Ladies and gentlemen, good day and Welcome to Tata Elxsi Limited Q4 FY2025 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I will hand the conference over to Mr. Shashank Ganesh from EY. Thank you, and over to you, Mr. Ganesh. Thank you very much. Good evening to all the participants in the call, and good morning if you're joining us from the Western side. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. Therefore, it must be viewed in conjunction with the business risk that could cause the result performance or achievements that differ significantly from what is expressed or implied by such statements. To take you through the results and answer your questions today, we have the senior management of 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. Kaveri Shiran, Company Secretary. We will start the call with a brief overview of the past quarter by Mr. Raghavan, followed by a Q&A session. We would appreciate your cooperation in restricting yourself to two questions to allow participants an opportunity to interact. If you have any further questions, you may join the queue, and we'd be happy to take them forward. With that, I would like to hand over the call to Mr. Manoj Raghavan. Over to you, Manoj. Thank you, Shashank. Good evening and good morning to everybody who's joining us on this earnings call today. For the fourth quarter of FY2025, we reported an operating revenue of INR 908.3 crores and a PBT margin at 23.3%. We ended the financial year with a revenue of INR 3,729 crores and a PBT margin of 26.3%. The Board of Directors has recommended a final dividend of 750%, that is, INR 75 per equity share of par value of INR 10 each, for the financial year ending 31st March 2025, subject to approvals by the shareholders. Coming to the business, we reported a healthy quarter-on-quarter growth of 3.5% in constant currency terms in the quarter for our healthcare and life sciences segment. We have established a strong foundation for continued growth in our healthcare and life sciences business with the addition of 30 new marquee customers in the year and expanded capabilities and platforms in new growth areas such as sustainability and AI-powered diagnostics and therapies. Our automotive business witnessed challenges in the quarter as some OEMs and suppliers paused new program starts in the face of geopolitical and market uncertainties and focused on conserving cash. We also saw delays in ramp-ups planned for ongoing deals won in the previous quarter that we expect to resume starting Q1 2026. We won a strategic EUR 50 million multi-year SDV and software engineering deal with a Europe-headquartered global car OEM that will actually start ramping starting Q1 FY 2026. We are transforming our customer base with a continued shift towards OEMs and SDV in the automotive industry, providing us with a set of customers and a platform for our long-term growth. Our media and communication business saw some customer-specific issues in the quarters due to M&As and business restructuring, while the overall industry continued to exercise caution in R&D spend and innovation. I am pleased to report a strategic multi-year product engineering consolidation deal of over EUR 100 million with a marquee operator in the media and communications vertical. It is the largest single deal in our company's history. We also won a strategic $10 million consolidation deal with a global broadcaster for their streaming video platform engineering. Both these deals are with existing customers, and we have won against some of the best global competition. This, again, lends a strong foundation for the coming year as we bring back growth in the segment. Our system integration and support business is pivoting to value-added services and innovation-led products such as experience centers. It works with our design team to deliver the design and technology implementation to the prestigious BARAT Pavilion at the World Expo 2025 in Osaka, Japan, that was inaugurated earlier this month. I'm delighted with the international recognition for our design digital proposition with two IF award wins for 2025. We won the UX award for GameSense, our experiential solution that brings together UX design, AI, and digital technologies to deliver enhanced fan engagement and monetization for global sports and live events. We also won an IF award for product design with our next-generation racing simulator gear design for Turtle Beach, a leader in gaming technologies. Our design-led revenues have grown at over 25% in the year, clearly underscoring the strength of our design digital proposition. We are expanding our vertical presence with the addition of aerospace and defense, addressing emerging opportunities for space, unmanned aerial vehicles, software-defined systems, and indigenization in the sector. We are pleased to have been associated with HAL, Hindustan Aeronautics Limited, for the combat air training system, or CATS Warrior, an unmanned autonomous combat air vehicle which was displayed at the AeroShow in February 2025. We have signed strategic partnerships with NAL and Garuda Aerospace, and have been empaneled with two global aerospace majors and a new age eVTOL company. We continue to invest strongly in digital, AI, and GenAI technologies across our verticals, targeting efficiency and quality in product engineering and novel applications of GenAI combined with domain and design expertise to solve complex business, product, and engineering problems. Over 70% of our talent base is now AI-ready, and we have built a pool of over 500 specialists across domains and application areas. We enter the new financial year with a foundation for stability and long-term growth, led by the large deal wins, the continued confidence of our customers across the world, and a strong deal pipeline and a differentiated design-led proposition for innovation and product engineering. Thank you, and let's start the Q&A session. Thank you very much. We now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from Sulabh Govila from Morgan Stanley. Please go ahead. Yeah, hi. Thanks for taking my question. The first question is on the