Ladies and gentlemen, good day and welcome to the TCS 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kedar Shirali, Global Head, Investor Relations at TCS. Thank you, and over to you, sir. Thank you, operator. Good evening and welcome everyone. Thank you for joining us today to discuss TCS financial results for the second quarter of fiscal year 2023 that ended September 30, 2022. This call is being broadcast through our website and an archive, including the transcript, will be available on the site for the duration of this quarter. The financial statements, quarterly fact sheet and press releases are also available on our website. Our leadership team is present on this call to discuss our results. We have with us today Mr. Rajesh Gopinathan, Chief Executive Officer and Managing Director. Hello, everyone. Mr. N.G. Subramaniam, Chief Operating Officer. Good evening, everyone. Mr. Samir Seksaria, Chief Financial Officer. Hello. Mr. Milind Lakkad, Chief HR Officer. Hi, everyone. Our management team will give a brief overview of the company's performance, followed by a Q&A session. As you are aware, we do not provide specific revenue or earnings guidance and anything said on this call which reflects our outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. We have outlined these risks in the second slide of the quarterly fact sheet available on our website and emailed out to those who have subscribed to our mailing list. With that, I would like to turn the call over to Rajesh. Thank you, Kedar. Good morning, good afternoon, and good evening to all of you. We are very pleased with our performance at Q2. Our revenues grew 18% in rupee terms and 15.4% in constant currency terms and 8.6% in dollar terms, reflecting the continued strength of demand for our services. Our operating margin for the quarter was 24%, an expansion of 0.9% sequentially and a contraction of 1.6% on a year-on-year basis. Our net profit crossed the INR 10,000 crore mark this quarter and our net margin was at 18.9%. I'll now invite Samir, Milind, and NG to go over different aspects of our performance during the quarter. I'll step in again later to provide some more color on the demand trends we are seeing. Over to you, Samir. Thank you, Rajesh. Let me first walk through the headline numbers. In the second quarter of FY 23, our revenues grew 15.4% YOY on a constant currency basis. Reported revenue in INR was INR 553.09 billion, year-on-year growth of 18%. In USD terms, the sharp fall of all currencies in our basket versus the dollar in Q2 resulted in a deflated reported revenue of $6.88 billion, a YOY growth of 8.6%. While the rupee appreciated 3.4% against the dollar sequentially, it appreciated 4.4% against GBP and 3% against Euro, eroding the benefit at the operating margin level. Still, this currency benefit, along with flatter workforce pyramid, improved productivity of fresh hires, helped mitigate the impact of normalizing travel and facility expenses and continued headwinds from backfilling and retention expenses. Overall, our operating margin expanded 0.9% sequentially and was at 24%. Looking ahead, we believe the supply side issues have peaked and should start easing in the second half of the year. Net margins were at 18.9%. Effective tax rate for the quarter was 25.76%. Our accounts receivable was at sixty-two days sales outstanding in dollar terms, down one day compared to Q1. Net cash from operations was at INR 106.75 billion, which is 102.3% of net income. Free cash flows was INR 100.62 billion. Invested funds as on 30th September stood at INR 592.9 billion. The board has recommended an interim dividend of INR 8 per share. Over to you, Milind. Thank you, Samir. On the people front, our earlier investments in capacity building and organic talent development allowed us to achieve our strong business growth with a relatively modest net headcount addition. In Q2, we added 9,840 employees on net basis, bringing our workforce strength to 616,171 as on September thirtieth. It continues to be a very diverse workforce with 157 nationalities represented and with women making 35.7% of its base. On the learning front, TCS clocked 11.7 million learning hours in Q2, resulting in the acquisition of 1.5 million competencies. Our FY 2023 fresher onboarding is proceeding as per plan. In keeping with our culture of being committed to our employees, we have honored all offers we had made and have onboarded 35,000 freshers in H1 and with 20,000 brought on board in Q2 alone. The TCS employer brand continues to shine strongly, helping us attract the best talent across the world. We launched the TCS National Qualifier Test for FY 2024 on August 15 and received an overwhelming response with 500,000 registrants, an all-time high. Industry-wide churn continued to be high in Q2. Our LTM attrition in IT services inched up further to 21.5%. That said, the technology job market, which had overheated in the last few quarters, has begun to cool off, and compensation expectations of new hires are also becoming more realistic. With supply catching up across the industry, the pressure to poach experienced talent is easing, so we should start seeing the churn settle in the coming months. Based on the monthly trends, we believe the quarterly annualized attrition figure has peaked in Q2, and should start moderating in the second half. Lastly, we continue to benchmark with the best employers globally for our workplace practices and policies. In Q2, we won more than 50 awards globally across various aspects of HR value chain, including our work towards gender equity. Over to you, NGS, for some color on our segments and products and platforms. Thank you, Milind. Let me walk you through our segmental performance details for the quarter. All growth numbers are on year-on-year basis and constant currency terms. All our industry verticals grew strongly in Q2. Growth was led by retail and CPG, which grew 22.9% after a similar strong double-digit growth last quarter. Growth is being driven by ongoing spending by retailers towards making their supply chains more agile and resilient, while improving the shopping experience for their customers. We've also seen an uptick in the travel, transportation, and