out the headwind just from the ESOP scheme, how many basis points would you say it was this quarter? Just sort of similar to the 2.8% impact you mentioned for 2Q. Just trying to understand if you were to adjust out for just ESOP impact, what the underlying margin of the business would have been in 1Q. If we would have taken out the margin impact, so it would be about 1% more, maybe. That would have been our EBITDA margin. But as I said, next quarter, we have also increments. We have three months of ESOP part. And so these are two main costs we have. But I mean, we will for sure go by what the guidance we have given on profit. Got it. So just I think lastly, just to clarify on this, this quarter would have been 100 bp s on ESOP. Next quarter should be 150 bp s, and the remaining 130 bp s should basically be from increments on your 280 bp s. So last quarter, it would have been 0.7%. This quarter, the next quarter would be 1%. So this coming quarter will be 1%. Last quarter was 0.7%. Got it. Got it. That's very helpful. Thank you very much, and all the best. Thank you. Thank you. Our next question is from the line of Nitin from Investec. Please go ahead, sir. Yeah. Hi, good evening, and congrats on another very strong quarter. Just wanted your thoughts on a couple of things. So first is you did allude to the U.S. geography. We've seen very strong growth across the others. Just wanted your thoughts on what's sort of holding back the strength there, considering that the targets for the emission norms continue to be strict even there. So broadly, how should we think about the U.S. geography? You did mention that it should pick up soon, but just trying to understand the underlying dynamics of what's holding it back. So Nitin, thanks for your question. Let me answer that question in two ways. What's sort of holding back? A couple of things have happened in the U.S. One is a couple of truck makers and one OEM; their headquarters over the last couple of years have moved out of the U.S. So the revenues also get the balance also shifts. So that's one reason. That's why there are very few U.S.-based OEMs in passenger cars that we can work with. We have taken a call that in terms of the newer OEMs, there are only select OEMs that we'll work with, and that too just to try it out. They're not really part of our T25, correct? So that's one part of the, so this is the reason why you have not seen the same level of growth. More importantly, what is it that we are doing in order to bring that growth back? So there are three things. One on the passenger car side, we believe that the existing OEM clients that we have will have more growth there. I think it would be visible in the next two or three quarters. That's what we believe. Second part is our U.S. is becoming more and more important from our global client perspective. Given there is a 100% tariff on Chinese vehicles in the U.S., it's sort of a secure market for Japanese OEMs and some of the European OEMs. So our engagement with our global OEMs with the U.S. is also increasing. So that's the second part that gives us the confidence that the growth will come back. And last but not the least, as we make investments in off-highway segment, there are three or four key players. Some of the largest players are actually based out of the U.S. So we believe that accelerating on these three levels will help us to sort of create more traction as we go forward. And just to add, simultaneously, we are also making investment in the front end to access this opportunity. Sure. Sure. That's very helpful. Just two other things. One is, would the QORIX, which is now moved to the JV, would that have had a benefit on margin this quarter, considering the costs have moved out? And is it fully baked in for the quarter, or is it partially likely to aid in the next quarter? Or is it meaningful? I just want to understand that. So there won't be any significant impact on the margins because anyway, the costs I mentioned about it that recently, once we had the agreement, then we have aggregated those costs. I think that would not have an impact on the current quarter. I think the impact we will see from both revenues as well as margin down the line, end of the next calendar year, kind of a thing. When actually the revenue starts coming into the JV, we would gain certain profits from that. Actually, during the other period, till that time, the operating expenses still to our share will actually impact our will come out naturally below EBITDA as a share of our expenses. Of course, naturally, we have factors that we have given our estimate for the year. The margin as well as the integration revenue will grow by the end of the next calendar, around the next end of the year. Got it. And lastly, so for the next quarter, we are calling out around 250-odd basis points from salary increases and 100 bps from ESOP costs. That 100 bps is incremental. So incremental is only 0.3%. It's only 0.3%. Correct. Correct. So historically, at least for KPIT, we have been able to always offset the wage hike to a certain level. You think that remains unchanged broadly from a thought process perspective? We may not be in a position to fully offset, but yeah, I mean, reasonable factors. Got it. Got it. And just lastly, just your thoughts on the deal pipeline and how that's panning out, and anything on large deals that you