Ladies and gentlemen, good day and welcome to the Investor Conference Call of Sonata Software Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-tone phone. I now hand the conference over to Mr. Samir Dhir, CEO and Managing Director from Sonata Software Limited, and Mr. Jagannathan, CFO from Sonata Software Limited. Thank you, and over to you, sir. Thank you, Dorothy. Good evening to all the participants. I welcome you to this conference. Today, we will share our strategy, the progress we have made in the recent quarter, our strategic plan, and the financial results for Q3 FY 25, the quarter that ended on December 31st, 2024. Thank you for joining us today. We appreciate your valuable time and support. It is my pleasure to share our progress regarding our vision and our growth trajectory for Sonata. First, I will provide you an update on our strategic goals, and then we will discuss our progress for Q3 FY 25, so let's talk about strategy and goals first. We aim to be one of the fastest-growing Modernization Engineering companies powered by a unique transformation framework and AI. In the current context, while there are macroeconomic challenges of slowdown of tech spending and decision delays, we continue to build for scale and drive towards our key bets, and our bets include number one, to continue to win large and mid-sized deals, building on our successful track record. By YTD FY 25, we have won eight large deals so far. Number two, deepen and diversify our partnership with Microsoft, AWS, and other key strategic partners, and to help win new logos for Sonata and scale those logos to the next $10 million, $25 million accounts for Sonata. By YTD FY 25, we have added 16 new enterprise-based logos that will scale over the next two to three years, and number three, scale our capabilities, continue to build out modernization engineering capabilities with AI across all our competency areas consistently. And we want to achieve our goals in our four verticals, which are healthcare life sciences, banking, financial services, insurance, retail manufacturing, distribution, and TMT, which is telecom, media, and high tech. With investments in healthcare life sciences and banking financial services verticals, which we incubated in the second half of 2022. And we want to do this across five geographies, which are North America, U.K., Europe, India, and Australia. With our differentiated Lightning tools, IT, and our offerings, we are steadfast in our pursuit of delivering value to our clients and their modernization needs. With that, let me provide you an update on large deals. Our large deals pursuits are a significant part of our strategy. 44% of our large pipeline is from 1,300 clients. I'm delighted to share with you two significant wins we had in Q3 FY 25. The first win is from a Finland-based mining and construction technology leader. Our teams will drive modernization and transformation by leveraging AI, Dynamics, and our integration capabilities. Sonata will deploy the solution across 26 countries over the next three years. The second large deal we won in the quarter, where our client offers technology solutions for transportation invoice management, data management, and network optimization. Our teams will be a strategic partner for modernizing our client's 20-plus-year-old SaaS-based platform through an AI-powered cloud and data modernization stack. This is a net new client and a large deal for Sonata Group. In both these deals, our teams have leveraged Sonata's deep AI capabilities for process transformation, modern AI engineering tools, and platform-driven data modernization. Let me provide you an update on AI, which is our big bet. As stated earlier, we expect 20% of our revenue from AI-enabled services in the next three years. We have a 58 million pipeline across 100-plus clients on AI. We enable our clients to leverage AI in three different ways. Number one, driving efficiencies for them. Number two, driving higher consumer experience and modernized sales for them. And number three, driving innovative business models for our clients. Our Harmony AI platform is critical for our recent deal wins and subsequent AI model implementation. For banking, financial services and healthcare, we're making significant progress in implementing GenAI using small language models for cost efficiency for fine-tuning, while implementing agentic AI for driving hyper-automation in our transformation program. Some of the key programs we are delivering include, for healthcare clients, we are building their GenAI platform, including forming their enterprise-wide AI CoE. For our travel clients, we're building a co-innovation AI lab and implementing modern engineering across their software development life cycle. For our financial services clients, we're building AI-enabled intelligent document processing capabilities. We're delighted that Sonata has achieved AWS's generative AI competency. By harnessing AWS's GenAI technologies and advanced AWS DevOps services, we are well-positioned to elevate customer experiences and provide hyper-personalized content. We are also a proud partner of Microsoft's Partner AI Council. In partnership with the Victorian Government, we announced our commitment to set up an AI Center of Excellence in Melbourne, Australia, to meet the growing demand for GenAI and data solutions. The center is expected to create around 100 skilled jobs in Melbourne over the next three years. Approximately 87% of our organization is now GenAI trained. This improvement demonstrates our unwavering commitment to upskilling and the immense potential of AI across our operations, ensuring that we are well-prepared for the future. The fourth update on scale and scale to build our capabilities in our verticals and technology capabilities. Our investment verticals of healthcare life sciences and banking contribute now to 35%-40% of our revenue, up from 13.5% 11 quarters ago. In the 11 quarters, we moved the dial from close to about 14% to close to about 40%, a significant movement, and that's as Sonata has grown in the last two years significantly as well. We expect our investment verticals to reach 250 million in revenue in the next three to five years' time. The following are the key bets to help scale our modernization offering. Number one, cloud and data. We have continued to progress in the cloud and data pipeline. Now, cloud data is about 44% of our overall pipeline. We are seeing increased demand for our data-driven deals. Our revenue from data modernization has grown from 13% to 26% in the last 11 quarters. Second, Microsoft Fabric, which we have talked