large deals that you've announced. Just wanted to check, especially on the consolidation deals, what's the net new component there in the media vertical? It's a multi-year deal. It's a three-year deal, so the net new component would be approximately 25%-30%. Okay, understood. With respect to the auto vertical, given that there have been changes globally with respect to tariff announcement, etc., some of our clients, especially the top client, have made certain announcements with respect to certain strategic changes that they are considering. Just wanted to understand, how does that have any bearing on the business that we do with them? Yeah, I think it's not just us, but I'm sure many other companies are facing the same challenges with our OEM customers, especially in the automotive industry, due to all these geopolitical issues and the tariff issues. Actually, in this quarter, we have seen a number of projects that we are working, especially with our top customer as well, in terms of project portals. We are hoping that over the next couple of quarters, we will have a lot more clarity on this. At this point in time, it's too early for us to have that clarity. However, with the new large deal wins that we have announced again today, we're really hopeful that those projects will ramp up, and some of these weaknesses will get covered up. However, we are in discussions with our key customers to really navigate this difficult scenario. Okay, understood. Understood. Just a follow-up there, and this is maybe both for auto and the media vertical. Given that there are multiple moving parts here, with respect to the current quarter, which we are currently in, how would you think about the visibility currently, given that there were certain pauses which were there and some deals which will ramp up? On a net-net basis, how should we think about the visibility that we have? Do you think that we can improve from the fourth quarter that we had and get into the growth territory, or that could be some time away? No, the entire focus of the management team is to ensure that we grow from Q4. I would say we have decent visibility and a lot of encouraging discussions with some of our key customers. We strongly believe that we will be able to grow back in Q1. Understood. Understood. Just one last question on the margins bit. The other expenses, they fell very sharply on a Q and Q basis. Just wanted to understand what led to that and what should be a sustainable number going forward. Yeah. Yeah, I will have Gaurav respond to that. Hey, hi,Sulabh, I think as this is a soft quarter and difficult times, uncertainty, we have been very disciplined in terms of some of the discretionary spend that we have been doing. Along with some of the other expenses, non-people costs, we have been very cautious in terms of how much to be spent and where to be spent. Most of that saving is coming from some of the third-party contractors, consultants, travels, the visas, and the office consolidation. Most of those savings are coming from those discretionary spend, which we believe can be avoided for the time being till the time we see the better growth on the top line. I think we put those measures into consideration and execution even before this quarter. Those have started to give us some better results in the quarter, and we continue to measure those as we move forward in the next quarter, in the next financial year. Understood. Thanks for taking my question. Thank you. Thank you. Next question is from Manesh from Axis Capital. Please go ahead. Hi, thank you for the opportunity. I actually wanted to clarify on a couple of things. Number one thing is that if I see your last three years' performance, you've had challenges in two of the three industry verticals. Automotive was the one which was driving growth. With some of these deal wins that you've announced in the current quarter, do you think we've begun to essentially reverse the course of declines that we've seen in the other two industry segments? That's question number one. The second question with regards to margins, once again, I would presume that some of the margin decline is on account of revenue weakness. As you are now saying that we should probably be looking at stability to improvement in growth from Q4 levels, does that mean that we should probably start to see an improvement in margins as well? Yeah, definitely. Margins would improve with the growth in business, right? I think one of the key reasons for the margin decline has been the revenue degrowth, right? Very clearly, our focus is to bring back the revenue growth, which will automatically bring back the margin growth. Regarding any of these industry verticals, we have announced large deal wins. Our healthcare business continues to grow, and we really expect that to continue to grow strongly over the next financial year. We've won some very, very good logos in the last financial year. For us, the focus would be really to go deeply and mine those logos that we have won in the last financial year. In the case of automotive and media and communication, the good part is because of the large deal wins, we will have stability in our long-term businesses. It is very important to really protect the sort of downside for us. These large deal wins give us that confidence. Now, we really need to go and see how we can mine these accounts and grow faster, right? Those are the activities that we will really focus. FY2026 will all be about growing back, getting that momentum back, and really focusing on these key deal wins that we have and really scaling them and mining them faster and better. Manoj, just a question with regards to whatever we've been hearing from some of your IT peers in the course of recent days. Typically, we have seen first half being seasonally strong, second half because of the calendar effect, and the usual finance tends to be weak. With the current backdrop, do you think we'd probably start slow and see an acceleration in sequential growth risk through the course of the year, or do you think it is difficult to essentially build that kind of a trajectory at the current