would see within that pipeline would be helpful. So what we can you can see that there are we called out five specific large sort of engagements, totaling to about $120 million-$130 million, on an average about $25-$30 million. And so it's been a good quarter from that perspective, and we really think that we can build on it as we get into the next quarter. Just the breakup of that is two of them are from the U.S., two are from Europe, and one is from Asia. And one also happens to be from the truck business. So that's sort of the breakup of the five large engagements that we were able to close last quarter. From this quarter perspective, as I mentioned earlier on, we believe that I'll talk about next one or two quarters, actually. There are two in the U.S., and then there are two in Europe where we think that that will help us to create a bigger pipeline for us as we get into the second half of the year. And again, most of them are passenger car vehicles, but you'll also see some trucks coming along as we get into the third quarter and fourth quarter of this financial year. So perfect. That's very helpful. Thank you so much, and all the very best. Thank you, Nitin. Thank you. Our next question is from the line of CA Garvit Goyal from Nvest Advisor LLP. Please go ahead, sir. Hello. Am I audible? Yes. Yes. Good evening, sir, and congrats for a good set of numbers. My first question is on the headwind industry, headwind side. So do you see any near-to-medium-term headwind, particularly towards Europe side? So Europe is getting slowing down. So do you see any headwinds in the end industry which our product offerings cater to, or do you see any execution delays of the existing deals in the rest of the year compared to what we were anticipating at the beginning of the year, sir? So naturally, there are headwinds for the mobility, which I'm sure you are seeing in the news. But it is different headwinds for different people. So for Chinese OEMs, their headwind is their market is quite saturated, and they have to move on into different markets to create a growth. European markets have to compete with the Chinese people on the cost in China market, which was their significant market, and that is really impacting their sales. Also, they have to compete in due course Chinese in their own market. So they are focusing on the so overall, also for overall automotive, especially PassCar, the overall sales of vehicles are going to be flattish or go down a bit. So that really makes pressure on their margins. So that is there. And the U.S. actually is also for the electrification area, they had to take more steps, basically, specifically because many of these OEMs have been focused more on electrification. And now, in order to really both for Chinese and otherwise the market, but at the same time to comply with their commitments, I guess they are going for hybrid and other technologies. So there are cost increases. There is a competition pressure, and that is there. And in some way, that creates an opportunity for us. And the only thing is you need a different kind of offering for this to capture these opportunities. That's what I had mentioned at the beginning of the comment. So we are not seeing any kind of delays or execution happening, right? So we see delays in the normal business, but as I said, that's what we are going to we are trying to offset with the new options, which are bigger and long-term. Understood, sir. Sir, KPIT has always emphasized leveraging global delivery and building scale through automation and productivity improvement. So can you share more details on the steps being taken to enhance the global delivery capabilities and how the automation is expected to impact the overall productivity and the operational efficiencies? Productivity improvement is a continuous pursuit. In the past, it has been through having toolchains, having effective training competency building. But the new thing that is happening is the usage of AI. So we'll start seeing the impact of that in terms of what the technology offers to us. So in multiple buckets, one is individual developer productivity. The second one would be in terms of efficiency at the functional level. And third is also enhancing offerings, which means the competitiveness of the offerings by using of the technology. So there is work happening on all these three areas. So for us, productivity is a continuous pursuit. Technology is just new technology coming to help us now. I would also add to what Anup just said. You also talked about global delivery. So we have presence wherever there is an auto and truck OEM footprint. And the model that we have is for Asia, we have centers obviously, we have centers here in India. We have a center in Bangkok as well. And pretty soon, we'll have something substantial in China. And from Europe perspective, we have a large center in Tunisia as well as our footprint in Germany, Netherlands, and the U.K. And for U.S., we have or for America, we have a center in Brazil and then in Novi, Michigan. So the nature of our business is that of a global model. And we are trying to make sure, depending on every client, we are trying to figure out the best cost country to sort of, A, increase our productivity, decrease the time to market for our clients. Understood, sir. And sir, one last question. This quarter, we reported YOY growth