Hello, and a very warm welcome to the third quarter FY 2024 earnings press conference of Tata Consultancy Services. Thank you so much for joining us. I'm Kritika Saxena. We have our friends from the media joining in, in person in the TCS headquarters in Mumbai, and, of course, we have several stakeholders joining in on our social media platform. We are streaming live. I'll introduce the management first. We have MD and CEO, K. Krithivasan; COO, NGS; Samir Seksaria, our CFO; and our CHRO, Milind Lakkad. As always, we'll first begin with the MD and CEO address. K. Krithivasan, the floor is yours. Thank you, Kritika. Good evening, everyone. So this is a quarter where sustained growth momentum in cloud and cybersecurity practices and the emerging markets helped us deliver a strong, really strong results in seasonally weak Q3. Our revenues grew by 1.7% year-on-year and 1% quarter-on-quarter on a constant currency basis. Our rupee revenue grew by 4% to reach INR 63,583 crore. Our continued focus on operational excellence helped us achieve an operating margin of 25%, which represents a sequential margin expansion of 75 basis points. This translates to INR 15,155 crore of operating profit. Our net profit for the quarter has come in at 19.4%, translating to INR 11,735 crore. Again, this is an expansion of 40 basis points in the net margin. Consequently, our EPS reached 32.14 from 31 in Q2. So margin numbers, all the numbers actually that I mentioned, that we'll be discussing exclude a one-time charge of $125 million towards settlement of legal claim. Cash from operations at INR 11,277 crore is at 102% of net profit. The board has declared an interim dividend of INR 9, and a special dividend of INR 18, amounting to about INR 9,800 crore. This is in line with our practice of returning 80%-100% of our free cash flows back to our shareholders. Our customer metrics continue to improve despite seasonality and macro uncertainties. The number of customers from whom we make more than $100 million rose by 2 to 61 customers on a year-on-year basis. There has been good additions across all the other months. In addition, our customer base of $1 million+ also stands at 1,288, an increase of 71 customers over last year. Moving on to segmental commentary. The new growth markets of India, Asia Pacific, Japan, Middle East and Africa, and Latam had very strong growth, validating our approach of portfolio diversification. Especially, our revenue from India grew by 23.4% on a year-on-year basis. Among the major markets, U.K. grew by 8.1%, led by market share gains. North America had a degrowth of 3%, reflecting the overall market uncertainties. Europe has continued to grow on sequential basis and achieved a 0.5% growth on a year-on-year basis. Among the verticals: manufacturing, life sciences and healthcare, energy and utilities, and regional markets and platforms had a strong sequential growth. On a year-on-year basis, manufacturing grew by 7%, life sciences and healthcare by 3.1%, energy utilities by 11.8%, regional markets and platforms by 19.2%. As you can see, impacted by market sentiments, BFSI degrew by 3% and consumer business degrew marginally by 0.3% on a year-on-year basis. Our deal wins continue to be very strong. Our order book closure for the quarter stands at $8.1 billion. This has been achieved without the support of any mega deals. This represents a year-on-year growth of 3.4%. Our order book for North America stood at $4.2 billion, for BFSI at $2.6 billion, and consumer business at $1.5 billion. Our attrition continues to improve. On LTM basis, our IT attrition has reduced to 13.3% from 14.9% in Q2. Subsequent to the launch of our AI.Cloud business unit, we are seeing an increased traction in the marketplace. We are now seeing GenAI POCs pilots moving into production. In Q3, we had four production deployments of GenAI engagements. We have enhanced our partnership also with all the major players in this space. As an update on our R&D efforts, we have filed for 187 patents in Q3 and were granted 305. Our continued efforts in creating IP have been recognized with the Asia IP Elite Award 2023, for being an exemplar of IP value creation. With that, I hand it back to Kritika, and we'll open it up for questions. Back to you, Kritika. Thank you. Thank you, Krithi. We'll start our Q&A with Reema Tendulkar from CNBC TV18. Reema? Gentlemen, good evening, and Happy New Year to everyone. You know, great quarter, you know, despite all the, you know, tenuous external environment. Krithi, first, an overview of the macro environment. Would you say the situation today is better than it was three months ago? Qualitatively, if you can provide some color. And what are budget conversations looking like? And also, what is the growth ex of, India, the BSNL deal? And when do you expect your core markets, North America, you know, BFSI, et cetera, to recover? NGS, for you, the question is on deal wins. I remember last time you said that maybe the deal win run rate could be $9 billion-$10 billion. It's fallen a little short of that at $8.1 billion. Why is it that the industry itself has not seen mega deals? And also, if you could just give us an update on GenAI. You know, how has it changed compared to three months ago? Samir, if you could tell us... Sorry, 70 basis points, what led to the margin expansion? And, three quarters back, you had a target of hitting 25% as exit margins. You've done it this quarter. ... So what could exit margins for FY 2024 look like? And Milind, for you on attrition, it's in the comfort range now, so do you see it trending lower? Is that trend continuing? And even the, on moderation, why is your employee headcount moderated? Thank you. Thanks, Kritika, and Happy New Year to everyone. I think still we are not in a position to call whether this macro... From our perspective, situations has not, that hasn't changed much. There was a sense of optimism when the interest rates were not high, but it has not resulted in any ground-level certainty or decisions being taken towards new investment set. Maybe it will happen after some time. We'll get to know maybe as Q4 unfolds, but I think it's too early to call. We have not seen any ground change. On the budget question, we have, again, we'll get to know, but also increasingly, we find that we are placing far too much importance on budget because we feel that our clients take decision on a quarterly basis, and so it's more like a planning horizon on what they intend to do. But most of our clients have been very agile looking at the market situation, they keep changing. So I will not read too much into... Even if we get- Conversation now for the next quarter. We will get. Like, it's, it's