to you about in earlier forums as well. Sonata is proud to be a featured and launch partner for Microsoft Fabric, a data analytics platform for the era of AI, which we call as Infrastructure for AI. And it was made available in November 2023. Since its launch, we have witnessed a significant pipeline buildup for Fabric, which is at around about $70-75 million now from across 70 clients. Dynamics, in Q3 2025, we won one large deal I just talked about earlier based on Dynamics platform. And we are seeing a good momentum buildup in Dynamics, F&O, CE, and Power Platform across. SITL, our India business SITL, which focuses on LSP sales, continues to deliver strong, consistent growth, and the industry-leading ROC of 48.5% in Q3 FY 2025. Let me share with you some of the awards and accolades our teams got in the course of the quarter. Sonata is now recognized as a disruptor in HFS Horizon Azure Ecosystem Service Providers. Sonata is now also recognized as a disruptor in HFS Horizon Generative Enterprise Services for Generative Enterprise 2024. We are also recognized as an aspirant in the AI and GenAI services in PEAK Matrix Assessment of 2024. We are also proud to share with you that we are recognized as a disruptor in HFS Horizon Best Service Providers for Commercial Banks in 2025. With that, let me provide you an update on talent. Our active headcount increased to 7,000 plus, up from Q1 FY 25 of 6,600, and we're pleased to cross the 7,000 mark. It's a significant moment for us to cross the 7,000 headcount mark globally. We added 182 people in the quarter. The last 12-month attrition was 14%, and our gender diversity is at 31%. During the course of the quarter, we implemented a compensation increase for our mid and senior management effective Q3. In addition, we continued with our campus hiring plans despite the market conditions and onboarded nearly 100 campus graduates during the quarter. Sonata University, which has been in the forefront of our capability building initiatives and continues to enable increased usage and acquisition of new skills such as GenAI. Sonata Spark Hackathon, our annual event to celebrate technologists at Sonata, continues to celebrate creativity, collaboration, and innovation at our company. After months of hard work, our talented Sonatians brought game-changing ideas to life using the power of AI and modernization engineering to drive value for our clients. With that, now let me provide you an update on our Q3 2025 performance. Let me start with international services business first. In constant currency terms, we have witnessed 4.4% QoQ growth. Dollar terms, revenue grew by 2.8% quarter-on-quarter. Order booking for the quarter, book-to-bill, is at 1.23 for the international business. In the Q3 quarter, we have witnessed a tale of two cities for us. On one hand, we're delighted with the 4.4% constant currency QoQ growth and robust broad-based growth in sectors like BFSI, HLS, and TMT. As a percentage of our overall revenue, BFSI and HLS have grown significantly Q2 to Q3. However, on the other hand, during the quarter, we had unplanned rundowns and one-time discounts for a large high-tech client. As a result, our TMT vertical degrew due to sudden rundowns and one-time discounts. This TMT large client rundown and one-time discount has two impacts on our performance, and I want to share that with you. First, on our Q4 revenue growth, we will have a full quarter impact of these rundowns, which happened during the course of the quarter. In prior quarters, we had indicated to you that Q3 and Q4 would grow strongly. While Q3 has been a strong growth quarter for us, we now expect Q4 to be a degrowth quarter for Sonata due to sudden rundowns in this high-tech client and Q4 seasonally weak quarter. The second impact of this sudden rundown is on our Q3 margins. Our EBITDA for Q3 quarter has a negative 3.5% one-time impact due to sudden rundowns, one-time discounts, and the severance payouts that we had to make. These costs are related to one-time discounts, and we do not expect them to occur in the upcoming quarter. Let me provide an update on EBITDA. We talked about EBITDA earlier. EBITDA has sequentially declined to 14.6% in Q3. Utilization remained steady at 87%. Quarter and quarter, our headcount increased by over 150 FTEs in international services. Second, SITL business. The gross contribution in our domestic business grew 16.7% quarter on quarter. We are very pleased with our performance in SITL business. The newly formed Security Operations Center in our SITL business will be 20% of our gross contribution in the next three to five years' time. In summary, we were and are very optimistic about our long-term growth prospects. In the coming quarters, we'll continue to face the tailwinds and headwinds, the tailwinds due to our large deals, our success in healthcare life sciences, banking, and the headwinds due to the sudden rundown in the high-tech customer space, specifically in Q4 and general store-owned retail manufacturing. Team Sonata remains committed to judiciously accelerating the growth curve and building scale for Sonata. I want to thank all the team members globally for their commitment, hard work, work ethic, and the quality of outcomes they deliver to our clients day in and out. Thank you. With that, let me turn over to Jagan for his comments on our financial performance. Jagan. Thank you, Samir, for the overview. Good morning, good afternoon, and good evening to all of you. Let me start the update with International Services Business for Q3 2025. Revenue, Q3 2025, our international services dollar revenue stood at $87 million, which is quarter-on-quarter growth of 2.8%, and in constant currency terms, it is 4.4%. Our rupee revenue stood at INR 731.7 crore, which is quarter-on-quarter growth of 3.4%. Coming to profitability, international services, EBITDA before forex and other income stood at 14.6%, down from 18.2% in Q2 2025. The 360 basis points decline was mainly explained by the following factors. Large tech clients had a rundown in Q3 for one-time discount given to them. Impact of salary hikes was offset by SG&A savings and leverage we got in this quarter. EBITDA after forex and other income stood at 16.1% in Q3 2025. PAT for international services stood at 56.9 crore, again 62.2 crore in Q2 2025. International services PAT decline was mainly explained by the following factors: EBITDA dropping by 360 basis points. Benefits include forex one-time tax benefit, unwinding of interest on debit consideration, and volume increase. At international services level, Q2 2025, ROC stood at 16.9%. Q2 was 20.3%, and Q3 