of 24% in the top line, but we are still maintaining the guidance of 18%-20%. So does that mean in upcoming quarters, are you seeing any muted kind of numbers as compared to this quarter, or what is the situation likely to be? We speak to the yearly guidance. I think very few companies are giving the guidance that they will give, I think. When we see a better visibility and we are sure about the external market, we will be visible. Okay. Anup, sir, thank you very much and all the best for the future. Thank you. Thank you. Our next question is from the line of Karan from Phillip Capital India. Please go ahead, sir. Yeah. Thanks for the opportunity and congratulations on a strong set of numbers. First question is on the commercial vehicles segment. So CV segment has been volatile since last 4-5 quarters. You spoke about some of the deals in the pipeline. So are you expecting this CV segment to rebound anytime soon? And what sort of projects are you engaging with clients? Is it related to EV transition, infotainment, move to hydrogen? If you can elaborate that as well. That's a good question. Karan, CV, we look at it in two ways: trucks and off-highway. Trucks is where we've had engagements in the past. Now, I think we have put in a lot more rigor to make sure that it's not just two or three OEMs that we work with, but there are six or seven OEMs. The nature of engagements with them is very similar to that of passenger car. It's just that their KPIs are different. So obviously, they have interest in software-defined trucks. That's one area. Second is within that, I think the level for autonomy in controlled environment is more likely to be more prevalent in truck business than anything else. Then also, the after-sales part is of interest to them. So over there, update, diagnostics, and after-sales part. That's another area of interest to them. Of course, from the propulsion perspective, there are fuel cell and other technologies that are relevant to them. Everybody has a pilot program in this, and we'll wait for it to sort of productionize it over a period of time. We do see these areas of growth. I have to say, this is on the back of all the work that we do in the trucks, in the vehicle engineering and design side, right? There is scope for innovation there as well. That's on the truck side. On the off-highway side, this is new to us. As we discussed earlier on, we are putting our strategy together. We've been working on it for the last six months. Now it's time to execute. Having said that, I have to just say that these are midterm bets that we are taking at this point in time. So the fruition and the actual impact will be realized gradually, but we'll see it will become a significant part of our business over the next 2-3 years. Okay, sir. That's helpful. Second question is slightly a strategic one. So in the global market, we have seen Volkswagen investing $5 billion in JV with Rivian to share the EV architecture and software development. So what can be the implications of this sort of a JV? Can Volkswagen reduce the outsourcing work to players like us, or do you think that such development may see a positive impact given that it will lead to faster time to market for their respective product lines? So your thoughts on this? So first of all, Volkswagen Group is an ocean. There are a lot of people there. Their budgets are very high, and there is a lot of catching up to do. Volkswagen Group, we look at it in three buckets. One is the Audi, CARIAD part, second is Porsche, and third is the Volkswagen brand. This is how we look at the account because it's one of the largest OEMs in the world. Their spend is tremendous. As Mr. Patil mentioned, they have a lot of catching up to do. A, in order to be competitive in China, and then secondly, retain their market share or increase it not only in Europe but beyond Europe. We think that using the Rivian platform, or they made investment also in XPENG in China, there is a twofold strategy. XPENG, they'll use it for China. Rivian, they may use it for outside of China. That's really their strategy. We believe that there is an important role for KPIT to play. All of this calls for substantial validation and integration work. For us, it's actually good news because they'll actually go down that path, and some of these programs will get launched. So we are looking forward to this. Okay. Thanks a lot for this. Last is on the cash balance. Cash generation has been heavy, and now the company is sitting on INR 1,000 crore cash. So any plans to do any M&A this year? And also, if you can highlight which are the service lines in your portfolio which are like white spaces that you would like to target through M&A? Beyond that, our growth strategy hinges upon three things: buy, build, and partner. We've been building many offerings over the years. We have also bought companies, acquired companies in order to enhance our current offerings and so forth. So it's a continuous effort, and we keep looking for complementary things. As Mr. Patil talked about building offerings for the future that are more relevant for them. I think some of them, they are building on our own. And for some, when we find the right kind of a fit, obviously, we'll go all out for it. So that's really the strategy. It's an ongoing strategy, and we'll continue to look at that. And I cannot ignore we cannot ignore