hospitality sector, driven by increased investments in the resilient operations. Communications and media grew 18.7%, driven by investments around 5G and delivering personalized offerings to consumers. Technology and services vertical grew 15.9%, while manufacturing as well as life sciences and healthcare both grew 14.5%. BFSI, our largest vertical, grew 13.1%, powered by strong spending on cloud, data analytics, and customer experience. By geography, growth was led by North America, which grew 19.1%. UK grew 12.6%, while continental Europe grew 12.1%. Let me now walk you through the growth figures by geography. Among major markets, North America led with 13.6% growth. UK grew 14.5%, while continental Europe grew 14.1%. It's riveting that Latin America led with 19% growth in Q2. During the quarter, we celebrated the completion of 20 years of TCS presence in the region. In these two decades, our businesses across the region has grown significantly, catering to the local market as well as serving as a nearshore center for North American clients. Moving on to our products and platforms, they did really well in Q2. Ignio, our cognitive automation software suite, signed up 4 new customers and 3 clients went live during the quarter. TCS filed 2 patents around Ignio during the quarter and was granted 1. The market demand for Ignio-trained professionals continued to grow. The number of Ignio-trained professionals now stands at 16,398, while number of Ignio-certified professionals is at 6,984 to date. A large American technology company specializing in consumer electronics, software, online services, and mobile phone manufacturing extended Ignio AIOps event management capabilities to their supply chain. This eliminated duplicate alerts and processed the genuine alerts, giving SMEs more time to focus on real issues, thereby reducing overall resolution time. The tool has handled 25+ alerts since implementation, 33% of which are suppressed and 66% are triaged to operations as legitimate alerts. TCS BaNCS, our flagship product suite in the financial services domain, had 4 new wins during the quarter. One of the world's largest investment management companies based in the U.S., offering a broad selection of investment advice, retirement services, and insights to individual investors, institutions, and financial professionals, has selected TCS BaNCS for Wealth Management for their retail business. One of U.K.'s leading insurance organizations went live with TCS' insurance platform, migrating 2.3 million policies into TCS BaNCS platform this quarter. This is the largest ever policy migration in the U.K. life and pensions industry and a major milestone in the customer's simplification journey towards eliminating aging legacy systems. Our Quartz blockchain platform had 2 new wins and 1 go-live in Q2. Quartz has been selected by a large electricity provider in North America to establish a private permissioned blockchain to track and manage energy consumption and renewable energy certificates allocation among multiple smaller entities. The initial pilot will demonstrate the ability of blockchain to bring different entities together on a shared ledger and track the actual energy consumption vis-à-vis the contracted quantity, automate the issuance of renewable energy certificates using smart contracts, and enable real-time tracking of those certificates issued. In life sciences, our award-winning Advanced Drug Development suite had one new win. We onboarded a top five pharma major on our supply management platform, part of the CCT suite, to deliver real-time insights into patient medication adherence. TCS TwinX, our AI-based digital twin solution, continued to gain ground in various industries, helping clients carry out complex what-if analysis and take informed business decisions. In Q2, we had 2 wins and 3 go-lives for the TCS TwinX platform. TCS Optumera, our AI-powered retail merchandising suite, went live in two of our clients. TCS iON had eight wins in this quarter. We're seeing increasing demand and familiarity among educators for the ability to author question papers and auto or manually mark responses. In Q2, we served 150 assessment customers and administered 300 exams to around 6.6 million candidates. Over 1,170 corporates now leverage the TCS National Qualifier Test as their entry-level recruitment platform, and over 3,150 candidates have gotten placed till date. TCS MasterCraft had 23 new wins this quarter, including 10 new clients and 13 renewals. In terms of client metrics, these metrics are an important validation of our customer-centric business model. The customary practice has been to report these figures based on U.S. dollar translated revenues. In quarters with sharp currency volatility of the kind we saw in Q2, the print numbers of clients in non-U.S. dollar markets may get underreported due to currency deflation. Despite that headwind, we had good additions in every revenue bucket in Q2 compared to the year ago. We added 5 more clients in the $100 million+ band, bringing the total to 59. We added 10 more clients in the $50 million band, bringing the total to 124. We added 36 more clients in the $20 million+ band, bringing the total to 283. We added 38 more clients in the $10 million+ band, bringing the total to 455. 31 more clients were added in the $5 million band, bringing the total to 655. Seventy-two more clients in the $1 million+ band, bringing the total to 1,210. Overall, a very satisfying quarter from an operations perspective. Let me now request Rajesh to speak on the demand drivers during the quarter. Thank you, NG. Before I get into the demand drivers, let me spend a minute talking about the demand environment and mood among clients. Despite growing news flow around a possible economic slowdown across the world, the client concerns over how that might affect their businesses, we haven't seen any change in their spending on us so far. As you could see from the growth figures, demand for our services continues to be strong in Q2 across all verticals and all markets, even in Continental Europe and U.K., where the pessimism levels are at the highest. Project ramp-ups proceeded as scheduled, and we have not seen any delays or