Ladies and gentlemen, good day, and welcome to the Tata Elxsi Q4 FY23 earnings conference call. 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, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Diwakar Pingle from EY. Thank you, and over to you, sir. Thank you very much, Gavin. Good evening to all participants on the call. Good morning if you're joining from western side. Before we proceed with the call, let me remind you that this session will contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. It must be viewed in combination with the businesses that will cause considerable performance achievements, but they differ significantly from what is expressed or implied by such forward-looking statements. To take us through the results and answer your questions today, we have the team from Tata Elxsi, represented by Mr. Manoj Raghavan, Managing Director and CEO. Mr. Nitin Pai, Chief Marketing and Chief Strategy Officer, Mr. Gaurav Bajaj, Chief Financial Officer, and Ms. Cauveri Sriram, Company Secretary. We'll start the call with a brief overview of the past quarter and the year by Manoj Raghavan, followed by Q&A session. Having said that, I'd like to hand over the call to Manoj. Over to you, Manoj. Thank you, Diwakar. Good evening, everybody. Thank you all for joining us today for the Q4 earnings call. By now you would have received a copy of the Q4 earnings release and fact sheet, both of which are available on our website. As we're meeting at this Q4 earnings call, I'm happy to report that for the full financial year 2023, we've delivered a strong performance, with revenue growing by 27.3% and profit after tax growing by 37.4%. During the financial year, we crossed the INR 3,000 crore revenue milestone. For the Q4 of the financial year 2023, our revenue from operations was INR 837.9 crores, which translate to a quarter-on-quarter growth of 2.5% and year-on-year growth of 22.9%. In US dollar terms, the quarter-on-quarter growth was 2.9%. Our EBITDA for the quarter was at INR 249.5 crores, which translates to an EBITDA margin of 29.8%. Our PAT for the quarter was at INR 201.5 crores. In a year which had macroeconomic uncertainties and several challenges for the industry in general, we have been able to grow our revenues and protect our margins. I'm happy to report that the board of directors have recommended a final dividend of 606% for the financial year ending 31st March 2023. This represents a 42.6% increase over the previous year and corresponds to a payout ratio of 50% of our PAT. Talking of our divisional performance, for the quarter in constant currency terms, our Embedded Product Design, or EPD division, grew 1.6% quarter-on-quarter and 13% year-on-year. The other two divisions, IDV and SI, had a remarkable growth during the financial year. IDV grew 52.8% year-on-year, our System Integration grew 77.6% year-on-year. Talking of the verticals, we had a steady quarter of performance for all our three verticals, but more importantly, our healthcare and the media and communication business both have returned to growth from last quarter, even if moderately. We're building a strong deal pipeline and hope to see large deal conversions picking up over this quarter and beyond. Across the three verticals, our growth has been primarily volume-led, and we have witnessed strong growth with our large accounts. Across the key accounts, we have increased the wallet share against competition, underscoring our differentiated value proposition, and offshore delivery capabilities. I'm personally excited with the opportunity ahead in the automotive and transportation business. The scale and rate of transformation that the automotive industry needs to undertake, changes driven by the regulatory sustainability and evolving customer consumer preferences and business models present extraordinary opportunity for Tata Elxsi. This transformation will demand deep domain knowledge, scale and software development, application of digital technologies like AI and IoT, and more importantly, design will take a center stage in creating consumer delight. I believe we are at the right place and bring the right capabilities and are engaged in the right conversations with global automotive leaders in their transformation journeys. Our strategic long-term deal with Alps Alpine in Japan to establish a global engineering center for developing next-gen mobility solutions in India and a multi-year SDV deal with a European OEM reflect this opportunity. I do recognize that an offshore-centric and ownership-driven delivery model is not only harder to execute, but also requires almost three times the number of resources to deploy as compared to on-site deployment for the same impact on top line. However, we strongly believe that this is the only way to create long-term and sustainable value, and we are best positioned to deliver on this. Equally, there's an emerging opportunity for applications around 5G that allow enterprises to harness the speed and reliability of this technology. We are seeing deals with operators and with enterprises to make this a reality. Two of the large deals that we announced this quarter precisely address this opportunity. We have been selected by a leading Middle East telecom operator as a design-led consultancy and development partner for next-gen applications around 5G, including healthcare, IoT, and connected digital services. We also won a strategic deal with the world's leading telecommunications product company for 5G broadband software and solution deployment that will power the next-gen consumer devices. Our healthcare and life sciences business was impacted by the extension of regulatory deadlines, which cut into our existing work and revenues. I'm happy to see the business recovering from the setback within a quarter and building a strong pipeline of deals and penetration into new marquee customers. We are seeing the success of our key strategies deployed over the last two years, with strong synergies between the EPD, IDV, and SI divisions playing out well, allowing us to address upstream and downstream product lifecycle re-requirements. We are seeing increase in duration and type of our deals feeding from this upselling and cross-selling. This is reflected in the strong performance of our IDV and system integration business in FY23. On the attrition front, our annual attrition for the Q4 stood at 17.3%, which is again one of the lowest among our peers in IT industry at large. We enter the new financial year with the confidence of working with a marquee set of global customers, scaled delivery capabilities from talent investments that we have made over the years, and a unique proposition of design digital that is more relevant today than ever. I strongly believe we are in good shape to move forward, and I now hand over the floor to NY for the Q&A session. Over to you, Diwakar. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bhavik Mehta from J.P. Morgan. Please go ahead. Thank you. A couple of questions. Firstly, on the transportation vertical, we saw a very sharp deceleration in growth on a sequential basis. Was it due to any project mix or rundowns which you saw during the quarter? What the outlook going into 1Q as well in this vertical? The second question again is on the other vertical, which is media and healthcare. We saw some growth coming back in 4Q. What's the outlook going forward? Do you expect growth to start activating from here on, or do you expect it to remain maybe weak for a couple of more quarters before we start seeing green shoots over there? Lastly, just a bookkeeping question on the ESOP, the schedule approach ESOP scheme in March. What is the outlay going to be and, you know, any impact on margins because of that? Thank you. Sure. On the transportation business, I, you know, we have won, you know, significant deals in the quarter. We have announced that. We strongly believe that, moving forward, we have a good deal pipeline, and we are seeing customer confidence in the value proposition that Tata Elxsi has. I think from transportation business, I strongly believe that, you know, that growth that we have shown over a year, we will be able to replicate that, in the coming financial year. On the media and healthcare business, yes, we've seen some amount of green shoots and some amount of growth come back. It is still, you know, early days, I would say. From a midterm to long-term perspective, I see no challenges for us, and this business will definitely, you know, recover. More important, as we see a lot more of these, you know, 5G opportunities and deals that are coming back, I strongly believe that, you know, towards the latter half of Q1 and Q2, we will see the growth coming back into Tata Elxsi. On that front, I think we are pretty confident. Regarding ESOPs, I think on a quarterly basis, we are looking at about INR four and a half crores or so of expenses that we would incur on the ESOP front. Okay, that helps. Based on the transport, what was the reason for the weakness in 4Q? 3Q was a very strong growth of 7%. Now we saw only 1.5%. Any color on that would be helpful. No, I think, you know, it's very difficult for you to look at, you know, it's a large business that we have. You don't really look at it from a quarter-to-quarter basis in that sense. You like look at it from a midterm to a long-term, you know, perspective. The fact that we have continued to grow and grow significantly over the year is what you need to look at. I'm not really that much bothered about, you know, this one quarter issue because we definitely see strong, you know, deal pipelines and so on. There have been some amount of determinants in some of our customer places, but that is fine, and we strongly believe that, you know, growth will come back in Q1 and Q2. Okay. Thank you. That's it from my side. Thank you. Ladies and gentlemen, we request you to restrict your questions to two per participant. For follow-up questions, you may rejoin the queue. The next question is from the line of Vimal Gohil from Alchemy Capital Management. Please go ahead. Yes, sir. Thank you for the opportunity. My questions are not on the growth, as you answered. Just on cash flow, despite our PNL growing very strongly this year, operating cash has been like muted, and that is largely driven by our increase, sharp increase in receivables. How do you see that going forward? Yeah. I would request, you know, Gaurav to answer that question. Hey. Hi. Yeah. This quarter, if you see there is an impact on our trade receivables. This is primarily because we embark on the system transformation in the quarter four, which kind of little bit rolled over the invoicing that has to be done to the customer. I think that is only a short-term phenomena. We believe that that cash flow will be back in there, and we will recoup those collection in the coming quarter. That will get normalized over the next one quarter. Understood. Understood. Sir, I just wanted your comments on this Alps Alpine initiative that you're taking. If you could just highlight something more on that. What could be our revenue model then? Could we see some contribution accruing from that? I know as you highlighted, it's a very, very significant, you know, effort, offshore effort from our side. Just wanted to understand, do we already have some clients here or is it still a very early stage? No. We have set up a global delivery center for them, and it is a multi-year, you know, engagement. You know, I would look at it anywhere from a five to 10-year sort of a roadmap. That is a roadmap that we have at this point in time. The you know, the color I would like to say is especially with Japanese you know, customers and so on, the first you know, two years of engagements are very, very critical. We have been engaged with them for a few quarters, right now before we, you know, got into this, you know, because we were empaneled as a global partner for them, right. In some sense. The challenge for them, if you look at it is, you know, outside of Japan, and they had a large, you know, presence in China and, at, you know, because of the geopolitical issues and so on that we're seeing, they definitely needed to find a partner in another country to de-risk