Ladies and gentlemen, good day and welcome to the Persistent Systems earnings conference call for the first quarter of FY 2022 ended June 30th, 2021. We have with us today on the call Dr. Anand Deshpande, Chairman and Managing Director. Mr. Sandeep Kalra, Executive Director and Chief Executive Officer. Mr. Sunil Sapre, Executive Director and Chief Financial Officer, Mr. Saurabh Dwivedi, Head of Investor Relations, and Mr. Amit Atre, Company Secretary. As a reminder, all participant lines will be in the listen-only mode. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Kalra. Thank you, and over to you, sir. Thank you. Good afternoon, good morning, good evening to all of you, depending on where you're joining us from. It's good to be with you once again, and I hope all of you are continuing to stay safe and healthy. Before I go into the financial and business updates, I would like to start by thanking our team members and customers for their resilience and their trust in us during these unforeseen times. Several of our team members and their extended families were impacted during the second wave of COVID-19. Sadly, we even saw a few of our colleagues succumbing to COVID. We pray for the well-being of their families and their loved ones. As a countermeasure from our side, we have been undertaking vaccination drives for all our India-based employees and their families. We are happy to report that more than 10,000 of our associates and their families have availed of these vaccination drives and the facilities associated. As the vaccinations have progressed, a small percentage of our employees have also started to work from office. We expect the numbers to go up gradually. However, we'll be taking a cautious approach to return to office fully, while considering the possibility of a third COVID wave, as well as region-specific nuances. Once again, we sincerely pray for everyone's well-being. With that, let me get into the business and financial updates. Coming to the quarterly financial performance. As you would have noticed, we delivered yet another quarter of strong growth, delivering continued progress on all major business metrics. On the financial side, the revenues came in at US$166.8 million for Q1, giving us a growth of 9.2% quarter-over-quarter and 27.3% year-over-year basis. This is in US dollar terms. In rupee terms, this translates into a growth of 10.5% quarter-over-quarter and 24.1% year-over-year basis. This is among the best quarter-over-quarter, year-over-year organic growth delivered by us as an organization. Our EBIT for Q1 came in at 13.5%. This translates into an EBIT growth of 13.5%, and this translates into a growth of 13.7% Q1. Now let me give you a little color on quarter's performance from an industry vertical and service line perspective. Quarter's growth was broad-based and was led by healthcare and BFSI industry verticals. These grew 15.5% and 11.8% respectively on a sequential quarter-over-quarter basis. Followed by software and high tech segment that grew by[5.2%] on a sequential quarter-on-quarter basis. On a year-on-year basis, the growth was broad based as well, with all the three industry segments faring very well. Healthcare came in at 32.1%, banking financial services at 23.5%, and software high tech at 27.9% year-on-year. We also saw consistent growth across our top account categories, whether it was our top one, top two to five, top six to 10, or top 11 to 20, all of these saw significant growth quarter-on-quarter. To give you specific numbers, the top one customer grew by 3.4%, top two to five by 15.6%, top 6 by 12%, and top 11 to 20 by 10.9%. This should give you the confidence of our strategy in terms of account mining working out very well. Further to substantiate this, the number of customers that we have in the greater than $5 million moved significantly up this quarter, going up from 17 to 21, an addition of four customers in the greater than $5 million category. Similarly, on the greater than $1 million category and less than $5 million revenue category, we added 10 customers on a sequential quarter-on-quarter basis. The quarter ended with 76 customers in this revenue category compared to 66 in the last quarter. Before I move on, I would like to point out two aspects. In the last two financial years, we have been reporting our revenue breakup by two organization units, Technology Services and Alliance. As we have been sharing with you in our previous calls, the business is now organized around industry segments and service lines. We are discontinuing the reporting of our revenue breakup by the two erstwhile organization units, as the utility of the same is no longer relevant. Revenue for our CE/ CLM reseller business, which is categorized under our IT business, has been accounted on a net basis from Q1 FY22 onwards. For the CE/ CLM reseller business, we are only taking the margins for value-added reseller services as the top-line revenue in our P&L. This was necessitated due to the lack of associated services engagements with such reseller revenue. Coming to the order book for the quarter. We had a good quarter from an order booking perspective. The total contract value for the quarter came in at $244.8 million. The annual contract value of this is to the order of $188.8 million. In terms of new bookings, the new business total contract value was $147.7 million, out of which the ACV component or the annual contract value component stands at $93.5 million. Just to refresh everyone's memory, the TCV, ACV numbers that I just spoke about include all bookings, small and large, renewals, as well as new bookings across existing and newer customers. Coming onto the employee numbers. We had yet another quarter of significant addition in our team count. We brought in 1,224 new colleagues, bringing our total colleague base or the employee base to 14,904 at the end of June 2021. The attrition for quarter came in at 16.6%, compared to 11.7% in Q4 on a trailing 12-month basis. As you would have seen, attrition has been increasing across the industry, given the shortage of digital skills in the industry and the ongoing upsurge in demand. This is definitely a focus area for us as a management team. We have taken many proactive measures with an aim to bring this under control. The measures include