cancellations. Deal closures also remained strong in Q2. That is not to say that the deteriorating macro has no impact at all. Clients have become more cautious when committing to longer-term investments. Some of the larger transformation programs are being prioritized for projects that offer quicker wins versus those with longer-term paybacks. Many of our clients are also working on plans for various economic scenarios for next year. We have also seen some sporadic instances of delayed decision-making on new deals. Those apart, clients have been telling us that even if their business outlook changes over the next few months for the world, technology will be one of the last areas to be impacted. The big driver of demand in this quarter was the continued investment by our clients on cloud transformation. The scale, breadth and depth of our cloud expertise, deep domain knowledge, strong partnership credentials with the hyperscalers, and our portfolio of intellectual property on the cloud makes us one of the largest beneficiaries of this opportunity. We are now seeing client focus shift to execution of the client transformation agendas announced earlier, and this plays to our strengths. We have seen instances where clients are unable to leverage the flex capacity of their cloud until they shift a larger portion of their workloads, and they are seeking our help in accelerating that move. Further, many organizations which rushed to move their workloads to the cloud without sufficient planning and controls in place are now discovering that they are not only losing out on the economic benefits of the hyperscaler clouds, but are actually incurring higher costs than they did with their own data centers. Such clients are very open to our proactive proposals with our FinOps advisory offerings to help optimize their spends on the cloud. Our cloud orchestration services powered by TCS Cloud Exponent, our multi-tenant cloud delivery platform, help them seamlessly and optimally manage multiple environments spanning public, private, and hybrid clouds. We won several cloud transformation deals in Q2. For example, we were selected by a leading American biopharmaceutical company as a transformation partner to modernize their technology estate. We will build for them a next-gen operating model leveraging cloud, Agile DevSecOps, and cloud-native technologies that will help them enhance enterprise resilience, accelerate the pace of innovation, and improve the customer experience. In addition to the migration of workloads to the cloud, several clients engaged us in Q2 to architect advanced analytics, leveraging cloud-native capabilities to help them launch new products, understand their customers better, and deliver a richer customer experience. For example, for a large U.K. bank, we proposed a transformation solution entailing the design of an enterprise data fabric architecture that enables advanced analytics at scale, leveraging our deep contextual knowledge, portfolio of tools and accelerators, and hyperscaler cloud expertise. This will help the bank drive more personalized products and services, understanding the customer's financial needs at various life stages, and deepening relationships with customers, thereby propelling growth for the bank. Similarly, a leading American hotel and motel operator engaged us to develop an advanced analytics solution to help transform customer and agent experience by designing a cloud analytics platform that consolidates and harmonizes data from across their enterprise. The economic uncertainty is also resulting in greater interest from clients in our machine-first approach to transform their IT and business operating models. You might recall from my earlier commentary on this topic that this approach basically entails embedding AI and machine learning deep within an enterprise to create leaner, more agile, and resilient operations which can flex up or down depending on their business environment and whose efficiency gains can fund some of their front office transformation initiatives. We had several such wins this quarter, of which I'll mention only two. We were engaged with Xerox for their enterprise-wide business transformation journey to enhance their competitiveness and power their growth. TCS Cognitive Business Operations and Xerox Center of Excellence embarked on multiple transformation initiatives across the various business functions, including finance and accounting. The digital transformation program, powered by TCS Cognix, has automated the processing, improving speed, accuracy, and throughput. Its AI-powered dashboards and various analytical models equip the finance function with intelligent and real-time insights for decision-making. This has resulted in a positive impact on their cash flow, significantly improving operational efficiency and employee and vendor satisfaction. A European industrial tools manufacturer chose us to transform their service desk operations. We will leverage cognitive technologies and implement a leading employee experience platform for auto-healing of user issues and improving user experience. Coming to the third driver of demand, it is what we broadly classify as growth and transformation. What stands out in these engagements is the value of our deep contextual knowledge of our clients' business and technology landscapes and our highly collaborative inside-out approach to transformation. This results in impactful transformation solutions that don't face traditional organizational resistance to change and gets us much appreciation from the management teams. Let me illustrate this with three examples. We have been working closely for over a decade with a leading bank in North America that services the start-up and innovation industry. Our deep contextual knowledge of their business gained over these years has made TCS a trusted advisor to their growth journey towards becoming a large financial institution. To support their business expansion and effectively prepare them for a transition from a Category IV to a Category II bank, which was as required by regulators given their significantly fast growth, TCS helped them conduct a detailed risk and regulatory assessment and prepare a roadmap to