the partnering part as well. We can't do everything on our own. So in certain areas, we'll have alliances and partnerships as well. Okay, sir. Thanks a lot, and all the best for the future. Thank you. Thank you. Our next question is from the line of Abhishek Kumar from JM Financial. Please go ahead, sir. Yeah. Good evening. Thanks for taking my question. My first question is on your business units. The architecture and middleware consulting has really been leading our growth for many quarters now. Just wanted to understand, is this a leading indicator for the growth in other areas given our strategy of going in with our middleware proposition and then taking up some of the surrounding services work? So how should we look at middleware consulting growth year- to- year? I think prior to middleware, there is architecture which comes before that. And if you look at PassCar, some of them have crossed the generation one, and there'll be generation two coming up very soon. Some of the pre-activities for Gen 2 have started. So these are continuous efforts that happen on the OEM side. We are well placed to actually contribute in those particular areas. Then Mr. Tikekar actually spoke about trucks. We see that even the trucks will go through the central architecture around the same time frame as the second phase of the car architecture renewal happens, right? So we are on top of that. We have focus activities happening around all these activities. So we believe that the network as well as middleware will be our entry points to anything that new happens at the OEM side. Sure. Next question is on competition. A lot of the IT services we have spoken about from softness. There's cost pressure. Even the European pure play ER&D players are ramping up their delivery in India, etc. So how do you see competition? Is it intensifying? Do you have a niche? And also, some of the deals that we win, are these RFP deals, or these are sole source deals? Any color around competition? Thank you. Yeah. So competition is certainly intensifying and largely from Chinese players for China market and some of the new parts. I think that's what really the competition we are working for. We had to be careful, and we still have the integration opportunities in all these areas. That's how we would say. I mean, naturally, all the players, this has been an area where there is a brighter spot than the normal IT. So many companies are trying to access to this. But I may just say that you can look at the growth numbers of many of the European and other OEMs. So naturally, they are playing in the conventional areas which have a growth. But to your fact, naturally, it will attract more competition. It will attract more. The competition will intensify. We believe that we are in a good position in terms of both sides. We are arguably the largest. Also, we are very focused, and we have made a lot of investment ahead of time. Sure. Maybe just last point on RFP versus sole- source deal. Just wanted to understand maybe pricing behavior of the competition. Yeah. So So from our perspective, this is an interesting metric to track. I would say I don't have the exact data, but I'll give you an approximate figure. I think there is a huge shift in our total revenue where many of the large engagements are actually initiated by us. They're structured by us, and there is no RFP. In some of our diamond accounts, most of our diamond accounts, that is absolutely the case. In some of the diamond accounts where it cannot be single source, we end up writing or influencing the RFP. So that part of business continues to grow, and the percentage of the overall business. Naturally, when it comes to some of the new clients and in some aspects, there are RFPs that we respond to. But that has gone down substantially as part of our total business. Majority of our business comes through long-term engagements and through proactive proposals that we make to the client. And they also emerge from thought leadership. Some of the problems that our clients are likely to foresee, we anticipate early, and then we go back to them with the solution. So that's been really the effort. And that's why Mr. Patil talked about adding new offerings that are more relevant from a future perspective. I think these are the investments that are essential for us to. Some part of the world, I think the OEMs do work in the RFP part. But I think our clear focus is to become a T1, technically in the best. Then we have an advantage in multiple ways, both in terms of price and winning deals. So that's what we play because that's what our play is, technology. Super. It reflects in the growth and revenue per employee. Thank you so much and all the best. Thank you. Thank you. Next question is from the line of Mohit Jain from Anand Rathi. Please go ahead, sir. So three questions. First is on TCV. Now, should we see this number in 2025 from a YOY standpoint? Should we see this number accelerate as we move ahead, or do you think this is enough for us to generate 22%-24% wherever we end up in terms of growth? So that was one. Second, CapEx. CapEx seems to be on the higher side for us. You spoke about various centers being open. So how should we see this number for FY 2025? And the last is on the JV, QORIX. Now, is the investment complete, or should we anticipate some more investment or infusion of IT from KPIT or