Ladies and gentlemen, you're connected to KPIT Technologies Limited earnings conference call. Please stay connected, the conference will begin shortly. Ladies and gentlemen, good day and welcome to KPIT Technologies Q2 FY 2026 earnings conference call hosted by Dolat Capital. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. 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, Shifa. Good evening, everyone. On behalf of Dolat Capital, I would like to thank KPIT Technologies Limited for giving us the opportunity to host this earnings call. I would like to hand the conference over to Mr. Sunil Phansalkar, who is Vice President, CFNG, and Head of IR at KPIT, to do the management introductions. Over to you, Sunil. Thank you, Rahul. A very warm welcome to everybody on the Q2 FY 2026 earnings conference call of KPIT Technologies Limited. I hope you all had a great Diwali and have a great year ahead. On the call today, we have Mr. Kishor Patil, Co-Founder, CEO, and MD. We have Mr. Sachin Tikekar, President and Joint MD. We have Mr. Anup Sable, CTO and Board Member, Priya Hardikar, CFO, and Sunil from IR. As we always do, we'll have the opening remarks made by Mr. Kishor Patil, and then we will have the floor open for your questions. Thank you once again for joining. A very warm welcome to you, and I will hand this over to Mr. Kishor Patil. Good evening, everyone. Very happy to take you through the Q2 results for FY 2026. As you might have seen, the overall year-on-year dollar revenue grew 4.4% and 60.4%. Quarter-on-quarter growth has been 1.8% in terms of dollar and 60.3%. Organic growth has been 0.8% in terms of dollar; it has been a degrowth of 0.8% and 60.23% negative. So the EBITDA remains at 21.1%. To give some color to the growth, I wanted to take some point and some time and explain to you something because there have been some questions about the wins we continue to have. Actually, that has been the issue in the industry also. The wins we have and then why it is not reflected in the growth. I would take a moment to explain that. See, if you look at the time, just if you take it out, I think I want to bring that out that there has been a reduction in the $65 million revenue in this time. And it has two compositions. One is the $45 million, roughly about $45 million, which is basically when the customers deprioritize their spend from the old programs or moving to the products or some of those kind of movement of their spend, either because of discontinuing or delaying of certain programs or a certain moving towards using something what they already have. If you really look at this $45 million, looks at the reduction in the revenue includes autonomous, sorry, electrical, middleware mainly. And in the area of geography-wise, it has happened in mainly USA, Asia, and a little bit in Europe. This has been basically the part where the companies actually reduce their spending overall on engineering. The about $20 million kind of revenue, which got cannibalized, mainly because we came out with a different solution and provided a more holistic solution to the client. Where the revenues dropped because we gave a more holistic solution, our revenues will get reflected in future because these are mainly AI-based and other solutions, which the holistic solution will take some time to really materialize. Overall, we have $65 million which got lost in terms of revenues, which of course has been compensated by the wins from our pipeline. That is the question I thought I would address properly. That has happened because of the wins we had. Generally, the wins we had have been in digital cockpit area, validation, after-sales diagnostics. These are the areas in which the wins have been more. Also, the products we have in the validation, etc., technical products. They have largely compensated this drop. That is why sometimes the question is why the pipeline could not get reflected into the revenue. We have actually absorbed this and actually have been in a position to maintain the revenue. The second part is about the key point I would like to bring out is, as a company, we believe that the client choices are changing, and we want to make sure that we continue to add value and continue to lead the client engagements and have a higher share and maintain our leadership with the clients. We have been moving our overall services to the solution part. When we talk about solution, it means that we take a holistic view and give an end-to-end solution to the client and take the full ownership. This kind of revenue we have more than doubled in the last year to 18%. That has also helped us in improving the profitability. That is why we have been in a position to maintain our profitability. Coming back to the profitability, our EBITDA is slightly higher than the last time. It is 21.1%. We are very confident that what we have talked about, that 21% EBITDA, we will be in a position to maintain during the year. That would be considering the fact that we will be giving increments, some in next quarter and some quarter after. After giving that, I think we will be in a position to maintain that. In terms of people part on this side, we have a net addition of 300 people. It has two parts to it. One is we have in the overall, in line with the movement from services to solution as well as also the AI readiness, we continue to relook at our talent. And wherever we believe that those kind of competencies cannot be achieved by a certain set of people, also we are making sure that all our people, including project management as well as the front-ending people, are technical. Where that is not, we are not in a position to have that kind of a team. We have a reduction of about 500 people headcount in the current business. At the same time, we have 800 people from the inorganic Caresoft acquisition. With that, our net addition is about 300 people. This is also a part of how we have been in a position to keep the efficiency and productivity. Overall, our profits actually from the fully-owned