their, you know, China presence. That is where, you know, Tata Elxsi came in and since we already had a relationship with them and, you know, this really helped us. Of course, we delivered, you know, significantly on the existing projects that we are developing for them. That really gave them the confidence to trust us as their, you know, engineering partner beyond China. This could be a significant business for us, a long-term business that we would continue to grow, you know, over the subsequent years. Sir, just on margins, do you think you'll be able to recoup, so, what you're effectively highlighting is about 0.5% of impact, incremental impact, which is margin or which is ESOPs? How do you plan to sort of offset that going ahead? Yeah. Of course, you know, we have different levers available, including, you know, utilization. Yes, there will be costs that will be coming in because of wages and salary hikes and so on. I think, for the year, we are pretty well positioned to be in, say, a band of, I would say, from a PBT perspective or, you know, I would say between 28%-29%. That is a band that we are targeting to operate in. Understood, sir. Thank you so much. Wishing you all the very best. Thank you. Thank you. The next question is from the line of Sulabh Govila from Morgan Stanley. Please go ahead. Yeah. Hi. Thanks for taking my question. I had a couple of questions. One is with respect to the divergence in growth within the top 10 client bucket and outside of that. The outside of the top 10 client bucket, the growth was a bit soft. Just trying to understand what you're hearing from clients with respect to the spending patterns and whether the growth that you're expecting in the coming year, is it's gonna be broad-based or you expect the top 10 clients to continue to do well for you? The second bit is on the margin spread. If you could provide the margin walk for the quarter. If you could talk about, where we are on the investments journey that we started with respect to hiring middle-level managers and developing on-site location in Germany, for example? Where are we in that process and how do we plan in the coming into next year too? Sure. I would say, you know, we definitely have been able to, you know, mine, especially our, large, customers, pretty well, not just in the quarter, but I think over the, over the financial year, I think we've done a commendable job in really, you know, increasing our wallet share and taking business away from competition and really growing that account, right? When I say growing the accounts, as you may realize, a lot of our business is offshore-based. We have been able to convince customers to move a lot of work, you know, offshore and, you know, and that has really, helped us. We will definitely continue to grow our top 10 accounts even in the next financial year and so on. When I say top 10, it includes the top 20 customers that we are looking at. I think overall, if you look at it in the market, yes, it is a difficult, you know, macroeconomic situation. You know, the E-R&D budgets are all discretionary. We see some signs of it. There are some customers that, you know, continue to invest and grow and, you know, trust, you know, Tata Elxsi's delivery capabilities and, you, know, work with us and so on. There are a few, you know, the customers that, you know, have had some issues in terms of, you know, their own, you know, R&D initiatives, whether getting paused or put on a hold or, you know, or whatever, for whatever reasons, right? So beyond the top 20 customers, we definitely have a set of accounts that we would really want to push into the top 10 and in top 20. So we are focused on that, and we're really working on that select set of customers to see how we can move them into, you know, gain larger market share there and move them into a bigger bucket and so on. So that's something that we continue to do. At the same time, you know, if you look at the overall set of customers, large base of customers that we have, there could be a few, you know, customers that have some issues in their own business and so on. That is why I think there's a relatively softness in the beyond the 20 bracket, I would say. I think that's, that happens every quarter, and I don't think it is a cause for concern. Definitely a large part of our growth will be, you know, pushed by our top 20 customers. At the same time, there is a next set of customers also that we are carefully curating and really, you know, working with, you know, very, very clear objectives of moving them from one bucket to another. That's something that we continue to do. From all the initiatives that we have, hiring, you know, managers, mid-level managers and, you know, the offices in Germany and, you know, other places, right? We have also, you know, investments in in UK as well as in US and so on. We have over the years, we have, those investments continue and I think those ramps are happening satisfactorily. , we have been able to deliver value for some of our customers, including in Germany and U.K. based out of, you know, based out of our delivery locations in that respective, you know, countries. I think it is still a work in progress, and we would continue to execute on the strategies that we have laid out. And we are as per our plans. I don't think we have a concern there. The SMEs, the mid-level managers and so on, that we continue to both, you know, internally, ramp up resources as well as, you know, hire laterally. That efforts continue. Regarding the margin, Gaurav- Yes. Can you answer that? Sure. Hi, Vivek. This is Gaurav. I will take your second question on the margin work. If you see for the quarter, our margin on the EBIT front, it was in the narrow, you know, narrowly below what we delivered in the last quarter, just 30 basis points. That is primarily to do with the campus onboarding that we did during the quarter. What Manoj also alluded to the fact that we continue to make investment into the people, subject matter experts, and augment our sales team across the location, which is important from the, you know, forward-looking strategy