meet the regulatory requirements related to liquidity, market, and credit risk. This entailed reimagination of the overall business framework for the treasury and capital markets swap dealer business for the bank. TCS led the discussions with the bank to define the target state business architecture, solution architecture, and implementation roadmap. We brought in actionable points of view, best practices, recommendations, and presented a tactical as well as a strategic approach to the solution implementation. As a business outcome, the real-time liquidity monitoring and management is expected to reduce the Nostro buffer for the bank by a greater than 40% and ensure compliance to enhanced regulatory requirements. The target reference architecture is expected to bring down the time to market by 10%-15%. Similarly, we are working with a large pharma and med tech company to reimagine discovery and development of therapies by blending science, data science, and emerging technologies, and have developed an advanced AI and model-based adaptive risk monitoring solution with a predictive engine to predict risk mitigation insights for clinical risk management. This solution was co-created with the client, is now part of the TCS ADD platform. We are also a strategic partner supporting the digital surgical platform for their med tech segment. The platform is in an early stage of evolution and has foundational capabilities of edge connectivity, analytics, and AI suite, with an objective to provide capabilities to launch specific use cases for connected digital surgeries. TCS has led the transformation of space range and display capabilities for Marks & Spencer, enabling it to improve customer choice while optimizing the range of products based on local consumer demand. This was achieved through automated data-driven range decisions and producing over 12,000 live store-specific planograms. By enhancing the accuracy of floor plans and equipment into the planogram fixtures, our solution ensured that the optimized display plan could be faithfully implemented in the stores. This transformation helped the members meet local demand, improve availability, and reduce waste and improve profitability, and align future business goals and the food retail strategies. Our deep domain knowledge is placing us at the heart of industry-level transformation across multiple industry verticals. One such industry that is going through a tremendous amount of technology-led transformation is the utility sector, at an industry level as well as at a level of individual enterprises. Almost every quarter, I've shared examples of transformation work we are doing in this sector. In Q2 last year, I had spoken about five-minute settlement solution that we have built for the Australian energy market operator that is helping now spur innovation in that market and lower costs for consumers. This time I want to highlight a transformation in the U.K. gas market. The U.K. energy regulator introduced a program for faster and more reliable supplier switching option for energy consumers with a new centralized switching service to facilitate competition and deliver better outcome for consumers. TCS worked with Xoserve, the central data service provider for the U.K. gas market, to design and deliver a complex solution that transforms core business processes like switching and contract creation, settlement, device update and maintenance, meter reading, billing, delivery and others, leveraging a leading hyperscaler ERP solution. TCS's deep domain expertise and technology expertise was critical in delivering the solution capable of processing 150,000 switches in under 30 minutes. The solution allowed the transition migration of 24 million U.K. gas meter data to enable CSS switching activity. The solution went live in Q2. With the new solution, the 14 days that it took to switch a supplier has now been reduced to one day. Similarly, last quarter, I had spoken about a Fortune 500 electric and gas utility that partnered with us to launch a new business model to generate new revenue streams based on home energy services. Let me share one more example along similar lines. ENGIE France, the leading utility retailer, is transforming its business model by expanding from a commodity-based business of gas and electricity to a new service-oriented model of smart home solutions offering to drive energy efficiency for the consumers and ensuring sustainability. TCS partnered with NG right from the conceptualization, design, and proofs of concept. Leveraging our deep domain knowledge and expertise in core ERP, we developed a solution for subscription in CRM with incentive and promotional management and integrated billing for service and energy commodity charges in a consolidated invoice. This offering has been launched in the market and has received a very positive response, improving customer satisfaction and growing market share for ENGIE. I'd mentioned in earlier calls that many of our G&T engagements are business model innovations. Let me share three such examples of business transformation solutions that went live in Q2. An American multinational conglomerate engaged us to build a comprehensive asset performance management solution that they market to their industrial and warehouse customers. The cloud-based IoT platform we built for them ingests real-time data from various assets and enables a new value-added services around improved asset visibility, monitoring capabilities and predictive insights, leading to improved asset performance, optimized operations, and increased plant availability and higher throughput for their end customers, and new revenue streams for our client. Ingram Micro, one of the largest technology distributors in the U.S., engaged us as their partner to power their pivot into e-commerce and achieve their vision to transform from a traditional distributor to a platform company that does distribution. We built them a new digital experience ecosystem platform connecting their customers, vendors and associates. It reimagines the customer journey, making it frictionless and highly personalized with conversational experiences and an AI-powered recommendation engine that enables intelligent