business has increased from INR 177 crore to INR 191.8 crore. There is a substantial increase in the profit. The net profit reduction is on account of our share from Qorix as well as Embitron. In both the cases, in case of Qorix, actually, the revenues have been good in some quarters and not so great. Next quarter, we'll see again some revenues. These are little fluctuating revenues being a startup. If there are no license revenues, then it impacts the profitability. One thing, if you go back and I explain to you that the reduction in the revenues was also on account of middleware and operating system, I think that part. The middleware part, actually, that also most of the OEMs have moving their re-architecture of middleware to the next for some time. That is what I explained last year also, last quarter also. Because of that, there will be certain delay in actually realization of revenue in some of these areas. Of course, still, there are certain revenues based on the current business in Qorix. On Embitron, also, we have an increased share of loss during the quarter, mainly on account of as we acquire, we are moving the accounting best as compared to our accounting standards. We have written off certain expenses such as stock options, etc. That has really impacted. All this is largely will come down significantly in next quarter and the quarter after. The other part is about the cash and the DSOs. Our DSOs are 49 days. KPIT DSOs have been 43 days last quarter. It is 44 days this quarter. The increase in the DSOs is on account of Caresoft acquisition, where their DSOs are at a higher level. It will take us some time to really get them into the same system as we have. Over the period, this DSO will come down. The overall cash is INR 10.5 billion. Now, this is after during the quarter, there has been, as always, INR 160 crore plus cash generation, which has been pretty strong. However, we had the payouts in terms of Caresoft acquisition, investment into health, and. Dividend. Of course, the dividend payment. With this, the cash is about INR 10.5 billion. If you really look at the future, we see that the client's discussions are turning positive. I think they see a little bit more stability on account of tariffs and geopolitical issues to the extent where it is. I mean, I'm not saying it is 100%, but it is much better than where it was. We can see that positive discussions happening. Very specific conversations with the client on specific opportunities. We can see that happening. In that, we see the good discussion happening on autonomous. Also, we see that after-sales diagnostics, cybersecurity, commercial vehicles. Europe, of course, continues to see good traction. India, China. We do believe that in the U.S., commercial vehicles, etc., will have a positive growth. That will drive that. Also, we believe that I do believe that the large deals which we have, which includes a significant deal win from a European OEM, which is a multi-year, multi-domain kind of a win, which is over three years, which will help us to really accelerate certain revenues. We do believe that from the last two quarters, we have a constant currency degrowth. Reported revenue has been growing. We believe that in the quarter three, we will be in a position to have a positive CC growth, flattish to positive CC growth. While absorbing the expenses like increments, etc., we will be still around the similar EBITDA margins and the profitability. In terms of quarter four, we believe that we do believe that there will be a meaningful growth, which will be coming in. We believe that it will be mainly on account of the areas which I mentioned earlier. This is where we see this. We believe that in the medium term, we would like to really be making investments already. We are expanding the verticals as we have mentioned about. One is, of course, off-highway commercial, which we believe will bring some growth. The second part, we are exploring industrial or manufacturing, as you can see. That is the third thing. We are exploring verticals such as micromobility. We are also exploring defense to see where is our sweet spot and where we can actually lead as we have led in the automotive world. We see some very interesting areas where we believe that the investments we have made in the technology will help us to get there. Again, I also believe that the investments which we made in the last year or so, again, whether it is in terms of health, whether it is in the base of Caresoft which helps us to reduce the cost of the vehicle as well as the manufacturing cost and health, these are all very, very related technologies which will really improve us to increase our wallet share in the existing client, as well as will be very meaningful propositions in some of these expanded areas. I may say that we are still in the process of going deeper into it and exploring where we can grow. I feel reasonably confident that based on our initial assessment, we will have a reasonable growth prospect in medium term. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sucrit B. Patil from Eyesight Fintrade. Please go ahead. Good evening to the team. I have two questions. My first question is to Mr. Patil. As more tech players enter the software space, what is KPIT doing to build a strong edge, not just through client wins or platform launches, but something deeper, like a way of working or thinking that grows over the time and makes it hard for your competitors to copy you? Thank you. I think the point you mentioned, I think we believe that there are two, three points I have. One is the new, basically software-defined vehicles, which a lot of people use the word, but KPIT had been pioneering that and has the largest number of programs. I still believe it is a meaningful part where clients have multiple years to get there. Not only that, it has become more important because of the introduction of AI and multiple technologies, specifically in autonomous area. With some of these investments, we may believe that we'll be in a