and the technical capability that we want to continue to build upon. We continue to invest in that, you know, in those, you know, parameters. That's why the EBIT margins came 30 basis points lower compared to the last quarter. If you see at the PBT level, our margin was 29% this quarter compared to 28.7%, last quarter. In fact, on the PBT we have delivered better and stronger growth and the margin this quarter. That has to do with the, you know, the higher other income due to the, you know, interest incomes and the R&D credit that we get from some of our onsite businesses and, you know, exchange gains that we had made during the quarter. If you see at the PBT level, we have done better than the last quarter. PAT is even better than that. At the PAT level, we have done 23.3%. That is almost 37.4% on a year-to-year basis. If you see on the full year basis, we have a 37.4% growth in our PAT. Understood. Thanks for the comprehensive answer. Thanks for taking my questions. Thank you. Thank you. Thank you. The next question is from the line of Utkarsh Katkoria from PGIM India Mutual Fund. Please go ahead. Yes, sir. Hi, good evening. Thank you for taking my question. I just wanted to understand, you know, in light of the Tata Technologies IPO, that is likely to hit the market, how do we compete for business, say, versus the Tata Technologies, which is a part of the same group? What is our go-to-market strategy, and how is that different, say, from, you know, Tata Technologies or some of the other base players in the sector? Yeah. Tata Technologies is a group company. As you know, Tata Technologies is a subsidiary of Tata Motors, right? They get a significant portion of their business from the group companies TML and JLR. A lot of their business is around, you know, definitely the mechanical engineering, the PLM. They do a lot of work on the ERP side. Of course, in a few verticals, I think automotive, aerospace, industrial, and those are the verticals that they operate in. Whereas Tata Elxsi is primarily focused on the embedded engineering hardware and software, along with a strong focus on design. Literally speaking, we are orthogonal, two orthogonal, you know, entities. The service offerings are literally orthogonal. I think, you know, from Tata Elxsi's perspective, we really don't see an impact of Tata Technologies, you know, affecting, you know, our business. They have a very, very strong portfolio of services that they deliver to their customers. We are literally a complementary set of offerings that we have. Maybe I can just add a little bit. This is Nitin here. I just look at it from. Sure, sure. Different perspective. Tata Technology has been in business for many years now. They have been in the market for many years now. In that sense, from a competition and a customer perspective, they're already there, they're already factored in. It's only for investors that it's a new factor because they're now coming up with an IPO rather than being a subsidiary that is not investable, right? In that sense, it is no change of status or world view doesn't change for us at all. Right. Right. What I understand is that, while they have are heavy on automotive and we are also heavy on automotive, the kind of service offerings they have are very different from what we are doing. Yeah. Auto electric. Yeah. When it comes to other segments, you know, we have strength in healthcare and communication while they have more strength in aerospace and industry. Yeah, that's correct. That's correct. Okay. Is there a time when both, you know, both Tata Technologies and Tata Elxsi together have gone to win, you know, a client to sort of win some part of the business? Is there a combined go-to-market strategy at all or we operate completely in different ways? No, we are two different companies, so we operate independently. At the same time, we've had occasions where we have come together to deliver a end-to-end service for a customer. That has also happened. Okay. Thank you. Thank you for that. Thank you so much. Sure. Thank you. Thank you. The next question is from the line of CA Garvit Goyal from Nvest Research. Please go ahead. Hello. Good evening, sir. Am I audible? Yes. Yeah, please go ahead. Just one question, basically on the margin sustainability side. Do you think these level of margins are sustainable going forward for next two, three years? you know, it's very difficult to forecast two, three years into on. If you look at the next financial year, we strongly believe that we can sustain this level of margins. Okay, understood, sir. What about the growth outlook for next year? you know, we are pretty bullish about about the growth prospects that we have. Yes, there are still macroeconomic uncertainties and challenges that are there in the industry. I guess, we will, you know, get out of it. you know, it's a question of one quarter or two quarter type thing. There are parts of our business that are already showing, you know, green shoots and that is what we'll really focus on, and we really hope that we'll be able to get back to a decent growth path. Okay, understood, sir. Thank you very much. Thank you. The next question comes from the line of Ajay Jain from Astute Investment Management. Please go ahead. Hello. Hi. My question is, does AI and generative AI like ChatGPT affect positively or negatively our profitability and billable values going forward? Hi, this is Nitin here, Ajay. Maybe I'll take that question. If you look at it, ChatGPT has the greatest impact on jobs that are automatable easily. To that extent, a lot of typically what would constitute shared services, creative services and so on, is where we believe the impact is a lot more direct from generative AI. When it comes to very domain-focused problems, and let me give you an example. When it comes to autonomous cars, for example, you have to train cars to be able to drive on roads and deal with scenarios that are completely complex and different. You cannot use a generative AI like ChatGPT to train cars to drive on roads. You can ask ChatGPT about what is the best car to buy, but you can't allow