RONW stood at 19%. Q2 2025, it was 23.5%. Now, moving on to the update on domestic business, our revenue in Q3 2025 stood at 2,111.1 crore, which is 44.4% quarter on quarter and 17.3% year on year. Gross contribution for Q3 2025 stood at 81.9 crore, with 16.7% QoQ growth and 14.9% year on year growth. PAT for Q3 2025 stood at 48.1 crore, again 44.3 crore in Q2, with 8.5% quarter on quarter and 12.8% year on year growth. The DSO for Q3 2025 is 45 days compared to 35 days in Q2. DSO increased due to 28% of invoicing being in the last month of the quarter. ROC for domestic business improved to 48.5% in Q3 compared to 45.2% in Q2 2025. Consolidated EPS for Q3 2025 was 3.78 per share. Q2 was 3.84 per share, decreased by 1.5% quarter on quarter. At consolidated level, Q3 2025, ROC stood at 23.1% compared to 24.7% last quarter, and RONW stood at 26.3% compared to 28.4% last quarter. Now, coming to cash flow update, this quarter, we delivered exceptional collection of INR 3,138 crore, including $100 million INR 842 crore collection we achieved in the international services as a result of a gross cash balance stood at INR 672 crore, and the net cash balance stood at INR 115 crore. Coming back to the update on operational metrics, total headcount moved from 6,918 Q2 2025 to 7,019 Q3 2025. Net headcount addition of 182. Utilization in Q3 2025 stood at 87%. Q2 was also 87%. We added 11 new customers in Q3 '25. Top 10 clients contributed 66% in this quarter compared to 63% last quarter. Number of clients greater than $3 million run rate in Q3 '25 is 21 customers compared to 22 last quarter. Vertical mix is as follows: TMT is 29%, retail and manufacturing is 25%, HLS is 11%, BFS is 30%, and emerging is 5%. Revenue by go-to-market, our data is 26%, dynamics is 24%, and cloud is 37%. Q3 '25 order booking stood at $114 million and 1.23x of international services revenue. Our international services DSO for Q3 '25 is 47 days compared to 45 days last quarter. In summary, we remain optimistic about long-term growth prospects. Thank you. With that, let me turn back to the moderator for question and answer. Thank you very much. We will now begin the question and answer session. Participants connected on webcast may click on the Ask a Question tab available on the screen. Before asking the question to the management, please introduce yourself, providing your name and your organization name. You may post text questions as well. Participants connected through audio call, you may please press star and one on your phone. 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. We'll take our first question from Mihir Manohar from Carnelian AMC. Please go ahead. Hello. Yeah, hi. Thanks for giving the opportunity. Am I audible? Yeah. Yeah, sure. So I wanted to understand this. I mean, when we see the international revenue, the CC growth is at 4.4%. Now, there is a client rundown which has happened this quarter, because of which, I mean, the margins are in impact. So how to understand this, I mean, why is the revenue not down despite the ramp-up ramp down being there, and there is only margin impact? Yeah, the ramp-down happened towards the end of the quarter, and this is going to have a one-month impact. We had the customer for this quarter in revenue term, but we had a cost impact because of the actions we have to take to reduce the cost. This will have a full-run revenue impact in the next quarter. Okay, but the margin impact was for the full quarter? The margin is one time because we have to do a settlement to the employees. Understood. Okay. Because 350 basis points kind of an impact, I mean, that would go to be INR 20 crores kind of a number as an impact. Was I understanding correct? Yes. The revenue growth had a one-month impact, and next quarter is going to be full quarter impact. Margin had one time because of the one-time cost we incurred, particularly in the nearshore location. We had an impact in the margin. Okay. Understood. Sure. Also, if you can just broadly, you know, how large? We had a salary increase. Hello? We had a salary increase also. Yeah, sure. Sure. How large will be this account and with geography, what kind of challenges are there in this account? I don't know why is it ramping down? Is it completion of a program or some vendor change or a change? How to understand that? No, this is a decision taken by the customer to cut down their cost due to the AI implementation and optimize it like 25%-30% of cut, bringing down the cost. They have taken an action on that. Okay. Okay. Understood. And second, my last thing was just on when we see anything, you know, this is where we have seen big ramp-down. One healthcare which happened in June. Mihir, I'm sorry to interrupt. Can you use your handset mode, please? Yeah, sure. This is audible now? Is this audible now? Yes. Yeah, yeah. Yeah, sure. Thanks. Thanks for that. Sure, sure. Thank you for that, yeah. I wanted to broadly know, I mean, you know, when we see the healthcare at the start of the year, during the June quarter, healthcare vertical had a client ramp-down, and now TMT vertical facing some challenge. So I mean, you know, what broader set of learnings or how to understand that, you know, we will try to mitigate such kind of ramp-downs going ahead? So if you can provide some clarity around that. Yeah, these are all very large. The healthcare client was a new client, and we were investing on to get the customer, and then we had a challenge on that. But this is like an existing customer. It's one of the largest customers. So because of the size and because of our size, the impact was felt immediately for us. Sure. Understood. And what could be the impact in full Q from this account? These kind of events in the uncertainty in the market and uncertainty with the customer can happen if it is very rarely. It's not that it has happened in the regularly it happens, but the TMT customer is like a one-time happening. Sure, sure. And what sort of impact should we consider for full queue for this account? Let me make this clear. I think I have multiple questions here, past year questions. Sure. If you're going pretty steady in the first half of the year, and in second half of the year, they decided to take some cost optimization effort for their own budgetary reasons, and hence we had an. I'm sorry, Samir, you were not audible. That's the problem with me only. I'm sorry. Hello? Is this any better than here or no? Yeah, this is better, yes. Okay, so I was saying that for this large customer, we were in a pretty good growth trajectory in the first half of the year. In the second half of the year, we started seeing