moment? I think for us, these large deal wins would mean that we really need to start expanding the relationship right from Q1, right? Of course, Q1 and Q2 would be a lot because these are consolidation deals. We would need to take over from existing suppliers, and there will be some amount of investments that we would need to put in to really build that business. However, from Q2 onwards and subsequently, we expect the full value of the deal to come in play. For us, we would really expect that, look, we will see an accelerated growth as we move into the financial year. Sure. The last clarification question is, do we also miss out a trend in our typical on-site offshore mix as we consolidate some of our competition, as well as how should we be thinking about hiring now, given we've been trying to essentially keep costs in control and thereby, through the course of this year, we've cut headcount? Yeah, from an on-site offshore mix, I don't think we will see too much of a change because some of these large consolidation deals have also been focused on servicing them from the best-cost countries. Customers don't really want us to spend additional budgets by hiring people on-site and so on. The signature of the deals that we see moving forward are a lot more onto best-cost countries rather than high-cost countries. That is the signature of the deals that we see, whatever deals that we are closing. That aligns with our philosophy as well that we are traditionally strong at delivering offshore. We don't see a big change there in terms of either having a lot more resources on-site and so on. There could be some temporary blip as we take over and transition work and so on. In the midterm to long term, we would be at the sort of on-site offshore ratios that we see today. Sure. Any questions or any response on the headcount metrics as to how should we see that play out, given we've cut headcount for the quarter year and focused on improving utilization, etc.? Yeah, so we have, when we say cut headcount, right, we have natural attrition. We have not replaced because we have a very good quality bench that is available. We have been very, very careful to add laterals. Of course, we do add laterals also on a need basis, but we have been very, very selective in the type of people that we bring in. I think we would continue to be cautious over the next two quarters, I would say. Having said that, we will have a few freshers coming in this quarter and next quarter. From a lateral perspective, we will definitely be a lot more cautious. It will all be based on the business growth that we see. Sure. There is an up and a bent trend to improve utilization and service to so-called improvement in demand that you foresee over the next three to six months? Absolutely. Yeah, absolutely. Thank you, Manoj. Wish you all the best. Thank you. Thank you. Next question is from Arustogi from Lyman Asia. Please go ahead. Manoj, may I request an unmute to line and proceed with your question, please? Manoj, can you hear us? Did you know response? We move on to the next participant. Next question is from Ashwini Singh from Statco Fintech. Please go ahead. Yeah, hello, Manoj. Sir, as you must be well aware, there's a huge CapEx currently underway for semiconductor fabrication and assembly plants in India, the largest being from Tata Electronics, which is a promoter group entity. I'd like to understand if there's any opportunity for Tata Elxsi because I understand that Tata Elxsi is a leader in semiconductor space design, such as VLSI design, etc. Whether you're in talks with some of the semiconductor companies which are coming up, and if you look at some opportunities over there. Yeah. Of course, yes, we are in discussion with the companies that are planning to set up fabs and so on. Right now, they are in the factory setup stage and so on. There are discussions ongoing with these customers from a viewpoint of our design offerings. Also, our manufacturing and industrial port offerings, we are having discussions with them. It's pretty early from a chip design side because the focus right now is not really building new chips and so on. However, those are discussions that we are having. These are still early stages, I would say. We would definitely be interested to see how we can support the India semiconductor ecosystem moving forward. Tell me, quantify what kind of opportunity size you are looking at in the coming few years in this space. It is very, very, very early, I would say, to give a, what do you say, a business value. However, we are in close discussions with a few of these customers to see how we can be relevant to their plans, right? I think it will take at least another couple of quarters before we can formally get back and say, "Hey, what sort of value proposition we have for these customers," right? However, today, we are engaging with them. We are supporting them where we have capabilities, especially from the design side and the manufacturing side. Those are areas that we are focused on. On the chip design side, we are on our wait and watch, right, to see what sort of opportunities evolve, right, for us. Okay. Thank you. Thank you. Next question is from Hasmukh from Tata Mutual Fund. Please go ahead. Yeah, hi. Thanks for the opportunity. I just have one question around FY 2026 growth. I do understand that you do not provide guidance, but considering the weaker exit and acceleration of growth from Q1 onwards, would it be fair to assume that you will grow better than FY 2025 in FY 2026? That is the clear focus of the management team. We are a little more confident because of some of the deal wins that we have had in the last quarter. We have entire four quarters now really to scale up some of these deal wins. We are really hoping that we will be able to deliver better performance than FY 2025. Okay. Got it. Got it. Just one follow-up here. These large deal wins, are you witnessing any delay in ramp-up, or those are, let's say, getting started on time probably for you? These deal wins have been, we have been in discussions over the last four quarters. It is not that, finally, the deal, I