Ladies and gentlemen, good day, and welcome to the L&T Technology Services Limited Q1 FY 2024 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pinku Pappan, Head of Investor Relations. Thank you, and over to you, sir. Welcome to the earnings call of L&T Technology Services for the first quarter of FY 2024. I'm Pinku, Head of Investor Relations. Our financial results, investor release, and press release have been filed on the stock exchanges and are also available on our website, www.ltts.com. I hope you have had a chance to go through them. This call is for 60 minutes. We will try to wrap up the management remarks in 20 minutes and then open up for Q&A. The audio recording of this call will be available on our website approximately one hour after this call ends. Let me introduce the leadership team present on this call. We have Amit Chadha, CEO and MD; Abhishek, COO and Executive Director; Alind Saxena, President, Sales, and Executive Director; Rajeev Gupta, CFO. We will begin with Amit providing an overview of the company performance and outlook, followed by Rajeev, who will walk you through the financial performance. Let me now turn the call over to you, Amit. Sure. I hope I'm audible and clear. Thank you, Pinku, and thank you all for joining us today on the call. Trust all of you are doing well. Let me provide you key highlights on our Q1 performance. We had a quarter of growth despite the macro challenges and slowdown in decision-making in pockets. Overall, we grew by 10% year-on-year in constant currency. The comparison on Y-on-Y is more like-to-like, given the fact that H2 is always higher than H1 for the Smart World business. Our revenue grew by 0.6% sequentially, organically, with transportation leading the growth at 4%, while medical and industrial had about a 0.5%-1% growth. Overall, sequential growth organic was 7.5% CC. Operational performance was strong, with EBIT margin at 17.2%, which is post the addition of Smart World. PAT at INR 311 crores were up 13% Y-on-Y. Our large deal engine continued to fire with a total of 6 deals above INR 10 million, of which one of them was a INR 50 million deal TCV that we signed this quarter. All deals have moved to execution. On other dimensions, happy to share that we filed for 55 patents for our customers and ourselves, taking the cumulative count to 1,145 patents. We were rated as a great place to work in India again and Poland for the first time. Attrition is down 330 bps to 18.9%. We expect this trend to continue. Moving on to industry two segmental performance and outlook. Starting with transportation, strong show of 4% quarter-over-quarter growth that was broad-based across auto, trucks, and off highway and aero. Demand continues to be strong, led by EV and connected cars in auto electrification and trucks in off-highway and avionics in aerospace. We won an INR 10 million+ deal with a transportation customer who had earlier chosen us as their preferred engineering partner. We continue to invest in transportation capabilities for the future, like software-defined vehicles. We are working on creating a digital architecture of a future state software-defined vehicle that will require a centralized platform with high computing, processing power, cybersecurity, and high-speed connectivity. We filed eight patents in transportation in this quarter. My colleague, Abhishek, as required, will provide more details on software-defined vehicles. In the connected car area, we are seeing incremental opportunities to manage SOC/ NOC, by leveraging Smart World capabilities. Overall, we see a good pipeline of opportunities across all subsegments and expect the growth momentum to sustain. In plant engineering, this differentiated segment remains in solid footing. Q1 was a one-off, as we were impacted by decision-making and supply delays by customers that slowed down the pace of ongoing projects. We see a bounce back in the next quarter as the pace of decision-making, regulatory, and other factors have seen an improvement in June and July. FMCG customers are undertaking capacity expansion as they move towards more localization. We have won a $15 million deal from a global agri-food company to provide engineering design services for the new plant in Europe. It will also help us set up local office in Europe for plant engineering and strengthen our European presence. This large deal, along with a few $5 million-$10 million deals that we won, gives us good growth visibility in Q2 and the coming quarters. Across all three subsegments of O&G, FMCG, and chemicals, we are seeing good opportunities on the sustainability side, with companies wanting to use advanced technologies to recycle water, waste, plastic, et cetera, to meet their sustainability goals. We are confident of growth in plant engineering in Q2 and beyond. At industrial products, we grew slightly on the back of good demand from the machinery and electrical segment, though we were hit by decision delays in building technologies and power segment. We see a rising adoption of digital in multiple areas like supply chain and productivity improvement under the larger Industry 4.0 initiatives. This is leading to an increased scope for deploying AI, private 5G, and cybersecurity as spends on software platforms, factory automation, and sustainability increase. We are focused on making accelerators and reusable solutions that can be used to reduce the time to market and improve ROI for customers. This segment filed 20 patents in this quarter and remains a flagship segment in innovation. We won a $10 million+ deal in Q1 with a U.S. customer to optimize supply chain and improve manufacturing efficiency. Overall, we see a good pipeline of opportunities in the digital space and expect the growth momentum steadily to build up in industrial products. Moving on to telecom and high tech. Organically, we had a marginal decline, although when combined with SWC, we were up year-on-year. Let me discuss organic telecom and high- tech business first. The key highlights of the quarter were the $50 million deal with a U.S.