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 Ms. Nehal Shah from the Investor Relations team at TCS. Thank you, and over to you, ma'am. Thank you, operator. Good evening, and welcome, everyone. Thank you for joining us today to discuss TCS's financial results for the first quarter of FY 2025, that ended June 30, 2024. This call is being webcast through our website, and an archive, including the transcript, will be available on the site for the duration of this quarter. The financial statement, 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. K. Krithivasan, Chief Executive Officer and Managing Director. Hi, good evening. Good morning, everyone. Mr. Samir Seksaria, Chief Financial Officer. Hi. Hello, everyone. 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 don't 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 this risk in the second slide of the quarterly fact sheet available on our website and emailed out to those who have subscribed on our mailing list. With that, I would like to turn the call over to K. Krithivasan. Thank you, Nehal. Good day, everyone. I'm very pleased to report a good start to the new fiscal year. Our Q1 FY 2025 revenue grew at 5.4% in rupee terms, 4.4% in constant currency terms, and 3.9% in dollar terms. All our markets have returned to growth on a sequential basis. Similarly, almost all our verticals also saw positive sequential growth, except for CMI. Our ability to deliver on large-scale, complex engagements, projects of national importance and mission-critical services for the world's leading companies have helped us in winning market share. Our operating margin for the quarter came in at 24.7% and net margin at 19.2%. I'll now invite Samir and Milind to go over different aspects of our performance during the quarter. I'll step in later to provide more color on the demand trends we are seeing in our business. Over to you, Samir. Thank you, K. Krithivasan. Good day, everyone. In the first quarter of FY 2025, our revenue was INR 62,613 crore, which is a year-over-year growth of 5.4%. In dollar terms, the revenue was $7.505 billion, and that's a YOY growth of 3.9%. In constant currency, our revenues grew 4.4%. Our Q1 operating margin was at 24.7%, in spite of 170 basis points headwind from annual wage hikes. In addition, third-party expenses also increased. These were offset by operating efficiencies, including better productivity, improved utilization, and reduction in subcontractor expenses. Net income in Q1 was 19.2%, and our EPS grew 10% year-over-year. Our accounts receivable, DSO, was at 70 days in dollar terms and up 5 days year-over-year. Net cash from operations was $1.34 billion, which is 92.8% of net income. Free cash flows were $1.223 billion, and invested funds at the end of the period stood at $5.59 billion. The board has recommended an interim dividend of INR 10 per share. I'm now going to talk about our industry-leading portfolio of products and platforms, which saw good traction during the quarter. Ignio, our cognitive automation software suite, saw 24 deal wins and 10 go lives. Our R&D effort has led in winning 60 patents so far in this product. TCS BaNCS, our flagship product for financial services, had 5 wins and 12 go lives during the quarter. 4 change drivers for our product continue to be business agility, cloud readiness, enablement for easy integration to ecosystem and partner solutions, and enhanced customer experience or client experience. Specific to securities industry, T+1 or shortening of settlement cycle in general is a big growth driver for us. Custodians are also looking to see how to improve accuracy in the capture of corporate announcements and bring overall efficiency in the value chain. Globally, we see increased levels of regulatory compliance requirements, and these are moving more and more real-time in nature. This is another driver for transformation of core technology. A leading bank offering co-custody and securities lending services through its fully owned subsidiary in the U.S., U.K. and Luxembourg, has selected TCS BaNCS for custody to integrate its global operations into a single custody platform and will be implemented in a SaaS model. TCS BaNCS's insurance platform continues to see strong growth in Q1, with 1 win and 6 go-lives during the quarter. A leading Pan-India private insurer has gone live with over 100 products across 8 business lines, spanning the entire business scope from underwriting to policy servicing, claims processing, and reinsurance. This represents the largest coverage of products and lines of business live on the latest versions of TCS BaNCS for general insurance company in India, positioning us very strongly in the growing market. Additionally, our digital portal for agents and intermediaries has been rolled out to 5,000 plus agents to expand market reach and scale up business volumes. TCS BaNCS for intelligent experience, our state-of-the-art framework for enabling next-generation customer experience, went live at a number of customers this quarter, strengthening what we can offer, leveraging digital data and AI. Quartz blockchain platform had one win and one go live this quarter. In life sciences, the TCS ADD platform had two new wins and four go-lives this quarter. TCS OmniStore, our AI-powered universal commerce suite, has two go-lives during this quarter. We launched GenAI-based intelligent buying guide enhancements, which is