mean, finally, the announcements are happening, and we are happy that we are seeing the light at the end of the tunnel. To that extent, I'm really happy that things are moving. We really don't see too much of delays moving forward because the customers also have the need and the necessity to ramp up and move quickly. Just financially, definitely, we will see a lot of revenue uptick coming in from these deals. Got it. Got it. Thank you a lot. Thank you. Next question is from Nitin from Green Capital. Please go ahead. Hi. Good evening to the management. My question pertains more as an investor. Now, obviously, there are some risk mitigation strategies that the management would have liked to undergo in terms of trying to change the revenue mix, maybe reducing U.S. exposure and increasing exposure to the rest of the world, China, Japan, or increasing exposure to India or to EU. Just wanted to get a sense of what the initial charts of feedback have been from some of the larger clients in terms of IT spending and some risk mitigation strategies towards that. Would love to hear the management thoughts. Sure. I think as you would have seen, the geopolitical situation with the tariffs and so on and with the war going on, we have, of course, seen Europe and the U.S., two large geographies, really showing a slowdown across both automotive and media and communication. Consciously, if you look at it, we have been really expanding beyond the two main markets. We are really looking at emerging markets, including India, Japan, the Middle East, Africa, LATAM, and Southeast Asia. We have consciously really expanded the bucket, expanded the markets that we would go into. I think we've had decent successes, I would say. Japan business grew pretty well for us in the financial year. Similarly, our India business really accelerated in the financial year. I think that gives us a lot of confidence that there are a lot more companies based in India now who really appreciate the design digital offerings. We have some wonderful successes in the Indian automotive industry. We work with all the major players, supporting them in a lot of the new product launches. A lot of the connectivity platforms that you see car companies launching in India have been powered by Tata Elxsi's Tether platform. There are a lot of interesting stuff that we are doing with India and India-based customers as well, right? Of course, GCCs are a strategic play for us. We have also seen an increase in the GCC business, both in our automotive as well as in media and communication and the healthcare space, right? I think for us, India and the emerging markets will continue to be an important market for us in the coming financial year as well. Yeah. The follow-up to that is, I do see over the year, in terms of the revenue mix, that the U.S. exposure has reduced from approximately 38% to 31%. India exposure has increased from approximately 16% to 19%. The rest of the world exposure has increased to about 5.6% to 8.3%. I am sure that there has already been a movement within the company to hedge a lot of exposure away from the U.S. and maybe reduce Europe and get more specifically into LATAM, as you said, or Africa or Southeast Asia or more towards Japan or East Europe. Having said that, is it so easy for a company to change the revenue mix so quickly, or does it take time, and does it take like a quarter or two lag? Or will you be also clear with the situation maybe once the U.S. clients are more clear, maybe after a quarter, as to what specific tariffs and taxes are applying and how their spending is getting affected? Because not everyone will be painted with the same boat. Just some thoughts on that. Yeah. These new emerging markets that we talked about, it is not a one-quarter play, right? We have been investing and actually building relationships, building local partnerships, building sales channels over more than four to six quarters, I would say. I think that is that de-risking strategy that we planned even the previous financial year has actually helped us now. I mean, nobody could have predicted the current geopolitical situation and the tariff issue that we are seeing, right? However, our strategy of expanding the universe of markets that we go after, right, has actually helped us in this particular situation. It's not been a knee-jerk reaction only for the last one quarter. This has been planned out, and it is that strategy of really looking out for new markets has really helped us in this current difficult situation in both the U.S. and Europe. Okay. Thanks a lot, Manoj, and all the rest of the management to go through this tough period. I hope we come out of this much better as we go across the year. Thanks a lot. Yeah. Thank you. Thank you. Next question is from Amit Chandra from HDFC Securities. Please go ahead. Yeah. Thanks for the opportunity. My question is related to the large deals in the media and communication vertical that we have announced. If you can throw some more light in terms of what is the tenure of the deal and in terms of margin, is the margin similar to the company average, or generally, the larger deals have lower margins at the beginning? Is it similar to that, and is there any rebudgeting also involved in this? Yeah. This is an existing customer, as I talked about. It's a three-year deal. Of course, since it's a consolidation deal, it is a deal that has been won over all the, I would say, all the major competition, global competition. I would say it's a very prestigious deal for us. It gives us the confidence. I mean, the confidence that the customer has placed on us, I think that is something that we really are very, very happy. Yes, as I said, since it's a consolidation deal, we had to be competitive from a pricing perspective. It definitely, I would say, comes at a competitive rate. The good part for us is it gives us that stability over three years. It is up to us now to see how we can leverage this deal and extract the margins. There are a lot of things that opportunities are there, including AI, GenAI, and so on, how we will leverage this to improve our margins. There is no rebudgeting