bundled offers. Similarly, for Tapestry, Inc., a leading New York-based house of iconic accessories and lifestyle brands consisting of Coach, Kate Spade and Stuart Weitzman. They partnered with TCS to drive their omnichannel modernization, implementing order management for its brands to help increase net incremental growth and improve customer satisfaction. This partnership created a flawless omnichannel order fulfillment and improved customer journey experience. Overall, these examples give you a flavor for the kind of services and the kind of opportunities that we are able to address across our customer and market landscape. Coming to the order book, we again had a strong set of deal wins in Q2, amounting to a TCV of $8.1 billion. By vertical, BFSI had a TCV of $2.3 billion, while retail order book stood at $1.6 billion. The TCV of deals signed in North America stood at $4.3 billion. Interestingly, while the pessimism in the macro is possibly highest in U.K. and Europe, our order book is stronger in Q2 than in Q1. While the strength of our order book as well as the pipeline for Q3 is comforting. Given the volatility, we remain very vigilant and are staying very close to our customer clients. With that, we can open the line for questions. Thank you very much. We will now begin with 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. Reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead. Hi. Good evening, team, and thank you for taking my question. My first question was specifically around European geography and U.K. In this quarter on a CC YOY basis also we saw a pretty robust growth of 14%-15%, which is a higher growth compared to how we reported last quarter. One of our larger peers who recently reported also saw pretty strong growth in Europe, and they talked about double-digit growth in their November quarter as well. Given the fear around macroeconomy being pretty severe in that geography, what is driving this much stronger growth in Europe despite those fears? Is there some structural growth drivers which we are now seeing in the European geography, or the impact could potentially come with a lag? Rakesh, as we've always maintained and it has been borne out through the pandemic, technology is at the core of solutions both on the growth side as well as on the consolidation and optimization side. Technology here remains very core to business agendas for our clients across the full spectrum, across all markets also. We are benefiting from participating in that cycle. The macro, as I've also mentioned in our press event, it's very difficult for us to zoom out and comment on the macro level. We can only tell you what is going on on the specificity of the clients that we have. We are in no better position than you. You're in fact in a much better position than us to be able to take a call on the macro. This is what we see, and we are running with it. Individual customer conversations, opportunities exist, but caution also exists. I called that out last time also that executive conversations are people are talking about caution. We need to remain vigilant to see whether that will translate into the budgeting planning cycle for next year and what that implies overall demand. We'll have to play it by the year as it comes. Great. Thanks. That's pretty helpful. My second question was around heading into December quarter, which is usually seasonally weak. Are you getting any sense how the seasonality this time around will be? Could they be higher than usual seasonality or could be the usual seasonality? Any sense, interacting with clients, how they are looking at their next year budget? Any sense on that would be very helpful. Leaving aside the fact that Europe is in a fairly volatile situation and that this winter is going to be critical in Europe. Leaving that aside, our conversations with clients indicate a regular seasonality. We have had extensive client interactions. We hosted our North American clients in our annual TCS summit, and we also had a series of client events across Europe. Overall, I don't think there is any change to the seasonality patterns that we are picking up. However, everything is dependent on, as I said, I mean, this does not address the possibility of some severe shifts in Europe during the winter. Client interaction on next year's budget planning? Too early to take call. We don't know. I mean, we get to hear of it only in the second or third month of the year as it starts actually translating into projects. At this stage, we don't have visibility. As I said in the last time also, there is a cautionary stance that customers are talking about. They are talking about scenario plannings, and the scenarios are more weighed on the downside than on the upside. Got it. Thanks a lot for that answer, and wish you all the best. Thank you. The next question is from the line of Sandip Agarwal from Edelweiss. Please go ahead. Hi. Thanks for the opportunity and congrats on good execution and good numbers. I have just one question. Although, you know, it is very hard to comment on how things will pan out. Rajesh, is there any kind of caution which you are seeing in your discussions with the client, particularly from the U.S. geography? Because any issues in U.K. and Europe, traditionally, we have seen that, you know, the economic pressure generally results into some help for outsourcing because it is more cost-effective in the past. But that correlation doesn't show up immediately in the U.S. What are you seeing? Is there any kind of caution which clients are highlighting on the fears of recession or you are seeing any action into that direction when they are ordering or they are? Have you seen any kind of delays or anything which makes us more vigilant? Thank you. U.S., Sandeep, we have not picked up any threats in terms of caution. I mean, extra caution than what could be normally expected. U.S. is not showing anything particularly concerning. People are overall continuing to invest and normal seasonality should apply. Otherwise we are seeing a fairly strong environment in U.S. Okay, thanks. That's all from my side. Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Hi. Just a question, Rajesh. Last time, in the Q1 FY conference call, you said that the trend of multi-tower outsourcing deals or multi-service transformational deals are going up, and you started signing more number of such deals. Is that trend continuing in this quarter as well? Also with macro being concerning, do you witness this trend being higher in Europe as a geography versus that of the US? I'm sorry, I don't specifically remember exactly what I said, but let me abstract and answer this. Operating model transformation as a demand driver is a very, very strong trend, and we are seeing multiple opportunities across all markets on operating model transformation. Operating model transformation is being characterized by a few very distinct ones. One is the shift to what we call as a vertical operating model or a product-centric operating model, where tech and ops is being aligned very closely to business units and to business outcomes, so that they operate in what is known as a product-centric model or the vertical model that I spoke about. The other big one is of course the adoption of Agile and Lean into everything in operations. Even more importantly, significant leverage of our Cognix platform, which is powered by MFDM. The embedding of automation at a granular level across the enterprise's operation suite, both on the tech side as well as on the operation side, is also core to the operating model transformation that we're seeing. This kind of, you know, enterprise-wide operating model transformations continue to be a big driver of demand. The couple of examples that I had shared, Xerox and one of the others, are examples of that. That demand trend, I think, is quite strong and will continue to remain strong into the foreseeable future. Okay. Just in terms of is it fair to say in terms of what you said in earlier question, in the second half, seasonality could be normal, especially in the U.S.? There could be some issues in Europe, and there could be significant shift, if the macro issues goes more concerning versus what you anticipate now. Is it a fair assumption? It's a prudent assumption. From our side, we will remain focused on the opportunity on the ground, and we'll deal with it one opportunity at a time. At an overall level,, it would be prudent to assume so. Last question, Rajesh. To CFO as well. In this quarter, is there 100% variable pay being paid or there's some adjustment looking at the macro issues and could be an impending slowdown, especially in Europe? This is Milind. We are going to pay 100% of variable pay for 70% of our employees. The remaining 30% will get paid based on their business unit performance. Okay. Milind, this is for 2Q or this is for the rest of the FY 2023? No. This is for this quarter, Q2. Okay. Thank you, and all the best. Thank you. Reminder to the participants. Anyone who wishes to ask a question may press star and one. The next question is from the line of Ravi Menon from Macquarie. Please go ahead. Hi. Thank you. Gentlemen, congrats on the margin improvement and the good revenue performance. Wanted to check about, you know, the strong additions in the $1 million and $5 million. I know that you did make an organizing change, but I guess that is, it's too soon to see the impact of that. Should we think of this as, you know, a change in your go-to market and trying to close a lot more of these smaller deals? Is there more demand for digital transformation from the smaller firms because they might be laggards in this transformation? No, Ravi. This is just a bit of the impact of the currency volatility that you're seeing. Our client metrics in non-US markets, APAC, LATAM, parts of Europe, et cetera, are more weighed on the smaller-sized customers. When we report those revenues in US dollar terms, they are getting significantly impacted by the strength of the US currency vis-a-vis the local currencies in these markets. Though our business with these firms is not going down, the translation of that when we report it in US dollar terms is showing up. That, you know, at the bottom of the pyramid, the impact is a lot more because the non-US markets are more concentrated at the bottom of the pyramid. It's a bit of a mathematics. We are also internally debating what is the best way to maybe communicate this metric. We also don't want to react majorly to this extreme cross-currency volatility that we saw. We'll put our heads together as to how to communicate this better in the future, if required. Okay, thanks. How should we think about the net hiring, you know, being a little lower than the revenue growth? Is this a reflection of your expectation that the worst of the supply side challenges are behind us and we can now improve utilization? Should we think of this as linked to slightly softer demand visibility or maybe a combination of both? Ravi, your question was about the headcount growth, right? That's a little lower than the revenue growth. I mean, this, we have seen that the- Ravi, we have been significantly investing into headcount addition through the last year. As you know, our headcount growth was close to 20% against revenue growth of about 15%, and that we have built up a fair amount of headroom. You should expect that we will be you know, using that lever a bit more as we go into this year and try to balance our overall headcount to our overall revenue from a longer term perspective. It's in line with our plan. Into that environment, we have significantly invested, and we are now reaping the benefits of that investment as many of those early hires become productive into this cycle. Great. Thank you, and best luck. Thank you. The next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead. Hey, congratulations on a good set of numbers. Two questions. Firstly, is it fair to assume that the book-to-bill in Europe would have improved on a quarter-on-quarter basis, the commentary that you made, and how the pipeline replenishment has happened in Europe, after the deal wins concluded? We typically desist from giving you incremental metrics because then that sets up a trend. When you take Europe and U.K. together, it is, yes, the book-to-bill has improved. The actual growth of the pipeline is lot more than the growth of the qualified pipeline. You are