Ladies and gentlemen, good day, and welcome to Mastek 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 presentations and clues. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Asha Gupta. Thank you, and over to you, ma'am. Thank you, Mira. Good day to all of you. Welcome to the Q1 FY24 earnings call of Mastek. The results and presentation have already been mailed to you, and you can also view it on our website, www.mastek.com. To take us through the results today and answer your questions, we have the top management of Mastek, represented by Hiral Chandrana, CEO, and Arun Agarwal, CFO. Hiral will start the call with the business update, followed by Arun providing financial update for the quarter. Post that, we'll open the floor for Q&A. 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 statement, must be viewed in conjunction with the risk and uncertainties that we face. This risk and uncertainties are included, but not limited to, what we have mentioned in the prospectus filed with the SEBI and subsequent annual reports 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. Thank you, Asha. Good evening, everybody, welcome to our Q1 results update. I'll start off with giving a brief overview of four different areas, our Q1 financials, what we're seeing in the market as a whole, but also with our specific customers, the exciting acquisition that we've just announced today of BizAnalytica, some commentary on Q2 and outlook for the remaining year. Our Q1 financials came in at 20.2% year-over-year growth from a revenue perspective at constant currency, we delivered 17.5% operating EBITDA for the quarter. We had variation in different geographies and different parts of our business, but at an overall level, we saw some good uptick in our Middle East business as a result of last couple of quarters of order book that we had closed and the revenue conversion of that. Our U.K. business had lesser number of working days, because of the time and materials work we do out there, had an impact in Q1. We had some good, solid deal momentum and order book in our U.S. business, which should reflect in a much more robust quarter and quarter growth as we look forward into Q2. As we look at what's happening in the market as a whole, our customers, you know, and particularly our top customers, are definitely prioritizing cost optimization and looking at different ways to generate efficiencies. Having said that, the journey that many of them have taken on the cloud migration and cloud modernization is starting to move into a different pivot, where they'd like to monetize the investments that they've made in the platforms, as well as optimize the consumption, whether it is hyperscalers or some other SaaS platforms. We've been seeing some interesting engagement models in terms of not just cost optimization, but also how do we fund some of the new solution creation and get more ROI for our customers that have already invested in the cloud journey? As we look at our own customers, customer satisfaction survey and results, we had some interesting insights as part of that. One of the areas which we were happy to see is that customers want to see Mastek playing a much more strategic role in their next few years' journey. They also want to see Mastek contribute in multiple newer areas of customer experience, of data modernization, of cloud modernization. It's a good sign where our existing customers want to see more of us. Of course, it's up to us now how we scale up and deliver to that promise. As we look at what's happening in the, you know, generative AI space, there is clearly a huge uptick just in the last three months since we last spoke, where customers are starting to pilot and have use cases very specific to their industry. Mastek has taken a very practical approach, I would say, where we are focused on few specific areas where we are contextualizing our capability to what the customer use cases and the industry-specific use cases are. For example, for retail and consumer industries, we've taken our icxPro solution and our Netail.ai partnership. For manufacturing discrete industries, we've taken a look at how we can integrate our VolteoEdge investment platform with the Warehouse 360. Our key platforms and partnerships, Oracle, Salesforce, Microsoft, AWS, are all investing in generative AI, and we are seeing how we can embed that as part of our proposition as well. As we look at our Q1 customer wins and some of the updates that we've shared already in the earnings deck. There is a variety of diverse experiences that we've had based on wins in Europe, in U.K., in Middle East, and in U.S.. While, you know, we continue to have some pressure from the NHS account, we've seen some really good wins in the healthcare sector in U.S.. For example, Brookdale Senior Living community, where we won a large transformation program, where we're looking at their entire supply chain, their entire patient experience. There is examples of wins we've had in the manufacturing sector in the non-U.K. Europe geography. We've also seen some marquee programs in government business of U.K., where we're looking at single sign-on and one login ID for their entire, you know, identity, access, and management processes. Just a wide variety of of wins and go lives. We have we had reported six months ago, our progress on one of the Blue Cross Blue Shield, and I'm happy to share that specific account is on track and trajectory to become a $10 million account in the U.S.. This will be our second account, where we see that this model of what we are bringing to the Blues can potentially be replicated to other Blue Cross Blue Shields as well. That's just in a brief in terms of Q1 and market and what we are seeing with customers. Moving on to BizAnalytica. As we have communicated almost for the last 15 to 18 months, as part of our M&A thesis and target prospects for M&A, we had prioritized three specific areas: customer experience and digital experience, data and the continuum of data with AI, and cloud platforms, which is the hyperscalers. As you know, we have acquired, you know, MSP last year, which aligns to one part of our thesis. The second part of our thesis was in the whole data modernization and data cloud journey. We've been very selective in looking at multiple assets, doing our due diligence, and super excited and pleased to report that we've officially signed a definitive agreement to acquire BizAnalytica. BizAnalytica was founded a few years back, is headquartered in Boston area in the U.S., with operations in Chennai, and provides a holistic view to the data cloud and modernization journey, where clients are looking at not just moving their data to the cloud, but also setting a strong foundation for how they can generate analytics and now generative AI use cases. The acquisition is very strategic in many ways because it not just aligns with our strategic priorities and thesis, but also in terms of what customers are asking from us and what the market potential is in this space. We're also happy about the client base and the profile of customers that BizAnalytica has. They have some marquee enterprise clients in asset and wealth management, in retail, in healthcare, in technology, and we feel that the synergies that we will start with the U.S. geography and then expand to our global market. Culturally, we feel that there is also, you know, high resonance in terms of both companies. BizAnalytica also has a very solutions-focused DNA. They have a significant investment in Mastek Lightbeam, which is a marquee IP, that really takes a look at data factory, and from a managed services perspective, how do we monitor consumption and cloud economics as more and more companies move to the cloud. Some exciting areas, which we are hoping to collaborate and work to build on. In all, this is a huge milestone for us. It's an area that we are very excited about in terms of growth prospects. Our mining strategy, which is progressing well in the U.S. and in the U.K., and in Middle East, will benefit from this capability. Of course, more. Happy to share more during the Q&A and in the coming weeks as we make progress. The feedback that we received last time from all of you, our investors, our well-wishers, our analysts, was to share transparently what was the mix of the business and the size of the business. The last 12 months of BizAnalytica was roughly about $16 million. That's something that we obviously hope to grow significantly higher compared to even the Mastek growth average. The last point is about outlook and a little bit commentary about not just Q2, but even looking beyond. We are very happy with the U.S. and Americas order book. There's some deals that took longer to close over the last 3 to 6 months. We've had a healthy back-to-back order booking and, you know, bullish about how that will translate to revenue. There's a good uptick that we can expect in terms of revenue growth in the Americas geography. In the U.K., we have some really large deals that continue to be part of our pipeline. Unfortunately, we had some very close losses, and a couple of losses where we were number two with some very large players. These are, you know, large deals and accounts where customers given us a seat at the table. A y ear back, we may not have even been able to compete. Being number two in some of those losses is not fun. We are taking that up as a challenge, and we feel that there is the potential to win some of those deals in the current quarter and the next. We've actually just got notified last week about one particular win, and hopefully, we can do some more in the U.K. geography. Our margins, and Arun will talk about financials in more detail, but specifically, we want to focus more on DSO and ensure that we bring a little bit more discipline there. There's various initiatives on cost optimization as well as margin improvement across the board, where we are taking very specific tracks and approaches so that we can optimize and then fund more strategic areas. As we look at account mining and one of those strategic priorities that we had outlined in the last couple of calls, we've taken our top, you know, 10 to 15 accounts in each geography and making progress, not just in terms of account plans, but also in terms of how we are approaching senior stakeholders, building relationships, looking at the vendor landscape, looking at partnerships, looking at how we can look at spend areas and offer a much more holistic proposition. We've also put in some new account managers and client partners in key accounts where we see growth potential. The Salesforce business and the Oracle business, which contributes, you know, significant part of our Mastek revenue, has continued potential. We see that, you know, both in terms of accounts or customers moving to the cloud, but also in terms of how they want to monetize, like I mentioned earlier, some of the investments, not just in sales, marketing, customer service, but even in data analytics. You know, Oracle has also branched out in a couple of new areas. I have spoken in the past about Oracle Health and their healthcare investments with Cerner, and we've made progress with the Cerner team and Oracle to look at more holistic propositions in select markets. All in all, you know, we have had a slow start in terms of our organic business and see some good lead indicators where we feel still optimistic and confident about our prospects, not just in Q2, but for the rest of the year, in line with some of the communication that we had done earlier. The pipeline is looking good. Our deal momentum is strong. Some of the recent wins are giving us confidence as we look at not just Q2, but beyond. And again, hugely excited in welcoming the BizAnalytica team to the Mastek family. With that, I'll turn it over to Arun. Thanks, Hiral. A very warm welcome to everyone on the call. Financial details and other documents has been shared prior to the call, so I'll keep focused on key financial metrics aligned to what Hiral alluded to from the business perspective. Our operating revenue for the quarter was INR 725 crores. It's 2.3% up quarter-on-quarter in INR terms, reflecting 0.4% in constant currency. Year-on-year growth is 27.2%, reflecting constant currency growth of 20.2% year-on-year. Once you break it up between geography, the growth is led by strong execution in Middle East. Again, in line with our previous quarter's order booking, as we mentioned, we are seeing good pickup in terms of demand in that particular geography, and the same has been reflected in terms of revenue. U.K. quarter-on-quarter was impacted because lower number of working days. However, the deal momentum, as Hiral mentioned, is quite exciting, and we believe, you know, that geography will continue to grow in the coming quarters. During the quarter, we added 22 clients across verticals and across geographies. Order booking experience was mixed across the geography, while delay and right-shifting decision-making continues. However, U.S. and Europe, when we say Europe, non-UK, Europe has shown positive momentum in order booking. Consequently, our 12 months of order backlog stands at $215 million, reflecting an increase of 16.9% year-on-year. A decline of 1.7% quarter-on-quarter in INR terms. Our operating EBITDA for the quarter was at 17 and half percent, a reduction of 20 basis points quarter-on-quarter. The primary reason of 20 basis points was because one part of our business, Salesforce, which we acquired last year, the increment has been done effective April. In line with as we do the integration, we wanted to ensure the team gets the hike in line with what they were getting earlier. That has impacted margin for the quarter. Partially offsetted by currency and other operating levers as operating during the quarter. Our PAT stood at INR 73.5 crores, up 1.3% quarter-on-quarter. Our cash was INR 220 crores at the end of June, this versus INR 270 crores in March 2023. During the quarter, we have paid one installment of loan as it was outstanding as per the payment schedule. Our borrowings stood at INR 363 crores as of 30th June 2023. Headcount was closed at 5,592 at the end of the quarter, reflecting net reduction of 30 headcount. Utilization improved during the quarter by 380 basis points, including trends, as we are operating and focusing upon better utilization of resources to drive the revenue growth and balancing the bench and in project utilization of resources. We have signed definitive agreement to acquire BizAnalytica, a data cloud and modernization specialist based out of U.S. Again, as Viral alluded to, it's in line with our strategy to get into data and cloud space together with the presence in the U.S. geography. It further helps us to sell a lot of integrated offerings, both to existing and to the prospective customers. I would like to thank all of you for your continued support and trust. Going back to the moderator and open the house for Q&A. Thank you. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephones. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. Anyone who wishes to ask a question, you may press star and one. The first question is from the line of Mohit Jain from Anand Rathi. Please go ahead. Yeah. Sir, two questions. One is on the U.S. pickup. Now, order backlog is more or less flattish, what kind of... I'm assuming this includes U.S. closures that you spoke about. What kind of growth rate are you looking at in the U.S. region for 2Q or maybe FY 2024? Mohit, the Q1 order book in U.S. actually was better than our targets and expectations. In terms of ratio of revenue, it was almost 1.5 times the revenue that we have in that geography. That's giving us confidence that as we execute on those programs and wins, which did take a little bit longer than we expected, but now since we have closed some of those deals in Q1, it will have a direct impact in Q2, Q3 and beyond in terms of revenue conversion. We, you know, obviously had anticipated slightly higher growth in revenue terms in the U.S. What we are confident is that we'll catch up, or mostly catch up in Q2 and get back on track in Q3 in terms of our anticipated year-on-year growth rate. Feeling confident right now based on end of Q4 order book and Q1 order book, that just the pure organic momentum as well as our integrated business with Salesforce is on the right track. This, of course, does not include any of the BizAnalytica business. I'm talking about our existing Mastek business. Right. This also means are we expecting slightly so slower U.K., because your total backlog number is still similar, and if US is growing fast, should we expect U.K. to remain slow for some time? We will still show growth in U.K. and Europe as we go into not just this quarter, but beyond as well. In percentage terms, in terms of quarter-on-quarter and year-on-year, our overall design and model for the year is U.K. and Europe will be slightly slower in terms of percentage terms. We're working with some very, you know, marquee programs, some new initiatives and areas on digital identity, kind of equivalent of, you know, Aadhaar card in India. Some large programs in the, you know, in the defense, in the hydrographic space, looking at new avenues in some of the public sector. Yeah, I mean, I think we're still sort of in some very critical programs, but just in percentage terms, comparatively, it'll be slightly slow. Right. Last is for Arun Agarwal. Now, what will be the margin impact for FY24? Like, you spoke about partly it is done. I assume the basic part is partly done and partly pending. How should we see it for FY24? Mohit, in terms of the operating EBITDA, the increments definitely as we are planning to look into in quarter two for the rest of the organization, how we are seeing there could be immediate impact. Again, there are operating levers which we are working on back of it to neutralize the impact of rate hike, sorry, the increments. We believe if any impact happens, that's more transitory in the quarter where the hike is happening. Come quarter three, quarter four, we'll come back to the range where we are operating, which we have always said 17%-19%, we feel very comfortable about. This includes acquisition impact as well. I assume Betasoft, you said Betasoft increments are already done. Is that correct? Yeah, that's what I said. It is done effective April, so that portion of impact is already in QPN. Yeah, that's already in the PN. Yeah. Perfect, sir. Thank you. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Ravi Mehta from Macquarie Group. Please go ahead. Hi, thank you for the opportunity. Here, just a question on the healthcare and life sciences. You were talking about how you won the BCBS contract, and that's ramping up well. Surprised to see the healthcare and life sciences declined. I think you mentioned that NHS, you know, had some challenges. Is it from that, and when would you expect NHS to bottom out? Yeah. No, good point. I think, Ravi, I, you know, I wish I could have said confidently that NHS has bottomed out. The reality is that we continue to see some uncertainty and challenges out there. We were expecting certain programs that could potentially ramp up sometime during the fiscal year. You know, the couple of the closed deal losses that I mentioned was, you know, one of them was actually in NHS. Having said that, there are three new wins that we've had in the healthcare space in America. Some of them are just, like, recent wins, so obviously it's not reflecting in the revenue. You should start seeing that in Q2 and beyond. Even in Middle East, we've, you know, won a couple of deals in the provider and healthcare space. All in all, that sector is still a bullish sector for us. The only challenge is some of that has been offset by NHS. You know, I think sometime during the course of the year, we will see a bottom and start picking up even at NHS. What we are doing out there is working with a significant number of arm's length body and multiple other divisions and units, including social care and the ICSs, which are not part of the core NHS, but are still getting significant funding. The election in U.K., which will come up in the next 12 to 14 months, is primarily being fought on healthcare and, you know, some amount of economy. But all the market intelligence, the customer intelligence we have is that there is still spend out there, and we are sort of making sure that we are still working very closely with some of our supporters and stakeholders, so that we can capitalize on the investments we've made in the past and start growing back out there again. You're right, you know, the NHS is really what has challenged us in terms of healthcare, but our healthcare momentum in U.S. and Middle East is strong. Great, thanks. Also, I was a bit confused by your comment that fewer working days in the UK. I mean, I thought that seasonally, you know, the after the Jan to March quarter with a fewer working days in Feb, this is a seasonally better quarter. Could you just explain that? Typically this is what happens. Since we have UK exposure, what is happening, a lot of PMM engagement, which we have, gets impacted because of Easter and other holidays, which comes in quarter one. Again, it's not globally, holiday pattern, is more, is very specific to the UK market. Great. Thank you so much. Thank you. Ladies and gentlemen, you may press star and one to ask a question. Next question is from the line of Darshan Jhaveri from Crown Capital. Please, go ahead. Hi. Good evening, sir, and thank you so much for taking my question. I hope I'm audible. Yes, sir. Yeah. Hi, so I think we had kind of a flat revenue. I just wanted to expect what kind of revenue growth do we expect for the full year? Because of maybe, our increments, so overall, our margin range will be in 17%-19%, right? Those are two of my questions. Yeah. Arun, why don't you address the margin, and I'll come back to the revenue? Yeah. To the point, as I mentioned to Mohit, in the quarter of increment, we might see some blips, but coming quarter three, quarter four, we'll come back to 17% to 19% range, that's the plan for this full year as well. Yeah. Darshan, this is Arun I just wanted to address the first question. The revenue growth and both quarter and quarter, year-on-year growth that we see from Q2 and for the rest of the year is strong. Like I said, we wanna be aiming for industry-leading and bettering that. I know that there is a kind of muted forecast at the industry level. There are companies that have shown degrowth. There are companies who are, you know, forecasting, you know, lower numbers. We feel that we are well-positioned, given some amount of uniqueness and some amount of focused activities in specific markets. As an example, you know, our financial services exposure is minimal, as you know. You know, we believe that, you know, that could benefit in certain different times, but in the current times, that limits, you know, some of the downsides. As an example, in manufacturing, and some of the related industries, we've had some really interesting wins. These are not just wins where we are implementing, you know, Oracle Cloud or Salesforce Service Cloud. We're talking about strategically working with clients on their supply chain transformation, on their how they're looking at, you know, connected enterprises with IoT and connected devices. It's a combination of, you know, business process transformations, as well as technology-enabled, strategic, market-driven growth that we are seeing with some of the manufacturing industries. We're operating in some of these industries, like healthcare in the U.S., manufacturing, U.K. public sector. We've seen a pickup in some Europe, non-U.K, Europe, deal momentum as well. We're still optimistic, like I mentioned, in terms of year-on-year growth and quarter-on-quarter growth, for Q2 and beyond. Okay. Just if I may, maybe it's not an exact number, we could maybe maintain the growth that we've been doing in the past, last couple of years. Maybe like not an exact number, because this time industry is very volatile, so it's a bit difficult to, you know, get the flavor of what it is. Maybe like what we maintained, what we've done in the last two years, that could be a benchmark that we have, maybe? Yeah. Actually, we shared some of the perspective last time. I mean, while industry might go through some amount of muted view here in the short term, our endeavor and our confidence is that we will be better than industry growth, and we will beat that by a few percentage points. That we still maintain and we still have the deal momentum and customer demand visibility to do that. Okay. Thank you so much, sir. That helps me. All the best for the future quarters. Thank you. Thank you. Thank you. Participant, press star one, to ask a question. Next question is from Salman from Sarasar Capital. Please, go ahead. Hi. I just wanted some more details on the BizAnalytica acquisition. Some financial details like, what is their revenue run rate, annual run rate, and what is their margin profile, and what is the consideration that we are paying them? Also about Vince, what was the thesis behind acquiring BizAnalytica? Was it for some clients? Was it for geographical expansion, or was it for a capability expansion? Sure. Sort of there's two, three different questions there. Let me try to break that up. I mean, this is a good opportunity to maybe re-welcome BizAnalytica team, because we, you know, our teams have been working with them the last few months as we were doing due diligence and detailed discussions. In fact, we've started working, you know, with our mutual NDAs in one account, or actually two accounts. Just a tremendous job done by, you know, by Arun, who's here with me, CFO, Raman, our Chief Growth Officer, Vimal, our legal, and the entire their teams all together to really collaborate with the BizAnalytica team to strategically drive this process. We are where we are. That's point number one. Second point is in terms of pieces, in terms of just the rationale, there are multiple elements. If you look at what's happening in the data cloud space, what happened in the infrastructure space and what happened in the application space in the last 15, 20 years, is really what's happening in the data space. More and more customers, instead of operating in siloed pieces, you know, if you look 10, 15 years back when analytics became a big theme, one of the challenges customers had is just getting their data into the cloud and data in one place, and the quality of data, et cetera. Things have evolved. Companies like Snowflake, companies like Databricks, and even some of the large platform players like AWS have invested significantly in the data space, because they believe that's a foundational capability that will be required, not just for analytics, but like I said, to generate more use cases in the gen AI space. This acquisition is definitely. One part of it is definitely about capability and giving us extremely differentiated assets in not just modernizing, you know, the data landscape and estate, but also accelerating the enterprise journey to the cloud of their data assets. Also, given the presence that BizAnalytica has in the U.S., in the eastern part of the US, with some very strategic clients, you know, in the health sector, in the asset management and wealth management sector, and in some retail accounts. These are Fortune 1,000, in some cases, Fortune 500, and in a couple of cases, Fortune 100 accounts, which we will get additional access to. It's in line with our enterprise, you know, focus, account mining focus, where we take a broader Mastek proposition. Now if you tie everything together, we have a heritage in digital engineering. We have a strong capability in Oracle Cloud, at the enterprise level with ERP, HCM, supply chain. We now have the CX portion with Salesforce in the customer front office. Now with the data and the elements of integration, there is a whole story that we can stitch together, where we can start competing in much larger investment areas. It complements our capabilities, it complements our U.S. focus and geography focus with account mining. It also, you know, sets a strong foundation for us to tap into a very high potential area, on, you know, AI, automation, analytics in the future. Okay. I shared, I think, earlier, that the last 12 months, you know, run rate, the last 12 months is INR 16 million. We believe it's accretive to our revenue multiple for Mastek. In terms of just kind of overall, you know, valuation, we are very pleased. It's an attractive, you know, acquisition for us from that perspective as well. With, with, you know, strong, you know, demand in the space and high potential when we look at the combined synergies of our business. Sure. Also, I just wanted to understand about BizAnalytica a little more. Can you give us an example of one of the case studies, one of their projects that they have done? Is it more on the data engineering side, or is it more into the analytics? I would say it's a combination, but the heavier focus is on the data engineering, the data modernization, and moving data to the cloud, right? Typically what customers go through is they look at, you know, a strategy of how they want to move some of their data across their value chain, multiple business processes, multiple divisions, into one centralized, you know, it could be a Snowflake or it could be a Databricks. Then start looking at how they can leverage that data to automate certain business processes, to get more solutions and use cases developed, how they can serve their customers better, meaning our customers' customers better. The value of driving informed decisions and insights for our enterprises is huge. In the past, that's always been the endeavor. Now with large data sets and with large language models, the processing speed and time is reduced significantly. For one of their customers, Optum, which is part of UnitedHealth, they're doing this type of work, where they're using and moving data to the cloud and making sure that they can set up, you know, Optum for their modernization journey. There are other examples in the retail space, where, you know, they're also doing some data science and analytics work for a couple of customers in the Northeast, you know, wealth management and capital market space. There is some combination of data engineering and data science. It's a little bit of a mix of, you know, the varied elements. It also depends in some cases, where customers are in the journey. You know, where do we take them from, you know, point A to point B. Hopefully that provides some flavor, you know, sort of. Okay. Thank you. Thank you very much. Thank you. Next question is from the line of Dipesh Mehta from Emkay Global. Please go ahead. Yeah, thanks for the opportunity. Couple of questions. First of all, I just want to understand margin profile of the acquired entity. If you can give some sense about what is the margin profile, and whether any nonlinearity in that business with revenue scale, If you see any scope for margin expansion? Thanks. Arun, why don't you answer the first, the margin, and I can add on the analytics? Thanks. Sure. Dipesh, they have. If you see the growth profile they have gone through, they have invested significantly with the size of the organization they are in, which led to them operating at a single-digit operating return. As we see them together with Mastek, we see them operating at early teens. How their earn out has been structured is, they make money if they deliver amount of growth, which we have, you know, kind of put as their target, and they deliver Mastek level profitability. We have done both the combination on. As we combine with Mastek, they start delivering, you know, in double-digits, and as they progress and grow the business, they start operating at the Mastek level. You know, there's a couple of interesting things about nonlinearity. I'm glad you brought that up, Dipesh, because nonlinearity has been a theme for us over the last six to nine months. We communicated in the last quarter, couple of wins that we had in the Warehouse 360 space. As an example, we have another solution in the Enterprise Workforce Scheduler space. This is a great example, where they have a solution and an IP, particularly in the context of managed services. This is a slightly different, you know, dimension of managed services, compared to your typical traditional on-premise managed services. This is data-specific managed services, which is also monetizing, you know, that data. There is some nonlinearity potentially we see there. There is also opportunities for value creation, like Arun mentioned, where, you know, expanding the offshore presence. They do have a Chennai operation, but there's more room to move work and to deliver work from offshore as we scale their business. As we look at the combined business together, we see more opportunities to do joint bids and solutions, not just in data projects, but in managed services as well, you know, for our existing accounts. The same applies to selling Mastek services to BizAnalytica accounts as well. Yeah, we see, you know, multiple avenues for the nonlinearity as well as value creation. Understand. Two more questions. First is about what would be the client concentration in the business of the acquired entity? Second thing is about the, what would be the amortization charges you expect on Mastek tender? What kind of hit you expect because of the transaction? Thanks. Arun, why don't you take the second one, and then I'll do the first? Yeah. From the amortization perspective, again, this is the acquisition which is done. We have to go through all the valuation, which is again done by the registered valuer team and all. Again, typically, you would have seen NEPP and all, it comes 2%-3% of the, you know, acquisition price. Again, let's perform. We have to go through all this, all this cycle, and we'll be able to give much more detail once we report September numbers. Because a lot of POCs has to be done, transition has to be closed, then the valuation will happen, and we get to know exactly, you know, how the valuation will work for their customer relationship, customer contact, and et cetera. Allow me 90 days to come back with better visibility into that amortization number. Dipesh, just to answer your first point, you know, the client concentration, like I said, it's a company that has a rhythm of much more deeper engagement and account mining compared to just opening new logos and hunting, right? So that's point number one. Second point is, once they have an interesting approach of base camp, where once they land into a particular account, they've had tremendous success in scaling to multiple areas within that account. So the quality of accounts and relationships, and the concentration is not a huge number of accounts, but they do have reasonable spread in terms of financial services, healthcare, technology, and retail. Those are the four industries primarily, with, you know, a couple of accounts in each of them, which are very strong, and then, you know, a decent pipeline of a few more accounts in each of those industries. They also have some solutions that are built for asset and wealth management, and developing another one for the healthcare sector as well. Thanks. Thank you. Next question is from the line of Amit Chandra from HDFC Securities. Please go ahead. Yeah, hi, sir, thanks for the opportunity. My question is on the UK government business... Sir, sorry to interrupt. Your voice is coming muffled. Can I request you to speak over the handset? Is it okay now? Yes. Thank you. You know, my first question is on the, you know, on the, on the government business. You know, we have seen acceleration in terms of the government spends by the U.K. in the last two quarters, but that is not being reflected in terms of our order book. Is it, and as you mentioned that we had some losses, is it, you know, we have lost some of the contracts, or is it our like win rate is coming down there, or we are seeing increased competition in the U.K. government space? How do you, how do you see it? If you can comment on the, on the U.K. private, you know, business, which is more financial services retail there in the U.K.. After initial uptick in the last quarter, we are, you know, seeing some softness there. You know, because we have said that we have invested there in that part of the business, and what is the update there? Yeah. You know, couple of points, right, Amit Chandra. One is, the U.K. public sector delivered, you know, some reasonable growth in the last quarter. Which is reflected obviously in our Q4 results, where we had a very, you know, handsome growth quarter on quarter and year on year as well. Like we said earlier, the number of working days in U.K., it's very specific to the U.K., for this quarter in Q1, did impact revenue. Having said that, the losses, the couple of losses that I was talking about where we were a close second, were not in our existing accounts and not in our existing business that we are running. These were in net new opportunities that we were pursuing. That's the second part. The third is that, again, you know, if you look at legal immigration, digital identity, police protection, looking at, you know, strategic areas of spend, even including, you know, down the road on the health side, we believe we're in the right areas. You know, yes, absolutely, the competition has gotten much more aggressive, and we'll definitely. This is not necessarily a U.K. public sector specific comment, but there's definitely going to be much more aggressive, you know, pricing pressure on some of the deals, particularly the cost optimization type of deals. You know, we've taken some lessons, you know, out of this. Our pipeline in that geography is still very strong. We feel still quite confident. Like I said, we had a win, actually reasonable win, about a GBP 8 million win last week, which is quite significant in the UK public sector. We think that the pipeline and the deal momentum is there. It's a matter of converting a couple of them and continuing to deliver. Our credibility with clients out there is very strong. We feel that we can tap into the spend that you are referring to, you know, in the coming quarters. That's as far as the U.K public sector. The private sector, you know, we've taken a slightly. We tweaked our approach a little bit in the last one or two quarters. As we were seeing in our own existing accounts, you know, a couple of financial services, a couple of retail accounts, there were new CIOs, there were new relationships that we had to build. We're sort of taking a more mining approach, even in the private sector, so that we can scale some of our existing accounts and take those case studies to open up new logos, right? We were focused a little bit on the hunting side with mixed results to be frank. We're getting a lot more traction and success. Just even the last two, three months, I was in U.K. last month, you know, meeting a couple of new CIOs in the private sector, same with the public sector. The trust that they have in us and some of our delivery, in some cases, we've been there, you know, eight years, 10 years, 20 years, is strong. It's up to us now how we leverage as they go through their transformation journey, including cost savings and how to fund transformation. We're up there with them, working together. You know, in the short term, we believe it's a little bit more of a mining story in the U.K. private sector. Then we plan to take that to open up new logos, tapping into the Fintech and financial services potential that exists in the geography. Okay. Sir, on the, on the, you know, on the U.S. business, you mentioned that, we'll see, on a good growth in the second half. You know, if you can comment on how has MST been performing as of now? Because, you mentioned some of the order wins that we had in the US, it was led by MST. Also, you know, if you can quantify what was the, you know, impact on, like, margins, you know, from the wage hike that we did for MST. Also in terms of Oracle CX business that, was under stress. What is the update on that? are, you know, is the stress over or are we still seeing some progress? Yeah. There are three questions on that, Amit. let me quickly answer the first and the third, and then I'll give to Arun on the second. Oracle Commerce and CX, specifically, that third point, we commented on this last couple of quarters as well. Oracle has deprioritized that space six, nine months back, obviously we had an impact, you know, over the last nine months, you know, because of that. The team has done a fantastic job in utilizing some of that, you know, moving that business to managed services, looking at Salesforce Commerce, looking at Magento, looking at MACH Alliance, headless commerce in different areas. We are still in that space, but it is not about Oracle Commerce anymore, right? Because Oracle themselves are deprioritizing that. We don't sort of expect any impact because of that anymore, right? Because where the implementations were going on, that is either done or moved to managed services, and we're not expecting any significant new wins, although we did have one win, you know, in the recent times. It's not like customers have completely shut down, but significantly lowered compared to the past. As far as the Salesforce and looking at some of the broader business, actually, if you look at some of our win announcements, the good news is that we've seen order book and growth across all the three different areas: Salesforce, Oracle Cloud, and digital engineering in the Americas. That kind of well-rounded... For example, we replaced one of the top three Indian-based size in one of the West Coast accounts in a very strategic data warehousing and BI. You know, we're running a few workshops out there. This is a retail customer which has been an existing customer for us in the last couple of years, where we see a potential large deal in the making. The Salesforce business has delivered good order book. They had muted revenue in Q1, but we expect that to pick up in Q2 and, you know, have a good full year FY 24. You know, our Oracle business in Americas had some delays in terms of wins and the project. macro level discretionary spend and even though there's some slowdown there from a customer perspective, we are still seeing new projects and new implementations, where there's a transformation involved and there's a model where we're able to save the customer money, and the total cost of ownership level and still able to transform their business processes are getting funded. It's taking longer, but the couple of wins that we had in the Oracle Cloud space, which we've included in the deck, you know, have been, you know, $5 million type of wins. From that perspective, it was a well-rounded, kind of order book quarter. Of course, you know, we have to execute and, you know, continue to ramp up and maintain that momentum, going forward. Arun, if you want to take the second one. Very quickly, Amit, again, it's a combination, but broadly it was in the range of 0.5%-0.6% impact to the overall EBITDA of the company. Okay, sir. Thank you, and all the best. Thank you. Thank you. Next question is from the line of Zen, from Asset Management. Please go ahead. Hi, thank you for taking my question. My question is more on the inorganic side. I wanted to understand what would be our near-term strategy or plan in this area? Because over the last year, we've made two good acquisitions in terms of MST and now BizAnalytica. Would we first focus on consolidating these before venturing into further M&A? In continuation to that, would you say that we are more or less, we do have the capabilities now to reach the target, which we set for ourselves over for the latter half of the decade. Wanted to get your consent on that. Yeah. So, it's a two-pronged answer, Hussein. There is definitely in line with our thesis, in line with our strategic priorities, which then aligns with our M&A thesis. We had talked about CX, we talked about data. Yes, you're right, those two acquisitions we've made. Our approach has always been, you know, sort of $10 million-$30 million type of companies, right? We are looking at some very specific segments, you know, in the U.S. market. We don't plan, you know, any other near-term acquisitions. We believe that we have rounded off the capabilities that is required in the immediate future. Having said that, our 3 to 4 year type of model definitely had, you know, a total of 4 to 5 acquisitions, which we would continue to pursue, you know, over that time frame. We're not gonna rush into it. We're going to do our due diligence. And as we see opportunities, and it could go beyond the U.S., it might be in U.K. as well, we will, you know, make some of those strategic bets. But as it stands right now, we feel comfortable this fiscal year in terms of where we are with the M&A strategy. Got it. Got it. Thank you. One last question was with regards to our cash position. I think INR 220 crores and approximately INR 130-140 crores will go in this acquisition. That will leave us on a thin gross cash balance. How are you looking at that as the year progresses? Thank you. Hussein, this is Arun. From the cash perspective, as being an IT service company, we believe the cash generation quarter by quarter is continued to be healthy. The gross cash of INR 220 crores is good sufficient, plus, as I mentioned, the cash generation quarter by quarter will keep adding on it. We believe it is sufficient to manage the working capital requirement and also to take care of the loan requirements. We feel quite comfortable with the situation of the cash as we speak. Okay. Okay. Thank you. Thank you. Participants, you may start and want to ask a question. Next question is from the line of Jay Jain from Finnovate Financial Services. Please go ahead. Yeah. Good evening. I hope I'm audible. My question is related to the Middle East geography. The Middle East revenue has grown 34% sequentially and 67% year-on-year. What is the reason for this growth, and what could be the growth trajectory going forward in this geography? Thank you. Jay, we, I think made this comment, and provided some guidance last two. calls as well. When we had, you know, looked at Europe as a market in the first half of FY 2023, which is last fiscal year, we saw, you know, with the Ukraine situation and the war, a clear slowdown. At the same time, because of Russia and other aspects, we saw a lot of funding going into, you know, both UAE and, you know, Middle East, you know, as a whole, with Riyadh and Saudi. We had strategically moved some of our focus and investments from Europe, I'm talking about the non-U.K. Europe, into the Middle East and Australia geography, because we were seeing demand in there, right? It was a strategic decision. You know, we realized that there are margin challenges and, you know, tough customer environment, but we were seeing some really good demand. Now, having said that, it is not a geography that we're necessarily banking on in terms of year-on-year growth in terms of volume for the foreseeable, you know, three years, four years time frame, if you look at the horizon. We believe that it provides us a good, healthy diversification. Last two quarters we have actually reduced our number of accounts, you know, in the previous two quarters and, you know, strategically looked at even account mining even in the Middle East. The net is that when you look at it full year level, the growth trajectory in the Middle East will. And when I say Middle East, I'm including parts of APAC and Australia as well, which we call the AMEA region. We see that growing at a faster than Mastek average, you know, along the lines of kind of U.S. business as a whole for the full year basis. But it probably will have some blips in terms of quarter-on-quarter because there's a little bit of a unique rhythm out there. And you know, we sort of have anticipated that in terms of balancing that during the various quarters in the year. It's an important and a significant part of our business. We plan to improve margins in that business, you know, so that we can have better quality accounts and growth even in that geography as we look forward. Jay Jain, do you have any follow-up questions? No. Sorry. Yeah. Thank you. Thank you. Next question is from Sudeep Gunnar, Individual Investor. Please go ahead. Hi, thank you for the opportunity. sir, I have one question regarding the U.S. business. With the deals coming on board for NHS, revenue coming on, in the books from the next quarter onwards, how should we see the margins in the U.S. business? Go ahead, sir. Sudeep, as you said, as the growth comes, the investment which has gone into the geography, any growth will help us keep improving margin quarter by quarter, because the scale will give us the advantage as we are looking for. Just maybe to add, this is Viral. So the nature of the deals and the nature of the accounts, even in U.S., we are being a little bit more selective in terms of quality of accounts as well. Like, we had a long tail of accounts, even in the U.S., there were accounts with just $200K, $500K type of revenue, with no potential to go beyond $1 million. And where we have projects which are ending, and we don't see those customers as strategic, with medium or long-term potential. We're not necessarily, you know, dragging or continuing there. We're actually sort of repurposing some of that focus into higher, you know, spend areas, larger accounts, larger deals. Our account mining strategy out there has shown good lead indicators in terms of order booking, so that will reflect in our, you know, growth out there. I think, as we deliver on a stronger revenue plan, like Arun said, you know, the margins will improve in that geography as well. Sure. Thank you. Thank you. That's it from my side. Thank you very much. I now hand the conference over to the management for closing comments. All right. The questions and the interaction is always enjoyable, and we kinda learn from it as well. The quality of the questions and the insights and some of the discussions are useful to us as well. Appreciate the trust, the interest, and the support for Mastek. We're, you know, on a journey where the market is volatile, the times are still uncertain, like I mentioned, the strategy and the investments that we had made in the last, you know, few quarters, is in the right direction, and we're very confident that it is paying off in terms of how we want to win in the right spaces, in the right areas, with the right quality business. While there are some mixed kinda performances based on the geography and based on the quarterly rhythm, as a whole, we are very, you know, optimistic about the prospects and the customer feedback in terms of where they want us to operate in some very strategic areas. There's an opportunity for us to scale up, particularly in some of our largest existing accounts. Having said that, there's definitely a tighter, you know, budget cycles that customers are going through, multiple levels of approval. Competition is aggressive, but we have the right team in place. We have the right coverage now, compared to what we had about a year or so back. As we look forward, the completeness of our portfolio, the stronger, you know, relationships in the UK public sector, the critical programs in the government that we operate in, plus the momentum in both Americas and Middle East, is giving us confidence of being able to deliver stronger and industry-leading growth. You know, with that, we again are super excited about the data cloud space and BizAnalytica as a company and as a combined business now with Mastek offers another dimension for, you know, potentially growing in areas beyond where we were present in some cases. As companies look at this 3-5 horizon of where the spend is going to go in particularly the data space, I think the prospects are very encouraging. So once again, thanks for all the participation and questions, an You may now disconnect your lines. Thank you.