in this particular deal. To that extent, we do not take any unnecessary risk with local and on-site that we have to rebudget some high-cost resources and so on. We do not have any of those challenges. Manoj, just to add to that point, I think with large deals also comes a billable deployment opportunity for us. With the quality of the bench available with us, that will definitely help us on our margins to move upwards from what we have seen in this quarter. That is what we said. I think the margin is a direct function of the top-line growth. Our focus is to get the growth back, and the margin, you will see, automatically start to get back to the normal levels. Okay. Also on the auto OEM deal, €50 million deal. These two deals, we have one-in-nine environment when there is a lot of uncertainty in the macros. Do you think that these two deals have been committed by the clients despite the tariff scenario and despite the ongoing challenge, or these factors did not impact, or maybe these were committed much earlier than the alternatives started? No, as I discussed in an earlier question, right, these are not new deals that come up just in the last quarter. Both these deals have been worked on over multiple quarters, right? It is whether the current geopolitical issues and tariffs have influenced this decision. I mean, I won't say that. The customers had to do a lot of, what do you say, internal negotiations. There are worker council-related issues. There are a lot of regulations that they have to be careful before they take this decision because this decision also involves moving a lot of work from high-cost locations to best-cost locations like India. There are a lot of sensitivities involved when you take such when a customer announces such deals. Naturally, it took a long time before they got all those internal approvals and so on. That is a deal cycle nowadays, especially when you look at large deals. Okay. Lastly, in terms of the deal to revenue conversion cycle, has anything changed in the last two weeks in terms of the revenue conversion, or is everything on track? No, I wouldn't say everything is on track. We've not seen any undue or any negative things over the last two weeks to make us cautious. Okay. Thank you and all the best. Thank you. Next question is from Debanshish Mazumudar from Swan Investments. Please go ahead. Hello. Good evening to the management team. I'm Gaurav Nitin. Thank you so much for taking the question. I have just only one question. If I remember the way you and some of your competition were describing the OEM situation last quarter and up to last quarter, it was like there were a lot of pressure in the OEMs' own business. Some of those pressures are structural, like not shifting to EV or Chinese putting pressure on European OEMs and stuff like that. In this quarter discussion, as of now, it is more seems to be related to tariff-related uncertainty, and it seems to be those OEM-related uncertainties are behind us. Is my understanding correct? Is it that in your way of it, or new order events or new deal events are giving us this kind of confidence? Yeah. There was just a remind me, and this is Nitin here. I think the points that were made earlier stayed because there is nothing that has changed in terms of China still being a very, very credible threat to business, and China as a market coming under pressure for a large part of the OEMs, global OEMs who traditionally have a large part of their revenues coming from that market, right? That does not go away. That still stays true. I think what tariffs have provided is an additional layer of complexity and uncertainty, right? That is where we have seen even further delays in terms of either decision-making or pauses in terms of ramp-ups that we have seen in deals that we already won. That is the pain. Why? Because we have built capacity. We have built bench. We have targeted it for the kind of business that we already won and seen. That, unfortunately, has come under a pause simply because of this uncertainty and therefore customer-related indecisiveness on starts and stops. The deal events, I think, in response to the previous question, are made in good cognizance of all the uncertainties and the tariffs and so on. Therefore, we do not see an issue in those starting off, ramping up, and going according to plan. In fact, some of the older deals are also hopefully coming back for ramp-ups, right? Just to address the point again, tariffs bring another layer of complexity. It is not that the previous issues go away. They stay. Even as OEMs are just starting to get their heads around those problems, I think tariffs have brought in another headache. Just look at it that way. Okay. Basically, if I what are you saying? If I understand that correctly, when are you saying that your FY 2026 has a possibility of FY 2026 will be a possibility better than FY 2025? Is it just because of the deal events that you have done already or the pipeline that you currently have availability? Is my understanding correct? Yeah. In general, I would say look at it this way. The fact that we have a fantastic customer base. We've been in this business for a long time. Customers continue. It's just a matter of whether all business renews, extends, and so on, and you have new project starts. On one hand, there are a set of customers like tier ones where we continue to see pressure on their business. Over the last two years, we've very strongly and smartly pivoted to OEMs, and they are now 70+% of our revenues. That gives you one level of stability and foundation for growth. Two is we're locked into LGV programs with a large number of these customers. LGV programs by nature are long-term. They are not project projects in that sense. That gives you stability from an annuity perspective. Third, I think the large deals provide an additional layer of confidence, which is that even as some projects ramp down, tier ones kind of slow down a little more, you have now these new OEM wins that are starting to layer on new revenue and growth. That itself is not the answer to growth, but it provides confidence for