seeing some amount of elongation of the deal pipeline between total pipeline and the qualified pipeline. Now, these numbers are volatile because it can change, you know, on depending on how the environment changes, but that's where we are. Got it. Secondly, last quarter you talked about revenue productivity getting impacted as you created capacity. Has that got sort of sorted out and you saw some improvement in revenue productivity, which also helped margins? Should this be seen as one of the levers for second half, you know, in terms of margin performance on revenue productivity side. Thank you. The way to think about it is not in terms of short-term margin lever, but we have strategically taken a call to significantly expand our employee onboarding, especially on the entry-level employees. We had hired close to 120,000 freshers last year and invested into that pool given the longer-term visibility that we see on the demand. We will continuously tweak our employee model on an ongoing basis looking at the demand. That is a reasonable expectation, but our overall hiring model is predicated on much longer cycle rather than short-term quarter-on-quarter adjustments. Got it. Thank you so much. Thank you. The next question is from the line of Manik Taneja from JM Financial. Please go ahead. Hi. Thank you for the opportunity. Just wanted to pick your brains about the aspect that historically what we've seen is that we've improved our margins through periods of slow growth. Do you envisage something similar playing out going forward as well? If you could also help us with the margin levers that you think we will play out in the near term, given the fact that you've suggested that price increases is not a unique component, it is still happening only in certain parts of the year. Thank you. You know, if we have strong visibility of low revenue growth, then we become much more careful and optimize it. I think at this stage, I don't think we are at that point for us to be able to make a comment on that. The margin optimization comes in more when there is good visibility on stable demand environments, and we use those periods to clean up on the margin side. Right now, whether we are at an inflection point or not, we'll know only in a few quarters time. Otherwise, we'll continue to stay in the growth and investment mode. Short-term margin levers, I will hand it to Samir to talk about. Okay. In the short term, between the quarters, we would expect to focus on our operating metrics. Utilization still continues to provide opportunity for optimization, and realization has improved this quarter, and we'd expect to still leverage further on that. We'd also enhance our rigor on execution and, as the headwinds start trending down, we should expect that to also support margins. Sure. Thank you and all the best for the future. Thank you. The next question is from the line of Apurva Prasad from HDFC Securities. Please go ahead. Thanks for taking my question. Rajesh, while H1 bookings has held up above the $7 billion-$9 billion midpoint, how should we be thinking of the bookings trajectory for H2? More around the replenishment of the funnel of the qualified deal pipeline, any progression around that. Apurva, difficult to say we are running at 1.2x book-to-bill, which is a fairly healthy rate to run at, and we can take a bit of volatility on that on a quarter-on-quarter basis. To take a near-term call on what will happen next quarter or the quarter after that, difficult for us to do. More importantly, it does not have a significant impact on our business model. Neither in our planning cycles or in our execution cycles. Our focus, of course, will be to maximize and capture as much as we can, but it's not really a big factor that changes any of our planning scenarios. Okay. Just to follow up on that, Rajesh. This 1.2 book-to-bill from a medium-term perspective, is that the number to build? I don't want to get drawn out on that. Right. On the supply side, Rajesh, any comments on the learning hours which had a decline YOY for Q2? If you could also help us with the hyperscaler certification numbers, the numbers that was 71,000 last quarter. Learning hours are to some extent impacted by the volume of freshers coming in. As you know, we had a very large volume of freshers coming in over the last couple of quarters, which has moderated over the last two quarters. That will have a flow-through impact on the learning hours. There's some amount of other impact also as we went into the reorganization that also had some impact. At an aggregate level, our focus on reskilling and training and investing into our people continues at scale and absolutely no change in it. the hyperscaler certification number? I don't know whether we give that out. If it is available in whatever forum it is given, you'll find it there. Okay. Thank you. Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead. Hi. Thanks for the opportunity. Can you give a little bit more color on products and platforms, which I understand is contributing around mid-teen kind of total revenue. Since we are moving towards more on SaaS migrating to SaaS business model. Has it got, I mean, despite good win, revenue recognition is bit slow and when do we expect that to catch up and what could be the margin lever in this business? Hi, this is NGS here. Overall, the product and platform business is quite stable and the number of opportunities that are coming our way across verticals and across solution segments that we have is looking good. The business model is certainly transformed itself into a pure play SaaS-based operating environment. Because without any exceptions, every opportunity that we wait for is on a SaaS-based offering. If you really look at it, you know, we have also transitioned, I should say beautifully from a licensed on-prem AMC kind of a model to a pay-per-use SaaS model for the past two years, right? All our products and platforms are now available on a cloud platform. Mostly, you know, it's either installed in our own cloud environment or in some of the platforms that we've also chosen to operate in a hyperscaler cloud. In either of these cases, I think the key thing to note is that the SaaS model is prevailing and the way that we monitor now is one of the ARR, essentially the recurring revenue that is contracted. That is the metric that we are monitoring and we are measuring our own performance as opposed to the earlier, what is the license fee, what is the AMC and what is the services element to it and so on and so on, right? It is maturing and not only the products and platforms itself is matured, but the whole environment of onboarding the clients on a single instance SaaS. Some of the things that we are seeing that look, the data privacy element, data localization element means that, look, we have to operate. You know, for example, in Europe, you know, the data residency increasingly is becoming a necessity to be located in Europe. These are things that, you know, are getting sharpened as I speak. But overall, you know, it's a good growing business. The ARR metric is going to become increasingly relevant. At some stage, you know, we hope that, you know, we'll be able to start to report it separately on an ARR basis as we mature our model. What are the margin levers in this business? Margin levers are, you know, essentially, you know, it depends on the volume of business, volume of transactions that they are going to put in. So it varies. I think the efficiency is going to come from the fact that we are not gonna be doing too much customization. People are going to be using the products and platform more as a cost model. So we don't have to maintain too many customer specific customizations at any point in time. That is going to be one level of efficiency that's going to come in. Consequently, our own support model, et cetera, is going to be heavily optimized and it's going to be a lot more standardized. Thirdly, you know, the product release cycles are going to be a lot more standard and we'll be able to define it rather than defined by customers at every instance. These are things that, you know, at an operating level I see. More and more is that as we add more optionality to the offerings in the sense that, look, you know, I can give you the standard platform, but there are certain value add services that I can bring in. For example, client reporting. Either customer can take data and then do it themselves or for example as a value-added service we can provide a client reporting separately or reporting separately or a certain amount of analytics. They can do it themselves or they can come and leverage our value-added services. So it's a standard service, value-added service. Efficiencies that come in lieu of a standard way of product management, product releases and upgrades. All this will contribute to the margins. Thank you and all the best. Thank you. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead. Hi. Thanks for the opportunity. Just on the sub-con side and on the global hiring side, if you could give us color. Sub-con cost has been going up, of course, for the supply side factor. Given the expectation of relatively better supply environment that is in the global market, is that going to change the sub-con cost as well as direct hiring outside India for- The question on global hiring again? Can you repeat your question, Rahul? The global supply side. Both sides. One, in general view on the subcontractor, how it should trend, if the supply side eases out eventually, and is there any result on the, at least in the global trend from a supply side challenge? Still didn't get it. What is it now? I'll answer first on the subcontractor cost. As you would have seen, subcontractor cost has started trending downwards, and that is most of it, the subcontractor cost increase was on account of two factors. The borders closed and with borders opening up and visa availability in most countries being more and more available, we would expect subcontractor costs to start trending down. Also, as the headwinds like attrition and probably the elevated backfilling costs eases down, we would expect the use of subcontractors also to trend downwards. Right. Will we be incrementally using it as a metric, you know, given the macro remains uncertain? Mr. Jain, please use the handset mode. The audio is not coming clear from your line. Is this any better? Much better. Sorry for that. Is it safe to assume that this may not go down substantially in near future, even if supply side eases out because it may be a good lever to in case of you know the macro weakens, this could be a good alternative to manage the demand and supply situation better, or it should ease out irrespective of it? We'll try to balance it and it would be a dynamic thing. If demand as it continues to be strong, we'd try to optimize and capture the demand first rather than optimizing the subcontractor cost. That's the lever which we know how to use and optimize as and when needs arises. Okay. Okay. Got it. Thank you. That's it from my side. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you, operator. We had a very good second quarter, growing 18% in INR terms and 15.4% in constant currency. Our growth was strong across all our industry verticals and all our markets. Importantly, we had a good order book once again. While clients continue to worry about the uncertain economic environment around and are planning for different scenarios, we are not seeing any material change in client spending behavior. There are some sporadic instances of delayed decision-making, but those happen at normal times too, so it's hard to pin this down specifically to the economic environment. Our operating margin expanded sequentially to 24%, and our net margin expanded to 18.9%. On the people front, the capacity we built up over the last few quarters and our investment in organic talent development is helping us meet this demand. Our attrition inched up to 21.5% in IT services on shifted LTM basis. However, we believe the situation is easing and that our quarterly annualized attrition has peaked this quarter and will start tapering off going forward. With that, we wrap up our call. Thank you all for joining us on this call today. Enjoy the rest of your evening or day and stay safe. Thank you. Thank you, members of the management. On behalf of TCS, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.