position to maintain our leadership. The second area I believe, which is very, very important, is the architecture of the vehicle, which I think the next programs which clients will come up, I think they will look at the one who has the highest experience in this area, where naturally we are building a very, very core expertise and a core team to really build a comprehensive solution for the next level of architecture, which will certainly help us to really get involved at a very early stage in the program. The second part, I would say that AI is a major area of focus for us. AI, we have invested for a long time already. We are doing not only pilot, but some production programs also with the OEMs. The feedback which we have from the clients is this is the best-in-class solution they have seen in this area. With that, we believe that we can significantly reduce their time to production programs and improve the quality, which I believe will be a sustainable advantage both in automotive and expanded mobility world. Thank you. My second question is to Ms. Hardikar. I believe she's also on the call today. Yes, yes, I am. Tell me. Yes. My question is, it's a forward-looking one again. I just want to understand when growth slows down or costs go up, how do you manage to keep the profitability stable? Are there any smart ways you're building into your system, like delivery design or automation or any other kind of thing that will help you stay efficient without cutting any corners or taking any pressure? Thank you. I think I will answer that question. I think we talked about it. I think first is the approach we are taking of the solutioning that allows us to really improve our realization. That is the most important part. The second is, I think we always like to be on a cutting edge of the technology and the solution. That also improves our realization. I talked about AI, which will really improve the productivity and efficiency, not only in the software development, but for the client. With all these three things, we will continue to do that. As you have seen, we are probably one of the only companies who have been in a position to manage this kind of margins in this uncertain world. Thank you. Thank you for the guidance. I wish the entire team best of luck for Q3. Thank you. Thank you. Next question is from Nitin from Investec. Please go ahead. Yeah, hi, good evening. Thank you for the opportunity. You gave a very detailed color on the revenue impacts. Just wanted your thought process on how do you see this, when do you see this reprioritization sort of impact reducing? I I understand because of obviously all these trade tariffs and all of that, it would have meaningfully changed priorities. Do you think a lot of the impact has already happened and we should start seeing that come off? How should we think about it broadly? How are you thinking? Yeah. So thanks, Nitin. I think one thing I mentioned too that from next quarter, we'll see the at least you will start seeing that on CC part also, we will be marginally growing and Q4 has meaningful growth. I do believe that there will be a certain cannibalization which may continue to happen next year as well. I think our revenue growth based on the solutions will be higher than that. That's how I would put it. Because it is not about just reducing by the client of the spend, which may, if you ask me, may really get more stabilized in the next couple of quarters. The AI-led solutions, which we are ourselves bringing into the client, we believe that it will give us an edge to take a higher share of the client for the wallet share, as well as give a more holistic ownership of the programs. That will improve the revenues. I would believe that there will be certain cannibalization which will continue to happen, but we will, and that is because of the efficiency and what we bring to the table. At the same time, I think it will also account for higher revenues. Got it. So obviously, you did mention next quarter should be higher growth in CC, flattish, or some growth. That is on an organic basis that you were alluding to, right? Yes, yes. Flattish, yes. Yes, flattish too. Yes, yes, yes. You did mention that the reprioritization is a bigger chunk, almost $45 million. Of the last year. Yes, of the last year. Cannibalization is around 20%. Cannibalization is understandable because obviously it should lead to higher velocity of business for you because clients save more, they will spend more with you. On the deprioritization of spend, that should be on a declining trajectory or more or less declining. That is correct. That is correct. Yeah. Fair enough. The other thing I wanted to understand was if you look at the geographies, obviously this quarter you have Caresoft as well, which has come through. So it is not very clear, but at least looks like Europe has done exceedingly well this quarter. US, there is some marginal decline, but obviously I am assuming there would be some Caresoft delta there. I just wanted your thoughts on one, how should we read the geographies this quarter? And two, how are you seeing the opportunity set across the geographies on a going forward basis? Overall, the way I put it in the initial thing also that basically we saw growth more in Europe overall. Then we saw a little bit growth in Asia. We believe that USA growth will come back on back of off-highway and commercial in a quarter or two. That's how we see it. In Asia, basically we see growth in immediate over time. We see all the regions growing in Asia. In the immediate future, we'll see a little more traction from India and China. We believe that in the next six months, we'll see some more revenues coming from this, apart from our general Japan, Korea. Japan, Korea, we may see some new engagements coming, etc., a little down the line. That should give us a further fuel to our growth. Perfect. One last question. On Caresoft, we reduced the consideration we are paying them because the revenues came in lower. You think they are broadly stabilized