growth. Okay. Okay. Understood. One last question. Over the period of the last two years, at least, we have seen a significant pressure on our margin performance. Do you think that where we are standing today, is it kind of bottom end, is a very high possibility that we will turn back from here, or in our model for the next two to three years, should we build in a comparatively lower margin for Tata Elxsi as compared to what we have seen in the past? Hey, hi Debanshish. This is Gaurav. Hi, Gaurav. Hi. I think we are very confident that in our operating model and all the operating KPIs that are there in the organization, that we will bounce back on the margin. I think it is only the equation of the revenue and the growth coming back. We tend to believe that we will start to see a margin level start to improve as the growth comes back in the coming quarter. We do not see any significant change in the signature of how we have been doing our business, whether that is an onsite offshore mix or TNN versus fixed price. All those KPIs remain very robust. We have a good bench available. Utilization today is slightly lower to 70%. We have a good way forward to improve our utilization, and that automatically helps in terms of improving our margins without doing much of the hiring that would be required for some of the large deals that have been done. Our hygiene is also quite controlled, and that will not go up linearly in terms of the revenue growth. All those factors give us available for the company to improve our margins. We can see, while I cannot comment in the short to mid-term whether we will get back to our normal margins, but yes, definitely, there is a path, and there is a very focused approach from our side to get back to the normal levels of margins where we used to operate about one and a half to two years back. Just a small follow-up. When you are saying normal margin level, is it like 20%-30% kind of margin is the normal margin level in your mind, or it is something? Since you brought the point of margins two years back, I'm just circling it back to the margins level that we used to see about one and a half to two years back. Sure. Understood. Thanks, Gaurav. Thank you, Nitin. Okay. Thank you. Thank you. Next question is from the line of Mahir from Mahish Kumar and Company, please go ahead. Yeah. Good evening, sir. Thank you for the opportunity. This quarter, after a long time, we have seen a growth in the healthcare vertical. If you can throw some more picture on it, how is the growth looking at and the deal pipeline that you see forward? Because last one or two years were difficult for this segment, but now we have seen a pickup after a long time. Do you think that this kind of growth can be maintained in the times to come? Yeah. My name is Nitin here. Maybe I'll take that question. If you look at what hurt us for the last five, six quarters in the healthcare business, there are two fundamental causes. One was something called the medical device regulations, which is a large part of what we were doing in our regulatory services for the healthcare business. That was set for a certain timeline to complete. There was supposed to be a big volume of work that would continue. That suddenly disappeared because the implementation timelines were relaxed by another three, four years. Customers suddenly had the choice of saying, "Look, let's not do anything right now," or, "Maybe I will insource some of this so I have the luxury of time," and so on, right? That kind of put us on a revenue cliff, which was not expected. That was part number one. Part two was we had some very specific client issue somewhere in the middle of the year where the customer had a standard renewal coming up for a very large program that we're working on for them, very prestigious, very next-gen program. That was put on hold because of certain signatures that they saw, and that was not resumed. We actually have climbed over two big holes that we have fallen into, one a few quarters back, one a lot more recent in two-three quarters. I think the positive signs there are the fantastic addition of customers. That is the part number one, which is how do you de-risk your customer base? Because remember, this is a small business, not too many customers in the portfolio, each customer being deeply mined, but also, of course, creating a risk of a single customer failure. I think we have de-risked that to the largest extent. Two is I think our portfolio shifted significantly in the year to core product engineering, innovation, and AI, and that takes away the risk of regulatory. I think in that sense, I would say truly as we stand today and as we look at the year ahead and the years ahead, the healthcare business is in good health. We had an ambition of 20% of our revenues coming from this vertical. When do you see that happening, or do we have any visibility that maybe two, three years down the line that can be a possibility? Yes. I think that would be a good time frame because please note, we want the medium-term location automotive businesses to grow too. Right. Sure. My next question pertains to the automotive vertical. We have been talking of large deals coming in media vertical and all, but what is the pipeline of the large deal coming in the automotive vertical as we have witnessed slowdown in Europe and all those markets? After a certain time, people always look for cost cutting. Do you see those opportunities coming to us over the next year or so where we can transform the company from a certain level to the next level in the automotive vertical? Yeah. Maybe I can take that again, Mahir. Definitely, yes, because I think two or three things are very true. One is that unfortunately, you cannot relax on innovation. That innovation fundamentally depends on software and digital and AI. The fact that for these skills, there is no better place to come to than India simply because you do not have a talent base, and the talent base is going to be very expensive anywhere else in the world. If you're already under pressure on your revenues and your bottom line, and yet you have to execute on your strategic R&D agenda and innovation agenda, we believe India is well placed, and Tata Elxsi is best placed. That, I think, is the fundamental point that we are making about how we see long-term sustainability and growth in our business, right? Of course, we will see issues at times. There will be quarters where there will be either customer-specific issues or structural issues like tariffs suddenly being announced that shake the world and cause them to pause for a bit. In the medium and long term, we are very, very bullish on how we see automotive and our competitive advantage that we have in the automotive business. Okay. Earlier, we used to talk that the automotive vertical can grow up to 20% to 25% CAGR on a sustainable basis, but that has not happened. What factors would contribute to that, do you think? Because near term, I agree that there are a lot of challenges and all, but the 20% growth in the automotive vertical and with the kind of advantage that India has, that has not come to us. Some of our listed competitors have delivered a higher growth in the automotive segment. Just wanted to have your view on that. Yeah. So Mahir, there would not be a black and white answer to that. I think there are two parts to this. One, you'll see that a large part of competition growth would also have inorganic components. You have to note that we are very, very organic in the way we do business. Two is their margin profiles are substantially different. We have to understand that the quality of the business and the nature of the business is different. We are very clear that while we want growth, we also want margins, right? Therefore, we're not constraining ourselves, but we're ensuring that what we do is at a certain level of quality and a certain signature of business. Look at it as constraints, but you'll have to remember that both inorganic and the nature and quality of revenues are not options that we have exercised at this time. Okay. Last question on the what is the deal timeline which you have? Because earlier, we used to have a short duration deal. Has that changed over the last year or so? Last question with regards to the payout. We have a large cash on our book. Probably we can think to look at increasing the payouts in the times to come. Thank you. Sure. Our deal, I mean, our deal nature of deals have, of course, moved to larger, multi-year sort of deals, especially with some of the deal announcements that were made. I think those are all trended in a positive direction for us. Definitely, we'll take your point on payouts and so on. If you have noticed, we have increased the dividend payout, yeah, from INR 700% to INR 750%. Yeah, we will take note of that, Mahir. Thank you so much. Thank you. Thanks a lot. Thank you. Next question is from the line of Apurva Prasad from Franklin Templeton. Please go ahead. Yeah. Hi. Good evening. Question that I have is on the automotive side. Actually, it's even beyond auto. How would the annuity mix have changed, let's say, over the past years and now across different verticals? Generally, what is being done to increase the annuity mix? I think at least Apurva, from the top 10 customers, if you look at it, a lot of the top 10 customers are, I mean, we have moved from a project-based engagement to an annuity-based engagement. While in ER&D, some of these annuity-based projects definitely will span multiple years, 18 months, 24 months, and so on. Having said that, the current situation in the market and so on, sometimes customers also take decisions of cutting off some of the long-term deals and so on, right? In general, though, the annuity profile has increased, but there's always a risk that we carry that, look, even though there is a confirmed business that we have for two years or three years, a lot of it is also dependent on the macroeconomic situation and the financial situation of our key customers, our key automotive customers, right? In general, I would say yes, the annuity business, I would say the component has definitely increased for us. At the same time, it doesn't mean that, look, there are no risks. Where would that number be, Manoj now? We should be around, I would say, around 45%-50%, Apurva. Okay. Also on the GCC support, broadly, trying to understand how is the current mix of business around services around that. I mean, if more such deals happen, is there a margin implication over the medium term? Yeah. I think we are very, very careful and strategic about the type of deals that we do, even with GCCs and so on, right? Beyond the fact that we have a large bench and we have resources that we can deploy. At times, we do take those strategic calls, right? Especially if you have a junior resource pool, we are not so focused on the margin profile in some of those deals. Having said that, we also limit the number of such deals that we go after. If you look at the India business, it is not only GCCs, right? We also work with some of the OEMs and other product companies that are based out of India. I think the deal, the margin profiles are pretty good. I mean, to that extent, I think we have managed the overall portfolio of Apurva. We are not going completely into the low-cost sort of deals. Got that. Got that. Manoj, with that said, how are you thinking of, let's say, medium-term sustainable growth levels for the company? I think from a medium term, I think we are in a very, very good position, right? The short term, yes, we will continue to see some of these challenges and so on. From a medium-term perspective, in all the three verticals, I believe we represent the best offshoring or best-cost destination for a lot of our customers, right? It is not just only best location for just manpower augmentation and so on. The processes that we have put in place, the ability to take outcome-based deals, the internal processes that we have to deliver on the margins, they are fantastic, I would say, capabilities that we have built in. I think from the midterm to long term, we are very confident of our business model and the team that we have and the capabilities that we have built. Thanks, Manoj. All the best. Thank you. Next question is from the line of Chirag from Ashika Group. Please go ahead. Chirag, may I request you to unmute and proceed with your question, please? Hello. Am I audible? Go ahead. Yes, you're audible. Yeah. My question is on pricing front. As the environment is very uncertain, and even our clients also know that the tariffs which are uncertain is there, and the acquisition cycle will remain challenging in the latest indeed. How is the pricing dynamics working in such an environment? Is it weaker than what we used to have in the bottom side for things? I would say for the next-gen sort of capabilities that we have, the digital skills, the GenAI skills, and so on, I think we still are able to work on a pretty good pricing and really maintain our margins and so on. However, as I said, in case of some large consolidation deals, where there is immense competition, 12-15 companies bidding for a deal and so on, yes, there will be some amount of margin pressure. I think that is something that we will manage. Overall, I think, especially for the areas that we are focused on and the capabilities that we have built, I think we still are able to extract a good pricing for us. If I look at your annual growth in GC terms, if you can provide what percentage you have done because of the price increase or mixing of? This is Gaurav. In terms of the price increases, consolidation, it's a mixed pack over the year. I mean, there are cases where we have received the price increases also, but at the same time, there are newer projects, large consolidation deals where we also need to pitch the competitive rate. To put up a number as a subsegment of our constant currency growth over the year would be a difficult thing. There are good rate increases that we have received in some of the customers during the year. While we cannot quote the numbers there, wherever we see an opportunity, we go back and depending upon the differentiated skill, value proposition, and the kind of the work we do with the customers, going up the value chain. We go back to the customer, ask for those rate differentiation and the premium pricing for those. Okay. Thank you. Thank you. A request to all the participants, kindly restrict to one question per participant. We take the next follow-up question from the line of Debanshish Mazumudar from Svan Investments. Please go ahead. Yes. Thanks for the follow-up opportunity. Sir, while we talked about the expectation of FY 2026 being better than FY 2025, which verticals would drive the growth here amongst media communication and transportation healthcare specifically? What I'm trying to understand is, as we sit right now, what sort of visibility in terms of the pipeline and the deals in hand, what would drive the growth in the next near term or the next year? I think growth definitely will come in both from our transportation and the healthcare and licenses business. A media and communication business, of course, also would grow, but the confidence level is higher for me from the transportation and the healthcare and licenses business. Understood. Understood. One last question, quickly. In the investment deck, you have talked about a new vertical which you are making investments in and you are trying to scale up. Where are we in that investment cycle or the skill development, capability development on there? When do you expect it to become a sizable part so that you start to report it separately and it starts to add to the total number? I think we have been building the aero and defense vertical, I would say, over the last couple of years now. We've built a very good technical team, capable team. We would definitely hope that in this financial year, we will really be able to report revenues. The good part is we have had some empanelments already among some major customers. We really hope to convert some of that into revenues and win some large deals and make those announcements in this financial year. Okay. Okay. Thanks for the context, Manoj Thank you. Next question is from the line of Jaya Jain from Mastery Investments, please go ahead. Thank you for taking my question. I have one question. Is China a competitor in our international offerings? No. I mean, the Chinese companies are pretty strong in the domestic market. But given the current situation within China and the U.S. and China and Europe and so on, at least in the major markets, we do not see them as competition. There used to be some amount of competition in the Japan market. But again, because of geopolitical issues between them, we see a lot of Japanese companies also planning a move from China to India and so on. I do not see them too much as a challenge in the international market. But definitely in the local Chinese market, they are very, very competitive. As a follow-up on that, will China start looking more at these kind of projects overseas because of tariffs that are coming? Sorry. Listen here, Jaya. I mean, the question if you can just. No. Because of these tariffs. Services and. Services are not subject to tariff, right? Will that change their approach to international business? No, I don't think so. Maybe I'll put it slightly differently. Services are never subject to. Yeah. Irrespective of that, they could have always competed with us in the U.S. and Europe and in other countries. We really don't see too much of them in the market as we saw. Okay. Thank you. Thank you very much. Can I hand the conference over to Mr. Manoj Raghavan for closing comments? Yeah. Thank you, Shashank. It was wonderful to have you all in the call. Of course, the industry has been going through some tough situations. I am pretty confident with the deal wins that we have had. I think for us as an organization, we strongly believe that FY 2026 will definitely be a much better financial year compared to FY 2025. I hope to continue to see you in the next meet in the beginning of Q2. Hopefully, we will come with a good set of numbers. Thank you so much for the support once again. Look forward to talking to you again next quarter. Bye-bye. Thank you very much. On behalf of Tata Elxsi, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.