not in a position to be calling out as it's growing or whatever. I would say it's probably more stable like last year. It is. Yeah. Okay. Also on Growth ex-BSNL and the core markets. You have the numbers, Samir? We don't call that a number out in terms of client-specific numbers, excluding that. So, growth of India, then, which is up 23%. That's the number we should look at, because it's popped up a lot. You could do the maths, it up. I think we can, we can go into the details, after. As I said, you know, like, the sentiments have been same. So we—I don't think we are ready to say that it will recover by Q4 or by Q1. We will not call that out now. Yeah. I think, you know, overall, the situation has not deteriorated from last quarter, right? Given all the things that we are all hearing from everybody, the fact that there is no deterioration itself is a very positive sign, right? Secondly, I think, you know, with reference to the deal wins, I think fantastic. $8.1 billion in this market, situation. We're very proud of our sales teams, our account teams. The fact that it has come without any mega deal support, and it has been pretty broad-based, so really happy with the deal that we have secured. Besides, the qualified pipeline that we see is actually increased after securing the $8.1 billion, right? So there is a demand out there, and that's something that we have to go and capture it as it matures. So I would say that we are pretty happy where we are with respect to what we have accomplished in this quarter, and how we see things emerge in the coming quarters, right. I will not read too much into BFSI degrowth as well, right? Because, actually, you know, if I look at the client portfolio that we have, the client portfolio actually has done well. Couple of large clients where we were executing large transformation programs, it got finished, we delivered them successfully. So we'll have to see how that pans out, you know, with these new clients, these new projects with these clients, you know, as they go through the budgets for this coming year, et cetera. So overall, I feel that, you know, comfortable that we have secured $8.1 billion worth of deals this quarter, right? The other question, I think, is GenAI. GenAI, I think as Krithi pointed out, I think it's moving into a situation where people are comfortable with it. They want to try out new things. They want to try out with very new areas across technology, operations and everywhere else. I think we have continued our focus on training majority of our workforce on using GenAI and coming up with innovative ideas of using GenAI to improve our own productivity and efficiency, as well as deliver projects in an architecture which can evolve on its own, right, using the GenAI thing. The possibilities that we see for the future using GenAI are enormous, and we only hope that it will realize its potential. So on the margins, Q3 margins at 25% are in sequential improvement of 70 basis points. The walkthrough of that is, in spite of headwinds of 80 basis points, comprising mainly from furloughs and higher third-party expenses, we were able to more than offset that with disciplined execution and operational improvement of 60 basis points coming in from productivity and realization. For the 70 basis points coming in from reduction in subcontractor expenses, and we got 25 basis points support from currency. And, as you'd know, this is, the 70 basis points is delivered on back of 110 basis points in the previous quarter. We don't give guidance, but, we hope the momentum continues. Reema, 13.3 is our comfort range. Very, very satisfying to see these numbers. Very proud of our entire TCS team to, you know, together come together and drive this number down to our comfort range. Whether it will come down further, I expect it to come down further. I expect it to come down further. With respect to your question on employee headcount, moderating, the answer remains the same. Actually, what I've been saying all along, that we have made a significant investment, and we made so much of hiring in the past years. We are continuing to, you know, leverage that investment today and driving business that way, and not needing to hire more. Anisha Jain from ET Now. It's just a little easier if you ask your questions one by one, easier to remember. Great, if you let me ask all my questions. Two questions, Anisha, as always. Sure. So let me start with Krithi, first to you. Last quarter when we met, you were talking about, you know, how the deal ramp downs have been there, in the sense that they weren't ramping up to that pace. Has that changed now in terms of the client billings? Has that normalized? And about North America, NGS has said that he is saying that, no bad news is good news. But are you a bit disappointed that North America is not recovering? Because, I mean, the commentary from Fed and the businesses have improved, but the sentiment clearly has not. What's your assumption of the timeline there? I'll wait by and then ask the rest of the questions later. Okay. First on see what we talked about last quarter also is, clients continue to reprioritize all the ongoing programs. And there is because of the market sentiments, the return on investment expectations are higher. So whatever doesn't meet those expectations, those projects get paused. And I don't think there's any major change in that, because as I said, there's no major change in the sentiment, like, at least on the ground. Am I disappointed? Yes, like, we definitely want to grow, like, we want to grow faster, and we expect that at least in the near... Our deal wins are good, as NGS has pointed out. We are winning deals, so we're hoping the medium to long term, it will recover. Okay, point taken. NGS, so are you hinting at $9 billion-$11 billion going forward in quarterly TCV or $8 billion-$10 billion? And this year, of course, the double-digit growth is difficult, but are you ruling it out for FY 2025 as well? Because at least the base is a bit more favorable, and if the pickup does happen, do you see a potential, a realistic potential of double-digit growth in FY 2025? Our goal is to go and win every opportunity that comes our way. So I don't want to put a number now, 8 point- 5 point- Of course, everybody wants to know the best, but realistically speaking, what do you, I think it's good. As I said, you know, we are extremely happy with the performance of our sales team, and $8.1 billion is this quarter especially, it's a great performance. The qualified pipeline looks good, and this quarter there's no mega deals, which means that mega deals are still maturing, right? So I think we are happy where we are, and I think, you know, wait