and growth should start coming through? The second part of that is. Yes. Yeah. Okay. Perfect. Any joint wins or initiatives that's sort of already sort of showing up for you? Yes, absolutely. There is a reasonable pipeline and we are seeing the conversion of some of them in the initial phase. Absolutely. Sure. Perfect. Thank you so much and all the best. I'll come for a follow-up. Thank you. Thank you. Thank you. Next question is from Bhavik Mehta from JPMorgan. Please go ahead. Thank you. So first question is, Kishor, you did speak that the client conversations are moving in a positive direction. But when you think about the pace of recovery over the next two quarters, how should we think? Because Q2 could be flattish, Q2 USA could be like a very good growth quarter. But does that growth momentum continue going into next year or will it be more like a gradual recovery we should expect over the next 12 months? I would be cautious right now, but I will give you more color on this end of Q4 only because I think by that time, I think some of the uncertainties would be less. I would not look at, I mean, I would see that it will be a meaningful growth recovery, but it will not be like a hockey stick recovery in the year. Okay. Got it. The second question is on this large deal engagement, what you have announced with the European OEM. Any color in terms of what could be the size of this engagement? When does it start to run? When does it reach full peak revenues? We have started actually the projects. I have mentioned in the current wins also, there is some part of it. Naturally, the deal of a certain size comes in phases. It is something in excess of three digits. Of course, potential we have to really maximize this, but right now, I would say put it as a three-digit number over three years. Okay. Got it. Thank you. Thank you. Thank you. Next question is from Aman Soni from Nvest Analytics. Please go ahead. Hello. I'm I audible? Yes, please go ahead. Hi. Good evening. Sir, my first question is on our initiatives on the sodium ion technology with Trentar Energy. How is it going on, sir? Also, on the hydrogen cell side, what are the latest updates? We are seeing various things that are happening in these areas, particularly the staff are getting shifted and hirings are being done. I just wanted to understand where are we at present and when can we expect these areas to start contributing to our top line in a material basis? That is my first question. See, basically when we had talked about the battery and sodium, we have licensed them. If you remember, their investment will be substantial. In phases, they will reach up to $250 million, not in the first phase, but in the phases over the next 2-3 years. That is what the investment they will make. The meaningful production will start after two years, and that is when we start getting the royalties. I think I had explained that when we had made that investment. I would say the hydrogen and some of these are at early stages. We do have certain pilots and those kind of projects may come in, but it is not something which will scale up in terms of an opportunity for us in the next few years because the production programs for new production programs to kick in, it will take time. Naturally, our all efforts are in terms of maturing the technology, building the ecosystem, building the pilots, and that's what we are doing with our clients. Got it. Got it. And sir, regarding our deal with MG, how is the execution going on? Last time you said the second half, we will be doing the good execution. What is the progress on that, sir? First, I have not mentioned that the company, I mean, it is all assumed, so that may not be true. At the same time, I would say that we will be in a position to start the project in Q4 and then scale up in the next year. Got it. Got it, sir. Just a bookkeeping question. There is some big jump on the other expense line items. Can you tell us the reason for the same, sir? I think in this quarter, Caresoft two months expenses are also consolidated. That is primarily the main reason. There are some other expenses that keep, which are not linearly similar, but mainly it is the consolidation that has impacted the absolute value that you are pointing out. Got it. Got it. That's it from my side and all the best for the future. Thank you very much. Thank you. Thank you. Next question is from Chandramo uli from Goldman Sachs. Please go ahead. Hi, good evening, and thank you for taking my questions. My first question is just around the share of profit and loss from associates. You did explain that there are some one-time expenses there, which has caused the number to be higher than normal. The usual sort of share of loss from associate we see is around INR 4 crore-INR 5 crore per quarter. This quarter seems to be close to INR 23 crore. I I just want to understand if you could size out for that, how much of that is one-off and one time, and then how much of that sort of goes away? What are the potential sustainable run rate could be there going forward on a quarterly basis? I think they have mentioned that it is one time is about four to five growth. This time, there was no revenue in the Qorix book, which got postponed to the next quarter to some extent. There is a cyclical nature. See, one thing I want to tell you is that the investments which we are making in some of these companies, I think this will really move the company from services to solutions to products. That transformation will make, while we believe that we have been in a position to do a good job, there are certain investments in the initial phases, and the revenues can be little, I would say. Intermittent. Intermittent. From that perspective, some of these impacts can come to us. In this case, specifically, I think there were two things. One is, as I said, the revenues got postponed. I think if that would not have happened, we would have been at the similar stage as last quarter. Got it. That's helpful. Just related to that, I think the Qorix