a conversational commerce system that helps agents and customers in better product discovery, personalized recommendations on products, services, and offers, and flexibility to tailor to the end user experience. TCS iON, our platform for digital assessment, exam administration, and learning, had 25 new wins and 70+ platform capabilities went live. Our assessment platform administered exams for more than 11.8 million candidates. TCS TwinX, our digital twin solution, has 2 wins and 2 go-lives, and MasterCraft and Jile had 32 deal wins in Q1. Now let me go over to our client metrics. The steady increase in number of clients in every revenue bucket is an ultimate validation of our customer-centric strategy. In Q1, we added 3 more clients year-over-year in the 100 million+ band, bringing the total to 63. Three more clients were added in $50 million band, taking the total to 140; four in $20 million band, bringing the total to 300; eighteen more clients in the $10 million band, taking the total to 486; twenty more clients in $5 million band, taking the total to 697; and forty-two more clients in the $1 million-plus band, bringing the total to 1,310. With that, I'll like to hand it over to Milind. Thank you, Samir. The workforce at the end of first quarter was 606,998. Net addition during the quarter was 5,452. We will continue to recalibrate our hiring for the year based on the demand. We are focused on reskilling and organically developing the required competencies amongst the talent base. Employees logged 11 million learning hours during this quarter and acquired 1.2 million competencies. We have one of the most comprehensive talent development programs in the world, helping us stay ahead of the curve and continuously innovate and adapt to keep pace with the evolving business needs. This program has earned us the respect and admiration of our customers and employees alike. Our workforce continues to be very diverse, with 151 nationalities representing and with women making 35.5% of our base. Towards driving a more performance-focused work culture, we rolled out double-digit wage hikes to for high performers and an average 4.5%-7% wage hike for the rest of the employees, with effect from first of April. All our efforts in rewarding the best talent in the industry are reflected in our retention rates, which are one of the best amongst industry peers. Our LTM retention in IT services was at 12.1% at the end of Q1, now down 40 basis points sequentially, and in our comfort range of 11%-13%. I will now request K. Krithivasan to speak on the various demand drivers in the quarter. Thank you, Milind. I am pleased to report a strong start to the new fiscal year, with all-round growth across industries and markets, led by cost optimization and business transformation. Cost optimization remains the top customer priority, including vendor consolidation and operating model transformation. Enterprises are increasingly relying on technology to help improve their competitive advantage, transforming the way they operate. Client spending under the business transformation initiatives included supply chain modernization, sustainability, enhanced customer and employee experience, technology modernization, cloud data and analytics, and AI, GenAI initiatives. We are investing in our workforce at scale, deepening our ecosystem partnerships, and strengthening our IP base. TCS, with its full services capability and industry-specific contextual knowledge, has always remained relevant to clients. Our strategy has resonated with clients continuing to entrust us with large and strategic deals. TCV in Q1 was $8.3 billion. The BFSI TCV was at $2.7 billion, while the TCV for our consumer business group was at $1.1 billion. The TCV of deals signed in North America stood at $4.6 billion. Having said that, during Q1, we continued to see the dichotomy that we have witnessed over the past six quarters. While larger and strategic transformational programs with enterprise-wide scope or benefits, example, cloud or data foundation, are continuing apace, some of the smaller programs with narrower scope benefits are coming under more stringent scrutiny, tending to get deprioritized. At the same time, we are seeing clients spend on initiatives oriented towards cost optimization, giving them immediate ROI. Let me now walk you through our segmental performance. As a reminder, all growth numbers are in the year-on-year constant currency terms, unless otherwise mentioned. BFSI, our biggest vertical, returned to growth sequentially on a year-on-year basis. On a year-on-year basis, it declined 0.9%. For the BFSI industry, the wave of the next net interest rate income that was strong in 2023, has been waning down in 2024. Clients are now balancing their transformation priorities to ensure business resilience and innovation to improve cost-to-income ratio. In the near term, we will see tech spend on enabling new partnerships and ecosystem models, stronger security practices to tackle cybercrime, data governance and de-democratization to address risk and regulatory scrutiny, and fully integrated digital operating models. Longer term, BFSI clients are expected to increase their spending towards developing integrated models using cloud and AI, mitigating risk of legacy systems and those aimed at boosting customer experience. ING Belgium partnered with TCS to modernize its legacy application for business