-based high-tech customer to enable new opportunities for digital video platform. We will enhance their suite of products and optimize it for better user experience using AI, and generative AI as we move forward. We are seeing more such opportunities in the media sub-segment as customers look to engage us to develop their next-generation digital platforms. As we had indicated in the previous quarter, there is a weakness in the semiconductor side. While this industry is still in inventory correction mode, we are moving up the capability spectrum and winning some deals in this area. I would like to highlight a post-silicon validation deal that we won in Q1, which will involve setting up a design studio offshore. As we partner with chip companies to develop new-age chips for cloud computing, data center, as well as automotive industry, our growth is set to pick up. We are also seeing good opportunities as global ER&D companies move manufacturing from China to India. One of the $10 million+ deals we won in Q1 is of that nature, where we partnered with a global technology giant to provide next-gen wireless and productivity engineering, product engineering from design labs that we've set up in India exclusively for the customer. On the Smart World side, we have fully integrated this into our telecom and high- tech organization, with a dedicated sales team and leadership in place in the U.S., Canada, Europe, Singapore, and the Middle East. The operational improvements will be discussed by Rajeev in his commentary. Let me share the progress in two channels that we've activated for Smart World. One, our game plan of taking Smart World global has seen early wins, including critical partnerships with telecom service providers, equipment manufacturers, and execution of these deals should start in Q2. I'm thankful also to our enterprise customers, who are actively engaging with us on specific opportunities in next-gen communication, some of which should close shortly. We were awarded cybersecurity deals, which have already started execution. The Smart World business requires an ecosystem play. To this end, we are working on partnership with key players. You would have seen the announcement of LTTS partnering with Palo Alto Networks to provide enterprise with operational technology and cybersecurity services. Teams have been formed on either side to take it forward. Another one is a partnership with BSNL to drive and enable global enterprises in their private 5G network deployments. With Qualcomm in North America, LTTS is working together to offer 5G-driven next-gen connectivity solutions. This leverages LTTS' chip-to-cloud expertise. In Q1, we had a few wins in next-gen communications overseas, and we see the momentum building with the pipeline increasing. We believe the measures we have taken will create a robust foundation for future growth and transition this business from domestic-only to a mix of domestic and international business. Summing up, we do see growth in the combined telecom high tech portfolio, driven by media and telecom. However, the semicon challenges may persist for another quarter. Lastly, in medical, we see strong demand for digital as customers prioritize areas like medical devices as a service, connected devices, and cybersecurity. In Q1, we signed an INR 15 million+ deal to design and develop a digital surgery platform that will connect with customers' robotics, surgical, and operative devices, and be used to deliver better outcome for patients. We are building reusable solutions for various areas like complaints management and QARA. The pipeline of deals gives us confidence that our growth momentum should improve as some of the large deals close. Let me now discuss the outlook. Our growth is tied to our long and strategic relationship with customers. I am happy to share that we had our first customer advisory council in Washington, D.C., comprising of CXO, board members of 16 of our customers, with a collective market cap of $2 trillion and a revenue of $400 billion. These organizations are advising us on our direction and investments so that we can bring more relevant offers to the market, build stickier relationships, thus helping us elevate our customer lifetime value journey. The large deals we won in the quarter are an affirmation that our customers continue to spend on transformation technologies. We remain front and center as a choice provider to them, we can deliver speed to market, cost synergies, and innovation. We are accelerating our investments in three emerging technologies: AI, software-defined vehicles, and cybersecurity. I talked about our investment in software-defined vehicles and our partnership with Palo Alto for cybersecurity. In AI, our focus will be auto, manufacturing, medical segments, and we will partner with hyperscalers and semicon companies for joint development or readily deployable solutions. We are strengthening our AI team in the coming months to achieve our goals. Let me conclude by saying that we grew in Q1 despite delays in decisions and deal closures getting pushed out. The pace of deal closures has improved from June, which combined with a healthy deal pipeline, which is bigger than year-on-year and quarter-on-quarter, we see gives us the confidence of growth momentum strengthening in the coming quarters. We maintain our FY 2024 guidance of 20%+ in constant currency. We also reconfirm our aspiration of a $1.5 billion run rate in FY 2025. Let me, with that, wish you good health. We'll stay up for questions. Thank you so much, and I hand over to Rajeev now. Thank you, Amit. good evening to all of you, and I hope you are keeping safe and healthy. I am pleased to share our Q1 FY 2024 performance. It has been another quarter of good results, with healthy additions of deals and operationally strong performance. This is our first quarter of reporting financials after completion of the SWC acquisition. In compliance with India's requirements applicable to common control transactions, we have restated our past financials to include SWC from 1st April 2022. As a result, all figures in the investor release include the comparison reflecting these restatements. Let me take you through the Q4 FY 2024 financials. As said earlier, throughout the commentary, I will elaborate on the restated combined financials that include SWC in all the comparable quarters, as well as organic numbers excluding SWC. Starting with the P&L. First, to address revenue. Organically, revenue for the quarter grew 0.6% on sequential basis and 12.6% on Y-on-Y basis in INR terms. On the combined financials, revenue for the quarter was INR 2,301 crores. A Y-on-Y comparison is more accurate indicator, as Q1 FY 2023 numbers have also been restated to include SWC. On a Y-on-Y basis, our double-digit growth trajectory continues, with Q1 revenue up 14.7%. SWC business at current state delivers higher revenues in H2 as compared to H1 on account of seasonality. Moving to EBIT. Earlier in our Q4 commentary, we had indicated that we aspire for FY 2024 combined EBIT margin to be in the range of 17%. I am pleased to share that our Q1 FY 2024 combined EBIT margin came in at 17.2%. Let me explain the evolution of margin from 18.7% that we reported in Q4 FY 2023, to the 17.2% in Q1 FY 2024. Organically, EBIT margin was slightly down on account of investments made for large deals. Amit did refer in his opening comments around the large deal that we won, a $50 million deal in high-tech segment. As we had highlighted earlier, SWC business has a lower margin profile. Hence, on a combined basis, Q1 FY 2024 margins have come at 17.2%. Overall, we've been able to integrate SWC as planned and maintain operational performance within the range that we had aspired for. Moving to below EBIT, talking about other income. Other income came at INR 35 crores, slightly lower than a sequential basis due to lower income from investments, primarily due to cash outflow of purchase consideration of INR 800 crores for SWC acquisition at the beginning of this quarter. Effective tax rate for Q1 was 27.6%, in the same range as our expectation of 27.5%. Net income for the quarter was up 13% on Y-on-Y basis and came in at INR 311 crores, which is 13.5% of revenue. Moving to balance sheet, let me highlight the key line items. To begin with DSO. DSO for the organic business was 92 days versus 90 days that we had reported in Q4 FY 2023. As indicated in our previous commentary, SWC is a high working capital business and had DSO of over 400 days at the time of acquisition. We are pleased to inform that we have improved on the DSO of this business since then. On a combined basis, Q1 FY 2024 DSO has come at 117 days, within our expected range of 115-125 days for FY 2024. Needless to say, we will continue our efforts to improve on combined DSO. On shareholder funds, shareholder funds was at INR 4,817 crores at the end of Q1, versus INR 4,951 crores that we had reported at the end of Q4 FY 2023. As per accounting standards applicable to the common control transaction, the excess of purchase consideration paid over the net assets acquired is shown as a reduction to shareholder funds. The reported value of INR 4,817 crores therefore reflects the adjustment of this impact. Now, talking about cash flows. Our free cash flows came in at INR 228 crores, a healthy 73% of net income. This reflects our operational rigor on improving combined DSO. Our cash and investments rose to INR 2,394 crores by end of Q1 FY 2024, which is after payment of INR 800 crores for the SWC acquisition. Moving to revenue metrics. On the combined financials, dollar revenue was up 9.1% in reported terms and 10% in constant currency terms on a YOY basis. Organically, dollar revenue saw 0.6% sequential growth, both reported and in constant currency, led by transportation segment. The segmental margin performance was better in two out of five segments on a sequential basis. Our telecom and high-tech margins came in at 8.8% in Q1, versus the then-reported 12% margin in Q4 FY 2023. This is on account of lower margin profile business of SWC and investment made on large deal win. We expect the margin trajectory to improve as we transform SWC business. Moving on to operational metrics. To begin with, onsite-offshore mix. Offshore percentage now stands at 59.3%, compared to around 57% then reported in Q4 FY 2023. This increase reflects the fact that currently SWC business is completely offshore-based. Talking about T&M revenue mix, fixed price percentage is at 35.6%, compared to around 29% then reported in Q4 FY 2023. SWC business is largely executed on a fixed price model. Talking about client profile, which indicates number of million-dollar-plus accounts, has shown a sequential improvement in the $30 million, $20 million, $10 million+, and $1 million+ categories. The client profile numbers have seen an improvement over the past few quarters, and this trend will continue in the coming quarters. SWC has added few large customers to our client base, including one $30 million and three additional accounts of $10 million+. Talking about client contribution to revenue. On a combined basis, top five, top 10, and top 20 have shown a slight uptick as compared to Q4. Moving to headcount. Headcount stands at 23,392 at end of Q1, versus 22,233 reported end of Q4 FY 2023. This sequential increase of 1,159 employees includes the addition of around 800 people from the acquisition of SWC. On attrition, pleased to share that it declined to 19%. This is as a result of various efforts on employee engagement. We believe this trend will continue downwards. Realized rupee for Q1 was at 82.2 to the dollar, flat compared to Q4. Before I conclude, let me give some visibility on the EBIT margin trajectory going forward. We continue to focus on profitable growth and maintain our operational rigor. This will help us achieve our aspiration of 17% EBIT levels in FY 2024. In Q4 FY 2024, we will offset headwinds from wage hikes that are effective July 2024, through a combination of growth and operational efficiencies. This is as planned to roll out wage hikes committed to our employees. In the medium term, we aspire for 18% EBIT levels by H1 FY 2026. With that, thank you to everyone. Moderator, now we can take the questions, please. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to limit their questions to two per participant. For follow-up questions, you may rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mukul Garg from Motilal Oswal Financial Services. Please go ahead. Yeah, hi, thanks. You know, Amit, just one question from my side. I think, you know, sorry about this being a recurring topic, but given the, you know, the delays and pushouts which you saw in the first quarter, what is giving us the confidence of, you know, delivering a 10% organic growth, you know, in FY 2024? You know, what really are you seeing in terms of client visibility that such issues might not recur anytime over the next three quarters? Currently, you know, if I kind of do a rough number, crunching, it looks like your compounded quarterly growth rate would be upwards of 4% for the next three quarters. If you could just help us walk through, you know, what really is the kind of behind this confidence of maintaining the revenue growth? Yeah. Hi, thank you. Thank you, Mukul. Couple of things here, and I'll answer it broadly. We'll look at growth, right? Number one, some of the deals did get delayed in terms of decisions. We were expecting them to be signed end of April, early May, but they got signed in the, you know, towards the end of June, right? That's, that's a given. Second, if I look at plant engineering, it was actually not a deal problem, it was more getting input from customer on time problem. That book of business still is with us, and therefore can be accelerated, executed, so I don't have a problem there. I have an issue in semicon, which I don't know it will be a 1-quarter pain or is it a 1.5-quarter pain, right? That's the only blip that I see. Given the fact that the pipeline is stronger now than it was a quarter or year-on-year. Second, the six deals that we have won, that have gone into execution, and third, there are other deals in the pipeline that we are expecting to close or very close to closing. I do have confidence of retaining the guidance. Also, on Smart World, it's a H1 to H2 business, where H2 being much better than H1. Overall, that 20%+ holds that we are at this stage. Right. Just a quick follow-up on that. you know, given that you have seen scaling up, in these six deals in the last few months, is the confidence also kind of kicking in a fairly strong second quarter, you know, which gives you enough buffer for any potential trouble down the line in the second half? Yes, Mukul. Mukul, see, I'll tell you what we did. After I went back in April, we spent time talking to the clients, working with them through their decision-making process. One reality is that where a deal would take two signatures, it now takes four signatures, right? That's a reality. How do we get that done quickly is the whole thing that we continue to work on. That's one. Second, I'm betting on the fact that some of these deals that we are sitting on in semicon or in consumer electronics, will close faster than what I saw in Q1. Thirdly, I do expect H2 to be better than H1, as we stand today. We're working on all three. I should confirm to you that net headcount will at least go up by 750 people in Q2 as compared to Q1, and we are already on our way to making those offers. People have been joining us, et cetera. Fairly comfortable and confident. We'll keep you updated, Mukul. I mean, we've always been very transparent, very direct, and we thank you all for your confidence in us. We continue to work on this and come back to you. We, in fact, hosted a client advisory council, first time ever in our history. About 16 clients, controlling close to about, like I said, you know, a huge amount of revenue and market cap came together, spent some time with us. We've got some trends from them. We've got some, you know, why don't you approve, what you don't approve also. Fairly good conversations, candid conversations, I'm fairly comfortable. Thank you. The next question is from the line of Sulabh Govila from Morgan Stanley. Please go ahead. Yeah, hi. Thanks for the opportunity. My first question is on SWC. On the numbers that we've reported, which is 1Q FY 2023 and the 4Q FY 2023, just wanted to understand that in this business, is there some variability involved in other expenses? Because they don't change much as a percentage of revenues. Sulabh, this is Rajeev here. I'll take that question. Like I said, we've had to restate financials of the previous quarter to include SWC. What you see in terms of other expenses is more like to like, and hence there is nothing in addition. We don't expect that the other expenses will increase or decrease materially. This pretty much reflects what is the reality of that business. Sure. Understood. Maybe, maybe I'll take that offline. My second question is with respect to plant engineering business. So in the past two, three quarters, we've seen some volatility in this business. We saw a decline in Q3, and then we saw a sharp bounce in 4Q, and we thought that vertical has sort of recovered. Now, the issues could be different in different quarters. We're just trying to understand that what's giving us the confidence that the volatility which we have seen in the past two, three quarters will not recur in the coming quarters? Sure. If I look back at plant engineering, and I'm scrolling through data as I look at it for you, right? If I look back at FY 2022, or I look back at. Right, if I go back to FY 2022, and I see there was a constant increase quarter-on-quarter, every quarter, right? I come to FY 2023, and yes, there was a one-off decrease in quarter three, but it continued to the upward trajectory, right? If I look at now, quarter one, we've had a blip, and we're sharing with you that some of these decisions, for design decisions from the customers were delayed, and it was not a budget issue. Therefore, and the backlog that we have got, with the new orders that we have signed, with the rigor that we have put in, I do believe that this will be of the past. Additionally, we are winning new digital factory and digital plant deals from customers in plant engineering that give us the confidence that we will see upward from here. In fact, now we are adding some resources that we can immediately hands on deck to make sure we're able to deliver. I also want to share that we have established now, a outpost in the U.S. for clients in plant engineering. That should help us in terms of engaging a lot more local talent, and the same will be happening in Europe, so we're fairly comfortable with it. Sulabh, this is Rajeev again. You may have seen, of course, our [SEBI] financials and tried to compare the other expenses for any variability. To clarify, in this quarter, there are lower subcontracting costs and of course, a lower legal cost as well, and nothing to do in relation to the Smart World business. Again, I just wanted to add, because it's more like to like. I hope that clarifies, Sulabh, your point on other expenses. Yeah, sure. I've got it. Thank you. Thank you. We have the next question from the line of Nitin Padmanabhan from Investec. Please go ahead. Yeah. Hi, good evening, and thanks for the opportunity. When you look at the SWC business on the numbers that you have reported, is the Q4 to Q1 dip the usual sort of seasonality in the business? Typically, if you could give some color in terms of typically, what's the sort of, you know, the mix between first half and second half? How does it normally look? Rajeev, you want to take that? Sure. Nitin, to your point, yes, this business is seasonal in nature. Typically, you will see H2 to be better off compared to H1. In terms of mix of business, you will see H2 to be at 60% versus H1 at 40%. That's, that's the reason we say that you tend to see H2 to be better off compared to H1. Sure. The variability from Q4 to Q1 that we have seen this time, is that a common feature of this business? Or do you think as you spoke about, I think, one $30 million and three $10 million deals, as these deals keep adding up, that should sort of come up? How should we think about it, at least as we go over the next 12 to 24 months? Two points here. One, the point that I made that H2 is better than H1, and hence you are seeing that Q4 had better off revenue for SWC when compared to Q1. That's one. Second, when you compare Q1 of this year to Q1 of last year, in fact, we have done better off, right? I hope that, you know, clarifies your point, Nitin. Sure. Perfect. That's helpful. Thank you. All the very best. Thank you. The next question is from the line of Vimal Gohil from Alchemy Capital Management. Please go ahead. Yeah, thank you for the opportunity, sir. My question on SWC has been answered. Second question is on the industry per se. We have seen a lot of influx or a lot of news on a lot of global companies setting up GCCs in India, and there have been news of, you know, a lot of aggressive hiring from them. How do we participate in this particular trend? Do we partner with them in their, in this, in this entire process of setting up their centers? Or do we look at these GCCs as our potential, as our potential competition? Thanks. Sure. Vimal, thank you. Look, I'm part of, I just joined the NASSCOM Executive Council, only engineering R&D, ER&D company member on the council, other than gentleman who's been co-opted from the ER&D Council, right? On the general council. Here, see, GCCs are an opportunity. If I look back and I look at the number of STEM graduates coming out of colleges in India, it's huge. It's more than two billion people coming out in the per year in STEM, right? They will find their way to global competency center. Now, here's the good news and the silver lining. All the business that was potentially going up to a Ukraine or going up to a Russia or going up to other parts of Eastern Europe, has started getting diverted to India. A significant part of what was being given to China has been given to India. If I look at it, the India pie itself has grown, right? Second, if you would have talked to me 15 years ago, I would have said they are all competition. I have learned, the industry has learned, everybody's learned to coexist. In our customer premises, often there are discussions that happen about green badge and red badge or blue badge and red badge. Blue badge or green badge is their own employees, while, you know, red badges are people like us. They continue to look at what is it that can be is core. They will keep whatever that could be contextual or that was core yesterday or, you know, could be given to us. Additionally, GCC is focused on only their area of focus. An automotive will focus on automotive, telecom will focus on telecom, but if they need cross-domain vertical expertise, they will not be able to deliver to that. For example, I've been executing a number of connectivity projects for a lot of my auto customers who have their centers here, but I work with their teams in Europe and US, and they give me work directly, right? That cross-vertical domain expertise that we bring is not there with GCCs because they are single-cylinder focused. Lastly, the fact to be considered is that the world is moving to a lot more fixed price, consolidated work kind of model. Therefore, we are the gainers there, because they look at us, and they actually let us deliver on an envelope basis rather than worrying about, you know, attrition and this and that. I do welcome GCCs being here. We've been hiring from them. They've been hiring from us. It's a two-way street. I do welcome the whole ecosystem being built up in India, because overall, it adds to the fundamentals of the ER&D business and companies like us. Right. Amit, just a follow-up to that. How do you look at our cost structures versus the GCC cost structures? Is there a significant differential for our potential customers to say that the Indian ER&D service providers like us they still have a better edge in terms of executing projects that are much better, you know, cost efficiency versus them doing within their captive work, within, or in-house? Vimal, actually, two things here, actually. Number 1 is that GCCs, their cost structures are higher than ours. That's clearly the case. They work on a cost center model, and we work on a profit center model, right? Number one. Number two is because they are single cylinder, they can't offer a lot of career growth or job enrichment to their software engineers or hardware engineers, et cetera, because they have to do the same work. In our case, we're able to provide that. I will not say we pay less, our cost structures are lower, but if I look at the total package of what we would be able to offer to our engineers, which is career growth, which is job enrichment, which is job rotation, plus customer interactions, is something that we are able to provide that are not there in an in-house setup. I do believe that's there, but having said that, I again will reiterate, together, we are creating an ecosystem that is good for India and good for sourcing from India. Thank you. The next question is from the line of Ravi Menon from Macquarie. Please go ahead. Hi, thank you. I just want to check on the growth in North America. It looks like we see some good revenue addition there, and it's almost as good as what we saw last year. What are the things that came in, well, this quarter in North America? Ravi, Rajeev here. I'll take this one. It's more relative in terms of when you look at the growth for North America, and that's probably because we have restated the Smart World financials in Q1 as well as in Q4. Because Smart World is a cyclical business, you're seeing, of course, Q1 to be lower relative to Q4, and consequently, the proportion of business that you see shows a growth in North America when compared, right? It is relative. That's what I would say, Ravi. Thank you. In terms of semiconductor, you are starting to see the business cycles get better, want to check. You also said that you don't know if it's probably one quarter pain or more than one quarter. Could you just explain it faster? I'll answer it two ways, right? One, on semicon, I will share, but I will then request my colleague, Alind, to add to what he's seeing in the market as well. One, from a semicon standpoint, there is a little bit of pain that's there in terms of, you know, they are shifting. Consumer electronic devices are not being sold so much, so the demand was not there. They are all trying to switch to data center chips and AI chips. Today, all of a sudden, AI is the only word they use, everybody uses, right, including all of us. Therefore, there is a shift happening. In fact, we see that spend coming. Will that come in a quarter? Will it be two quarters? To be seen. I would request Alind to add on the color of the market as he sees today in North America. We are working with more than one semicon company. Totally to look at, there could work four or five semicon companies. If you look at the trajectory, which is there, broadly driven by AI, and then by default, the requirements of the data center for them to be up and running, we see that continuing. There are shifts which are going to come in market, which are going to change the fundamentally the way that compute is going to happen. We are lucky that we are involved in quite a few of them. We do believe that in about a quarter's time, we will see the growth trajectory come back up again, and we are confident of the progress there. Thank you. Are you using those downturns of semiconductor to deepen your capabilities in any areas or any white spaces, maybe, in the analog side or, anything else where you think you lack? From a capability standpoint, Amit, again, I do believe that we have capability across the spectrum, and we are working towards. In fact, we've executed projects now on 7 nanometer as well, and we continue to work on different areas, in fact, tying up with the global ecosystem as well. You know, you just have to start, some of these have to get signed off and start. Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah, thanks for the opportunity. My first question is, last time in the Q4 earnings call, you said that the more than 20% constant currency growth, the organic growth would be more than 10%. Whether that assumption changed, or we expect that growth would be slightly higher in case of SWC calculation? Because the first quarter run rate for SWC on a year-over-year has been healthy. Whether the 10% organic growth guidance, more than 10% still stands? Sandeep, thank you. The way we look at it is, number one, you know, as you've seen numbers, we've reported, Smart World mostly in the telecom segment, right? Because operationally, we have integrated, and there are leaders from our Smart World, L&T Smart World family, that today are responsible for one of our two of our centers in India, execution centers. There are leaders, senior leaders from our side, from the LTTS heritage side, that are responsible for the next gen comms business, which has been integrated between both of them. We do commit to that 20%+ CC, and we are watchful that we don't sign lower margin deals, and there has been a conscious effort, and, shall I say, cadence developed in the last three months in the company to ensure that. I'm confirming 20% + CC, H2 will be better than H1, and broadly, the split will be what we have told you. Okay. Organic growth will also be more than 10%? At this stage, 20% +, yes, organic, 10% +, and that's where we are. You should know that both the teams are merged and integrated. Thank you. The next question is from the line of Bhavik Mehta from JP Morgan. Please go ahead. Thank you. Just one question from my side. Just going back to the guidance. How should we look at the mix of growth within your portfolio? Do you expect all verticals to show stronger going forward, or do you think that some verticals will do better than the other, you know, they will have the ability to offset weakness in maybe some other verticals? Just a color on that would be helpful. Sure. Sure. In fact, I'm going to answer this two ways, if I may. One, I'm going to give you an industry view, and then I'm going to ask one of my colleagues here, Abhishek, to actually talk to you about what we are doing in software-defined vehicles and AI, because that's a huge path forward for us. From an industry standpoint and growth standpoint, I do believe that transportation will continue the strong growth we've had because of the differentiated story of EV that we have created and the early investments in SDV that we are doing. When it comes to industrial products, given the fact that we are seeing deal closures happening for us in digital as well as software platforms and people discussing AI in a very interesting manner for shop floor applications for us, we believe that growth for that will continue, not maybe at the same rate of transportation, but better than, you know, what we have done this quarter. We do see the growth continuing. Plant, we do see the growth coming back next quarter and then continuing from there. Our backlog is fairly strong, and people continue to do design, call us for designing of newer plants, expansion, et cetera. With this outpost we are creating in the U.S., which has already been staffed, we are very confident that it'll grow. The two areas that I am a little conservative about, one is high tech. Even though next gen comms will continue to grow given 5G cybersecurity, I don't know how long the pain in semicon and consumer electronics will continue. I do believe it's a quarter off, but we don't know. That's something that I'm a little concerned about at this stage, and cautious is the right word. Finally, in medical, we've had some good traction, some very nice dialogue around the connected platforms, QARA, AI, it's again, you know, how much do they want to give and do in the same quarter is to be seen. That's where we broadly see it. I would invite my colleague, Abhishek, to talk a little bit about investments we are making in AI and SDV. Abhishek, because that will help us in terms of growth as we move forward. Yeah, thanks, Amit. Clearly, as our customers, Amit earlier mentioned about the advisory council, we are clearly seeing SDV, AI, and of course, the third leg is cybersecurity, as a three legs, where we see a lot of investments coming in. The good news is, from a timing perspective, the SWC acquisition that we made, the whole NGC, next-gen c ommunication skills that comes through that and the cybersecurity area are a direct fitment into the SDV space. Why I say that is because if you look at the software-defined vehicle architecture, a lot of it is those high-compute architecture. What that means is the skills that come from 5G, internet, and areas are directly relevant for the, the way the vehicles are going to be designed. Interestingly, cyber security is a sweet spot for us, because vehicle SOC is something that needs automotive skills and deep cyber security skills, and this acquisition gives us both in a very nice way. That is probably going to be one of the differentiators as we get into the space. I mean, as we speak, we're already doing at least four or five SDV programs for most of the customers in Europe right now. We see a decent pipeline on the SDV front. Coming to AI, our sweet spot there is going to be manufacturing, automotive, and medical. Here also, I think the domain expertise that we bring to the table, it's very clear that AI is not just going to be about technologies, about domain as well. Our deep domain expertise in three of these areas definitely helps us take some good strides ahead. We will be, of course, focusing on these three segments. Apart from that, the investments we have done over the last couple of years, we have taken some AI specific solutions as well. That should help us the work we do with hyperscalers, semicon partners. I think this is a great recipe for different domain segments coming together to provide domain-specific AI solutions to our customers. In both of these areas, we are investing big time in internal trainings and the partnerships with various entities in the ecosystem itself. You will definitely hear more from us in the coming quarters on these areas. Thank you. Thank you. The next question is from the line of Rohan Nagpal from Helios Capital Management, India. Please go ahead. Hi, am I audible? Yes. Hi, thank you for the opportunity. One quick question on your India business. Noticed that there is significant reduction. There's about a $10 million reduction in your India business. Is this just on account of SWC seasonality, or what is going on here? No, that's largely SWC. I don't see it another way. Okay. One of the things you mentioned was, you know, the deals that you've signed have already gone into execution. Could you provide some color on the timeline of deals in terms of what is the typical timeline from signing to execution, and some color on the pipeline that you're currently seeing? When it comes to the deals that we signed, the $50 million deal actually was something that we had been pursuing for more than about four months. It took time, and we actually have been, we were waiting, we were investing and waiting, right? It took a lot of decision, approval, et cetera, to go through with that, but it's already moved to execution. We've gone live. Now, the other five deals that are there, the $10 million+ deals, they have all gone into execution. I want to confirm towards the last week of June, right? Ramping up as we speak, and should get to steady state sometime in this quarter. We are continuing to work on those. As an example, one of the high-tech deals that we signed, $10 million+, not the $50 million plus, that took us three months, took us multiple meetings to sign. What we have done as a team is that we've actually improved our funnel. We've increased the number of deals that we are chasing. We have hired more salespeople. They are on the ground and leaders. I believe that therefore, we are comfortable with the fact that we'll have to put in more effort to be able to do this. The moment the deal gets signed, right, the ramp-up is fairly immediate. These are not long-term, that they'll take six months, nine months to do. Ramp-up is immediate. Therefore, we've beefed up our recruitment engine as well, as well as Abhi, who's very passionate about the Global Engineering Academy, is also running full time to make sure that we are able to repurpose people, turn them around, et cetera. In fact, in one of the particular deals that we signed, which was not a $10 million deal, it was a shorter period, we actually had invested in hiring and holding about 100+ resources for some period, and they have gone live now and billing. So some of that training, upfront, education is required. We have more deals in the backlog deals that we are working on, and we'll continue to update you as we close them. Thank you. The next question is from the line of Mihir Manohar from Carnelian