increased engagement levels with our employees, flexible working hours to help work-life integration, increase in fresh grad intake, upskilling of our existing employees, and helping our people with long-term career development and planning with active learning and development interventions. As you may be aware, we had undertaken salary increases in November 2020 for the last financial year cycle, much ahead of our other peers. For FY 2022, we have reverted to our normal wage hike cycle in July. We continue to strengthen our leadership. Suresh Prabhu joined us as the Chief Delivery Officer for industry verticals. Suresh comes in with a strong experience across multiple product organizations. Suresh's experience should help us further enhance our digital engineering expertise. We also continue to strengthen our team with addition across sales, delivery, and enabling functions. These additions to our team would help us strengthen our muscle as we move with conviction towards [audio distortion]. Coming to the M&A front. The integration of CAPIOT has progressed well, and we continue to see quarter-on-quarter growth in our integration practices. We acquired the IP and business assets of Sureline Systems during Q1. The IP and the team of Sureline Systems have augmented our capabilities in cloud migration and modernization services. Continuing to scout for potential targets in our focus areas and hope to give you an update on this in the coming quarters. Moving on to ESG. As shared with you in our previous analyst call, we have now appointed an ESG consultant to define the ESG roadmap for the company and start measuring ourselves against standard ESG practices. By the end of FY 2022, we'll come up with a comprehensive report on our ESG roadmap and the status of our current initiatives against the same. I turn the call to our CFO, Sunil Sapre, to give a detailed color on the quarterly financials and the related matters. I'll come back after Sunil's comments to give you some more details on the key client wins for the quarter and awards and other recognitions the quarter got us. Over to you, Sunil. Thank you, Sandeep, and good evening to all. I hope you're all safe and keeping well. Sandeep has given a fair amount about the business. Let me give you some more financial details for the quarter ended June 30th, 2021. Revenue for the quarter at $166.82 million, registered QOQ growth of 9.2% and YOY growth of 27.3%. You will recall that in the year of the pandemic, when the pandemic outbreak happened, in the first quarter of last year, we have also had a growth. This is a significant improvement in year-on-year growth that we have seen. The revenue in INR terms was INR 12,299 million, reflecting growth of 10.5% QOQ and 24.1% YOY. As regards industry verticals, BFSI grew by 11.8% quarter-on-quarter, healthcare by 15.5% QOQ, and technology companies by 5.2%. Coming to linear revenue. Offshore linear revenue grew by 10.7%, primarily on account of volume growth of 8.6%, while billing rate grew by 2%. The onsite linear revenue grew by 12.9%, comprising of volume growth of 10.2% and increase in billing rate by 2.4%. With continuing efforts on improving the level of engagement with customers, you would observe that the number of customers in greater than $5 million category went up from 17 to 21. In $1 million to $5 million category went up from 66 to 76. As you are all aware, this quarter has visa expenses on H-1B visas. The impact of this cost on the margin was 50 basis points. Given the increased demand for talent in the market, the attrition during the quarter went up to 16.6%. We continued the hiring momentum during the quarter, adding 1,224 as net head count addition. This is on the back of the two quarters gone by in the earlier year, where, if you remember, we added 1,618 employees in Q3 and 1,242 in Q4 of last year. The gross margin stood at 33.5% as against 33.9% in the previous quarter, largely because of the one-time seasonal expense on visa filings. Yes, SG&A expenses were in line. As regards G&A expenses, there was an impairment in one of our investment in startups. The impact of this on the margin was 60 basis points. There was also an increase in recruitment expenses on the back of continued hiring and some leadership hires. Collections from customers against some receivables that we had provided for earlier, resulted in reversal of doubtful debts. Doubtful debt provision, whereas the total spend on donation towards COVID was slightly higher than the previous quarter. These two items in some sense offset each other. Overall, SG&A was at 17.2% as against 17%. The EBITDA came in at 16.4% as against 16.9% in the previous quarter. You will observe that these two one-time or one seasonal item in form of visa costs and the other in terms of the impairment are the two main reasons. Otherwise, most of the items were in line. Depreciation and amortization accounted for 2.8% against 3.8% in the previous quarter. As you will recall, we had mentioned about one of the products that had completed amortization in the last quarter. With that, EBIT was at 13.5% as against 13.2% in the previous quarter. Treasury income for the quarter was INR 256 million against INR 211 million in the last quarter. Forex gain was INR 109 million against INR 174 million in the previous quarter. The profit before tax was INR 2,031 million at 16.5% as against 16.6% in the previous quarter. The effective tax rate for the quarter was 25.5%, same as in the previous quarter. PAT for the quarter was INR 1,512 million at 12.3% of revenue, as against INR 1,378 million in the previous quarter at 12.4% of revenue. Coming to the operational CapEx. It was INR 141 million in this quarter. The cash on books at INR 199.55 million as at 30th June, compared to INR 198.31 million as at 31st March. As you would be aware, the quarter happens to be a quarter of payout of the annual bonuses and thus trends lower in terms of net cash added during the quarter. As Sandeep mentioned, we also had a small acquisition-related payout during this quarter. As the collections continued to be very good, the DSO came in at 54 days as against 55 days in the previous quarter. Forward contracts outstanding as at 30th June was $140 million at an average rate of INR 70.78. Thank you all, and I hand it back