JV we've invested over the past 18- 24 months, which is a pretty large middleware opportunity, as you mentioned, more ballistic solutions. You might get more integration business also out of this opportunity set. I just want to understand, I think we have said that initially we expected December quarter 2025 to be the quarter where we start seeing more visible business from Qorix, but maybe the macro has changed. I just want to understand what your thoughts are on Qorix and when the potential inflection in opportunity set might happen there based on the discussions you're having with customers around this unique solution. There are a couple of customers where we have a strong discussion happening. As I mentioned earlier in the time, middleware and the architecture for many of these programs have been postponed by many people, most of the OEMs, to a later date because they do not first, they have not been in a position to deliver on the existing programs. There we see a huge opportunity in terms of validation and taking the full ownership. However, on the architecture and middleware time, they have postponed some of these programs to a later date. The architecture and opportunity, as you know, comes at the beginning of a program. However, it has become more strategic to us. Qorix has become more strategic to us because, as I mentioned, some of the very strong differentiators we are building is about building a more efficient architecture, which will reduce the time of a vehicle production program to less than two years. One of the key parts in that is the architecture part. We are building many solutions, and Qorix would be one part of that solution. That is why I think in the medium term, this will become more strategic than what we thought in the earlier stage. Got it. That's helpful. My second question is just around the macro environment. We've seen the U.S. has signed trade deals already with Japan, with the U.K., very close to signing a trade deal with Europe and Korea. These four regions are possibly the most important auto manufacturing regions globally, apart from China. In this environment where you're getting closer to trade deals and clarity on the macro front, that potentially means more clarity for the auto OEMs as well in terms of their capital allocation and investment plans. I just want to understand how your core customers are thinking about potentially reopening that app on automotive R&D spending. I think in your comments on the presentation, you did mention that you're expecting more meaningful pickup in FY 2027. Any qualitative commentary you're able to share around tariffs negotiations coming to a close and what that might mean for the macro for your customers? I think I would say that due to the way things have happened in the last year, people are most of the places, for example, I will just without many clients in the Southeast Asia piece. Earlier, we were looking at making investments in the U.S. in manufacturing part. They are very ready, but they are still taking time to see whether which would be the best way to do it. Some people were going to make investment in Canada, but then they are evaluating that option while they are completely ready with many of those things. I think it still will take, in my opinion, a couple of quarters before things become very clear to them. At the same time, as I mentioned to you, the current, I believe, next 2-3 years' demand, two years' demand for us will come out of current production programs, which are in a, I would say, not in the best of the health for many clients for multiple reasons. That is where they are reaching out to KPIT, even the clients which are not currently we are engaged with. That will be one opportunity. The second is the innovation opportunity, which is I talked about a couple of areas: innovative solution on autonomous, innovative, etc. The third thing, as you have seen, the cybersecurity issue which happened with JLR and some of those. I think these are some of the areas which create opportunities currently. There is one market, there are a couple of markets, and especially I would say India market, which is positive and will provide more opportunities to us, which is innovation-led. That is the same case we believe in Southeast Asian market. Some of that will really help us in this time. Got it. That's helpful. Just last question is just a clarification on one of the comments you had made earlier on the call. It looks like this quarter, there was close to 2.3% benefit from half a quarter sort of consolidation of the Caresoft assets. Next quarter as well, I think you will get maybe a month, month and a half additional benefit from Caresoft. The constant currency flat to sort of low single digit you mentioned for 3Q, does that include that one to one and a half month benefit next quarter also? You might get closer from Caresoft. No, no. That does not include. I said organically we will be flat to positive. Got it. That's helpful. Thank you very much and all the best. Thanks. Thank you. Next question is from Vimal Gohil from Alchemy Capital. Please go ahead. Yeah. Thank you for the opportunity, sir. Just wanted to check on or double down on the plans for China. Any movement there? When could we possibly see some small, even a small contribution from there in terms of our revenues? That's point number one. The second point is a question in terms of the industry in general. We've seen General Motors do away with Android and Apple CarPlay in their infotainment system and move towards their own platform, which is called Altify. Do you see some of these OEMs moving towards a similar trend? This is, of course, because of privacy concerns, data security, etc. If at all OEMs move towards a similar trend, how does KPIT benefit from the same? Thank you. Let me just answer the first question on China. I think we are making good progress. As I mentioned, we are looking at China in two or three ways. One is really learning from them and investing into technologies proactively, which