from ZF into the JV? Okay. Let me take up the TCV part. Given the TCV that we have and what we believe we are likely to close in the next quarter, from our guidance perspective, I think there is sufficiency is what we think at this point in time. So I think we are in a pretty good position. And on a slightly longer-term basis, should we expect a pickup, say, Q2, Q3, or do you think around 200 numbers is good enough? No, I think it's too early to say any of that. I think if there are any changes, we'll, as always, in Q3, we come back. It's okay to say. Stick to the yearly guidance only, then we are very clear we would revise it in the end of Q3. I think we have been following it religiously because there are too many changes in the world. So we would like to be cautious on that. Second question on the CapEx. This CapEx is in the routine course of business. The quarterly mix may not be linear. So this quarter, also, we did some procurement in terms of our business for licenses or otherwise. It's a routine course of business, and the quarterly changes are cyclical, and there should not be looked at the linear. There is nothing one-time or nothing exceptional in it. So FY 2024 is a good benchmark? Yes. From a general number perspective. On the CapEx perspective, yes. Yes. Last on JV. Yeah. Can you repeat that question once more? So ZF also invested, and KPIT also contributed some IPs. Now, that is, and I think you have spoken about EUR 15 million being contributed by them. So is the investment complete, or should we expect more money flowing into the JV from KPIT standpoint? Money or IP? And second thing was, will we be consolidating this line by line, or do you think this will remain separate from our accounts? So the first part is from the KPIT. So I think we have mostly completed our part of the investment. If at all, it is required after 12-18 months, we may contribute EUR 5 million or so. But it really depends upon at that point of time what the requirements of the JV would be. EUR 5 million? Yes. Yeah. Overall, I think this will be naturally a joint venture. As I have mentioned many times in the past, we may look at the third partner. So this will come as a one line in terms of. It will not be consolidated line by line. We will have an equity pickup, and therefore, share of our profit or loss will come as a one-line item below PBT. Okay. Understood. Very clear. Thank you. Thank you. Thank you. Our next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead, sir. Yeah. Thanks for the opportunity. Just wanted to understand, you have given a color about the deal pipeline and the deal wins in this quarter. But on the mega deals, any commentary would help. I do agree those are cyclical and sporadic rather than recurring. But any commentary on the pipeline, any mega deals shaping up? Sandeep, I don't know what constitutes a mega deal. But from our perspective, the whole concept of T25 is to build long-term engagements with them. I think with the majority of them, we have built long-term relationships. And we believe that just the nature of the relationship that we have will continue to have growth in each one of them. And of course, there are a few others that we need to tap. So overall, I think where in the past, I think there are three or four large announcements that we made of so-called mega deals. Many such engagements get closed. It's just that not everyone is comfortable talking about them. And so they don't come up, or they're not bunched up like that. But most of the things that we do are all long-term large engagements in nature with at least 50% of the T25 OEMs. Yeah. So that's the nature of our business in general or at least the T25 model. Okay. Fair enough. Second question is, we have touched base in terms of the market headwinds, which we also read in the newspapers. But do you believe these market headwinds, especially in the mobility, is impacting our addressable market in the R&D budgets of the OEMs? I think I addressed that. The challenges have changed, and what their challenges are also addressed in different parts of the world. And I mentioned that it does impact some of the current offering, but there is a place for new offerings which we have built. So I think I mentioned that overall, our market opportunity does not change. It's not increased in due course. Okay. Fair enough. Last question on the QORIX side. As we said, commercialization may happen by end of CY 2025. But till that time, we might have to do some expenses for building the products. So any guidance in terms of how the JV loss line will look like in FY 2025 and FY 2026 through QORIX JV, which we can model? I think we would not be in a position to give that. I think all our guidance and etc. take care of what we commit on that. It will pan out as the JV requires the investments. Okay. Thank you. All the best. Thank you. Thank you. Our next question is from the line of Manik from Axis Capital. Please go ahead, sir. Hello, Manik, sir. Y es, can you hear me? Yes, sir. Yes, sir. Yeah. So while you already answered my question with regards to the performance in America, you also made some remarks that while we focus on the T25 customer base, a significant part of our growth essentially has been led by 15 customers. So given that we are now trying to essentially broaden this growth, do you think in the interim we go through