some ramp-down, which is due to largely because of their cost containment effort that they wanted to do to manage their own cost, so we had a ramp-down mid to late November, early December timeframe, and now we'll see a full quarter impact. This is a very stable customer, but we're going through a sort of a seasonal change with them at this point in time. We think this effect will last fully for Q4. It might spill over to Q1, but we can't comment on it today, but this will come back on growth trajectory in a couple of quarters back again. This is not a permanent damage. This is a short-term blip that we are facing right now. Sure, sure. So fair point, Evan. Just to follow, what could be the impact in full Q because of this account? Like we said, I think we expect a degrowth right now because this customer is still in a very much decision-making mode, so it's very hard to predict how much of the impact will be. But we'll answer the overall. Yeah. Overall, we are expecting about 2.5% to 3.5% degrowth next quarter, including seasonal impact. Okay. At the company level? Sorry, IT, international IT services. For the international IT services. International IT services. Yes. Okay. Understood. Understood. Yeah. Okay. That's it from my side. Thank you. Thank you. We'll take the next question from the line of Hasmukh Vishariya from Tata Mutual Fund. Please go ahead. Yeah, hi. Thanks for the opportunity. Just to follow up on the previous question, right? So here, if we look at all these high-tech customers that are spending huge money on AI, right? So in that case, how one should predict all these ramp-downs coming in? Because this looks like one time, but probably because of future investment, they may ask for further discounts or cost rationalization. So how one should think about that? Yeah. Thank you. Hopefully, I'm audible. So this customer, like I said earlier, Hasmukh was going quite well for us in the first half. Very stable customer. It is the largest customer for us in the high-tech space. We don't anticipate this effect to last long. We think it's one or two quarters discussion that they're having. And then post that, the growth will resume in this customer. But having said that, the reality remains in this current market. Industries are going through cyclical effects. If you recall, one year back, banking was in a slowdown. Now, banking is up. One year back, TMT high-tech customers were doing well. Now, TMT is down. So we are definitely seeing in a year cyclical effects of some of these industries. And that's one of the reasons that we have diversified Sonata over a period of time so we can have multiple bets in the market. That's why the four verticals that we have talked about are really important and core part of our strategy. But right now, the impact, because this is the largest client of Sonata, the impact is pretty deep for one or two quarters for us from a growth perspective. But are we worried about long-term prospects for the growth of this account? Absolutely no. We know we'll bounce back to growth either in later part of Q4 itself or maybe sometime in Q1. Hard to predict the exact timeline, but in the next four to five months, we should be back on growth. Got it. Got it. So because let's say after DeepSeek, these high-tech customers or large high-tech customers might have been taken aback as far as the huge amount they are spending on, let's say, GenAI, right? So in that case, there may be in future a possibility of rationalization of cost additionally to what they have done in the last one or two quarters. So yeah. It is possible. I mean, what you said is absolutely right, but it is also possible that they can decide to ramp up and try to DeepSeek that effect harder. So it's very hard to predict Hasmukh, to be honest, but it is possible. That's why the industry is going through cyclical cycles right now because, as you know, the innovations are happening literally every one or two months. So people are adjusting and adapting their strategies in almost real-time business right now. Got it. Got it. Thanks a lot. Thank you. We'll take our next question from the line of Vipul Kumar Anupchand Shah from Sumangal Investment. Please go ahead. Sir, employee cost has also gone up substantially quarter to quarter and year over year also. So that is due to it is attributed to this client. So what explains that? Exactly. This explains the one-time settlement to the employees for this client. And also, there is a salary increase there. So can you quantify both the factors, sir, if it is possible? Yeah. Salary increase had an impact of around 75 basis points on this quarter in our EBITDA. The rest has come from this one-time settlement. One-time settlement means the employees which were earmarked for this project, so you let them go with one-time payment? How it worked? Yes, yes. Yes. They are in a different geography, nearshore geography. So as per the regulation, we have to give a notice period for them, and we have to pay the money for them in one time. To rescue the impact of the downtrend, we have settled with the employees and given them the money. In fourth quarter, employee cost will normalize? Yeah. Except for the salary increase impact, other things will normalize. Okay, sir. Thank you very much. Yeah. Thank you. We'll take our next question from Surbhi Sarawgi from SMIFS Capital. Please go ahead. Hello. Sir, my question is, can you quantify the one-time expenses incurred during the quarter? And also, can you give some revenue and margin guidance for the next quarter and next financial year? Yeah. The total impact we said is 3.6% impact this quarter. In that, 75 basis points is because of salary increase. The balance is because of this one-time settlement. Next quarter, just now added that we will have a revenue degrowth. Degrowth is at company level. This is because of this particular customer full quarter impact as well as Quant Systems impact. So we will have a degrowth of 2.5%-3.5% for next quarter degrowth. So margin, while all this one time, we are expecting it to bounce back next quarter. Okay. And sir, next year? Next year will come in during the year in time, ma'am. Okay. Okay, sir. Thank you. Thank you. Ladies and gentlemen, in order to ensure management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions. We'll take the next question from the line of Mayank Babla from Enam AMC. Please go ahead. Hey, thank you for taking my question. Am I audible? Yeah, yeah. Yes, ma'am. Yeah. Sir, given the recent unfortunate and unforeseen developments in the ramp-down, by how many quarters can we expect the $500 million