to hear from us more, right? Any word in terms of double-digit growth possibility in FY 2025? Yeah, as I said, look, you know, this business, the opportunity is there, demand is there. There will be constraints like what we are facing today, and there are uncertainties. We have to weigh in all of this, and then see whether we can improve our market share in this kind of situation. I think we are happy that we are increasing our market share wherever it presents ourselves. And overall, compared to last quarter to this quarter, I think in select areas, we have improved our market share. Our focus is going to be increasing our market share in this kind of conditions, and participate in all the big, large transformation projects. Win them, as well as whatever we have won them, see how we can accelerate, you know, using technologies like GenAI, if I can deliver it in three years rather than four years, then that will be Christmas, right? Okay, waiting for that Christmas. Yeah. But, Samir, the question to you, the margins have improved quite a bit despite the headwinds. It's at, what, seven-quarter high, if I have it right? Going forward, what are the more levers available for you to grow it further? And the risks are more skewed to upside or downside, because you're very close to that guiding beacon of 26%-28% now. Okay. So yes, margins are at a seven-quarter high, and we remain focused on disciplined execution and driving ops, operational excellence. The levers remain productivity, utilization, as well as realization, which we have called out and driven through the quarters. That's what has delivered. Depending on the demand environment, you could squeeze or not on the subcontractor cost as well. And from a long-term perspective, pricing does remain a lever. So with all of it, we are committed to our guiding beacon. Okay, so good to hear that pricing is a lever and not a pressure point. You are gaining market share and maintaining your pricing at that. But the question to you, Milind, the headcount decline really continues. Another 5,600 headcount decline this time around. Is this the run rate we should expect in near future? And by near future, I mean the next couple of quarters. The kind of bench strength that you have, should we expect this decline to be normal? I won't be surprised if that happens, you know, but that doesn't mean that we are continuing to hire. We hired a good number of trainees, good number of people from the market, and even in this quarter. You know, so we will continue to hire, but, you know, depending on the overall situation, and including our own investment we made, we continue to repopulate on that investment. A nd, you know, drive efficiency, as Samir said. And, as a result, if the headcounts becomes negative as a result, then so be it. Sure. I'll hand it over to others for the questions as well. Thank you so much. Debangana Ghosh from Money control. Hello, gentlemen. My question to Krithi, I wanted to understand this BFSI degrowth a little better. If you could give us a breakdown of how things have shaped up within BFSI. Are you seeing pressure in certain geographies? How is it playing out? See the—I would say degrowth. There are two aspects, like, one, we had some merchants, particular about North America, some large programs coming to an end. So the large programs, in fact, sometimes it's I was explaining, like, they very successfully we complete them, but then, the another replacement program doesn't start, so that has an impact on, on this one. And, there is a furlough impact in, some parts of Europe. So these two primarily are the reasons why you see a degrowth in BFSI. So but, as I said, but we've been, like NGS has mentioned multiple times, like, we've been winning very good deals in BFSI as well, and, we have a very good pipeline, so we are confident medium to long term, the growth will return there. Right. Also, we see the growth in India stands out at, like, more than 23%. So do you expect this to continue in the upcoming quarters? What's driving that growth? Obviously, like, India growth has is driven by the positive seasonality like we do. And of course, BSNL, we started to deliver BSNL program, so the revenue from BSNL also comes. So these two are important factors. Will we be growing 23% every quarter? Like, that will be a stretch. But will we continue to grow? Yes, we are very focused. We will continue it and hope to grow. Right. I had two quick questions for Milind. So you had earlier mentioned that you're expecting to onboard 40,000 freshers in FY 2024. So do you still stand by that number, or is there an update? See, I think overall, for the year, I still stand by that number. How we start up with what number and eventually where, where we'll end up is something we'll decide as we go along. Right. And the other thing is, this is more from an industry perspective. We are seeing the poaching issue coming up within the tier one IT companies. I don't think TCS has reported or seen as much of that happening, but just wanted to get your thoughts on, you know, will this lead to employee, senior employee contracts changing, or do you expect an impact of this? Hmm, I did not get the question. Sorry. No, I just wanted to understand, like, the whole thing happening, that a lot of company veterans moving across- Yeah. -rival firms. We have not... Have you seen that in the past from TCS? The answer is no. Not as much, but just- No. So answer is no, so that continues. Sure. Thanks. Thank you. Sajeet Manghat from NDTV Profit. Hi, gentlemen. Happy New Year to you all. Krithi, you spoke about that on the ground, nothing has changed for you compared to the last quarter. Give us a sense of how the discretionary orders are playing out. Are they coming or, you know, still on a very slow pace, which is coming in? And do you see, as new products from a GenAI point of view, you rolled out four of them in the quarter. Do you see some of the clients moving towards that instead of a normal new contract that's going to come in from your end? See, first on the discretionary projects, we don't see a major change. Okay. Like, yes, like we on an environment like this, clients would focus more on, cost and optimization than transformation. So there is no major change as discretionary, not discretionary, but, but the project focus tends to be more on cost optimization than transformation. So the... And the second point there is, like, all the projects that we won recently, all of them we've been continuing to execute mostly as per plan, and so there is no rethink on what we signed in recent past as well. So, there is no change in what our clients signed up with us in the last one year. We are continuing