to Sandeep. Yes. Now to give you a color on the key client wins from the quarter. Our press release for the quarterly result carries a number of our key wins, and I'll just highlight a few. The banking, financial services, and insurance segment. We were chosen as a partner to co-engineer a next generation microservices platform and to manage the legacy products by a leading U.S. state and local government solutions provider. This is roughly a five-year deal with the provider to pretty much take the legacy products to the next generation and also accelerate the product roadmap. The next win that we saw in banking financial services was with one of the largest banks in the West, where we were chosen as a partner to transform wholesale and commercial lending operations through consolidation of multiple legacy systems of record. In healthcare life sciences, we were chosen to manage the Salesforce roadmap implementation and provide managed services to support proprietary inventory management platform, moving to Salesforce for a large U.S.-based pharmaceutical company. We were chosen by a large U.S.-based global retail pharmacy company to implement and modernize cloud-based security utilizing Microsoft Azure. In the software and high tech and emerging technologies, we won a multi-year, multi-million dollar deal involving the implementation of Salesforce platform to drive business growth, improve customer experience, and unify business processes for an education travel organization. For a leading player in gaming products and services, we were chosen to provide rearchitecting, re-engineering, and modernization services for gaming systems. This is again a multi-year, multi-million dollar deal. Moving on to the awards and recognitions for the quarter. Q1 saw us get continued recognition from multiple industry leading analyst firms and associations. Mention a few. For the fifth consecutive quarter, we were named a top 15 sourcing standout for managed services in Q1 Global ISG Index in Booming 15 category. ISG also named Persistent a rising star for digital transformation in 2020 ISG Provider Lens for healthcare digital services for the U.S. We were named a star performer in Everest Group software product engineering services PEAK Matrix assessment for 2020. Moving on to the partner ecosystem. We continue to invest in deepening our collaboration with IBM to accelerate hybrid cloud adoption in the enterprise. Under this collaboration, we'll continue to invest in IBM technologies that helps its customers adopt hybrid cloud architectures with Red Hat OpenShift, industry specific clouds, and advanced security practices. During the quarter, we also became a key development support and deployment partner across the IBM automation portfolio, including IBM Cloud Pak for business automation, robotic process automation, and other network automation solutions. More details on these partner activities are available in our earnings release and on our website. In summary, we delivered well in Q1. We're seeing a good traction for our services in the markets we serve, and we are confident of growth journey going ahead. With this, I would like to conclude our prepared comments. I would like to request the operator to open the floor for questions. Operator, please go ahead. Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and One on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants on the webcast can use the chat box option appearing at the bottom of their screens to submit their questions to the management. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Right. I will begin with the questions on the chat first, and then we can go to the audio questions. Sure, sir. Okay. San. Sandeep, Sunil, the first question that we have got on the chat forum is, could you give a number on what level of growth has the acquisition of CAPIOT enabled in this quarter? Also, do you expect going forward? Okay. I'll take that question, and I'll have Sunil answer that margin question. Yeah. The question came from [Janil Jain] from Omkara Capital. Okay. Sounds good. On the question around CAPIOT growth for the quarter compared to the last quarter, the CAPIOT growth would have been roughly around $500,000 quarter-on-quarter. If you can answer the margin question. Yeah, sure. On the travel expenses coming back, while there has not been resumption of travel in a very big way, but we do expect U.S. and Europe to slowly have increased travel going forward. The next two quarters, we can expect about 30 to 40 basis points of increase in travel expenses, which will come back by end of December. If we reach a good level of vaccination in India, then the outbound travel from India could also start towards maybe 2023. Overall, if we look at the full year, it will take two or three gradual moves towards taking the travel expenses back to a level of 1%, which will still not be the same as what it used to be in pre-COVID times. That is how we look at that moving forward. Right. Sunil, we may want to clarify the travel expenses for this quarter, just to clarify, were on account of H-1B filings and not on account of travel. That happens every year in this quarter. We just want to clarify. Okay. Before we go to the audio questions, I think the only other feedback I got on the chat forum is maybe the voice from our side is a little low. If we can speak a little more loudly. Thank you. We'll move to our first- Yeah. Yeah. We'll move to our first audio question, which is from the line of Nitin Padmanabhan from Investec. Please go ahead. Hi, good evening, everyone, and congrats on a great quarter. The first question was around the TCV and ACV data. It's been three quarters of this data. In the current quarter performance, is there revenue accretion from deals won in Q3? That was the first question. You're talking about deals won and Q3 revenue accretion from that obviously would have happened. A little bit, as you look at it, some of these deals take time to ramp up, and that's what is happening. As we win deals over the quarters, every quarter as these ramp up, you are seeing the revenue consistently go up in terms of growth. If that was the question? Sure. Yes, that was the question. Thank you. The second one was on, in terms of the rising attrition and the compensation increase, I