aspiration to be pushed back by? Earlier, it was FY26 and mid-FY27. Now, that would be delayed, right? Yes, ma'am. Great question. I think Management will provide an update after the quarter. We're just waiting for this customer's ramp-down to stabilize right now. I think there will be a one- or two-quarter impact we expect. But we'll probably give a more formal answer around about the next earnings call, ma'am. We think at this point, it's about a quarter or two impact. And my second question would be, these large high-tech sort of clients that we've seen impacting our business, these companies have very deep pockets. So can you help us reconcile that? Why would they cut down IT spends and shift them to sort of CapEx on AI? If you can help us reconcile or understand that. Yeah, it's a great question. Again, ma'am, I'll tell you. I'll tell you what we think it is happening. We're not sure, but I can give you our estimate of this. So most of these high-tech customers are buying hardware to drive AI from an NVIDIA chip buying perspective and processing power buying perspective. The consumption is really going there. So they're paying a lot of capital on the OpEx side to buy the hardware capability because it's a race to build a hardware engine at this point in time for many of them. Now, given what has just happened recently, the question that came up earlier on DeepSeek, how will that impact? How will they calibrate? It's hard to predict, but that's the cyclical nature of the world we are living in right now. At one end, they want to accelerate their spend to improve their customer experience using AI. On the other end, they want to buy hardware to have more capability from a processing power perspective. So right now, we are on a cycle that the hardware purchase has a bigger premium in their world for next one or two quarters. But we're pretty sure that at some point in time, the tide will turn over on the software development side yet again. But that can only be the situation as we see it. These are cash-rich companies. They're not customers in distress or in trouble. They are just diverting their investment dollars to a pocket of investment that they want to make in the short term. And they're recalibrating. I'm sure you're seeing it. They're recalibrating across literally every quarter. And that's why companies like us have to adapt to their needs. And unfortunately, while in the first half of the year we gain, in this second half of the year, we're going to lose out. But that's the nature of doing this business. Okay. Got it, sir. Thank you. Thank you for answering my question. Thank you. We'll take our next question from the line of Pralin Nandu from Edelweiss Public Alternatives. Please go ahead. Yeah. Samir and team, I hope I'm audible. Yeah. Yeah. So a lot of contradiction, right, Samir, on the call. At one side, we want to be leaders in AI. On the other side, we are losing customers because of their spends in AI. So do you think this is something which will continue going forward, or does it require a very critical assessment of our client, the quality of our client? Because see, this unfortunate event has happened twice, one on the new deal side, now on the existing client side. So we understand that you are a smaller company in the overall scheme of things versus our peers. But such kind of things, we haven't heard from any peers, right, that high-tech slowing down or customer doing a sudden kind of a withdrawal. So how should one think about it? And does it require a very deep internal introspection about the quality of clients that we have? At the same time, how do we think about new deal wins as well, right? I mean, how should one deal with this contradiction? Yeah. So I don't know if I would call it contradiction. I think I would call it uncertainty, candidly. The client that we're talking about has been with Sonata for over 30 years. So this is not a new client. Now, as you know, every enterprise in the marketplace is really figuring out their strategy with AI. Did any one of us knew DeepSeek four weeks back? Probably the answer is no. Did any one of us know Microsoft Copilot three months back? The answer is no. So I think as these newer technologies are coming, customers are going to adapt, and we have to react to them. This is a marathon and not a sprint for us. We have to stay in the game with the customer for the long term. Because some of these customers, when they grow back, you tend to enjoy. And companies of our size and scale, we are a relatively smaller-sized company compared to many other companies that you calibrate against. But also keep in mind that we have grown faster than many of the industry peers. So then even that leap to grow faster, you will have odd quarter. And I know there's one too many bumps in this year, earlier with the healthcare client and now with the high-tech client. But those are expected if you want to play in that league. If you want to play safe, then I think there are other ways to play safe out. And like I said earlier, this is not a mid-year client. It's not like we are adding to the risk profile of the business. It's just unfortunate that in a year, we had two customers, one at the beginning of the year, one at the tail end of the year, where we had sudden ramp-down. So I wouldn't call it contradiction. I just think it's the uncertainty that we faced. And it's also visible, like I said earlier. If you recall, a year back, the entire industry was talking about banking is slowing down, and there was a big discussion on banking. I'm sure you recall that. Now, including our commentary, banking is doing well for us. But can any one of us predict in six months where the banking industry will be? I think it's very hard to predict right now because the demand pattern and the industry patterns are changing quite dramatically. That's how candidly we see it. We don't think it is adding to the risk profile like you illustrated it. I think it's the nature of the business that we are in and the industry that we serve. The client is not a small client. They are one of the largest clients in high-tech space. Yeah. I appreciate that, Samir. So just since, let's say, we heard from this client, have we been able to talk to some of the other clients and assess that this is a risk which might be developing in some of the other clients, some of our other relationships as well? Have we been able to do that since we have heard from this client on the direction in which they want to go? Yeah. No, it's a great question. Again, see, in our TMT vertical, we have a total of five clients. So we don't have a, again, based on our size, it's not a big spread. Now, the other four that we have, we don't see that risk right now because this is the largest client in that TMT sector. But have we assessed the same risk for other clients? We have. But to be honest, if you look at our largest banking customer, our largest healthcare customer, tomorrow they want to build up their own data center and start buying immediately. Of course, their strategy can change and it can have a filtered effect on us. Candidly, can you predict that? I don't think the answer is yes because it is a very customer-specific decision at this point in time. Do we expect AI to continue to have a little bit of this impact off and on in some clients? We do think it will happen, especially for the larger companies. Most of the clients of Sonata, candidly, by and large, are the mid-tier market customers. So we don't see those customers having this impact. But the larger customers, of course, have this impact as they calibrate and recalibrate and recalibrate the strategy. All right, Samir. That's it from my side. Thanks a lot and all the very best. Thank you. Thank you. Next question is from the line of Dipesh from Emkay Global. Please go ahead. Thanks for the opportunity. Dipesh, please use your hands a bit more. You're not very clear. Is it better now? Yes. Please go ahead. Hello. Yeah. Just want to get first about the demand environment. I think if you can help us understand any change you're witnessing in the demand environment. And it would be preferable if you can give sector-wise some comments about demand compared to, let's say, three months back. Second question is about the margin. Now, one of the large clients which you said in high-tech is likely to face some headwinds because of their AI productivity kind of thing. Any implication you expect on margin on a sustainable basis in that account? And I want to expect your Q4 margin trajectory compared to where we are. And last question is about our expectation about, let's say, earlier, H2 to be better than H1 and then growth to excellent, entering into FY26 and returning to low 20% margin. If you can give some sense around it, how do you expect growth to play out overall? Thank you. Thank you, Dipesh. Very good. I think there's lots of questions, and then let me try and answer one by one so from an industry point of view, the demand pattern is very different, Dipesh. If you look at our current results as well as if you look at slightly one or two quarters ahead, we think healthcare life sciences and banking financial services will continue to do well for us so feel pretty good about those two verticals right now, and healthcare life sciences, we have maintained that trajectory for at least three or four quarters. We think for the foreseeable future, we don't see any significant headwinds coming our way. In fact, good growth coming our way in healthcare life sciences. Banking financial services, we think we are going to have a solid growth in the next one or two quarters. So that sector is looking pretty well for us. Keeping aside the quant seasonality of Q4, in general, the banking will quantitatively be strong for us. There'll be a short-term impact in Q4 because of quant seasonality. But going into Q1, I think banking will be in a solid platform again. Retail industry is candidly under a lot of pressure right now. The retailers are talking about it. Their essential retail sales are down. The high inflation impact continues to be within the retail industry. So we don't expect retail to bounce back anytime soon. I think we'll continue to see a flattish or marginally up growth in the retail sector. The fourth sector is PMP. PMP for us is a tale of two cities. We have one large client and maybe four or five other smaller clients. In the smaller clients, we expect growth to continue the way we have been doing. But the large clients, at least for a quarter out with Q4, we think there is a demand pressure. And hence, we're going to talk about -2.5% to -3.5% growth for the companies in the next quarter. It is a little premature for us to talk about what will happen to this client in Q1. But we think sometime late Q4, early Q1, they should come back on track. But we'll probably provide a more finite update in the next quarter. So that's on the first part of the question, Dipesh. The second part of your question around the margin profile for Q4, like Jagan said, I think we expect a large part of the margin recovery to happen next quarter, except for the compensation related that we have seen this quarter. The large part of the one-time impact will not be there next quarter. So we should be coming back on our high-teens EBITDA profile going into next quarter. And that should be pretty doable for us. As far as the H2 is concerned, yes, you're right. I think we talked about in H1 that H2 will be stronger. And candidly, Q3, we have a 4.4% constant currency Q1Q growth, which I think we're pretty pleased about that. Had this large client not ramped down, which was an unexpected thing to happen in mid to late November, we would have probably clocked a very strong Q4 as well. But minus of this large client, we have pretty good growth going into next quarter. But this one significant impact is diluting the overall results of the company, which is unfortunate, and we couldn't have predicted it, but that's what we're faced with. Samir, our question is about. Sorry? Yeah. Many parts of your question. I hope I answered all of them. If I missed anything, please follow up. Yeah. So broadly, let's say on the margin part, now we indicated by Q1, at least we'll be to low 20%. Are we confident to return back to low 20% kind of margin profile in Q1 or because of the client-specific challenges, what we face? Now, low 20% may get delayed. And last part is about Quant turnover-related thing. If you can give some sense about, let's say, what kind of revenue they made in calendar 2024 and how one should look turnover kind of thing, if you can provide some clarity because considering the target, what we set for turnover when revision happened earlier, whether we expect any reversal to happen. Thank you. Okay. The first part of the question, Dipesh, about early 20% margin, we are still making an assessment of the impact of the large client. We will get clarity during the course of Q4. We will keep you posted about that when we are coming back in Q4 results about the Q1 reaching the margin level. At present, we will, as I mentioned earlier, the one-time impact, we will recover back in Q4. But reaching to the early 20% because of the large client impact, we will wait for