lending, bonus and warrants management applications, and branch banking applications. With our contextual knowledge of bank's IT ecosystem, we collaborated in their simplification journey, providing ING with modernized microservices-based cloud-hosted applications. The modernization initiative will provide simplified operations, seamless customer experience, optimized and modern front-end, simplified technology landscape, higher productivity, and lower cost of operations for ING. This success story is a good example of the end-to-end large-scale IT modernization work we are doing for our customers. Consumer business group saw sequential growth for the second quarter, led by demand for cost optimization, improving end customer experiences, and enterprise application modernization and transformation. On a year-on-year basis, we declined 0.3%. Optimizing IT costs and realizing efficiencies in a big is a big priority for consumer businesses. To that end, we see good demand for operating model transformation and vendor consolidation as key themes. AO World, UK's most trusted electrical retailer, engaged TCS to transform the systems that underpin its finance and operations functions to respond to constantly changing business dynamics and customer expectation, and maintain the competitive advantage in the industry. TCS led this transformation through the design solution, blueprinting, and implementation of the cloud-based platform. Through this initiative, the customer could streamline its business processes, automate numerous workflows and approval processes, create robust and resilient integrated system, and bring transparency in financial reconciliation. bpost, also known as the Belgian Post Group, a leading European postal services company, partnered with TCS to digitally transform the retail front office. TCS developed a modern, scalable, and portable POS solution using open source technologies and cloud-native architecture, reimagining both the customer journey and employee experience, and redefining the front office environment. The new solution has improved customer and employee experience by reducing wait times and enabling many self-service options for customers. Manufacturing continued with its positive streak and grew 9.4%, led by broad-based growth in all sub-sectors. Specific areas like smart manufacturing, renewable energy, battery energy storage systems, grid modernization with digital solutions, supply chain transformation, and vendor consolidation are showing a positive trend. Jaguar Land Rover, UK's largest luxury automotive manufacturer, has partnered with TCS to implement SAP Service Parts Management. This streamlines JLR's aftermarket parts supply chain, unifying multiple legacy systems across the two iconic brands into a single system. JLR benefited from optimized inventory worldwide, improved stock turnover, enhanced supply chain visibility, and improved collaboration and communication with suppliers. This also established common processes to support standardized operation across both brands, Jaguar and Land Rover. This success story showcases how the client embarked on its supply chain transformation, wherein the key objective of global inventory optimization and system consolidation was achieved, and how TCS, with its large project expertise and contextual knowledge, was able to deliver substantial savings to the client. Life sciences and healthcare continued to do well and grew 4%. The pharmaceutical companies continued to invest heavily in R&D, supply chain transformation, smart manufacturing, clinical unified platform, cognitive-based case intake automation, and customer experience transformation for patients, healthcare personnel, and others as part of business transformation. In the healthcare, in the healthcare customers, we see vertical integration, significant increase in home care and virtual care, and adoption of value-based care at scale. All these initiatives are leading to increased IT services spend for us. Energy resources and utilities also grew at 5.7%. ER&U companies are investing in transforming businesses and asset portfolios towards a more sustainable future, including renewable generation capacity, transmission and distribution to bring the energy to where it, where it is needed, energy storage-... and new ways of running the grid, like distributed energy resource management and virtual power plants. TCS is engaged in pioneering work in such initiatives for its clients. CMI continued to face business challenges and declined 7.4%. Given the uncertain macroeconomic outlook, clients are focused on realizing the benefits from the investments in 5G made during the pandemic period before investing in any large-scale programs. As these challenges abate, we expect spending on tech stack modernization to grow as telcos leverage automation, network intelligence, and virtualization to align with shifting industry trends. Investments will be oriented toward enhancing business and operational performance by leveraging real-time intelligence, scalable and modular networks, and partner ecosystems. Current spend in this sector is led by initiatives in cost optimization, vendor consolidation, and integrated operations. Technology and services returned to sequential growth after five quarters. On a year-on-year basis, it declined 3.9%. Customers in this vertical remain cautious about new spending until business growth momentum picks