you are seeing. That's exactly what we are doing. The second thing is engaging with the clients, which are global clients in China and Chinese clients. We are seeing progress in all these three, and we believe small revenues will occur in quarter four. The second one. On the technology side, I would request Anup, our CTO, to take. Yeah. The question about GM has done away with the support of Android Auto and CarPlay and whether it's a generic move by the OEMs, the answer is no, we don't see this as a generic activity. The logical explanation for that could be GM has a very captive audience in terms of its customer base, so they can probably afford to do that. Others may have thought that it's better to stick to the flexibility that consumers may get through Android Auto or CarPlay. In any case, either one of these, when it is Android Auto or CarPlay, or whether it is a proprietary solution implemented by the OEM, we do stand in terms of our advantage of being the best in that particular area to gain the market share. It doesn't really affect us whatever decision the OEM takes. Just to clarify, what you're saying is if at all the OEM moves towards an internal architecture, a centralized architecture, it doesn't really impact us. And if it is not. There is a negative impact. In fact, if at all, there is a positive impact on us. I wanted to understand where in the value chain of building that architecture does KPIT participate with the OEM? Right from the top of the value chain, right? In terms of engaging in definition of the architecture to defining the proof of concepts of architectural concepts to actually doing all the platform software, the validation of that, and then subsequently developing domain software, integrating that. The whole value chain is our involvement. Of course, that gets further enhanced by our ability to give solutions in some of these spaces now. Understood. Sorry to harp on this demand environment question. If you would were to compare the uncertainty levels when we started the year, maybe in Q4 of FY 2020, in Q4 of last year versus now, incrementally, how much of an improvement are you observing, or is it the same? Or has it deteriorated? It has improved substantially. I do not have a barometer to look at it, but it is certainly, I think I would say a certainty has gone down. In many parts, it has, I mean, people have, because people learn to cope up, right? I think from that perspective, they are making their priorities. As I mentioned to you, in either case, we have basically big opportunity on where they are. I would say more than 50% uncertainty is gone, if not more. Understood. Thank you so much, sir. I'll fall back in the queue. Thank you. Thank you very much. Next question is from Ankur Pant from IIFL. Please go ahead. Hi. Thanks for taking my question. My first question is on the deal. Do you need some clarification? Yeah, three-digit multi-million dollar deal. Is that included in this quarter's ticketing? Ankur, as we said, only a very small portion of it is included in the deal wins that we have mentioned in this quarter. New engagements under this will keep happening in the coming quarters. So a very small portion is included in this quarter. Sure. When do we expect the ramp-up of this deal? As we said earlier, we have already started working on it, and we'll have ramp-ups coming up in the next quarter and the following quarter. Okay. My third question is on the trajectory that we have highlighted for 2H. We expect a spike in revenues in Q4. Is that basically dependent? Is that coming on the back of an improvement in the environment, or it's basically something kind of a deal ramp-up that we have in hand, which we know about? It is based on the improvement. It is based on the deals which we have and the visibility we have for now. Okay. Does it also build in an improvement, or it's built in a status quo kind of an environment? We have not looked at anything significantly different from here. Okay. And finally, Europe did exceedingly well. I understand that there is Caresoft in that as well, but even without that, it did quite well. Again, things getting better in Europe, or a deal ramp-up which drove this kind of a growth from a particular client? There are two things which we service the client across. There are two things. When the client is spending and building a new product, we have a big opportunity. When the client is in a real problem and he is facing issues in terms of delivering on the current program, there is an opportunity for us. European opportunity is currently based on changing the supply chain. I think most of the European players are looking at moving from the local ecosystem to more global ecosystem. I think that is where we will get. Do you see a change in the timelines of, say, what they were initially planning before this slowdown, the electrification timeline, or the timelines of how a particular product development would take place? Have they been right-shifted to some extent, or how do you see that? Timelines of product development. The new product development timelines have shifted by about one to two years for almost all the OEMs. Got it. Perfect. Thank you. All the best. Thank you. Thank you. Next question is from Sandeep Shah from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity. Sir, the first question, generally, if I look at the TCV which we disclosed, the second half is generally heavier in terms of TCV wins for KPIT versus first half. Do you believe the same trend may continue this year, or do you believe because of macro decision-making delays can lead to a normalized trend over all four quarters rather than second half heavier than the first half? I don't know. I mean, if you are asking me what will be the deal wins next quarter, I cannot answer it directly. I can only say that what we have, the total wins and the pipeline is pretty strong enough. Our focus is on conversion and whatever we have done now to really get into implementation. Okay. Okay. Sir, the explanation