a phase of consolidation and slower growth compared to what we've witnessed over the last few years? That's question number one. The second question was with regards to essentially getting your comments around the competitive intensity in the space as we've seen IT services companies make acquisitions in this space. How do you think that changes the competitive intensity for you in the segment? I think I answered both the questions in the past. I think I did say that there is an intensity, but I do believe that we are in the best position to we are in a prime position with the business which we have planned for. Yeah. The first one was in T25, you're saying that some of them you already have long-term relationships. Does that mean that the growth within those will slow down? So we will go by the guidance we give. I think they have given the guidance, and we continue to give our commentary over the medium term. I don't think there is any change. The second question was, I have a follow-up question with regards to the fact that you are seeing some weakness in terms of EV volume, while in the current context, it may not be impacting R&D budgets on new product developments, etc., etc. But do you think at some point of time, this starts to essentially impact future or new model R&D spend as well? I think we see the spend multiple market reports are there, and we have been talking about reasonable drivers for ER&D to continue beyond 2030. So nobody knows after five, six years, but I think this is a good enough visibility in terms of coming at it. Yeah. Great. Thank you. And all the best in the future. Thank you. Thank you. Our next question is from the line of Rohit Singh from Nvest Advisor LLP. Please go ahead, sir. Hello. Can you hear me? Yes, sir. Yes, clear. Yes. Congrats for a good set of numbers. I have two questions. One is on this QORIX joint venture, right? So see, we understand that it's a middleware business and stuff, right? So if you can take a step back, and then you can explain us what could be the size of this type of services currently and how it can build up over the next 3-5 years, not from KPIT perspective, but as a service industry as such. So if you can spend some time giving the color. QORIX is actually a product that goes in between the application and the, in the real literal sense, the operating system. So many people call operating system that includes the middleware. But the difference between an operating system and middleware is the operating system usually deals with making the capabilities of the hardware available to the application, whereas the middleware handles many functionalities that the application needs or multiple applications or a system needs to make it work efficiently. So this QORIX is a company that will focus on the product of middleware, and it will actually not do anything from a service perspective. Most of the integration activities related to the QORIX will be done by KPIT. Okay. Okay. Got it. And what could be the size of the business if you can? I'm sure that it's still at the nascent stages maybe, but how big it can become? No, I think typically license revenue, depending upon the product company, we expect it to be reasonably successful in the market with what we have done. Typically, it is 1:3, 1:4 ratio as normal when there is a license revenue or integration revenue in the product. Okay. Okay. Got it. And secondly, on your hydrogen fuel technology, is there any updates? Are you going to monitor your technology? If so, are you near that opportunity, or still you are at some way distance from that? Any talks with the government? Any follow-up that you can provide? I think our role is to work with the OEM. We continue to work with the OEM. We are engaged with few OEMs. And these are the early stage of the technology and a lot of POCs, etc. going on. We are helping our OEMs to realize this technology. The production program will come in due course. Okay. Thanks. That's it from me. Thanks. Thank you. Thank you. Question is from the line of Deepak Rao from Kuber Asset Advisor. Please go ahead, sir. Yeah. Hi. Can you hear me? Yes. Yeah. Congrats on the continued success. Thank you. you. Some of the questions I have on QORIX have been answered in the earlier question. Now, I just want to say, you're saying that 1:3 would be the revenue. So if architecture and middleware consulting is now 20% of your present revenue, then maybe half of that would be construed as the middleware product revenue? Currently, what we do does not include any product revenue because, as I mentioned, the products will get ready by the end of the next year. Got it. Got it. And just from a perspective of opportunity size, would ZF be originating business, especially from? It's an independent company, so it has its own business development team. So it's quite likely that the customers might be from non-KPIT customer base. Yeah. Yeah. So it has independent clients, and they will go in the market. See, the product, basically, the nature of product business is it goes to multiple clients, and it will go through. Naturally, they will leverage KPIT as well as ZF's ecosystem. But it will have its independent presence, and it will look at the opportunities in its own way as well. But that will create opportunities both for ZF and KPIT in their own business. Excellent. So thank you very much.