up. However, we are very excited about a marquee deal we secured with a leading tech company, where we will showcase the depth and breadth of all our service offerings. We expanded our two-decade-long partnership with Xerox to develop a new agile, cloud-first operating model in an end-to-end transformation program designed to fast-track the evolution of the company into a simplified, services-led, software-enabled organization. We will consolidate Xerox technology services to improve business outcomes, migrate complex legacy data, data centers to public cloud, deploy a cloud-based digital ERP platform to transform business processes, and incorporate generative AI into operations to help drive sustainable growth. We will be leveraging the deep capabilities of our service practices such as AI.Cloud, Enterprise Solutions, including Crystallus, and cognitive business operations, including Cognix. We will also build an AI-first enterprise platform for Xerox. Coming to our service practices, AI.Cloud, cybersecurity, and enterprise solutions led the growth this quarter. We launched new labs, centers of excellence, and delivery centers focused on AI, IoT, and digital engineering. We have also further expanded our partnership and alliances ecosystem by onboarding new partners in the areas of ER&U, which is utilities, process industry, and consumer process industry segments. Cybersecurity, cloud workload and endpoint security, threat intelligence, and cyberattack responsive services, GenAI, e-commerce platforms, business consulting for public sector, and enterprise integration services are also continuing to grow. We continue to see global recognition across for our service offerings. AI.Cloud organizations are seeing cloud data and GenAI adoption as essential for delivering superior customer experience, remaining cost-competitive, as well as be able to roll out differentiated products and services rapidly. There is a renewed focus on data strategy, data governance, and use of analytics, driven by the desire to leverage AI and GenAI. Generative AI continues to hold major mindshare, and this is increasing by the day, with newer models and techniques coming to the market almost on a daily or weekly basis. Customers are looking at scaling out the POCs and pilots by implementing necessary guardrails. Mature customers with a solid cloud and data foundation that were able to experiment with multiple generative AI use cases are now looking to reimagine parts of their value chain to make them AI native. This AI-first business strategy is increasingly seen as an eventual long-term aspirational goal. While the interest is strong, organizations are taking a calibrated approach to measure the risk potential and organizational impact while charting out their roadmap for generative AI adoption. TCS has been batting on the front foot with all the required investments made to participate in this space and opportunity. In this quarter, over 270 AI, GenAI engagements have been deployed or in various stages of progress. Engagements that have successfully gone live include those enabling dynamic pricing strategies, improved product quality, transformed customer experience, and significant productivity uplift in business operations, software development, and IT operations. Our AI and GenAI pipeline has also doubled in the quarter to $1.5 billion. During the quarter, we launched TCS AI WisdomNext, a platform that aggregates multiple generative AI services into a single interface and enables organizations to rapidly adopt next-gen technology at scale efficiently and within regulatory frameworks. The platform offers a comprehensive suite of modular, reusable components and industry-specific prefabricated solution blueprints that are easy to use and enable faster business value realization. It can evaluate the accuracy of the AI model used and offers fine-tuning as a service. IoT and DE, we continue to see demand for the IoT platforms and digital engineering capabilities across different application areas. Two examples include life sciences and healthcare customers continue to invest in remote patient monitoring, diagnosis through connected devices, leading to more software platform solutions and services. High-tech and technology solution software and services customers are looking at new age skill sets, which include chip design and optimization of manufacturing operations through automation. In the manufacturing space, key areas are factory transformation, PLM services and smart product engineering. Energy management solutions like TCS Clever Energy are seeing good demand from customers across retail and manufacturing. Cybersecurity services continued to grow this quarter. The focus areas of our customers have been network security, identity and access management modernization, risk and compliance, and cloud security. Our interactive services saw good growth this quarter across multiple offerings. The effective integration of technology and creativity is a key theme for all marketeers. Our narrative around the need to improve CMO-CIO collaboration is being received well. CMOs understand that it is of paramount importance to connect the dots of complex technology systems, AI, and data, and that this connecting of the dots, along with creativity as the co-multiplier, is a key to help brands in their responsible growth journey. Our cognitive business operations services also saw good bookings and revenue growth in both ITIS and BPS. As businesses are looking to get a heads-up on the long-term view, investments are made in current operations to make it leaner and more efficient. Our approach-led, modern tech-led transformation and assets such as Ignio, Cognix, MFDM is gaining traction. Lastly, in the enterprise solution unit, clients continue to invest in clean and sustainable digital core by modernizing their ERP. We'll continue to invest and strengthen our joint go-to-market approach with our partners. Moving on to geographies, emerging markets continued showing superior and diversified growth. India led with 61.8% growth. Middle East and Africa grew 8.5%. Asia Pacific grew 7.6%, while Latin America grew 6.3%. Among major markets, the United Kingdom led with 6% growth. IT services spend continues to be more resilient in the U.K. and is expected to remain on the growth path. Europe grew 0.9%. IT services spend remains flat. In addition to other growth areas, sustainability initiatives and compliance of regulatory requirements is a key focus area amongst European clients. The biggest positive was North America returning to a sequential growth after 5 quarters. On a year-on-year basis, it declined 1.1%. Overall, IT services spending is stable in the geography. However, clients are neither going for large-scale CapEx initiatives nor ramping down with deep spending cuts. There are tailwinds in the form of consumer demand, employment rates, and technology innovation, and headwinds coming from rising government and consumer debt, inflation, and interest. We remain focused on delivering to the best of our capabilities and improve market share across industries, services, and geographies. We can now open the line for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Ankur Rudra from JPMorgan. Please go ahead. Thank you. So just maybe the first question, we've seen an element of pickup in overall growth momentum this quarter. However, if I peel out the growth from India, growth in the international business is about 1.5%, both sequentially and year-over-year on constant currency terms. So, you know, in this context, and also the fact that deal wins are sort of weaker than the last four-quarter average, the question is: What gives you the confidence that fiscal 2025 will truly be better than fiscal 2024? Thanks, Ankur. So, we see, like, we said, we said fiscal 2025 will be better than 2024 overall. And even what we see, like, compared to Q4, we see the sequential growth, even leave India out. Even India—leaving India out, almost all our verticals and all our geographies have grown. So the growth, while, India, India growth has been substantial, but, compared to previous quarter, the other sectors have also really done well. So the fact that it's been broad-based is what is giving us the confidence that, this, this year will be better than last year. As we were explaining before, on the TCV side, we find it's more a timing issue because the pipeline is quite strong. We are not too worried about the, TCV being lower than last quarter. Okay, appreciate it. The follow-on question from me would be on generative AI. You did highlight that your overall AI pipeline has strengthened. But if you just, you know, stay with generative AI, how is that impacting your, you know, business? If you can give us some color in terms of how it's impacting specific projects and, customer perception. A related question is: Do you feel that, generative AI in client conversations and client thinking is potentially creating a headwind for, spending on IT services? At this time, first question, like, there is always a discussion almost any new program we do, or even it's a AMS program or AD program we do. There is a discussion on, can we leverage generative AI? Can we bring in more productivity? That discussion always happens. We will also look for opportunities to bring in those productivities or other values through generative AI. In terms of is there a headwind? We are not seeing a headwind so far. Clients do want us to look at generative AI as one of the lever to better deliver in terms of cycle time or in terms of cost, in terms of quality. That discussion always happens, but we have not seen it as a headwind so far, Ankur. Appreciate it. Just last question, if I can squeeze in. Any comments on pricing, given the nature of the business? Thank you. Yeah. Samir will take this question. Yeah, Ankur. Pricing overall in general is stable. While there could be aberrations at an individual customer level or the phase in which deals which we are facing, but at an portfolio level, there is nothing material to call out. As you would have seen, realizations also have been improving sequentially. Okay, appreciate it. Thank you and best of luck. Thank you. We have our next question from the line of Sudhir Guntupalli from Kotak Mahindra AMC. Please go ahead. Hi, K. Krithivasan. Congrats on a good set of numbers. In March, you indicated that the demand visibility has certainly improved over December quarter. Now you delivered growth better than expectations. In that backdrop, just trying to get a context of your comments in the press, that you don't want to yet call out the sustainability of the current growth number, given the volatile environment. Is it just a philosophical stance you are taking not to indulge in near-term guesswork or quarterly guidance, given the uncertainty? