Ladies and gentlemen, good day and welcome to the Mastek Limited Q4 FY 2023 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Asha Gupta from EY LLP. Thank you, and over to you, ma'am. Thank you, Prashant. Good evening to all of you. Welcome to the Q4 and full year FY 2023 earnings call of Mastek Limited. The results and presentation have already been issued, and you can also view them on the website at www.mastek.com. To take us through the results today and answer your questions, we have top management of Mastek represented by Hiral Chandrana, Global CEO, and Arun Agarwal, Global CFO. Hiral will start the call with the business update, which will be followed by Arun providing the financial update for the quarter. As usual, I would like to remind you that anything that is said on this call that reflects any outlook for the future or which can be construed as forward-looking statements must be viewed in conjunction with the risks and uncertainties that we face. These risks and uncertainties are included, but not limited to what we have mentioned in the prospectus filed with the SEBI and subsequent annual report that you can find it on our website. Having said that, I will now hand over the call to Hiral Chandrana. Over to you, Hiral. All right. Good evening, everyone. Are you able to hear me okay? Yes, sir. Can you confirm? Okay, great. Fantastic. I'll cover three things. quick financial highlights for Q4 and FY 2023. Some business updates on the quarter as well as the full year. Some quick updates on the FY 2024 strategic priorities and outlook. Will then hand it over to Arun for more detailed financial updates. For the quarter four that ended, we grew at 7.7% quarter-on-quarter from Q3 to Q4 on an INR basis and 5.3% quarter-on-quarter on a constant currency basis. Our operating EBITDA for the quarter was 17.7%. For the full year, FY 2023, we grew at 18.5% on a revenue basis, constant currency. Our order book backlog, which is the 12 months order book backlog that we closely track, grew 17.2% year-on-year. Our full year operating EBITDA was in the same range of about 17.8%. In terms of quarter four, we are pleased with some good deal momentum as well as progress on the multiple strategic priorities that we've been outlining for the last year or so. I'll share with you some of the highlights and then move into the FY 2024 outlook. In FY 2023 as a whole, we had some challenging quarters, particularly in specific areas that we've discussed in the past, NHS for the first key account. Sorry to interrupt you, sir. The audio is now breaking. It's unclear, sir. Okay. Are you able to hear me now? Now it is better. Thank you. Okay. for FY 2023 as a whole, for the full year, we had some challenging couple of quarters that we've discussed in the past with respect to NHS, with respect to a couple of areas within the Oracle space. We are pleased to inform that there has been good progress that has been made on multiple aspects of the business, and some of that is reflecting in the Q4 results as well. In addition to the business growth quarter-on-quarter, we are very happy to have received the Great Place To Work certification, as well as our attrition is 21% on a 12 months basis, last 12 months, which is a drop of 700 basis points from a year ago. We also received some recognition externally from the market from various industry analysts, including a recent recognition from ISG as a booming 15 player in the global system integration space. We also struck a partnership with an AI company called Netail, which provides AI-based competitive intelligence solutions in the retail and consumer industry. In terms of our business in U.K., we had solid in-quarter execution. A key win is in one of our premier accounts in U.K. where we manage borders, trade, biometrics, immigration, asylum services. We had developed multiple solutions and engineered multiple systems for them in the past. We've extended that to a biometric program which helps automate multiple processes for students and immigrants to legally move into the country. One win that we've reported last quarter is a large manufacturing company in the U.S. Where we have been awarded complete transformation of their business processes from finance, HR, supply chain, powered by Oracle Cloud. We're excited about this particular win in addition to the overall value of the win being more than $5 million, because one of our nonlinear solutions, called Warehouse 360, was also deployed as part of the program. In the Salesforce business, we've had good momentum in healthcare and public sector. One of the interesting wins, though, has been in the financial services sector, which is a payment card company, where we are automating multiple parts of their merchant force powered by Salesforce, and also taking responsibility for cloud operations and application development of new solutions. Another win that we had was in the managed services space in one of the healthcare clients in the U.S., where our approach to managed services has been cloud enhancement services, where we take over the run and maintain part of the business. We've had some interesting wins in Middle East as well as in Australia. Some of the success that we've had in the Oracle space in our U.K. council, state and local government councils, have now been deployed and replicated in Australia, where we see good potential to leverage those learnings and have new wins. There's multiple other, you know, wins and delivery successes and go-lives that we've had in the quarter. To kind of put things into perspective in FY 2023, we had account mining as one of the key priorities. While we underestimated the time it would take to make that successful, it is starting to show results in pockets of certain accounts, reflected in our growth of greater than 1 million accounts and greater than 3 million accounts. We have also made a couple of key leadership updates, which we've announced earlier in the quarter in Q4. Prameela joined us as COO of Mastek and Vijay Iyer joined us as Americas President. Both of them have spent a few weeks now in the system and have settled down well. We will invite them for future calls so that they can give their updates as well. As it relates to margins, we continued to put focus on operating efficiencies, utilizations. You would have seen progress in those metrics, which is now reflected in our growth in revenue, with minimum headcount gross addition increases, because we've been able to deploy and make some of the billable, make some of the freshers and associates billable in the last one or two quarters. This is part of our strategy where we want to continue to improve gross margins so that we can reinvest back into the business. As it relates to FY 2024 moving into the next fiscal year, we are already into day 19 of the new fiscal year. We feel that the changes and the fundamental improvements that we have made to look at multiple aspects of the business, right from recruiting to account mining to marketing to capability development, are starting to, you know, yield results and show progress. While the macro environment still remains uncertain, there's still caution among customers in terms of deals and decisions. We've continued to see our order backlog grow, and we continue to see our pipeline at a healthy level. Our Salesforce business, which is the acquisition that we made last year, has delivered almost 118% of the plan, of the acquisition plan. In Q4, it is typically a seasonally weak quarter for MST, but the outlook for the business and the momentum and pipeline that we have in our Salesforce business remains strong. U.K. business has shown tremendous resilience in-quarter execution. We believe the foundational pieces that we've put in U.S. will also reflect in strong quarter-on-quarter growth and full-year growth in FY 2024. One of the businesses which has really, to some extent, positively surprised us is our Middle East business. Even though we reduced the number of accounts, we actually saw the revenue growth, you know, uptick in that geography with good order book momentum as well as good outlook going forward. In addition to our Oracle business in Middle East and Australia, we're starting to see good momentum in digital services, particularly in specific areas like ServiceNow, Microsoft and Snowflake. All in all, we feel that while there have been challenges in FY 2023, we are closing on a very strong note in Q4 with a good foundation to build on and demonstrate industry-leading growth and above industry averages into FY 2024. With that, I'll pass it on to Arun, and we'll be happy to answer questions after that. Thank you, Hiral. A very warm welcome to everyone on the call. While date containing much more detailed information about our financial performance and key metrics has already been circulated, I will reflect upon key highlights and we can thereafter get into Q&A to have specific question answered. As a key highlight, our operating revenue stood at INR 709 crore for the quarter, reflecting 7.7% quarter-on-quarter and 22% year-on-year growth in INR terms. In constant currency terms, quarter-on-quarter growth of 5.3%. Growth is led by strong execution, as Hiral alluded to, by U.K. followed by Middle East across secured government, our Oracle business. We have seen good order booking across geography. As a result, our 12-month order backlog is now $280 million, which is up by 5.2% quarter-on-quarter and 22% year-on-year. In constant currency terms it's 17.2% year-on-year. We added 28 clients during the quarter. It is across verticals and across geographies. Our acquisition of MST continues to do better than acquisition while we are closing cross-sell and cross-sell opportunities. A lot of integrated fees and the momentum is building up. Our operating EBITDA stood at 17.7% for the quarter, increasing by 40 basis quarter-on-quarter. It is led by improved operating levers and currency while we continue to invest in building capabilities in line with our three-year strategy. Our PAT stood at INR 72.6 crores, up 8.2% quarter-on-quarter. Our gross cash was INR 270 crores versus INR 325 crores in December 2022. During the quarter, we completed acquisition of second tranche of ECPS, paid installment of loan as it was due, and also disbursed interim dividend. Our borrowings stood at INR 371 crores as of March 31st, reduced from INR 397 crores as of December 2022, [at] the end of quarter, reflecting a net reduction of 65 headcount. Consequently, our utilization improved by 450 basis points quarter-on-quarter. With this, I would like to thank you all and open the house for Q&A. We can give you much more details. Thank you, everyone. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use the handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one. First question is from the line of Baidik Sarkar from Unifi Capital. Please go ahead. Gentlemen, good evening, and congrats on a good consolidated quarter. A couple of questions. The numbers from Oracle indicate continued softness, right? What exactly is going on here? Our base isn't large enough to warrant softness, even if there is some kind of a slowdown at an OE level. You know, do you think this is temporary? Should Oracle pull back? You know, some kind of commentary there will help. Back to the U.K., is there reason to believe that the acceleration we've seen in Q4 will continue for the rest of the year? You know, we're coming out of a very soft period, so very healthy acceleration there. Would you caution us saying that, "No, this is a positive blip," and execution in the U.K. is something that we're going to see on a day-to-day basis. I'll just close this with one question on Hiral before I come back on the financials. This is on the U.S., Hiral. You know, the lack of growth that we've seen here now constantly, you know, what is this really a function of? Is it the function of a lack of visibility? Because frankly, the cost takeout ecosystem that we're hearing anecdotally is still very strong. Our base isn't really large enough to kind of warrant softness, even if the environment as such is soft. You know, what is it? You know, does it really warrant a better investment on a go-to-market level? Yeah, I'll leave you with these proxy questions, and I'll come back to you, Jeff. Thank you. All right. Thanks, Baidik. The Oracle business actually grew for us. While you might see some small dip in terms of percentages, from a quarter-on-quarter perspective, that business grew. While we had seen some level of softness in the previous quarter, the momentum both on deal wins as well as on revenue growth has been positive. The discretionary spend and budgets and implementation will be under scrutiny, increased scrutiny in terms of investments. We've also won new implementations and managed services deals in Q4. That gives us confidence that the digitization and cloudification and movement to the SaaS platforms will continue to remain, and customers are trying to get more ROI from those investments. In terms of U.K., we did get the benefit of higher number of working days in Q4 as well as currency help as well. As I've mentioned in the past, right, while the environment as a country is volatile, our business is still-resilient, particularly in the secure government services, our core public sector services. The work that we continue to do is of national critical importance. I wouldn't call it a blip. There is good progress in diversifying some of our presence in U.K. We see potential going forward as well. U.S. has been disappointing. You know, if you look at some of the account discussions and investments that we've made and some of the delays and deletions that we've seen. We did get impacted by a significant drop in the Oracle Cloud commerce. This is the cloud commerce, e-commerce space which Oracle deprioritized to seek Other pack. But we've reached the bottom of that and negated all the dip that we saw from that space. We feel confident that some of the changes that we have made in converting some of those accounts into managed services, diversifying our business into data and app dev areas and some pockets of customers. As well as uptick in the Oracle Cloud space and the Salesforce synergy that U.S. is set for a growth going into FY 2024. Hopefully, Baidik, that answers. Happy to take more later, but that's a quick overview. Sure. Sure. Yeah, I mean, I gather probably U.S. will come back. On Oracle, Hiral, on Q4 of last fiscal, Q4 2024, our run rate was $27 and a half million. You know, we're starting at the $23 million-$24 million for the last two quarters. You know, there might have been a sequential growth, but, you know, we had to clear that base, right? You know, my question was more forward-looking. Is there enough ammunition for us to believe that we'll, you know, go back to at least half the pace of growth that we've seen in the Oracle ecosystem? Would you caution us saying that, I mean, you know, the growth rate, what we delivered this quarter, is more indicative of what is to come. I'm just trying to understand, you know, the quantum of growth that one can expect here. We expect both Oracle and Salesforce, both those, which constitutes a reasonable portion, you know, anywhere from 45, 47% of our overall business. We expect both those to continue to grow higher than our company average. Both of them, will have deep momentum and order book backlog, that gives us confidence of, them growing faster in FY 2024. Sure. Sure. Even from a disclosure perspective, you know, if I were to request you from the next quarter to probably, you know, try and disclose Salesforce also. I mean, just, or at least call out the number separately it'll. Plus place your journey in context. I'll just end with one last question on bookkeeping. You know, are we done with the entire payouts and dilution that was due to the promoters of the Evosys? I mean, was this the last year or will September of next year be the last term? We are done with 2 tranche. One more is pending, but, that will happen in the October of 2023. That's the last one. Okay. You know, because your minority transition was almost, you know, 100% this quarter, I was just a bit confused. On margins, our aspiration was to come back to 20% EBITDA level, right? You know, that was an aspiration for the next year. You know, given the cost and the revenue environment, is there any change to our aspiration? Are we on track? Broadly mention that. Yeah. As we mentioned earlier, high teens was our aspiration. We continue to aspiring to that. I think we are very close to 17.7%, and full year this is 17.8%, right? We believe that that's a good range to operate around, and we want to operate in that range. Till definitely mid to long term, we want to come back to the higher EBITDA profile as we start achieving our growth target. Okay. All the best. I'll be in touch. Thank you. Thank you. The next question is from the line of Mohit Jain from Anand Rathi. Please go ahead. Hi. Most of the questions are on the cost side. One is, there was this steep increase in employee expenses this quarter versus last quarter. Is there a specific hike which was given during the quarter, because headcount has declined? One is that. Second, in terms of subcon, like, where are we currently in the overall scheme of things, and how should we see that, as we move ahead, in terms of percentage or absolute numbers, wherever you are comfortable with? Sure. Mohit, yes, there's an increase in that overall, you know, comp cost, but there are multiple factors into it. One is the currency conversion also has led to some impact as we are getting advantage into revenue. The same, you know, it gets reflected into the cost and a conversion as well. That's one. Second is, while headcount has gone down, but that's more like a month end of quarter end number, right? Which you see. More of the decline has happened on the later part of the month, which the cost anyway has come into the P&L. Second other initiative as we continue to invest into, you know, right talent. Having those digital niche talent is very critical for our kind of work. Some of the talent where the account goes down. When you hire them onshore, you would have seen onshore, offshore mix also going up because as U.K. growth comes more in the secure government space, that leads to, you know, higher cost in terms of overall P&L. Definitely, the rates are also better. Margin is protected, but in terms of absolute number, you see the cost. That's one part. Similarly, in the subcontractors as well, since some portion of our work in the secure government space need security cleared resources, some of those resources are not available into the employment market. You have to get them first in a security cleared market under subcontractor and gradually start converting them into the employment. To the point of yours, are we comfortable with our subcontractors percentage to the overall? Answer is no. There is a scope of improvement, that's one of the lever which we are working on to improve our gross margin and the EBITDA profile of the company. Right now the subcon cost would be fitting in other expenses, is that correct? Yes. As we move ahead, we should see some of the other expenses getting converted into employee benefit as you translate some of the subcon or convert some of them into employee. Absolutely. Okay. The other two are related to revenues. One is this growth in BFSI/professional services. You spoke about one deal win as well. Have we ramped up or should we expect the current growth in BFSI vertical to continue, and what is it driven by? That's one. Second, on U.K. Health. This particular revenue number was not moving for some time. Do you see stabilized trend for 2024 therefore? Should we expect more growth to be driven by U.K. Health? Mohit, the financial services sector is not currently a broad-based sector for us, as you know. We do have a few good accounts in U.K. and a couple of accounts in U.S., and then a few accounts in Middle East. It's still sizable but not one of our biggest. This particular account is a very large organization, U.S.-headquartered organization, where we have seen some interesting momentum and deal wins. But it is not something that is across the board in the industry as such for us, right? As of right now. It is more account specific. The ramp up, should we assume that you guys have ramped up reasonably in fourth quarter? Should we assume that this ramp up in BFSI will happen in 1 Q, 2 Q as well? Yeah. We club I think some. I mean, it's kind of ramped up, we club a couple of professional services industrial accounts into that cluster as well. It's a combination of core financial services as well as some professional services. That's ramped up. I mean, we see selective opportunities in that sector, it is in a few set of accounts, right? That we have. As far as health in U.K., particularly the one large account that we have, we still see uncertainty in terms of the organization and the changes that they have. We have seen a bottoming in terms of our position out in that account. We have actually won a few deals, as communicated earlier, the organization has decided not to ramp them up. Those are still potential possibilities for the future. Going into FY 2024, we've taken a conservative view on U.K. Health. We want to make sure that with a little bit of a reset on the baseline and look at specific areas. There's a very detailed strategy that the team has put together. If there is an uptick in terms of opening up of spend by NHS, then we would benefit from it. We have taken by design a conservative view. On the other hand, we see a tremendous potential going forward in FY 2024 from both U.S. and Middle East healthcare. That is one area that we have invested in, particularly with Oracle's acquisition of Cerner and our own capabilities within the Salesforce ecosystem in delivering payer and payor solutions. Banner Health was a great example of a customer where there's a case study in the market which is vetted by the customer and Salesforce. Similarly, we are very strong in senior living, acute care, home care, and delivering some really interesting programs. We do see healthcare while we've seen the dip because of the one NHS account that we have in U.K. As a whole, that's an important industry for us, and we expect that to grow significantly as a whole in FY 2024. Just a clarification, did I get it right that Oracle is 45%, 47% of the business? Was that the comment? No, Mohit. Oracle and Salesforce put together combined is about 47%. Oracle is what you disclose as Oracle Cloud. That is where it is sitting, the 