the full impact to be known in Q4 and then come back to you and update you on that, Dipesh. The second part of it is about Quant earn out. We are still working with Quant's earlier management to extend the SPA. We are still negotiating with them. We will give an update once the negotiation is over and we get into a concrete idea about their near future impact of that. We will come and update you on what is that they have achieved and also give an update to you. Since the process is not complete, we are waiting for that process to complete. The SPA is still March 2025 already, the old one. So we will wait for the full completion of the SPA negotiation and give an update to you on that. The third question. Sure. Can you repeat again, Dipesh? No. So I just want to understand what will be the revenue of Quant calendar 2024 because that is what we indicated, $100 million kind of target what we gave to them to get the turnover. If you can give us what is the actual number they achieved. No. The audit is going on now, Dipesh. Once it is completed, we will give an update to you. The Quant purposes, limited review purpose, they have seen it. But for the whole year, the audit is going on. So once the audit is complete, we'll give an update on that. Okay. Thanks. Yeah. It also depends on the future negotiation, Dipesh. So let both be completed before March. We are expecting it to complete. So we'll come back and update you in Q4 results time. We'll give a full update on that. Sure. Thanks. Thank you. We'll take the next question from the line of Mihir Manohar from Carnelian AMC. Please go ahead. Yeah. Hi. Thanks for giving the follow-up. I wanted to understand this. I mean, how does it work? I mean, there is this. So the employees are going out, which are there for those particular clients. We are paying them one-time cost. Now, does it get reimbursed to us or it doesn't get reimbursed? Because ideally, there could have been a, I mean, this is a basic question, but there should have been a notice period or a reimbursement happening. So how does that work? Yeah. Actually, there is no. The client doesn't compensate for this because that's how the model works for it. We have to, whenever the opportunity comes in, we will be able to deploy people and take it up with the people. It's not exactly a T&M model. It is actually like a fixed price kind of a model. So there will be a, when the project is ramped down or a project is stopped, so we will have a very short notice period time. But this being a foreign geography and near-shore geography, there are regulatory requirements. So we have to settle with the employees. That is a kind of a risk embedded in the margins of the project whenever we have taken that. And this is how the operations happen. So we have to abide by the regulatory requirements of that particular geography. For the best practices, we have taken a settlement with the employees and then closed that. There will be some amount, some notice period, and some amount of benefit flow also for us in this. That is why the revenue was not that much impacted in this quarter from the customer. The full quarter impact will be known only by next quarter. Sure. Sure. You mentioned next quarter 2.5%-3.5% kind of a degrowth, considering Quant as well as base account going down. Excluding base account going down, what could be the growth? Pardon? I mean, how could we see the growth next quarter ex of base ramp down? I mean, considering the Quant seasonality, but without considering ramp down of base account, what can be the growth in fourth quarter? No. This is difficult to tell you now what will be the total impact of it. We have made an estimate as of whatever data we have access to. Quant will be the major portion of it in this. And this customer will also have an impact on this 2.5%-3.5%. If not, it must have been much lesser the impact is. Okay, so the impact is more driven by quant also here. Mihir, I request you to join back the queue, please, as we have other participants waiting. Thank you. The impact that the Quant definitely had an impact, which we know. If without this customer, we may not have gotten this kind of degrowth. Sure. Sure. That's it here. Thank you. Ladies and gentlemen, in interest of time, we request you to restrict to two questions at a time, please. We'll take our next question from the line of Abhishek Shindadkar from InCred Capital. Please go ahead. Hi. Thanks for the opportunity. My first question is to Samir. Samir, just wanted to understand this ramp down and we can? Sorry to interrupt. Are you listening to the webcast as well, please? Can you shut that off? We are getting late. No. I'm not listening to the webcast. I've just logged into the normal call. Is this better now? Yes. Yes. Please go ahead. Okay. My first question is to Samir. Samir, just wanted to understand the timelines in terms of the communication from the large client in terms of ramp down and project cancellation, so on and so forth. Can you just help us understand the timelines? Was it towards the start of the quarter, mid, or towards the end? That is the first question. The second question is to Jagan sir. Is this a new margin reset for the company? And do you think margins can go back to at least 17%-18%? Just third, bookkeeping question is, was there any deal transition cost that we incurred for the business that grew in the quarter? Thank you for taking my question. Let me take the first part, Abhishek. So the timeline of this was pretty much very progressively in the course of the quarter. We started seeing the discussion start in November timeframe. And then we were, of course, negotiating with them because there was a ramp down as well as a discount. And it built up progressively. I would say the impact started trickling in towards the later part of November and the full quarter of December. That's a broad way to think about it because it was, like Jagan said, on-site geography is not in India. We had to handle the employee and their severance-related costs in the course of the quarter. So that's how it progressed. I'll turn it to Jagan for the second and third question. Yeah. Abhishek, as he mentioned earlier, the one-time cost, we will recover back in Q4 to that extent the margin recovery will happen. So as I mentioned, out of 3.6% degrowth drop in margin this quarter, 6.75% is because of salary increase. And the balance is because of one-time cost. That will be. We are expecting it to come recover back in Q4. What was your third question, Abhishek? Any deal? My third question was about. No. Yeah. Was there any? We got an increase. No, no. We are not concerned, Abhishek. We are not concerned. Okay. Fair enough. Understood. Thank you for taking my question, sir. Thank you. We'll take our next question from the line of Jalaj from Swan Investments. Please go ahead. Yes. Thanks for the opportunity. I hope I'm audible. Jalaj, please use your hand. Yes. Now it is clear. Please go ahead. Thanks for the opportunity. One thing more or so with regards to the vertical split. I do see there is some slowdown specifically in retail and manufacturing also. Could you talk about what is exactly happening there? And in the headcount, if I were to see sequentially, it has increased. So were these people not on a payroll, or how should I understand specifically for the projects which have been ramped down? Yeah. Jalaj, so like I said earlier, in the retail, so let's step back. Healthcare and banking are on a good growth trajectory for us. We have maintained that, and I think we continue that growth momentum to continue for the foreseeable future. Retail, because of the high inflation, we have continued to talk about that, that retail is going slow for us. And retail manufacturing, by and large, given the forcefulness as we are, they're pretty much intertwined, and we think that will continue to put the stress and pressure in time to come as well. Will it degrow? No. But will it grow significantly? No. I think it will be a marginal growth in retail. We'll see significant growth in healthcare, and we'll continue to see significant growth in banking. That's how we think about the industry pattern. The second question that you had was a response about—what was the second question? As to the headcount, so I see sequentially the international business, there has been a growth, but were those people who have been ramped down or those who have moved out, were they not on the payrolls, or how should I understand it? They were very much part of the payroll. They were pretty much part of the payroll, especially in on-site geography. If you recall, we had talked all year around that the second half of the year will go well for us. So while you're seeing a 150 FTE increase, there would have been significantly more if this unplanned headcount, unplanned ramp down didn't happen. And that would have continued to contribute for a full quarter impact of a growth. That's what we were seeing. But in the last one or two months, we started seeing this ramp down hitting us. So what we see is a net ramp down after this impact. Otherwise, the headcount would have been slightly higher than what you're seeing right now. Thank you. We'll take our next question from the line of Dipesh from Emkay Global. Please go ahead. Yes. Thanks for the opportunity again. Jagan, just want to understand quant business operated higher margin than company average. Considering the seasonality, what we are highlighting about the next quarter, do you expect the margin benefit will not be fully reflective of the one-off cost recovery considering the quant seasonality? Yes, Dipesh. There will be an impact of quant revenue drop on the margin to some extent. But we are not able to make a full assessment of that now. But most of the one-time cost, we will recover it back, Dipesh. No. So, considering the margin trajectory, I think where we are already reached. How one should look at it? Because low 20s is what we aim for. Now, single client-related plus minuses, one or two quarters is fine. But your headcount addition is, let's say, way ahead of your revenue growth if I look from that perspective. Utilization also, I'm not sure, let's say, how to look at it. But you added Q of Q headcount while you expect significant growth next quarter in terms of revenue. And some of the other levers also in terms of on-site offshore and other mix if I look at it. So, considering some of those things, how one should look at your margin trajectory? And you also said low 20s we will revisit at the end of Q4 kind of thing. But over medium term, do you think any risk to low 20s kind of margin profile what we always aspire to be? Or you are comfortable for medium-term low 20 kind of margin profile? Yeah. Dipesh, one thing we want to highlight to you is for other quant margin profile was there, the rest of our, because of this particular customer ramp down, our on-site portion is on-site mix is coming down and offshore is going up. That will also help us to recover some margin back next quarter, Dipesh. So secondly, yes, the one-time cost is going to help us come out back, which is almost like a major portion of the 3.6% impact. So we are expecting that recovery to fully happen in the next quarter. Some impact of quant revenue degrowth for next quarter can be there on my margin, but we don't expect that to be a major element on the recovery part of it. But there can be some impact, some small impact can be there. So we expect that we will come very, very close to that quarter 2 EBITDA margin level in Q4, very close to that, plus or minus 50 basis points is the range, Dipesh. We are expecting that to come near there. And from there, we will be able to grow the margin in Q1 once we know the exact situation of the particular customer, where are we heading. We will give an update towards the early 20s by end of this quarter, Q4, Dipesh. Thank you. We'll take our last question from the line of Vipul Kumar Anupchand Shah from Sumangal Investment. Please go ahead. My last question is regarding we don't have any legal protection regarding this ramp down, sir? No. This is a customer-regulated commercial contract and all this. Because they are a very large customer, they will, these kinds of protection may not have. And we know the prospect of the customer is very high. We don't want to do a short-term problem by doing something and kill the business in the long-term angle, yeah. Because they are going to continue to be a large customer for us, and they will continue to grow in the good prospect for us in future. These are all very, very short-term and impact of that. We expect this will settle down in a quarter or two, and then we may recover back the business soon from the customer. Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Mr. Dhir for closing comments. Over to you, sir. Thank you, Abhishek. And I just want to thank all the participants for dialing in today. And also want to take this opportunity for all the Sonatians globally for their hard work and diligent efforts to keep moving Sonata forward. And we'll connect with all of you in a quarter's time again. Thank you. Thank you all. Thank you. On behalf of Sonata Software Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.