to deliver on them, and, revenue flow is along expected lines, and there is no major change, discretionary or non-discretionary. GenAI, I don't think that is impacting at this time. Like, clients—at the way we see it is, clients are trying to see how what benefit they can gain, and they're doing multiple experimentations. Like, I talked about some of the POCs moving into production, but they are all small projects. We are not talking about huge large projects here. And so that continues to happen, but it's not eating into our regular TCV. You've been giving good amount of TCV every quarter for the last couple of quarters there. But, you know, the execution is something getting delayed because of decisions at a large client level or, you know, projects starts are not happening on time. Have you assessed the total TCVs that you have got over the last couple of quarters on how they are, you know, stacking up with respect to are they active, they are on a slow pace, or, you know, they're being deferred by a few weeks or months or quarter to quarter? So you just know, that's why I mentioned, like, whatever we won, we've been executing as per plan, and the revenue flow has been as per plan. What is hurting us is the programs that we started maybe a year ago, two years ago. T hat are getting reprioritized. I want to reiterate that the programs that we started in the last one year, they continue to deliver as per plan. We don't see any of the programs that started after that. See, once the uncertainty was known, we called it out, I think, around last Q4. So what were we signed after that, clients also knew the environment in which they were signing, so there's not been further rethink on those programs. NG, when do you see BFSI orders coming, picking up? Because you saw a degrowth this year. But you know, as Krithi said, you know, it's not a cause of worry. But from a North America point of view, when do you see orders from the BFSI picking up? I think soon, right? What's the trigger? Let me put it this way. I think if you really look at it- What do you see as a trigger for clients to start looking at and giving out orders? I think this quarter, as Krithi explained, the degrowth has largely been contributed by programs that got finished, number one, and then, Seasonal furloughs. Furloughs, right? Which is pretty much, you know, if you look at U.K., Europe, the- APAC. Even in Asia Pacific, right? So all that, I think the furlough will probably be there in Q4 also for a couple of weeks or so, but then, you know, that should bounce back, right, significantly. And some of the deals that we have won, in this $8.1 billion that we have announced, is also include deals from BFSI. So you should see that, that should bottom out, and then I personally believe that we should grow in BFSI, from the coming quarter, itself, compared to the baseline that we have got right now. But if you really look at, you know, life sciences, we've grown by 1.1%, manufacturing 7%, energy resources, utilities by 11.8%. This, the whole regional markets have grown well. So if you look at all of this, right, there are deals which are in these segments. These segments, I think, you know, they all are not holding, they're all investing, right? Not losing with it. If you look at technology or if you look at BFSI, there are pockets where, you know, they want to be cautious, they want to see the impact of tech, new technologies and, digital twins and other things. How do we employ them much more productively? So they're waiting and watching because BFSI always gets the first impact, right? Whether it's positive or negative. So I think, you know, we should see some of those segments, show a positive sign in Q4, is what, I'm hoping. While, you know, life sciences, manufacturing, et cetera, should continue to be, at least grow moderately, right. The India growth, 23% odd, Krithi said, it's not going to be like that for every quarter. But, I know this BSNL deal is front-loaded, so for how many quarters are we going to see the effect of that, for India business? See, India business this quarter is basically during this past seasonally is the third quarter. There are, let's say, you know, third-party software licenses, et cetera, et cetera, coming, right, you know, during this quarter. And of course, you know, we started to deliver BSNL. And BSNL, you know, we have a plan to execute it during through the contract period. So certainly not one-off. We've just started to deliver a certain number of sites, and we have a long way to go. So I should see that momentum picking up from quarter on quarter over the next at least four, six quarters. Yeah. Samir, you know, good set of margins, and you've been able to get 25% this quarter. Do you see some kind of impact with respect to receivables from the client, slowing, the number of days increasing as a result of some of the, you know, headwinds which we see in some of the markets? So, yeah, our receivable days are best in class, and at 67 days, they're quite managed. On the working capital management, we keep a keen eye on it, and overall, as a portfolio level, we manage it. Yes, given a higher interest rate regime, customers also look at strategic cash management, but that's part of it. Our receivable days are steady. Milind, you said that you expect some contraction in headcounts going forward as well, at the same level as Q3. Do you have any outlook for how much of onboarding that you're going to do for FY 2025? Have you, you know, have you done the budgeting for that? So for experienced hires, we budget every quarter. You know, for our trainees, like I said, we actually have a number which is similar to what we do in the past years. You know, we may start a little with a lesser number, but we eventually may end up at the same number which we normally budget. Is there a number for FY 2025 you have? Actually, don't have a definitive number at this point in time because of the market situation, but definitely, we are the first ones now to go into the campuses and start in hiring. So very, very positive energy I'm seeing in the campuses and a lot of energy there. So we will continue to hire in big, reasonably big numbers, but what exactly number, that number would be at this time, this year, would be difficult to say. Is there a specific skill set now you are seeing? Because the market is also changing in that sense. So are you also looking at specific skill sets when you go to the campuses? So when we go to campuses, we actually are looking for more learnability, the desire, the aptitude and everything else. And obviously, some coding skills. And everything else is what our learning and development does, and that machinery works very well for us. And we trained like 167,000 people now in GenAI, with 14,000 people in the next level of competency. So all of that machine is working very well for us. So, you know, we're really looking for people who have a desire to learn, people who are showing, you know, hunger, and that's what we leverage and eventually make them productive for our business. Thank you. Thank you. Romita from, Economic Times. Hi. Krithi, first query, are the deal cycles, you know, coming back to normal, or do they continue to be extended as we have seen in the past few quarters? Not much change compared to... And also, you should remember Q3 is a holiday quarter, like, it doesn't change much, but I don't think there's a huge change in the deal cycle. Got it. And, Samir, because all of the numbers you have given are excluding provisions, I just want to understand, where does the margin, operating margin stand if we were to include the one-time provisions? So EBIT would be. It's a 160 basis points impact at EBIT, so 23.4. Got it. Got it. Milind, couple of queries here. Everyone has asked a lot of hiring queries. One of the things that—Two of the things that we saw this quarter was, one, people were really putting down their foot about... dragging their feet about, returning to office. And two, is there are concerns that, you know, TCS is probably pushing a lot of its employees forcefully to change their base locations. That is also something that came up. So, what is the company's commentary on this? So return to office, actually, I am, Romita, I am seeing a lot of energy. You know, before, before the holidays, we actually, everybody in the organization, all senior leaders, business leaders, you know, next-level leaders, are actually driving this. And we are seeing a significant energy, and the numbers have gone up. You know, after the holidays, it's basically we are still seeing good numbers, 65% plus people coming in, you know, so that is going in the right direction. We actually had a family day. You know, we had a family day, for, in 10 different locations within India. Close to 180,000 people with families came in with, you know, a lot of bonding, a lot of energy. So, you know, very, very, very satisfying outcome out of that. So I'm not at all concerned about that. Regarding transfers, you know, it is mobility is part of... is a requirement in our business. You know, it is something which is there in the employee contract. We have all been mobile all through our lives, so, you know, it is actually people need to understand that. And it will only be good for their careers if they basically get into mobile, be mobile and get into good projects, wherever there are, and you know, build their career. A lot of these people, and some of these that we have also spoken to, actually, their concern is that they're not, they're being moved without projects. Is, is that something that is normal, as well? That is, I would not like to comment on that because, you know, the fact is, we are moving people because there is business in that location. So, you know, that is how it is. Got it. Just one last query on the variable pay. What do we expect this quarter? It will be 100% for 70% of our workforce, and for the remaining 30, it will be based on business unit performance. Got it. Thank you. Shivani Shinde, Business Standard. Hi, good evening, gentlemen. Hi. Most of the questions have been answered, asked to you. I have a few clarifications. Krithi, you know, the press release says that the growth this quarter was led by, Cloud AI, AI.Cloud. You said this quarter was four, four deals which moved from POC to actual contracts. What's the size of these deals? If it's, it's leading the growth, can you give us some sense about that? Okay, I just want to clarify. I talked about four GenAI deals moving from, and, if... Did our revenue come from those four deals? No, I didn't say that. Like we say, our AI.Cloud practice includes GenAI and our what we've been doing in cloud. The growth is actually... We've been talking about cloud for quite some time. We're seeing that cloud becoming more and more mainstream, more migrations happening, more modernization programs coming in. So I would still say the growth in terms of volume came from mainstreaming of cloud and more opportunities and more programs we do in cloud. So the four programs I talked about in GenAI is to say that things are slowly moving from POC stage to production. So these four GenAI deals did not change our revenue. When you say cloud, don't we consider that as discretionary spends? I mean, how do you look at that? Yes, it is discretionary. See, it is depending on how people look at it, like, because cloud also has an element of moving from your CapEx to OpEx, and if they do it right, they can also reduce their overall spend. So somebody can look at... But it is discretionary in a way that it gives you more flexibility, it reduces the release cycle, so it benefits the organization in multiple ways. Whether to call it discretionary or non-discretionary is a line we want to draw, but it's a program that they have to do. It's a transformation program. In a way, I would call it a non-discretionary transformation program. Great. In years, you know, this is the fourth straight quarter where growth is being driven by U.K. You know, if I have to look at TCS, the, the kind of revenue it makes and that being driven by U.K., what's the room that you still see? I mean, assuming that, like you said in the commentary, nothing major has changed at the ground level, do you see more room, there is, room for growth in U.K.? Yeah, I think so. I think, you know, by saying no, I think I'll put the sales team to sleep. I'll say that, right? So I think there is a room for U.K. to grow. I think they are initiating, many industries are investing. Public sector, U.K. is investing. Europe now, I think, is turning around for us, and we are seeing some growth that is coming back compared to what we have done in the last three, four quarters. So I think U.K. and Europe should do well in the coming quarters, is my prediction. U.S., you don't want to take a call on that? U.S., you know, we will have to grow, you know, because it's a given that it's a significant part of our portfolio. Right. It will have that portfolio impact, and it will grow. There's no reason why it should not grow. Barring, as I said, you know, anything, you know, specifically on BFSI and retail, you know, they will wait for certain positivity or certain... depending on what they read of the macro situation and in an election year, where they want to invest, et cetera. But what I think, you know, the cloud question that you asked is more interesting, because the minute they have started a program to put things and workloads onto cloud, it's they have to go and complete it to realize the benefit, right? If they stop in between, then the return on that investment that they made will get deferred. So to that extent, the typical cloud migration and cloud transformation deals initiated, they're all progressing, right? They may calibrate it a bit because, A, GenAI, I think if I have to put in, you know, should I do it differently? That kind of questions come. But then moving workloads into the cloud is something that we are doing it, and in fact, across hyperscalers, we probably have the best record of moving workload to the cloud. Thanks. Samir, a small clarification. So assuming the next quarter is similar to this quarter, this quarter, if you look at margins, chunk of it has come through productivity gains and cost. Do you still see room there, improvement going to the next quarter? So, we have relied on the measures which I called out, productivity, utilization, realization. This time it was more productivity, realization, and subcontractors. They definitely offer scope of further improvisation. Great. Milind, final one for you. So when you say you're going to the campus, this is for FY 2025? Yes, right. So you've already done your 40,000 for this year. Have they been onboarded? No. We don't give away the numbers on how many we have onboarded so far, but it's... I'll tell you every quarter, a significant number coming in. Okay. Okay? But this process I talked about is for FY 2025. Right. But do we see some delay in onboarding of the campus hire that has happened for this fiscal? Every quarter, we are getting a sizable number, and it is going as per the schedule, like the way it happens every year, every year. Thanks. Thank you. Kushal Gupta from Zee Business. Good evening, everyone. So you asked about vendor consolidation. That continues to be. I talked cost and optimization as one of the key levers, and within that, vendor consolidation is a major program. Like, our clients try to do a vendor consolidation so that they can drive more efficiency. They can also move operating model transformation. So that continues to be a key lever. In fact, even among the TCV we have, a significant portion comes from vendor consolidation. Pricing, stable realization. Last quarter, improve operational, disciplined execution or operational excellence. Okay. NG, yeah. The partnership with NVIDIA is progressing as we envisaged. Part and parcel of that is the training and upskilling of a lot of our employees, which is going according to plan. And advanced training, I think, you know, beyond the minimum training that we started, and there are about 14,000 of our employees have been trained in advanced AI technologies, and how do we leverage the architecture and specific features of the NVIDIA chipset and framework that is there. We have started to going to market with some of those offerings. I think it will pick up, you know, is our read at this moment. Okay. No, pura, pura. So 100,000 logon ne GenAI basic skills develop kar liye hai. Aur 14,000 advanced skills mein bhi un aa gaye hai, next level pe aaye hai. Advanced nahi kahunga, next level pe aa gaye hai. Specifically with respect to NVIDIA, isme se carve out karna thoda difficult hai, lekin, all of it is basically we're doing together based on a certain specific offerings we are driving. So overall, abhi jo GenAI ki situation hai, usko dekhte hue, kya aap jitni training ki intensity hai ya jo pace hai, jo number of people jo aap train kar rahe hai, woh aur badhayenge aap? Bilkul, bilkul badhayenge. Hum chahte hai everybody should know. Everybody should have a basic understanding, aur uske baad ek pyramid bane, pyramid banega. Usme kuch log even pe ayenge, uske baad next aur next level expertise develop hoga. Isi tarah se age badhe. Thank you. Like we do for any other technology. Varun Sood from Mint. Hi, gentlemen. Two questions, sir. One for Krithi, one for NGS. Krithi, at least over the last 3-4 quarters, there had been a kind of a disconnect between the TCVs and your revenue growth. Our understanding was that some of the projects are getting deferred. They are not starting on time. And like you said, a couple of minutes back, that they are getting reprioritized. So at least some of the deals which you have won as part of the TCVs, has work started on it? Because that will be a good sign to see if anything is changing on the ground. So on your large TCV deals, or does situation remain status quo? That's the first question for you, sir. Sure. NGS, the second question. It's nice where you said that we are very happy the state where we are, but if we look at your incremental growth of the quarter three, outside of the BSNL deal, if I have done my math correctly, there's not much incremental growth. I mean, 80% of your business is coming from the BSNL deal. Now, is this the nature of the business, or is it worrying that for a company of a scale of TCS, your biggest geographies and the markets are not growing? There is an uncertainty in, among clients, and then there is also the risk posed by disruptive technologies like GenAI. So only the BSNL deal, actually, if I have to say that, bailed you out. Thank you. Varun, again, I mentioned before also, what are deals we signed or started the programs since the beginning of the year? Okay, those deals are progressing as planned. We don't see any. See, there could be some operational delays, but there is no delay in terms of clients reprioritizing the programs that started from the beginning of the year. We've been always calling that the programs, the programs that started maybe two years ago, three years ago, those long-running programs. If you remember, at the beginning of or the yearly parts of pandemic, a lot of digital programs were kickstarted, like during the growth phase. Those programs is now in the changed financial overall economic situation. If they are not making economic sense to our customers, those programs are getting paused. We are saying the programs that we started in FY 2024 or even Q4 of FY 2023, those programs are progressing as planned. We are not seeing any delays in them or suspensions in them. The delays or the revenue is not growing as along, like you said, disconnect between TCV and revenue, primarily because the programs that were started during the year 2022, FY 2022 or early parts of FY 2023, some of them are getting paused because they don't make the necessary ROI sense for the clients today in the current macroeconomic environment. That's what we are saying. Yeah. I think, the other thing to, where to answer that, question, in addition to what Krithi answered. Programs that started in, let's say, three years before or two years before, there is a revalidation. One is from priority perspective on the return on investment side. The second is to also see whether the architecture in which at that time it was current. But at this juncture, is the architecture is correct or do we need to adjust that architecture? Is also a question that's being asked. But coming back to your question on, you know, I don't know how you did your mathematics and 80% from BSNL, and, I think, you know, the way to look at it is, if you take life sciences, there is a growth. Manufacturing, we have grown 7.0%. Energy resources, 11.8% growth. India, of course, grew 23.4%. Latin America, 13.2%. Middle East & Africa, 16%. Asia Pacific, 3.9% growth. So it's not attributable only to the BSNL. Of course, BSNL, we have started to deliver. Rightfully, you know, it'll kick off, and it'll go on, right? So I think, you know, there is a to attribute saying that the entire growth has come only from BSNL is an incorrect view from my perspective. I believe that there is a reasonable portfolio that we have which we are executing. And some of this, especially as I said, in BFSI, should come back, and this is seasonally a weak quarter because of the furloughs, this, that, et cetera. You should see us moving the needle from here, you know, in the next quarter. Benny John from BT. I have one clarification. I missed the legal settlement part. How much was that? The settlement in the U.S.? Yeah. We have taken a charge of $125 million on the P&L, and the payout was $140 million. The other question is about are you still, when do you see the hybrid model ending? What is the ratio now? I don't like to- No, no. How many of your... How many days you're open in the office, and still you have the hybrid model happening? No, hybrid, you say. How many- Yeah. How, what, what percentage of the people are coming to- I'm saying 65% of the people are coming to office. 65%. When do you see the 100% coming? We will continue to work on it, and we'll let you know as soon as we know. Thank you. Next is Ayushi Kar from Hindu Business Line. Hi, gentlemen. I have too many questions for Krithi sir and NGS sir. Firstly, I just wanted NGS sir to sort of elaborate on... You talked about how, like, your overall growth is not purely attributable to BSNL, but also to other verticals that are not nec- or other geographies that are not necessarily as as val- as do not have as high a market share for TCS. Do you see these become a significant a significant contributor as far as revenue is concerned in the future? And when- what do you expect that to be? Sorry, I didn't get the question correct. I just like when you talked about how emerging markets, et cetera, are contributing towards growth. Do you see that becoming a significant contributor, and what would be the timeline with how that happens? I also just wanted you to speak a bit more. We have spoken about moderation in BFSI extensively and what are the reasons for that. But for the top four verticals, there has been moderation throughout. Even for life sciences, the growth has come down in this quarter. I just wanted to get your take on what exactly is the detail, what, what is happening in these verticals that are sort of creating this moderation of growth. So, Krithi sir, you spoke about how like you have implemented projects in generative AI. And the last time we spoke, you said that significant deals in generative AI is not going to come for a few quarters. Can you give us a timeline on that, and can you talk about exactly like what is the trend going to be of getting these POC projects to the implementation stage? Yeah. Okay. I think overall, what we call as regional markets, and the new growth markets, especially in Asia Pacific, Latin, it should do well. You know, the way I will put it. Like any other, you know, the fact that we are calling it as regional markets, you know, why we call it as regional market? Because there is a sense of volatility in these markets, you know. That's why we have put it in a separate bucket there. So there will be volatility, but, you know, there are significant opportunities. If you really look at Middle East, the kind of investments that's happening in Middle East. Saudi Arabia is building a completely a new city, right? And, what UAE is trying to do, what's happening in Abu Dhabi, right? So there's a lot of opportunities out there. It's only kind of neutralized by the war out there, and then see where people want to invest, how we want to invest. Otherwise, I think, you know, this particular region should have grown a lot more. This is my perspective on this, right? If you take life sciences or manufacturing, you know, they, they're doing good. They're doing good, and where we are, I think we are happy, and I think, you know, manufacturing, I see that a lot more investments happening. People are adopting digital twin technologies, and the B2B2C kind of programs are a lot more becoming reality in some of those segments. If you take CMI, which is communications, telcos, most of them, they've made huge investments on 5G rollout, right? They are now trying to see how they can recover revenues out of those investments, especially in major markets, right? In the emerging markets, rollout of 5G technologies, they are trying to see what mistakes the others have committed and see how we can optimize this, how we can roll it out better. What should be the focus on enterprise business as opposed to the consumer business? There are a lot of things happening in the telecom sector and, the media sector in terms of, They're also trying to see whether we can, really leverage the convergence of, you know, broadcast and broadband, right? So there are certain amount of innovation that's happening in the CMI field. It'll take some time, right? But I think, you know, today, I think telecom is one of the stressed-out sectors in many markets, and because they've done the massive CapEx, and they need to see return on that CapEx investment. Energy resources, utilities, again, you know, they're adopting digital technologies. They're adopting things, you know, intelligence and digital twins. So there are, you know, especially the use cases that are in manufacturing, energy, resources, and utilities, they are so visible in terms of, putting automation, putting intelligence, moving things into cloud, and, prevention rather than, you know, correction. Those kind of things are happening there. So overall, the way I see it is, every vertical is trying out, different things, and, some are stressed because of the CapEx investment that they have gone through, like in telecom and, others. I don't see anything wrong with, let's say, consumer business, especially our retail consumer business goods under travel and hospitality. Especially, you know, travel and hospitality is booming, actually, right? They are doing really well, and then, you know, more and more projects will come, in my opinion, in these segments. So it's a mixed bag that we have, but, I think I've explained to you what I'm seeing in various segments, right? It's for you to make out as from what I have said, right? Where we are going to grow, where we are not going to grow. You mentioned that across the top four verticals that I'm talking about, like, that includes BFSI, life sciences, retail, et cetera. There were some geographies where there is certain moderation, which is being reflected in the moderating of these numbers. Can you speak a bit more- So actually, Europe has been. If you look at it, Europe has been quite weak, right? Over the last several quarters, right? I think, you know, as I said, Europe, we are seeing some green shoots, and we have actually grown in Europe this quarter. I believe that Europe should grow and turn around and grow in a big way from now on. Krithi, so on AI? So on GenAI, broadly, we would classify these kind of programs that we or projects that we win in three categories. What we call them as assist, augment, or transform. See, that's what this technology can do. And assist is where you summarize the information from multiple sources and able to answer questions from that. Augment is where you help and run. So what you see are projects that happen, and assist is where you see more programs happening and moving from POC to production. So it will take some time, like, because, yeah, the, there is less number of projects you would see in the augment space, even less or much, probably almost nothing happening in the transform space. So, as time progresses, you will see more and more programs, like, cross, like the crossing or getting the next level of these programs happening. So I don't want to put a timeline, but maybe over a period of next two years, maybe you would see more program, more programs being done at a higher level of complexity. It's a new technology. You have to give it some time for people to become mainstream. Thank you. Vivek Kumar from Informist. Hi. Two questions. First, Samir, what is the reason for sharp decline in subcontractor costs, and do we expect such sharp decline to continue in the next quarter as well? And, Krithi, you said, completion of projects led to some decline in BFSI vertical. So in the next couple of quarters, are there any major projects scheduled for completion, and what is going to be the outlook in that scenario? So subcontractors, we use for short-term match. And if you see for the last three, four quarters, we have been significantly been bringing down the subcontractor costs, and it's strategically done. And as I mentioned in my earlier one as well, depending on the demands environment, it could be further unlevered, which can be available. See, there'll always be projects that come to an end, come to a start. I'm not, I will not be able to call out what is the impact of what's going to happen in Q4, what kind of projects are likely to end, and what is going to be the impact. We are, we don't give a guidance, and I won't be able to give you a call-out at this time on that one. Our second last question from Sankalp Phartiyal from Bloomberg, who's joining us, from New Delhi. Sankalp, you can unmute yourself and switch on your video. Hi, everyone. Good evening. Thank you for taking the question. My first question is for Krithi. I I know, Krithi, you just said some of this, but in your own words, you've told me previously that you're waiting for GenAI to gain critical mass. I just wanted to know when you think that kind of critical mass can be achieved so that it makes a difference to your overall sales and revenue, especially since rivals like Accenture are already growing their share of AI business? That's one. And just one question for you, or actually any one of you could answer that, you know, U.S. inflation is easing and you know, interest rates are also likely peaking. How do you... When do you expect American clients to sort of spend big again on software projects, especially, BFSI? If I could get some color or visibility on that. Thank you. Sankalp, on GenAI, we, we've been saying that we will not be able to put a timeline on when it achieves a critical mass. Maybe four quarters, maybe six quarters. It's too early to call out when this will happen. We continue to stay invested. Like, Milind said, we have trained close to about 160,000 associates on the first level, another 15,000 on the next level of training. So we continue to invest, we continue to create opportunities for our associates to create new products and services. We stay ready. We help our customers in coming up with new offerings and new product services. We, every vertical, we look at what use cases are possible. So we get ready, we go to our customers, work with them in creating new use cases or opportunities. But, it definitely will take some time. It's not going to be, one quarter or two quarter, critical, the lead time. It's going to be longer than that. But I don't want- I won't be able to put a timeline for you. I think inflation, interest rates are really questions for the economist, and I'm not an economist. But you know, what perplexes us is really you know, if you take India, inflation is probably above the growth rates that India as a market achieve. And perhaps the market and the customers and different industry segments are used to it. And whereas if you take U.S. market, it's the other way around. Whenever the inflation goes higher than the growth rate, then they have a problem, right? They don't know how to probably handle it. So immediately they start to conserve cash and then see what best opportunities that are there. It's what something that we are observing, but it's very difficult to correlate and answer your question. We have one final question from Sai Ishwar, who was unable to join us from Reuters. Do you see mega deals coming in after budgets get refreshed from the calendar year 2024 for NGS? We are working on a few large deals, and whether they will convert into mega deals, when they will convert, is very difficult to answer. But as I said, the qualified pipeline is increased and we're working on many such opportunities. Thank you, gentlemen. Thank you so much for everyone for joining in, and to everyone that's been watching online, to the live stream. Thank you very much from all of us at TCS. Wishing everyone a very happy New Year. Have a good evening.