which you gave on $65 million revenue leakage, can you correlate with which period it was in terms of last year, this year? What is that definition? First, it was not leakage. It was basically what the clients stopped spending. That was the large part of it, which was $45 million, which I mentioned is when they stopped spending in certain programs or certain areas. The other $20 million is what we talked about as cannibalization, where we are doing the project, and the only thing is we lost that project because the current revenue, because we went with a more holistic solution with them. This is how I see it. I cannot really 100% tell you what it will be, but certainly under a year. Certainly under a year. Okay. Okay. Just the last bookkeeping question on depreciation and amortization. It has gone up because of Caresoft. Do you believe this run rate can be maintained, or can it further go up with the full quarter consolidation in Q3? No, it will go up. I mean, this is two months amortization for Caresoft in this quarter. So linearly, it will be for three months in the next quarter, and then that run rate will continue. The revenue will also be continued. Okay. Thank you. The revenue also will be added for three months. Yeah. Okay. Thanks. All the best. Thank you. Thank you. Next question is from Ishan from Crowd Asset Management. Please go ahead. Yeah. Hi. I just wanted to ask about the KSAR Classic and KSAR Adaptive. Also, your product platforms that are there, that are modular or customizable, how are they scaling from client to client? Both the products have been moved as an IP to Qorix. Qorix is actually managing these products and product sales to our customers right now. We are not really accounting them in our KPIT revenues or costs at the moment. You can explain why. Both Qorix roadmap is actually about supporting the two current products. That is KSAR Adaptive and KSAR Classic. KSAR Classic has been there for quite some time. KSAR Adaptive is for the service-oriented architecture and adaptive version of AutoSAR. There is also a third product that Qorix is introducing, which is called the Performance Stack, which is a more optimized version of KSAR Adaptive, where some of the other system problems have been taken care of. That is largely the portfolio that Qorix is going at. All right. That's all from me. Thank you. Thank you. Thank you. Next question is from Ruchi Mukhija from ICICI Securities. Please go ahead. Yes. Thank you for the opportunity. I have two questions. First, you have clearly demonstrated progress on profitability led by what you call solutioning as well as the AI effort productivity. Given the current context where growth is slightly soft, can you elaborate how you plan or what is our strategy to reinvest these efficiency benefits? Do we see continued margin expansion, or you would think to prioritize in addressing these investments that you've been highlighting to us? I think we would do both. Of course, the current organization and the front end as well as the practices are all geared for the current business and the expanded into off-white commercial. We have the organization, we have the focus, and we have the clients. We will double down on that. Just looking at we will be in where we are looking at the future expansion plans we have. We are looking at the adjacencies where either we can leverage our existing client because, see, for example, some of the areas I mentioned, like defense or this, some of our clients will go into are expanding into that, or the technologies which we have are getting into the new vertical. That is the time we are trying to leverage. I think efficiency, of course, we believe that AI will be a big differentiation for KPIT. Fundamentally, we are looking at adjacencies in order to leverage what we have. You know that KPIT has been a growth company, and last few quarters has not been to our expectations. We are just making sure that we create enough ground to play. Got it. Is the workforce adjustment near conclusion, or do we anticipate further changes to the employee base in the coming quarters or not yet? It will be a continuous thing. We keep on hiring. We will continue to hire. We will continue to hire even on-site because of the solutioning overall thing which we are doing. Of course, we will hire the people which are most suitable for our AI-led transformation and the solutioning transformation. I think from that perspective, we'll continue to hire. Wherever we believe that people are not in a position to make that transition at the individual level, we do give sufficient time. As you know, even today, after all this, we have the lowest accuracy. We are very transparent with the people as much as we are transparent with the investor. I think we will make the maximum effort to do that. Wherever it does not work, then I think then only in that case we have to part ways. Thank you. Thank you, Mr. Patil. All the best. Thank you. Thank you. Next question is from Sushovan from Anand Rathi. Please go ahead. Hi. Thanks for the opportunity. I hope my voice is audible. Yes, we can hear you. Yeah. So the question is, if you look at the fixed price projects, which are there that have significantly increased by 800 basis points from 56.7% to 64.8%, do you see that? I mean, when we look at some of your peers also who are moving to the fixed price projects, we see that it improves the profitability and the productivity, but it has an impact on the cash flows. Do you envisage going forward, if this contribution keeps on increasing, it may have an adverse impact on cash flows? If you could possibly just highlight on that, that would be helpful. I have another question, but I'll wait for the sponsor. It's a marginal impact. I don't see it's anything significant. Once we are in the cycle, I don't see that. There could be some minor impact, but as you said, we will have a higher profitability as well. The milestones for fixed price projects are designed in such a way that, I mean, it has minimal impact on the overall cash conversions. Understood. Thank you. The other question was basically, if you look at whatever is happening in the U.S. with GM writing off a significant amount of charges for impairments on the battery EV, and the same thing we are seeing that even for Mercedes-Benz and Volkswagen, where they are deferring their entire EV programs. Just wanted to understand what is your revenue correlation with the EV programs and how much would be pure play ICE correlation and such. If you could give some color on that, that would be great. That's it from my side. You are basically asking what will be the impact on us, right, with these two things? I think the first thing is that. Yeah. Sorry. How much we do not see, I mean, if you really look at what I mentioned, some of the programs where we dropped revenues were in this area. Actually, we hope that, and we are seeing that, some alternate programs are coming up, alternate powertrain programs are coming up. We do not see any significant thing. I must say that it is specific to certain clients, and where they see the differentiation, some of the other OEMs are continuing their investments, actually. If you look at, for example, if you look at, I mean, just something because it is close to us, look at India. I think people are continuing to invest into some of these areas. Okay. So basically, just to get it correct, a decline in the EV concentration would not impact your revenues to a larger extent? I mean, an EV concentration. I think I had mentioned that sometime back. If I may repeat, our revenues are not only EV revenues. I think there is some wrong notion people had. As I said, our revenues are driven by digital cockpit, autonomous programs, then after-sales diagnostics, middleware, many of these areas, body, some of these areas. As I said, there are a few areas we are adding, such as cost reduction, cybersecurity, digital experience. There are many areas which we are adding. Also in the powertrain area, propulsion area, as I mentioned, even if such things happen, I think alternate powertrain by itself is an opportunity for us. I mean, I think these things happen, and we do not see any big change, impact on because of that. Sure. Thank you so much for the elaborate answer. Thank you. Thank you very much. Next question is from the line of Karan from Philip Capital. Please go ahead. Mr. Karan, your line has been unmuted. Please go ahead. Hello? Yes, sir. Please go ahead. Yeah. Thanks for the opportunity. Just one thing I wanted to check. Mercedes recently rolled out their first SDV vehicle on MB.OS platform, and they are talking about rolling it out across their entire sort of models. Does KPIT have any role to play in that sort of an opportunity, or are we working on, let's say, SDV 2.0 for these OEMs? I would not comment on a client-specific thing, but we are engaged with Mercedes. We had made that announcement some time. Okay. Okay. Second thing, so you spoke about commercial vehicles will be driven in the U.S., but about passenger vehicles, will the growth be consistent across all three regions, or are there any counters to that? I think I answered this question a few times. I think Europe followed by Asia, followed by US in passenger car. Okay. Okay. Last thing, on the interest expenses have been going up since the last two quarters. How should we think about the interest expenses going forward? For the current quarter, as you must have seen the results, there is a working capital loan that we have availed only for a short term. That is the reason why you will see the interest cost going up. Also, on Caresoft acquisition, there are some in-depth notional interest entries on the deferred consideration. Non-cash expenses. Non-cash. That's about $47 million during the quarter. That is the larger part. That is the larger part. Okay. Okay. Thanks. Thanks Thanks a lot. Thank you. Thank you. Next question is from Aditi Patil from ICICI Securities. Please go ahead. Ms. Aditi, please go ahead. Your line has been unmuted. Yeah. Thank you for the opportunity. I wanted to ask a question on the cannibalization part. Can you share an example of what kind of solution are you providing which is leading to cannibalization, and what is the billing model for these solutions? These are typically places where there are multiple people, parties engaged, and there is including where we come out with a full solution, including other infrastructure also as mainly AI-driven solutions. Also, the related infrastructure or ecosystem we need for that kind of a solution. Especially where, as I mentioned to you, many of the validation part, just one example if I can take is in the validation where companies typically in the past have been giving a testing or doing it in pockets, and they are not in a position to get the required impact. There we came up with more efficient, holistic full solution and have been in a position to really take the full responsibility. In some of these cases, some of the realization will be in the later part of the program. Okay. So these would be fixed-priced programs? Yeah. Yeah. This will be fixed-price program. Okay. Are you reducing the number of people in this work versus the number of people who are using AI? I answered this question. I think we are already over the time. I have answered this question a couple of times. I just said that we are not reducing just to reduce the headcount. Only when there is no competency required for the solutioning or AI, we would part ways. I think I have mentioned this. Okay. Thank you. Two times. Just one minute. Sachin, is there any comment you want to add at the end? No, Kishor. I think all good from my side. Thank you. Thank you. Thank you, ladies and gentlemen. In the interest of time, that was the last question for the day. I would like to hand over the call to management for closing comments. Thank you. Thank you, everyone, for joining the call. Have a great evening, Ayed. Bye-bye. On behalf of Dolat Capital, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.