it to run the car that you want to buy. To that extent, I think the fact that we operate in domains, the problems that we address are very deep domain problems. For example, recommendation engines that go into OTT products that tells you what do you like, what should you watch next and so on. The AI that goes into cars that allows it to drive, or the AI in healthcare that looks at radiology results, looks at precise image mapping, identifies disease. If you think about it, these are specific problems. These are not generalized problems. To that extent, we see very little impact from ChatGPT or generative AI directly in our businesses. However, there are areas where we are actually starting to use it ourselves, right? There are very interesting applications that we can use it beyond what we do today. That would be our assessment at this time. Would it be, on balance, be a cost-cutting area or improve your billable values or reduce your billable values in future? For us, I think we see AI as something that enhances value all the time. Even in our own domains and our own projects, we don't see standalone AI projects. We see AI building into the projects that we deliver. To that extent, I think ChatGPT is just another lever in the armory. Yeah, I agree. Apart from that, there are so many new AI solutions that are going to be available soon. In that, I'm asking my question in that context, not limited to ChatGPT. No, sorry. Your question is? If you can repeat the question in that case please. Will AI affect you positively or negatively? AI is a great positive. Yeah. Already a great positive for us. What we're saying is it's always been a great positive. It will continue to be a great positive. Generative AI by itself doesn't represent a threat. All right. Okay. Thank you very much. Sure. Thank you. The next question is from the line of Akshay Ramnani from Axis Capital. Please go ahead. Hi. Thanks for taking our question. My first question is on employee costs. I'm just trying to understand. It is up about 4.5% on a sequential basis. If I look at last quarter headcount, it was flat. This quarter headcount is also up by about 2.2%. I'm assuming we didn't have a widget this quarter. What explains this increase in employee costs? Hi, Akshay. This is Gaurav. Let me take that, you know, question. The employee cost increase, as mentioned earlier, is because of 1, the headcount increase that we have done. Also some of the on-site investment that we have done in the people, sales, subject matter expertise. Also remember that while we have a benefit from the exchange on the revenue side, but for the on-site headcount, there is also a cost impact that comes from the exchange, you know, exchange movement during the quarter compared to the last quarter. We have certain new contribution plans that we have started in the US geography, which, for which also cost got added in this quarter. Those three, four factors added to the cost, you know, from when you compare from the last quarter. Got that. Other expenses, line item has been quite volatile over the past three quarters. Any sense on what's the sustainable basis number there or, is it expected to volatile in the near term as we see it? If you see the last three quarter, you know, after quarter two and quarter one, quarter one of this financial year, you know, when the COVID related lockdown started to open. We had to, you know, open back the offices, travel started again. There will be, you know, slowly that cost started to come back. As people started to come back, we also need to, you know, set up the facilities. There are certain increase in the discretionary expenses. On a quarter to quarter, there will always be event which will be very, you know, quarter specific, which may not have the cost in this quarter versus the last quarter. Most of the cost that was not there during the lockdown period is now back. Probably, you know, if you see the quarter, you know, quarter to quarter average, that would be the level of the, you know, operating. I would say the other expenses that where we will operate now. Sorry, you mentioned quarter to quarter three average. No, I'm saying last two quarter averages if you see. Don't take one quarter as a, you know, as a benchmark or basis, but take a couple of quarter to take an average as what percentage of, you know, our overall operations where we will run those other expenses. Got that. Got that. One question was to Manoj. Manoj, if you can catch up on the hiring outlook for next year and maybe based on the demands which you have in hand, how do you expect the revenue to shape up over the next couple of quarters? From a hiring perspective, in this financial year, we will be adding almost, I would say 2,000-2,200 odd headcount. That is the current plan that we have. Out of which, almost 1,800 or so would be the fresh grads that we would add. About 450-500 gross lateral, I mean, net laterals that we will add. That is the sort of headcount that we are looking. From a growth perspective, I think I've already answered. We definitely see in each of the businesses that we are, we see a good confidence of the opportunities coming back. There are large deals that we are signing, in the process of signing. There are a lot of discussions happening, you know, with customers. Yes, there is little bit of the macroeconomic uncertainty. I would say let's wait for a quarter and see how it rolls out. We are sitting out here today, we are fairly confident of, you know, the way forward. Got that. Just one if I can squeeze in. Offshore revenue has come off slightly in this quarter. Is it just a quarter phenomena or is there anything, any reversal you are seeing there? No, I think it's not significant. Yeah, it is very marginal. That kind of a movement between onsite and offshore, depending upon the project completion in a quarter will always be there. If you see that range of, you know, movement quarter to quarter, that is very insignificant. Got that. Thank you. Thank you. The next question is from the line of Urmil Shah from Ageas Federal Life Insurance. Please go ahead. Urmil Shah, the line for you has been unmuted. You may proceed with your question. Yeah. Thanks. Good evening, gentlemen. Thanks for taking my question. My question is a follow-up on the transportation business. Just to understand, you mentioned that there were a few decisions that happened in case of select clients. Was it towards the back of the quarter or it was more that one project got completed and the ramp up of the follow up time? Secondly, as regards to geography performance, US has been relatively softer in this quarter. Was it to do more with the auto business or it was broadly across the verticals? Lastly, as regards to the top five clients in the auto segment, how has the performance been specifically for the transportation segment among the large clients? Yeah. Maybe I can take that on behalf of Manoj. This is Nitin here. With respect to auto and the revenue ramp-up over the last quarter, it's a combination of factors. To some extent, like Manoj said, there are projects that have ended and the renewals and extensions have taken a little time in some cases. In some cases, it's about, I mean, including Alps Alpine and so on, you'll find that whole announcement was made on March 23rd, almost the last week of the quarter. Right. Because the inauguration was done on that time, and we have started to build up that entire center starting from then. You know, ideally liked to have had that announcement made in the 1st week of January and then got to building the business and ramping up revenues right from there. To that extent, I think nothing to worry. It's simply a combination of factors, but the path ahead is clear. Right? Moving to your second point in terms of U.S. For us, U.S. is far, far more secular. In fact, Europe is typically auto-dominated, while U.S. is a lot more media and healthcare. To that extent, that more or less explains the softness of it all. Right? And, was there anything else which you had, Rahul? The top clients or the transport verticals. Oh, I think they're doing extraordinarily well. Yeah. We don't see an issue there in the top five customers. Yeah. Sure. sir, just want to ask, which quarter should see a ramp-up of the deal? It'll happen over this financial year, right from Q1 to Q4. It is not going to be, you know. Step change. Step change, right from, you know, Q1. It will be a gradual ramp-up that will happen. Sure. Q2 is when. Sorry to interrupt. Can I please join the queue for the questions? Sure. Thank you. Thank you. The next question is from the line of Ajay Garg, an individual investor. Please go ahead. Ajay, the line for you has been unmuted. You may proceed with your question. Yeah. I believe, all the questions have already been answered, by the previous speaker, during Thank you. The next question is from the line of Tushar Bohra from MK Ventures. Please go ahead. Yeah. Thanks for the opportunity. Sir, first I would like to understand, you know, some of the initiatives beyond your top three segments, automotive, media, and healthcare. You have been ramping up on, you know, initiatives in defense, aerospace, maybe in a few other industries or segments. If you could give more qualitative comments, inputs around that. In a related question, you know, we're seeing a revival of manufacturing domestically, a lot of investing deposits coming up, EMS, semiconductor space, and so on. Does Tata Elxsi have a play in any of these areas, maybe in defense offsets, for example, or defense-related stuffs in India? Is there anything interesting things you would like to highlight? Lastly, I want to understand on the IT front, if there are any noted, you know, notable wins or any interesting qualitative comments on your IT side? Sure. Maybe on IT front, I would ask Nitin to respond. Yes, you know, apart from the three main verticals that we have, you know, we've really been focusing on our design, you know, business. Within the design business, really focusing on, you know, of course, consumer electronics. You know, manufacturing is an area that we have been investing in. You rightly said, in India, we see a lot of, you know, opportunities in the manufacturing space, especially with our Industry 4.0 and IoT solutions that we have. Yes. We are building that muscle, and we have some interesting deals that we have, you know, won over the last financial year, right? That's something that. I think that progress is pretty satisfactory, I would say. We're really not working from a defense perspective, but we really work with, you know, organizations like ISRO or VSSC. I'm happy to let you know that we have been involved in the Gaganyaan project, and we have done some very fantastic work there. Whenever, you know, time. I mean, I'm not sure whether we've already published it in our website and so on. Okay. At an appropriate time, we will definitely talk about that. It's a cutting-edge work that we have done, and we're very proud of the type of work that we have done for ISRO. On the, on the IT front, is there anything that you want to specifically talk about? Yeah. I think, Tushar, to that extent, there is nothing new to report in terms of our portfolio. We're building some, and we have some very interesting IP that we are investing in, especially that leverages AI significantly, whether it is to be able to do predictive maintenance and prognostics relating to automotive or otherwise, relating to battery technologies and being able to predict state of charge and advanced algorithms that power EV experiences. We are investing in AgTech, especially the recommendation engines and related content moderation and so on, where we see a lot of opportunities around how do you manage and automate the management of content that's being published on social media or in streaming video and so on. In that sense, there is very selective and very careful investments that we're making to develop some more or augment our existing platform and products with AI-based capabilities. There are some wins and there are some interesting, in fact, I would say a very good traction that we're seeing, especially with our IoT platforms, connected car platform. We're seeing some good traction with TEPlay, which is our widely with OTT platform, especially in emerging markets. I'm hoping that we can make some of these announcements, you'll actually see that also reflecting a little non-linearly in our revenues in the quarters to come. Thank you. Just quick follow-up on the question. By when do you think your non-top three segment performance will be reasonably large enough to report as separate segments? On the design side work that you're doing in these new areas, you mentioned manufacturing, industrials and so on, does it translate to work on the embedded side and, you know, longer-term commitment, or does it remain at a design-level kind of an engagement, get in, get out quickly? How do you? No, that is a, that is a change that we have brought about over the last, you know, four to six quarters, right. Where we have been pushing design as an entry strategy. Definitely our focus is to look at the downstream, you know, activities, including, you know, software, hardware development and, you know, end-to-end product maintenance and the life cycle of the product, right. That's how we have been, and what we have also done is to strongly integrate the design capabilities in our sales kit, right. That the sales team that goes ahead, you know, talks, you know, from design perspective. I think that has actually also helped us, you know, mine our existing customers and also, you know, open new logos for us and that is a very strategic move that we have done. You know, definitely in the quarters to come, that's something that will help, you know, move, you know, both top line and bottom line for the company. Thank you. The next question is from the line of Rajesh from Zenith Financial Services. Please go ahead. Yeah. Good evening. Thanks for the opportunity. I just want you to check, like, do we have the capabilities or, you know, do we have any plans to work on the something like a geospatial technologies? Because somebody mentioned about the aerospace and defense sector. No, we currently are not focusing on that. We don't have any plans in time to come? No. It is a very, very niche area that we really are not... At this point in time, we're not even thinking about it. Okay. Apart from the three segments, you just mentioned that you are also working on some other manufacturing and other segments. How soon or when can we see appreciable reporting of revenues from the other segments? Yeah. Whenever we reach a size that we believe, you know, we can report and we can sustain that particular thing, right? That is when we will talk about it. We don't want to pressure ourselves by giving you a number or a timeframe today and, you know, and then... We will take it whenever we are confident we'll come out and- No, somebody is taking a long-term view, say three to five years. When can somebody see that change happen? Definitely in that timeframe you will be able to see. Okay. Wonderful. Thank you. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Sanjaya Satpathy from Ampersand Capital Investment Advisors. Please go ahead. Yeah. Sir, thanks a lot for the opportunity. You mentioned that you're fairly confident of the transport vertical growth, which will be something similar to that 25%-30% kind of growth that we have seen in recent years. At the same time, there was bit of a slowdown in Q4. I mean, you have tried to explain it, but just want to understand that when we will start seeing the acceleration in that vertical in sort of revenue. No. You will definitely start seeing that, you know, as we close the deals and, you know, there are definitely, you know, large deals that at this point in time that we are bidding and, we have been, you know, shortlisted and so on, right? It's a question of when the paperwork is done and when we'll be able to, you know, get into a billing situation and so on. What we were expecting some of the deals to close, maybe early part of Q4, and some of those have got deferred. I think, you know, we are in active pursuits in many opportunities, I would say the funnel is pretty strong. Yeah, there have been some delays due to the market situations and so on. I'm really not that concerned about it. We will definitely recover, you know, moving forward. Yeah. Sanjaya, I think, simply put, we should pick up speed. Understood, sir. Considering that, you maybe, you have already managed to get lot of orders, so basically, FY 2024 could be a year in which there will be more balance to it. Is that what you will say? That's what we are hoping for. You know, essentially, you know, we want all the engines, you know, to start firing, right? Yeah, we've had some weaknesses in the last financial year in three of our verticals. Over the last few quarters, we've been working hard to really, you know, put in steps to really get back to a growth path. I hope we will see that those results, you know, in subsequent quarters. Thanks a lot, sir. Thank you. The next question comes from the line of Karan Uppal from PhillipCapital India. Please go ahead. Thanks for the opportunity. Firstly, on transport vertical. On the SVB related deals, any sense of the range of the deal size? Because one of your competitor has announced 2 deals which are in the range of $150 million-$250 million. Anything which you can give a sense on. Secondly, you have spoken about transport and broadcast, but on healthcare, any outlook which you can provide for FY 2024? Yeah, on the deal sizes, yeah. You know, the deals that we have also closed are multimillion dollar deals. Definitely, yes, the opportunity exists. You, if you look at it, we bring very, very strong domain capabilities in this area, especially on cloud and, you know, DevOps and IoT and so on, right? This entire, you know, what do you say, software-defined capabilities that we have built over so many quarters, right? I think we are pretty confident on the deals that we have picked up, right? At the right, you know, margin levels for us, right? I think that's something that we will be very, very careful. I've, you know, and again, most of the deals that we have picked up are offshore-led, right? Which means, we are not really looking at on-site-led business. Most of our deals are offshore-led. Yes, it will take a little while to show in terms of revenue growth and so on. I think we are on a very, very good wicket and very good path to take the growth forward. Right. Karan, I think the second question was on healthcare and the fact that we have not made. Yes. any commentary. I think I would simply put it this way. If you look at it's been on a great path, and suddenly you, in a quarter, you had a setback of one part of the business just vanishing or rather diluting because of pre-regulatory deadline change. Especially what happened was, some deals are supposed to be delivered in four quarters was now allowed to be delivered over 16 quarters. Which means that the TC doesn't change, but an entire business now gonna be spread over 16 quarters. I think the healthcare business has done extraordinarily well in my opinion, not only to recover, but also to find different customers, different work within existing customers, that has nothing to do with regulatory that allows you to recover. For me, I think the great plus point, the 1%+ return back to growth quarter-on-quarter from previous quarter, which officially sets the pace for new customer additions and new business. I, in that sense, we are very, very both happy as well as bullish on healthcare. Now, maybe there's an early quarter more of speed that needs to pick up, but long-term. Yeah. Yeah. It's a long-time, long-lead, you know, business. It takes a lead time to really, you know, convert. I think we are working very hard on that. Sir, just to understand, you are saying that healthcare might grow lower than the company average, while transport may grow higher than the company average. Based on whatever comments you have made, this is what I can conclude. Maybe you can correct me. No, we are not making those statements. You are putting words in our mouth. Okay, sir. Thanks. All the best for FY 2024. Thank you. Thank you, Karan. Thank you. The next question is from the line of Urmil Shah from Ageas Federal Life Insurance. Please go ahead. Yeah, thanks for the call. Just on the supply side front, Manoj sir, you had mentioned that, you know, at least on the auto front, previous quarters, had there been more relevant accounts, growth could have been better. So, going into FY 2024, is the supply side easy? And it could be also a lever for margin. And part of your question is- You just, you know, as it is your voice is also breaking and, you know. Thank you. Supply side, yes, definitely I would say supply side is easing out a little bit. As compared to maybe a couple of quarters, I think we are in a better position. We have actually built up bench strength, right, which is significant. We have been investing in people over the last, I would say three to four quarters. We'd have seen, you know, even from an account perspective, we have been investing. I believe we have a healthy bench available today, and we'll be able to, you know, use that bench to really deliver the growth, that we are planning. Yeah, I think from a supply side, at the critical resources, we still, I mean, SMEs and so on, we still have, we could do definitely if we had more resources, we'll be very happy. Having said that, we are in a better situation as compared to 2 quarters ago. Sure, sir. Sir, as regards the wage cycle for this year, we should be following the normal cycle? Yeah. Yes. All right. Thank you. Thank you and all the best. Thank you. Thank you very much. Thank you. We have the next question from the line of Vimal Gohil from Alchemy Capital Management Pvt. Ltd.. Please go ahead. Yeah. Thanks. Thanks again. Gentlemen, just one question on media and comms around 5G. If you could just maybe highlight, are you seeing this demand from 5G coming in from existing customers? Because, I think some of your, couple of your top five customers are big on the infrastructure vertical. Or are you seeing some of the newer, customers, embracing newer solutions around 5G? What sort of work are we seeing exactly doing here? Hi, Vimal. This is Nitin here. Maybe I'll take that. The two deals that we announced are actually two new customers for us. You'll find that in the deals that we announced, you'll find that there's a Middle East telecom operator who's deployed 5G and is now looking at monetization opportunities, both B2B as well as B2C. For us, that's a fantastic intersection because we are saying, look, the opportunities are gonna be with what can you do with logistics, connected cars, connected fleet. What can you do with connected and digital health. What can you do with media. For us, we are coming in as on top of 5G and what ties the industries that we are in and applications there from a monetization perspective. That's the telecom opportunity where you're on the side of the operator and looking at how to make money from 5G. The other deal, if you look at it, that we announced was with an absolutely world-leading technology company to build a telecom product company to build products that could go into the consumer homes for broadband and fixed wireless access. It's 5G on the in talking to the world, and it will possibly be Wi-Fi and so on in talking to the home. For us, these are completely new deals, completely cutting-edge work, and we believe this can be replicated very, very well across both new customers as well as existing customers. To that extent, there are conversations going on. There's somewhat work going on with existing customers. I think these deals represent great opportunities to replicate. Understood. Thanks. Thanks, Mithil. Thanks a lot. Thank you. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir. Yeah. Thank you, everyone, and, you know, really look forward to seeing you again in beginning of Q2. Obviously, we definitely hope that we'll be able to deliver, you know, better results to you in this quarter going forward. Thank you so much, and have a good day. Thank you. On behalf of Tata Elxsi, that concludes this conference. Thank you for joining us. You may now disconnect your lines.