29% number. Will it be across service line? There is some across service lines because there's some elements of CX and elements of data as well. Okay. Oracle is slightly higher than 29%, and total the two tech is around 45% for you. All right, sir. Thank you very much, and all the best. All right. Thank you. Thank you. Thank you. The next question is from the line of Ravi Menon from Macquarie. Please go ahead. Thank you. Gentlemen, good numbers. Congratulations on that. Wanted to ask you about the U.S. government business. That's shown good traction, that you described how the embassies, custom set, yeah, that's ramping up well. Of the other parts, are there any indications of new programs starting? That's the first question. Second, in the U.S., you know, it's flat quarter-on-quarter and I think last quarter we had won a deal to start an offshore development center for a client. I was expecting to see some of that ramp up. Has that got delayed, or, you know, is that already in the numbers? Ravi, just your first question, your line was not fully clear, but your first question was related to state and local government in U.S., did I get that right? No. You know, it was about the U.K. government business, you know, outside of energy. Yes. Sorry, what was the specific question on the first one, on the U.K. government? Yeah. You said that, you know, you started a new biometrics program. How is the pipeline looking there, beyond this? Yes. Yeah. Got it. Sorry. No, thanks, Ravi. U.K. government, and, you know, if you leave NHS aside for a second, the secure government services, right? We have been participating in some very large frameworks, as you know. Some of those frameworks do take time in terms of ramp up. However, we have a seat on the table. While there are multiple vendors in some of those frameworks, we believe that there is certain market share that we can continue to gain, right, through the course of the next one or two years in those frameworks. These are very, very large, you know, opportunities. There is a diversification of our presence that we have continued to make because we had few large institutions that we work with out there, particularly three or four, which have continued to, you know, show growth. We're trying to also make sure that we win new opportunities, right, in police protection, in some of this biometrics program that I was mentioning earlier, in the workforce and pensions, DWP as an example. There are certain areas that we're trying to diversify outside of the base that we already have. Also our state and local government business in U.K., where we work with about 29-30 councils, is still, you know, a sizable presence for us. You know, we continue to do specifically Oracle work there today, but there's an opportunity to cross-pollinate with other platforms. We've seen interest in Microsoft, for example, as well as AWS and Salesforce in pockets of U.K. public sector. The last thing I'll say on U.K. public sector is that central government, while we have a very good presence on the digital engineering side of things, Oracle as a company and as a business does a lot of work with the central government. We see an opportunity, which is a little bit more medium-term, of taking our Oracle Cloud story as the government modernizes and moves to the cloud in the central government space. These are some of the areas that from a pipeline build perspective, some of those are longer cycles, as you know, so we have to seed some of the investments and scale the security cleared resources. Hopefully that, Ravi, that answers that part of the question. Thank you. As far as the health deal that you were referring to, that has ramped up to some extent. It is one of the blues that we had communicated in the last quarter. In fact, that particular account, we are seeing new areas that the customer is interested in the data space. You know, we believe that, like I said, the blues in the U.S. in particular, is a good opportunity for us to replicate that success that we have with that particular one. There's no issue with that particular account. In fact, we see a good opportunity going forward. Thank you. Just a longer-term question on the Oracle side. Again, I thought that the work that you also did was very project-oriented, you know, we were able to, well, do a lot of them, that's a constant treadmill of projects that we are on. Has that changed? You know, how would we see that, you know, your Oracle business? You were talking about that growing above company averages. Is that predicated on, you know, getting a new pipeline of larger deals? Are we moving to a more annuity-oriented model through that? Yeah. A really good question, Ravi. Both those are true. We wanted to make sure that our dependency on pure implementation and projects is, you know, is limited, right? I mean, in the sense that some of those deal cycles have taken longer. We have won actually our average deal size in the Oracle space has grown in Q4. Having said that, like you rightly said, last three, four quarters, we've made a shift by design in having more managed services and annuity work. Now, those come with three-year deal time frames, so the ACD values of that might be lower. Having said that does establish stickiness for us to continue and mine those accounts, which is a key part of our strategy. While we continue to see projects and implementations, but our mix is definitely changing significantly towards a combination of projects and managed services in Oracle space. In fact, some of the work that we've won in Middle East has a high degree of annuity and managed services as an example. Yeah, it's a combination of the two. Great. Thank you. One last question, Ravi. You know, broadly, on the U.S. environment, we've been hearing that there have been projects put on hold. Customers are starting to show some reluctance to commit to CapEx. Are you starting to see any of that? I think customer base is a little bit more smaller companies. You know, would they be more at risk in this environment? Yeah. I mean, we in fact had, even two quarters back, right, pointed out, that there are certain delays and there are certain uncertainties. I mean, in Q4 in particular, the quarter gone by, we've not seen any orders or any ramp downs as such in terms of new projects. Deal decisions are definitely taking longer. And in some cases, you know, twice as long, right, than we might have seen in the past. A couple of wins that we announced, there's an interesting, you know, City of Hampstead win that we announced. Again, these are deals which took maybe two months longer than we anticipated. We did win then. I think they will continue to see that uncertainty, right? Many of the investments are going right up to the CEO or even to the board, in terms of approval cycles. That I think is a trend that we'll see at least for the next two to three quarters. But what we've done is we've put strong account managers in some of our key accounts, while we need to do more work in that space. But we do see a mining opportunity in some of our existing accounts. Also strengthening the value proposition that we take to a client. Combination of our functional architecture and industry knowledge, and putting that together in the context of the customer. And helping, you know, customers save money instead of just spend money. Models where we can actually modernize but also optimize at the same time is what we're taking to some of our existing clients. But I think the caution in our customers or industry level will continue to remain, right, in the next couple of quarters. Thank you so much. Best luck. Thank you. Thank you. The next question is from the line of Amit Chandra from HDFC Securities. Please go ahead. Yeah. Hi, sir. Am I audible? Yes, you're audible. Please go ahead. Yes, sir, and thanks for the opportunity. My question is on the NHS recovery. You mentioned that we have seen recovery in the NHS account. If you can throw some more light on, you know, how the NHS merger that was happening, has it been, you know, completed? Also, the recovery that we have seen was at the end of the, you know, at the end of the quarter or we have seen the full quarter impact of NHS recovery. Also in terms of the contract that we had won earlier with NHS, post the, you know, post the merger, has there been any changes in the contract structuring or we are just seeing the ramp up of the existing contract that we have won? Yeah. Amit, thanks for the question. I just wanted to clarify in case there was some miscommunication earlier. We've definitely seen growth in our secure government services in U.K.. That is not necessarily NHS recovery or NHS specific growth or recovery. We continue to see some uncertainty in the leadership and the structure of NHS and some of the merger and the integration that they're going through, right? That's the point I was trying to make earlier, that we've taken a conservative view going into FY 2024 related to NHS, right? We feel that it has bottomed out in terms of, you know, our exposure, there is still uncertainty, right? Our growth, and, you know, the uptick we saw is not necessarily from NHS, it's actually from our, rest of the secure government services, right? Work that we do in U.K. Okay. Mr. Chandra, sorry to interrupt you, sir. The audio is unclear from your line. Please use the handset mode. Hello, is it clear now? Yes, sir. Hiral, on the, on the investment that you made on the U.K. private, you know, side. You know, obviously we are seeing benefits of it, but what kind of growth, we are expecting from the U.K. private segment, especially because, you know, financial services, and obviously on the retail side. In terms of investments, are we through with the investments on the U.K. private? You know, on the, on the U.S. side, we have done some restructuring there. You know, post Vijay coming in, are we going to continue with the same strategy or are we going to see some change in strategy there in the U.S.? U.K. private sector, we, the team has done a good job in defending some of the real estate in the previous quarter. Once we reached certain level of stabilization in the middle of the year, we started to see more deals and upticks in incrementally growing, right? Some of that is reflecting in the numbers as well, like you said, Amit. We still see that as a growth area for FY 2024, but if I relatively compare that to some of the other areas of growth, for example, the U.K. secure government, the Americas as a whole, or our Salesforce and Oracle business as a whole, we believe that those are bigger opportunities for us, right? While we will grow in U.K. private sector, but it's not necessarily in the top three priorities, right, for us. The U.S. strategy has undergone some tweaks and change, particularly as it relates to the environment that we're in and some of the customer voice that we're hearing. As we go deeper into some of our existing accounts, there's definitely more cost savings and cost takeout opportunities. We're making sure that our value proposition of modernizing, cloudifying as well as, you know, transforming experiences in the customer journey is combined together with the cost optimization pitch that we're taking to customers. That would be one call-out. A much more deeper focus on account mining earlier. Third is doubling down on U.S. in particular, where we see opportunities in providers, payers, and providers, both in Oracle and in the Salesforce space, and to some extent in the data space as well. Those would be the three call outs. I think that the cost savings element, combining that in our value proposition, would be one element that we've updated, right, in the last few months. Okay, sir. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address question of, from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The next question is from the line of Ravi Naredi from Naredi Investment. Please go ahead. Thank you very much to give me this opportunity. Sir, when we analyze the result, main change in margin from employees cost and other expenses, how you deal in current year about all these expenses in margin? As we mentioned, the margin, if you see EBITDA profile of the company is broadly in 17.7% kind of a range. Right? Again, the cost is obviously day-to-day like, the cost increase pressure will always be there, but that's how you manage between multiple operating levers. I was alluding into subcontractor mix, which we spoke about. We have been talking about the utilization of the levers. Again, it's a combination. Some costs will go up, but there are certain levers which we'll pull out and thereafter endeavor is to maintain the margin within the range. Okay. order book, backlog, INR 1,794 crore, can you bifurcate in U.S., U.K., and other territory? We don't give that geography wide breakup. That's for the full company. That's a committed order which we have to be executed over next 12 months. Okay. Thank you. Thank you. The next question is from the line of Zubeyr from Mondrian Investment Partners. Please go ahead. Thank you. A couple of questions from our side, please. Firstly, it would be kind of just a ballpark number on the organic growth for the quarter and for the full year, because obviously we've had some sort of M&As during Q1, Q3. Secondly, what should we be expecting on the debt side of things? You know, do we repay or do we take on some more for further M&A? Those two questions from our side, please. On the debt side. Go ahead, Arun. I'll let Arun answer the debt, and I'll come back to the other question. Sure. The debt which we have in the books, carries a repayment plan, and we have sufficient cash flows, you know, to take care of it. There's no further plan to raise any debt unless we get into any inorganic activity. As an operating, requirement, we don't see any debt requirement out there. We'll continue to discharge debt liabilities. There are certain debts which will get discharged over this year. Certain part of the debts which we took for the purpose of MST acquisition will get discharged over the period of next three years. Perfect. Thank you, Arun. Zubeyr, are you able to hear us okay? Seems like the feedback is the voice is not fully clear. Yeah, sure. I was asking about the organic growth that the company has achieved for the full year and for the quarter, because obviously numbers are very strong. For just comparison for like for like, for compared to previous quarter last year, just you want to understand what has the company done on more organic basis? Sure, sure. No, you're able to hear my voice okay, right, Zubeyr? I can, yes. Clear sometimes, but it's unclear, sir. In between, it's getting unclear. Okay. Yeah. I'm not sure why. We are very close to the mic and it's unfortunate. Let me answer the question. Like I mentioned earlier, the MST and the Salesforce acquisition has delivered above, you know, plan and exceeded our expectations, both on revenue as well as on order book, for the FY 2023 timeframe. As you know, about eight months of acquisition, in terms of reflected in the numbers that we reported. In terms of Q4 in particular, like I mentioned earlier, we've seen historically for the last three, four years that this particular quarter is a slower quarter with MST, with the seasonality. Essentially, you know, our Q4 growth has come from organic and it's an apples to apples comparison as you know from Q3 to Q4. Going forward into FY 2024, we believe that the order book and deal momentum from the Salesforce business continues to be strong. We will see good year-on-year growth on the Salesforce business as well. In Q4, the quarter that just went by, it was an apples to apples, and it was, you know, a significant part of it was organic growth. Thank you, Hiral. What I meant was like, year-over-year, so obviously from a quarter-over-quarter sequential perspective is organic. I mean, relative to March 2022 versus, you know, March 2023, that is what I'm trying to understand, the 7.5% growth with the 5.5% constant currency. You know, how much of that would be organic? Excluding MST and Salesforce. Hi, this is Arun. Typically, we don't give this information separately, but, what I can confirm is in this quarter is, 5.3% predominantly is driven by the organic. As Hiral mentioned, you know, there's this seasonality in the Salesforce business in this quarter. You can count most of the growth has come from the organic business. Okay. Perfect. Thank you. Yeah, that's it. Thank you very much. Kasera, your line is in talk mode. Please go ahead with your question. Hello. Yes. It's audible, sir. Please go ahead. Hi. Hiral, this is Sachin Kasera here. Congratulations. Please use the handset mode. The voice is echoing, sir. Hi, this is Sachin Kasera here. Congrats, Hiral, and the entire Mastek team. After many quarters, we are seeing growth come back in a strong manner, so very good set of numbers. Two, three questions from my side. First was, you mentioned that, this is the current momentum. You are quite confident on delivering a strong above-industry and initial growth. If you could just give us some more greater insights as to what gives us this type of confidence and momentum that, you know, this growth that we're seeing this quarter is more sustainable? Thanks, Sachin. Sachin, as you know, there are various parts to our business, and in some ways, there's some uniqueness in each region, right? We really needed to make some fundamental changes in the underlying elements of our business, which included, like I said, our ability to strengthen our capabilities, ability to mine accounts better. Some of those underlying changes are starting to pay off. There are two, three metrics that we look at from a leading indicators perspective, right? One is our pipeline and our overall uptick in the level and the type of conversations that we're having, right? The 12-month order backlog has definitely gone up, that is one part of the data point. The second part is that in the areas that we are good at, which includes our Oracle Cloud business, our Salesforce business, our U.K. public sector digital engineering business, we are continuing to diversify and see larger deals and opportunities, in some cases multi-tower deals in the context of Oracle. In the context of Salesforce, larger opportunities beyond what we've delivered in the past. Also, some indications of, you know, mining those accounts better that we are present in, right? This is the second sort of leading indication that we're looking at. Third is, we've made some strong hires, not just at the leadership level that I mentioned earlier, but also at next level, and at an account level in some cases, at a domain level in some cases. We believe that some of the capability investments, which we continue to need to make, but some of the capability investments, we continue to strengthen our propositions. Some of those progress that we've made in addition to getting the right people, will position us better going forward as well. Looking at the pipeline, our order backlog, our mining, our ability to mine, if you look at greater than 1 million accounts, you know, two years back, we were about 25 or 30 accounts. Now we are 60 accounts, right? 61 to be specific. Similarly, we want to continue to move up the ladder on 3 million accounts, 5 million accounts, 10 million accounts. Middle East and the uptick that we've seen continues to look strong even going into FY 2024. In addition to our largest markets, which is U.K. and US, the third geography leg continues to fire. Those are the three, four things, Sachin, that is giving us confidence. Sure. second question was on the U.S. market. Please use the handset mode, sir. Your audio is echoing. Yeah. Second question was on the U.S. business. This quarter we have seen some pressure in margins. One, is it because of some investment that we have done? Are there some write-offs or is it a general pressure on pricing, if you could quantify? Sachin, see, it's predominantly because As the investment continues to be made in the geography because that's the growth we want to see in America specifically, right? As the growth comes back, as Hiral alluded into, we see the margin coming back to the normal levels. Sure. And have we now started to see our ability to bid in larger bids in the U.S. business? Because that is very critical for us to grow the U.S. business and achieve the balance that we have, you know, targeted in the next four to eight quarters to achieve a mix between U.S. and non-U.S. business. Yeah. Sachin, we definitely have that as part of the strategy. We have taken proactive propositions to a few of our clients. We have a seat in the table on few customers that we want to make sure that we try that with. Our strength though will be in accounts which are between 1 billion - 10 billion companies, right? That's the range that we believe are sweet spots and even in some cases 2 billion - 7 billion, right? That's where we feel that we can make the biggest impact. In some cases, the customers are actually breaking down their overall strategy, sourcing strategy into smaller chunks, which in a way is beneficial to us. We don't want the necessarily the entire IT real estate, right, for bidding because we may not be successful in those type of bids. The success that we are seeing in some of the leading indicators is in our existing accounts, right? We have seen $5 million deals, $7 million deals. We have some of those in the pipeline as well. In terms of larger than $10 million deals, it's an aspiration that we have in FY 2024. We are picking certain specific areas and industries, where we can take that proposition to, like I mentioned, healthcare in particular. We're trying it out with a few of our top existing accounts. We want to show that and demonstrate that with the results. We will keep you and the teams posted as we start having those wins in the U.S. Conversations are definitely moving up the ladder. Our relationships are getting stronger in certain accounts. We have to now take that to the next level in terms of some of the cost take on deals. Fair to assume that in FY 2024 in the U.S. market, the average deal size should be much larger than FY 2023 and overall order intake or order win should be much better than FY 2023? Yes. Okay. One bookkeeping question for Arun. If you see the cash flow from operations this year, it has come down to INR 100 crores versus INR 270 crores last year. Is there some one-off in that? That looks quite low. How do we see the cash flow from operations? Because this year, you know, almost INR 700 crores is gone from the balance sheet because of investments and the net debt has gone up quite a bit. It is still net cash but, you know, net, this cash outflow is much larger than cash flow from operations. If you could comment on that and how do we see FY 2024 in terms of cash flow from operations? Sachin, very good observation. Yes, this year we have seen some reduction in the cash from operations, and it's kind of reflected in our DSOs going up to 93 days. There's an internal team which we have created who is working very dedicated. We don't see any risk into those numbers. You would have seen 98 days last quarter. We have gotten down to 93 days. There's a continuous effort. Our endeavor is to operate free cash flow in the range of 75%-80%, is the range we operate internally. We believe next year we'll come back to that range. Okay. Okay. Just one last question. When we see the minority interest, there's only INR 2 lakh. That's little confusing because we still 10% is minority in case of EvoSys. Is there some one-off again in that? That looks like a very low number for 10% minority, just INR 2 lakh that we have got this quarter. There are certain one-offs in that particular set of business. Again, as a company, this, you can say it's an offsetting, but, between the entities which are subject to minorities, there's a one-off there. It doesn't impact at the group level. Okay. Thank you and all the best. Thank you. Thank you, Sachin. Thank you. The next question is from the line of Mihir Manohar from Carnelian Asset Management. Please go ahead. Yeah, hi. Thanks for giving the opportunity and congratulations on a great set of numbers. I mean, the growth coming back after some point in time. Largely wanted to understand on the government side of the business. I mean, you mentioned the reasons that has driven the growth in this particular quarter, and also you mentioned about the opportunities which are there in the government side, specifically U.K.. I mean, I just wanted to get a sense. I mean, we are seeing some 10% + kind of a growth. Considering the opportunities which are there, which is on the police profession side, workforce pension side, I mean, do we see ourselves maintaining the- Sorry. Mihir Manohar, please use the handset mode, sir. Yeah. Hi. It's audible? Yeah, you're audible. Carry on. Yeah, sure. Sure. Mihir, we heard most of the question, so please go ahead. Yeah. Sure, sure. I mean, you mentioned about the untapped opportunity. Just largely wanted to understand, will this growth rate sustain or how should we build the government business kind of a growth or will it come off once again back to a 2% kind of a growth number? How should we see that part of the business? That was my first question. Second question was on the NHS side. I mean, you know, the two deals which are there. I mean, what kind of probability should we assign of these deals getting ramped up for us? I mean, you know, what should be the probability that one should consider or one should just drop off these deals even in FY 2024? Let me start with the second question, Mihir Manohar. NHS, in reality we believe that there is, you know, higher probability, but we have assumed that the probability is very low. And again, we've taken that conscious call to be very conservative given what we've seen in the last nine months with NHS. Until we see one deal, spend coming up, we're going to take a conservative approach. But I do believe that things will open up, right, during the year. There is different parts of the healthcare ecosystem within U.K. Health. It may not be in the same areas, but it might be in slightly tangential and surround areas that we might also see some potential growth. The growth levels that you've seen in terms of quarter four did have help from both number of working days and currency, like I mentioned. That level of growth quarter on quarter will be difficult to sustain in the U.K. public sector. Having said that, like I mentioned earlier, in the three or four different areas, we do see opportunities to further strengthen our presence, both in some of the existing accounts and even diversify in a few other institutions. It's, it continues to be a key part of our growth strategy and business going forward. Yes, sure. Got it. That's it from us. Thank you. Thanks. Thank you. Ladies and gentlemen, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The next question is from the line of Darshit from Robo Capital. Please go ahead. Hello. Am I audible? Yes. Yeah. Hi. Thanks for taking my questions. I actually just needed a ballpark view on revenue going forward in the next two, three years. Also, I heard that you are wanting to bring the EBITDA and PAT margins back to previous levels. Could you specify some timeframe, say probably how many years it'll take to, you know, come back to those levels? Thank you. Darshit, I think, you know, we have a three to four- year view in terms of how we are looking at the business as part of the strategic priorities that we had laid out. FY 2023 has been challenging, you know, in the couple of quarters prior to this. We feel, we're very pleased with the quarter four results and momentum. We feel FY 2024 will be a stronger year. As we look at the overall opportunity in front of us, in terms of the sectors and the regions that we operate in, we continue to believe that we will be at industry leading or a few percentage points above industry in terms of year-on-year growth, right? Our margins and operating EBITDA in particular, is in that range that we feel comfortable right now. There's always going to be some room for improving, which we would like to reinvest back in the business. Then demonstrate consistent quarter-on-quarter as well as year-on-year growth for a few quarters before we try and improve our operating EBITDA to, you know, 19%-20% ranges. Right now the 18% range is where we feel comfortable. Okay. All right. Thank you. Thank you. The next question is from the line of Pratap Maliwal from Mount Intra Finance. Please go ahead. Hello, can you hear me? Yes. Yes. Yeah. Yeah. Hi. Thanks for taking my questions. I think most questions have been answered, but I think, last quarter you had called out that there's been some, greater than $5 million deals, and a couple of them are maybe in the pipeline for Q4. Is there any update here? Have you won any of those deals? Any traction on that front? Yeah. Actually, we've won two of them. One in America. These are both Oracle deals which had longer cycles than we expected. The manufacturing company that I was referring to earlier. Interestingly, both those deals, if you recall in the Investor Day roughly about a year back, last year, many of you attended in person, we had showcased our investment in non-linear platforms and non-linear solutions. It was part of a medium to longer- term strategy where we believed that architecting certain platforms and solutions that can give nonlinear growth will be a key part, you know, going forward. That's, we're pleased to sort of update that both these deals, you know, one in a utilities company in Australia and second a manufacturing company in the U.S., had this nonlinear component. In fact, we have another solution called Workforce Scheduler, which is popular in the healthcare space, which is also gaining traction. There's another deal which we had referred to which is what you're referring to, Pratap. In terms of, you know, in terms of greater than $5 million, it is with a healthcare customer. That is something that we are expecting to close in the next few weeks. Yeah, I mean, the good news is that we've not lost any of the ones that we referred to. Deal cycles are definitely taking longer. Out of the three, we actually have won two, and are expecting to win the next one in the next few weeks. Thank you. We'll take the next question from the line of Sameer Dosani from ICICI Prudential AMC. Please go ahead. Hey, thanks for the opportunity, and congratulations on a great set of numbers. Just want to understand utilization specifically. You know, this number we have seen a very good improvement now. Now how should we think about this number? Is there some scope for improvement? How should we understand this in the context of margin improvements? Because 17%-19% is the range, if I'm not wrong, that we have spoken about. Are there other levers to at least go the higher end of the margin? Thanks. Yes, Sameer. Yes, there's a room for improvement in utilization, and we are working towards it. As we mentioned earlier, there will be gradual improvement, and that's what has been reflected in last two quarters. There'll be further improvement down the road as well. In terms of margin improvement, yes, utilization is not only the lever. There are sub-contractors conversion and there are other operating levers as well, which we are working on. However, at the same time, we need to keep investing back into the business for the purpose of growth, right? Including capabilities, getting into the sales and other channels at the same time. Our endeavor is to maintain the margin around this similar range in the short-t erm. As Hiral mentioned, like, you know, in the mid to long- term, our endeavor will to further keep improving it and come back to the old levels. Yeah. Sameer, the only thing I would add is, we did make a tough call in the middle of the year to continue to onboard freshers into the system. When some of our competition stopped that or reduced that, we actually did not do that. You saw a hit in the utilization in the previous couple of quarters. Now, with disciplined execution and moving many of them into billable roles, which we would continue to do, you're seeing some of the benefits of that, both in terms of utilization as well as in terms of revenue growth. It was a tough call that we had made in the middle of the year, but it is paying off right now. Fresher intake and making sure that we run the internships and training programs is an important part of our strategy, right? So that we can improve the overall pyramid structure, do more offshoring, as well as deals become a little bit more managed services in terms of our business mix, that'll also help us, going forward. Also, second thing, thanks for this. Second, when you look at industry growth, what is your benchmark in terms of industry growth? Is it top 10 players, top 15 players? What is the benchmark when you say, you know, industry growth plus, couple of percentage points is our end of year? Thanks. Yeah. There are the Tier 1 and the larger Indian IT services players, which all of you know, the big seven or eight players, and then there are mid-cap and small-cap combination of, you know, 10-15 players that we typically benchmark against, right? What we've seen with various external reports, and some of you are the experts in this, is that typically in the range of 7%-9% is what we've been hearing for some of the larger industry players. With the mid-cap and the smaller players doing slightly better than that, in terms of the range of industry growth. That's what we are benchmarking against as a baseline, and we aspire to do more than that, right? In terms of the industry. Given our size is on, in the smaller side of the mid-cap or small-cap. So while saying that, right, there is still continued uncertainty in the market and the environment. You've seen some of the results that have been announced. You know, we obviously will wait and see how some of the other competitors do. We feel comfortable that the investments that we made in the business, the leadership that we brought in on board in the last few months position us well, right, for that industry leadership. Yeah. Sorry, go ahead. Correct. It's a combination of Tier 1 plus mid, small, all players, not just bigger players. Understood. Understood. All right. Thanks. Thanks. That's it from my side. All the best team, and congratulations again on the great set of numbers. Thank you. Thank you. The next question is from the line of Vikas Vijayvargiya from Health Tech Services. Please go ahead. Yeah. One thing I want to understand, this is purely the bookkeeping question. It's our creditors is slightly decreased by INR 16 crore or number is there, I believe. Any specific reason and what is the component of the creditors like rate is up? Again, it's the timely payments of the creditors, which is the nature of it. Also sometimes what happens, you get into longer-term engagements, and the timing of it could relate to, you know, closer to March and the payments are not due, and you don't, you know, you make the payment as it becomes due in May or June, could be the reason. It's again business as usual. We don't see any significant reason as such unless the timing of certain contracts which you would have entered with the vendors, may be different between last year and current year. What is the nature of the creditors or trade payables is there? It's again, as usual, you are doing a lot of procurement of CapEx items. It could be laptop. It could be IT softwares which you buy for our employees. We are in the range of 6,000 employees, right? We have to make multiple procurements. There are facilities, there are rentals, so on and so forth. Any kind of the commissions or professionals are included in this one? There would be subcontractors, where you'd be outsourcing certain part of services. There are individual subcontractors. Even they will become part of this. A ny third -party. We are not including any. Yeah. It's predominantly third -party. There would be certain accounting-related disclosure to be included in the trade payables, but predominantly it's third -party. That because our, Sorry to interrupt you, Mr. Vikas Vijayvargiya. The audio is breaking. Hello. Sir, your audio is breaking. Please repeat your question. Hello. Pardon? Yes. The second part is is there a growth or decrease as compared to... Still breaking. Sorry, we are not able to hear you. Sorry, Mr. Vikas Vijayvargiya. The audio is breaking from your line. As there are no further questions, I would now like to hand the conference over to the management for closing comments. All right. I think, as always, we highly value the interaction and the questions. Like I mentioned, FY 2023 was challenging, but we are very pleased to end with a strong note and solid in-quarter execution of Q4, that is reflected in our results. The changes and the investments that we made in the last year has set a good foundation for us to develop confidence in the outlook going forward. I would like to take this opportunity to thank the entire Mastek team, who we call Mastekeers, for their commitment and continued focus on the customer. The investors and analysts who've joined the call today as well as the interactions that we have had through the year has helped a lot. We value your feedback and support and trust in Mastek. We will continue to keep you posted on the progress on our strategic priorities and looking forward to an exciting FY 2024. With that, thank you once again and good evening. Thank you. Ladies and gentlemen, on behalf of Mastek Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.