Asset Advisors. Please go ahead. Yeah, hi. Thanks for giving the opportunity. Sir, largely wanted to understand on the synergy, which is there, I mean, the SWC acquisition. Which are the internal KPIs that you are tracking? You know, how are we progressing on those KPIs? That will be really helpful. My second question was on the deal pipeline. I mean, you know, you mentioned the deal pipeline is quite strong, has improved materially. If you can quantify, you know, what is the quarter-on-quarter or YOY improvement in deal pipeline, that will be really helpful. Specifically, which are the areas where you are seeing good deal pipeline in that context? My last question was just on the external environment. I mean, you are appearing to be more optimistic on the external environment, when compared to your earlier commentaries. If you can throw some more color and, you know, is the external environment worry, just behind us, and how do you see, the external environment, per se? Yeah, those were the questions. Thank you. Sir, this is Rajeev here. Let me take the part on the synergies from SWC acquisition. We've, of course, briefed this earlier as well. Three areas that we are working towards. The integration did conclude as of April 1, 2023, so both the companies are now together, and we are reporting SWC under our high tech, telecom and high-tech segment. In terms of synergies, three areas. One, internationalization of revenue. Amit did talk about that we've beefed up our sales leaders in US, in Europe, in Middle East, and clearly, the idea is to build pipeline. Some of that progress indeed has happened. The second is in terms of improving the EBIT margin. SWC has been a lower margin business, more so because most of the revenue has been India-based, right? Of course, taking it international will help us getting comparable margins, much like our heritage business. Third is in terms of improving DSO. DSO, because the deals that we are executing in India are deals that are like, are with the government entities. As we do deals with global customers, we will see DSO terms closer to what we have in heritage LTT business. These are the three areas. We'll continue to update. We did mention that our aspiration in terms of the combined EBIT margin is 17% levels. In terms of DSO, the range that we maintain combined is between 115- 117, and we will continue to update on that. Of course, Amit did reiterate in terms of the growth aspiration, which is 20% plus, including the SWC acquisition. Amit, you want to take the second one, please? Sure. pipeline where and its external environment. If I look at external environment, the fact that we are in five segments is what gives us confidence when one goes down, another goes up, it is a portfolio. That's point number one. Number two, being an end-to-end engineering provider, from mechanical to hydraulic, electrical to plant engineering to digital skills, and in that, across the stack, from VLSI to hardware to software, firmware, all that gives us the confidence that, you know, we are, we are fairly in the right place. Now, having said that, I'll tell you where the problem is. The problem is that some of these deals that we are talking about, and we have chunkier deals like the $50 million that we closed in our pipeline. The number of 50 million+ deals or 25 million+ deals for us at this stage is higher than it was last quarter, or it was same year, same quarter last year. That is driven by the fact that some of the investments we made in EV, some of the investments we made in digital manufacturing, some of the investments that we made in VLSI capabilities is coming to bear, and digital skills. Now, that's what gives us the confidence. Now, the issue is, instead of two signatures, stuff is taking four signatures. In reality, I will not shy away, I will acknowledge it. I mean, I should tell you the number of miles that Alind or even Rajeev, Abhishek, our HR Head, Lak, is putting on in the last two quarters is much higher than they would have traveled over the last year, because clients need that reconfirmation from the entire management team and not just one or two people, right? A. B, in semicon and consumer electronics, like I said, there's a little bit of pain left. I cannot quantify for you how long, but that's the reality. Third, any project that doesn't have a profit pool or a revenue pool associated and is being done for the love of mankind or womankind is getting delayed. These are three realities that are there. Having said that, we continue to be agile, we continue to look at various areas, like I requested Amit to talk about today on SDV and AI. We are thinking ahead of the market, and I believe that these investments will carry us forward. Thank you. The next question is from the line of Aniket Kulkarni from BM SPL Capital. Please go ahead. Am I audible? Yes, yes, please go ahead. Yeah, so, just a small question from my side. It is regarding the ROE number which you are doing right now. Are we comfortable at these numbers, or is there any specific bracket where we want to be going forward? Aniket, this is Rajeev here. Of course, you may be looking at ROE at a quarter level, but we certainly try to aspire for an annualized number. At this stage, we are comfortable in terms of the ROE where we are, or rather, where we ended for FY 2023. The aspiration certainly is to improve at the back of 18% by Q1 FY 2024. Sorry, Q1 FY 2026. We believe over the period of these next five, six quarters, we should be able to improve the ROE, but at this stage, we are comfortable with where it is. Okay, okay. Thank you so much. I understand that. Thank you. Ladies and gentlemen, we will take that as our last question for today. I would now like to hand the conference over to Mr. Pinku Pappan for closing comments. Over to you, sir. Thank you all for joining us on the call today. We hope we were able to answer most of your queries. Happy to do follow-ups with you through the quarter. With that, we're signing off from this quarter's call. Have a good day and wish you all, you know, a great day ahead. Thanks. Thank you. On behalf of L&T Technology Services Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.