think we are likely to give next quarter. Just wanted your thoughts on how are you approaching that and what the potential impact there when we look at next quarter. For us, the pay wage, the hike cycle is July onwards. We've already given the letters out in terms of our increases, et cetera. Started. I will let Sunil comment on the margin impact and what our plans are to recoup that. Sunil, over to you. Yeah, sure. If you recall the historically, we've been having wage hikes and typically the revenue growth and several other levers, most commonly allow the company to recoup. Currently, we are seeing two phenomena in the market. One is that we have significant tailwind in terms of revenue growth, but this is coming also in a combined way where the digital technology-oriented skills are not exactly adequate to fulfill this demand. As a company, what we have done is we have significantly increased the hiring over the last few quarters, and that's where you will find that our offshore utilization has hovered around 80%. We have first concentrated to ensure that we are able to fulfill the business. At this point in time, we have the utilization lever, which is significantly, you can say, one of the areas that we are working on. The second part is also the mix between lateral hires and fresher hires. That is another area that we are looking to optimize. Lastly, of course, the fact that we have onboarded these people and the conversion When it happens, in terms of better utilization, we'll provide the cushion to absorb the pay hike. These factors are what will be the areas to look out and watch out for, and we are conscious of the fact that we have to manage the attrition in a controlled environment, in a manner that we can be comfortable with respect to deliverables and sustaining the quality with the customers. Last but not the least, we will also take a conscious view in terms of potential areas where we can work with customers wherever we have flexibility in pricing. I believe that there is a point of time when customers do understand that these skills are not easily available, and to ensure that their deliveries and quality is not affected, we do have pricing power in some of our businesses which we put to use. I hope that gives you a good understanding of how this will pan out. Yeah, sure. That's very helpful. Only the quantification of what we could expect in terms of potential headwinds is the only last thing, and then I'll get back into the queue. Thank you. Yeah. In terms of overall impact from the wage hike, it will be of the order of 250-275 basis points, and we expect all these levers to allow us to absorb most of it. Maybe there could be a 75-100 basis points of headwind in 1 quarter in which the hikes actually start. With increased revenue, we're trying to see how much we can contain that. It will not be more than that kind of. Very helpful. Thank you so much, and all the very best. Thank you. Thank you very much. Next question is from the line of Vimal Gohil from Union Asset Management. Please go ahead. Yes. Thank you for the opportunity. Firstly, congratulations to the team. Splendid results. I have two questions. The first one is on attrition. You mentioned that FY 2021 really saw industry-leading wage hikes being rolled out by the company. Despite that, while it has been a phenomenon for the industry as a whole, our attrition, sequential increase in attrition seems to be a tad higher as compared to what some of the peers that have reported numbers. If you could just give your comment there. The second bit is on your subcontracting cost. Currently, our subcontracting costs are at 14.7% of sales. This is probably the highest in the industry currently. What is your sense? Does our business particularly need such high levels of subcontracting? If so, what would be the sustainable level for subcontractors going forward? Along with the margin levers that you just mentioned, could lower subcontracting costs be another lever that we should count? Thank you. That's all from my side. All the best. I'll take the attrition part, and I'll have Sunil talk about the subcontracting cost. On the attrition side, you have to look at companies in the context of the areas they work in. If you look at Persistent, we have always been on the cutting edge of technology. We are the leaders in digital engineering, hence the kind of skill sets that we have in the company, whether it is doing custom products for technology companies or doing digital engineering-enabled programs in cloud data, Salesforce, et cetera, we are on the cutting edge, those are the skill sets that are the hottest in demand in this post, or if I can say, post-pandemic times. That is the reason that we may have a tad bit higher attrition that looks like from the outside as compared to a general purpose IT services company, which also does ERP or legacy stuff or legacy infrastructure management. That is the rationale that is there. Having said that, this is an area of focus for us, and we are committed to making sure we do the best in terms of engaging our employees, and we have good plans in place for that. Now over to you, Sunil, for the subcontracting part. Yeah, sure. On the subcontracting side, you would have observed over the last two quarters, given the fact that we are continuing with this situation of restricted movement, right? On one side, the flexibility of using your own staff while they may be in a particular country, but the mobility of that staff within the country is limited. We have been winning deals, you would have seen in several new areas where we definitely require certain skills that may necessarily not be available to join on a full-time basis. Our approach is to ensure that we are able to convert these as we get more visibility of their continued deployment, and not to engage them that can lead to a disruption of costs. The whole idea is to optimize that, and be rest assured, we are continuously keeping track to ensure that is a channel that we use only in select cases and to fulfill the skill gaps. Once the flexibility to travel improves, the reliance on that will gradually reduce. Is it that maybe there is a need for more local delivery centers? Probably that could have been the case if we had more local delivery centers outside and probably had more local employees hired before, we wouldn't have required so many subcontractors. The subsequent question then would be that if at all we are, as and when travel starts, you will replace it with your people on-site? Further, can those on-site people then probably, can that work shift offshore when the project really is steady state? Can that happen? As I said, the question was really to gauge if subcontracting can really be a margin lever for you. Lastly, just one more question on the TCV. Is there anything to fill in the sequential decline in the TCV this quarter? Okay. Let me answer these questions. I'll try and keep it brief because we need to take multiple people's questions. Absolutely, you are absolutely right. In an ideal scenario where COVID could have been predicted, people would have had onshore hiring done and we would have any which ways scaled up the nearshore, onshore kind of things. They are on the roadmap. As soon as the COVID gods allow us to do it, you will see us have more presence on-site as well as nearshore centers. Is it a lever going ahead for margin improvement? Yes, it is. Again, we'll have to let things pan out as we go along. The first and foremost thing is to make sure we have a good growth going. We need to fulfill our customer demands. We deliver our projects absolutely impeccably. That's where some of these things will play out. That is first thing. In terms of TCV, look, a company that does today we announced, let's say, $166.8 million, roughly $167 million. We're talking of TCV of $245. Last quarter also, the TCV was roughly in the same range. I think it's a fairly healthy thing. As a management team, we are fairly comfortable with this. Some quarters will be higher. Two quarters back it was higher than this. Some quarters will be at this level. Some quarters will be at a lower level. Look at it from an annual perspective, and look at what we have delivered on a sequential quarterly or sequential year-on-year basis. All of these point out towards a healthy trend, and we are comfortable with the TCVs where they are, and we will try our best to do more. Hopefully that answers. Congratulations once again, and all the best. Thank you. All the best, sir. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address queries from all of the participants, please restrict your questions to one per participant. Time permitting, you may return to the queue for your follow-up questions. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity and congratulations once again on a great quarter as a whole. Sandeep, my question is more on the operating leverage. Despite last three-four quarters solid QOQ growth which is coming, the EBITDA margin, though on a YOY basis looks better, but on a QOQ basis has been hovering around 16.5%-17%. One obvious reason is the increased supply-side issue. In this scenario, how do you tackle this supply-side issue in terms of business perspective? A. in terms of pricing negotiation with the client, because you are saying the attrition is going up because of the hot talent. B. in terms of any restructuring of your low-margin business units. If you can throw some light besides the other margin levers which the Chief Financial Officer has spoken about. Sure. As far as pricing negotiation is concerned, I would say it's a collaborative thing with our customers. A number of our customers have been with us for years, and even the newer customers understand the market dynamics. We are in discussions with many of those on seeing when the contracts anniversary periods come, how we can work with them to bring in the COLA at the right levels, et cetera. That gives us the cushion to be able to retain the talent and do the right things. In some places, we are looking at other ways and means of doing special bonuses along with the customers as well. That's as far as price negotiation is concerned. All of that is on the table. The other part about low-margin businesses, at any point in time, we are having an eye on the low-margin businesses, and we are continuing to rationalize some of that. If there are more hard to take, absolutely do that. We have brought good tailwind behind us. We have a good growth momentum. Decisions, small or large, on low-margin businesses, rest assured we have an eye on the ball. Balance sheet, if we take those decisions, we'll announce with time. Okay. Just a second question on terms of alliance business. Can you throw some light whether it's now on a consistent growth path, both on the IT as well as in terms of revenue? Also any efforts to improve the margin on this side of the business. Just a feedback, today, I think the audio of both the CEO and the CFO has been weak, so I think there is a difficulty in hearing your opening remarks. If you can rectify, it would be really appreciated. Okay. We'll try and speak a little louder. Let us know if this is any better, Sandeep. Is this any better for you? Yeah. It is better. I think in the opening remarks it was really bad. It has improved thereafter. Yeah. Okay. Sounds good. If we have time towards the end of the call and we are able to complete the questions, we'll try and do that. Otherwise, in the recorded version, we'll make sure that it is corrected. Let's go back to the alliance business. Your question was on the growth in the alliance business. Yes. Alliance business is definitely seeing some amount of growth. If you look at our top one customer, the sequential part is the alliance business. You can very much relate to it. The top one business grew by 3.4% sequentially. From that perspective, you should be able to gather between that and the fact sheet that we have, all the details about that. In terms of margins, et cetera, as well, as I said, we have an eye on the ball in terms of which are the businesses where the margins can be improved, and part of the thing is those are being implemented, and that is where, despite the one-time things that we talked about, the impairment that we talked about, the basis points because of the H-1B filings we talked about, we still were able to come in at about 16.3%, 16.4%. If you add back those things, we are actually higher than the 17% whatever was there last quarter. From that perspective, we have an eye on various parts of the business, and we will keep continuously looking at what we can optimize. Okay. Last question. Sorry to interrupt, Mr. Shah. May we please request you to return to the queue for your follow-up question as we have several participants in the queue waiting for their turn? Yeah, no issue. Thanks. Thank you. Thank you very much, sir. The next question is from the line of Manik Taneja from JM Financial. Please go ahead. Hi. Thank you for the opportunity and congratulations for a very solid performance. I'm just trying to prod you a little bit further on the revenue productivity trends. We've seen about 2% to 2.5% sequential increase here. Do you think that the tight labor market drives an opportunity to press customers for higher pricing, especially because of the tight supply side environment? That's question number one. The second thing is that if you could help us understand the number of freshers hired in the quarter, the plan for the year, given the fact that historically, the industry used to complain about the quality of fresher talent, and currently most of the industry peers are talking about increased fresher intake. Do you think that problem rears up, starts showing up once again after a certain amount of time? Thank you. Okay. Let me go back to the first question first. The first question, if I got it right, is you were asking about typically the increase would be in the 2%-2.5% range in terms of the price increase on a yearly basis. In this situation, do we have the ability to go higher? In some cases, yes. We have to be cautious of the competitive market that we play in. While we definitely believe we have the pricing power in some of the customers, in a number of larger customers, we play in a competitive environment as well. Wherever we have the ability to play competitively and do more, we will do more. Otherwise, it may be in this range and so on. That is as far as that is concerned. In terms of freshers hired, we had roughly about 400 freshers in this quarter. For the yearly basis, we are looking at roughly about 2,000 freshers, but they will obviously be staggered out and they will go through their training programs, et cetera, before they become productive. A typical training program may last between four-six months, depending on the technology that they are in. That is the high-level answer to your question. Thank you. Thank you. The next question is from the line of Mohit Jain from Anand Rathi. Please go ahead. Hi, sir. This is actually a follow-up of the previous one. I think the first part of the question is billing rate improvement seen in 1Q FY 2022. What happened in the last three months that your billing rate both onsite and offshore has moved up sharply, and changing the trend which we were seeing over the last few quarters? Second is on the fixed component of S&M. S&M cost as a percentage of revenue is behaving as a totally variable cost. Is there some element of it which moves in line with revenue, or should we expect it to behave like a fixed cost going forward? Thank you. Sir, Sunil will answer the questions. Sunil, go ahead, please. Yeah. On the sales and marketing costs, I don't think that they will be fixed in absolute terms. There will be some kind of additions to the cost happening, but in terms of percentage to revenue, you will find that on a wider revenue base, there will be some release of basis points in the sales and marketing cost. On the first question about billing rates, yes, consciously we have been working with clients and trying to optimize the pricing position that we have. Like Sandeep mentioned, whether in new projects or in case of renewals, wherever we have an opportunity to discuss the same with the clients. We have that kind of a benefit available in certain parts of our business. It's consciously happening. It's not because of anything particularly expanding in the earlier quarters, but it's a conscious effort to improve. That's needed to ensure that we are able to hire good talent and pay them well. 1Q, you already saw some price increases, right? Yes. Okay. Thank you, sir. Thank you. Next question is from the line of Dipesh Mehta from Emkay Global. Please go ahead. Yeah. Thanks for the opportunity, congrats on strong releases and healthy momentum. Two questions. First of all, just want to get what is driving strength in healthcare. If you can provide some perspective, what is driving demand and how we are addressing that strength of demand in healthcare. Second question is related with India business, if you can provide some perspective, because India is doing well for us, and we have not seen any impact despite second wave of COVID in India. If you can provide some colors, what is driving strength in India? Thanks. Sure. The first question first, strength in healthcare. The strength in healthcare is driven predominantly on the back of focus attempts by us in different parts of healthcare. Healthcare is a portion. In our country, it's one of the biggest GDP spenders. Healthcare part, as far as we are concerned, there are instrumentation companies and medical device companies on one side, and on the other side you have pharma payer provider. We have gone deeper into hiring talent, which can kind of go into each of these segments and mine these segments for us, whether it is for the existing customer and also do the right logo acquisition from a new perspective. In the instrumentation companies, that has been a traditional strength for us. In the provider and pharma, we are partnering more deeper with Salesforce. We have the best capabilities in the market on the provider segment in the U.S. as far as Salesforce is concerned. Right from digital front door to many other solutions for the healthcare market, we are the leading provider. That is what is panning out well for us. We have further invested in our sales capabilities. We should now try and keep this at pace, every quarter will be 15.5% sequential, whether it's healthcare or other segments. Overall, the segment, we have gone deeper in our penetration, hopefully that will keep fairing well for us over a period of time. Now, on the India side of it, there are two parts in the India market. There are a number of our global customers whose Indian subsidiaries we work with. That is one segment for us. Second segment for us is there are companies in India like the NBFCs, et cetera, where we are a big leader in the Salesforce space in implementing many different things like their loan origination systems and for one of the leading mid-tier NBFCs, we are basically doing a huge multi-year transformation program as well. There is good market locally for us, and then there's a market in India for the global customers, their Indian subsidiaries and so on. Wherever the contract originates from, that's where we accrue the revenue. That's where the global companies, Indian subsidiaries, that revenue is accrued in India. That's where you see the growth coming in India from. Hopefully this answers your question. Yeah, thanks. Thank you. Thank you. Next question is from the line of Girish Pai from Nirmal Bang. Please go ahead. Yeah, thank you for the opportunity. I have a question for Sandeep and one for Sunil. Sandeep, your digital engineering stems from your OSPD capability, which is your legacy capability. What is your right to win in the enterprise modernization market, especially against incumbents who are fairly strong out there? On what basis are you winning those deals, and is this sustainable? Sure. Let me answer that first, and then you can have the second question for Sunil. Girish, if you look at it, what is the digital engineering side of it, and why is that giving us a seat on the table in the enterprise side? Today, if you look at it, everyone in the enterprise side, if you go to a large credit card company or a credit card issuer, they want to look like, feel like a software product company. You go to a ATM company, they want to have software solutions outside of the ATM as well. You go to any company, everyone is looking at product and platforms, whether you are a enterprise in the banking financial services space or in healthcare or any others, right? Everyone is talking about agile development. Everyone is talking about going more digital. Who has the most skills in that? Is it the legacy providers or is it providers like ourselves who have been doing this for last 30 years? We were entering in the product segment, and that is the skills that are today relevant for enterprise modernization. What we used to do for product companies in a cloud-first kind of a product development is today applicable for a cloud-first platform development or enterprise modernization. That is where today the barriers for us competing with the who's who, whether it's a U.S.-based organization or a European-heritage organization or an India-heritage large organization, those barriers are broken, and we are competing fairly squarely for that market share, and that's where we are winning as well. That's as far as the enterprise modernization story and our right to win is concerned. You can ask the second question to Sunil, and we'll take it from there. Thank you. Next question is from the line of Abhishek Shindadkar from InCred Capital. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity and congrats on an excellent quarter. My first question is regarding the growth in Europe. Anything that we should read? It's been quite volatile both on a quarter-on-quarter and a YOY basis. My second question is more about the strategy. Now with us positioning ourselves as a pure play OPD player. Historically, Persistent has operated at a very higher band of margins. I'm not asking from a quarter perspective, but structurally, how do we position ourselves, whether we would like to kind of achieve a higher band or kind of reinvest and kind of accelerate the growth, which is more comparable to OPD players. Thank you, sir. Sure. Let me try and briefly answer both the questions. The growth in Europe, yes, it used to be volatile because one part of our business out there was majorly focusing on the resale of CE CLM, which is an industrial product which we also engineered for one of our largest customers. Since it's a product sale, sometimes some quarters it used to go up, some quarters it used to go down. The other thing was we were trying to provide services around that. If you look at it this quarter, we have taken the revenue on net accounting. If we had taken it on gross accounting, even Europe would have grown much higher. The growth rate being one, the volatility being second, both are things to take care of the volatility. Since we don't add much value in that reseller business, we have taken it to net. Now on, you should not see much volatility in the Europe business and in the IT business. That's the answer on that. The strategy part, yeah. Today, if you look at it, our skills are fairly well in demand. Can we try and get a little bit more margin over a period of time? Absolutely. Is that the highest priority for us right now versus making sure we continue the growth momentum? The growth momentum is up. At the same time, we will see wherever we can keep moving on the margin parameter over a period of next few quarters and years. Our aspirations are to do both. Very good growth and also increase the margins. That will take time, and growth is priority for us as of this point in time. Hopefully, that answers both your questions. Yes, sir. Thank you for taking my question. Just a small one for Sunil sir. Nothing to worry about the unbilled this quarter or any comments that you would like to make? Thank you for taking my questions and best wishes for sir. There is nothing to worry about that. It's just a matter of some of the paperwork that we had to get done spilled over to the next two weeks. It is getting billed in this. Thank you. The next question is from the line of Madhu Babu from Canara HSBC. Please go ahead. Yeah. Hi, sir. Now I think our growth is almost mimicking EPAM. Do you encounter EPAM and Globant in competition in couple of our deals? Second is that, with the kind of cash balance and with the kind of momentum, is it the right time to go for a much bigger acquisition? Thanks. Yes. Madhu Babu, yeah, we encounter a variety of competition in different kind of segments that we deal with. In some segments, we do compete with the names that you mentioned, the EPAMs and Globants of this world. In some segments, we compete with other people. Our growth rates, as you rightly said, they are inching up, and hopefully it bodes well for us going on. Now, the second part of your question was around acquisitions. At any point in time, we are evaluating three to four tuck-in acquisitions, and where should we find the right target, we'll absolutely go after it, and that is definitely a stated part of our strategy. We have very clearly said our acquisitions would be tuck-ins, either to make us more smarter, sharper on some of the service lines that we have or to go deeper in an industry vertical, whether it is BFSI or healthcare or in a geography like Europe. We are working on all these different fronts. We hope to announce something in the next quarter or so. It'll be an ongoing process. Thank you very much, sir. Next question is from the line of Rishi Jhunjhunwala from IIFL. Please go ahead. Yes, sir. Thanks for the opportunity. Sandeep, one question on headcount. Our headcount is consistently growing at least 10 percentage point above revenue growth for the past two, three quarters. How do we read that? I guess, there could be two or three ways in which it could pan out. Either revenue growth catches up with headcount growth or you will cool off hiring over the next few quarters. Probably, is it the case that incremental business is coming at lower pricing and as a result, while volume growth might still be there, it's not necessarily translating into revenue growth? Just wanted to get some clarity around that. Overall, the headcount will continue to increase because a number of our businesses obviously are dependent on our ability to staff them and scale them over a period of time. Our businesses, a good amount of that is linearly dependent on the headcount. I wouldn't read it into the headcount increasing as yield decreasing or cooling off and so on. At least for the next few quarters, we believe the headcount, this pressure will still be on, and we can do with more. More is less here as of this point in time. If you look at the realizations, et cetera, we are comfortable, and we talked about hopefully trying to increase it. Hopefully, that answers. If I missed something, please let me know. That's fine. Thank you. Just quickly- Hello? Go ahead, please. Hello. Yeah. Go ahead, please. This quarter's growth, really it is one of the best quarters for you. Just wanted to understand whether, if the growth also could be attributed to some of the revenues probably, getting booked later in the end of the quarter, which would have otherwise spilled over to next quarter? Do we expect the momentum to continue in the next quarter, given that it's generally, easily fairly strong, even though of course not similar kind of growth, but it will remain healthy? The bookings, et cetera, that we have done, if you look at the booking sequentially on a quarter-on-quarter basis, that should give you the confidence of the growth continuing. I'll not put a percentage there. There was no end of the quarter phenomena. There's no one-time IP license, et cetera, that we sold. It was scaling up our services business over a period of time and built up over the quarter based on the deals that we won in the last few quarters and even in this quarter. We have done healthy bookings. We have a healthy pipeline, so we are confident of the ongoing growth. Great. Thank you. All the best. Thank you. Thank you. Mr. Dwivedi would like to take. Yeah. Chat questions for now then? Yeah, we just have time for a couple of questions which have come on the chat forum. The first question to you, Sandeep. From? This is from Atul Bhole, DSP Investment Managers. In light of substantial deal wins across industry and shortage of skill set, do you see risk of delay in deal ramp-ups? It is a reality that a number of our peers are also having good order bookings, et cetera, and there is pressure in the market for talent. The objective at our end is our ability to forecast our requirements and try and be ahead of the curve in terms of trying to hire the right skills, et cetera. We are doing our best. So far, we have not seen any delays in any of our customer program ramp-ups. Thankfully, all the ramp-ups that we have done, we have hired roughly about 4,000 people in the last three quarters. That has kept us on pace. We have not missed any customer commitment, even in COVID times. We are hopeful and it's an ongoing business challenge, and we have good processes in place to take care of it. The last question, which maybe either you or Sunil can address, from Debashish Mazumdar from Edelweiss Finance. He's asking, unlike most of the peers, our onsite contribution to the revenue is going up significantly in last few quarters. What is the reason there? Are we addressing the high demand scenario in a different way than competition? In the previous high demand cycle between 2010 and 2016, Persistent Systems used to operate at 16%-18% EBIT margin bracket. Do we see potential to go back to those levels in the medium term? Okay. Let me quickly try and answer because we are running out of time. As far as we are concerned, look, when we talk of digital transformation-related projects, there's an upfront good amount of interaction that's required with the customers. At times you need more upfront headcount to be deployed on-site to be able to have those discussions and engage at the levels with the business that we need to. That is there, and those are normal business scenarios. I don't think that's a thing to worry about. As far as the margins are concerned, as we have said, we've got a good growth going. Growth with the right balance of margins is what we are looking at. We are not looking at squeezing EBITDA out of everything that we can. Businesses can be run differently. We are confident with our growth and our right balance of EBITDA. With that, I think we should stop here. Once again, we'd like to thank our 15,000 team members, our customers, and our partners for their unflinching support in this COVID times as well. We have been on a good growth journey for last many quarters. We are bullish on our prospects for the future. We appreciate you spending time with us on the call today, and look forward to connecting with you again in three months, hopefully with a positive update on an ongoing basis. Please stay safe, stay healthy. Thank you. Thank you very much the management. Ladies and gentlemen, on behalf of Persistent Systems Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines.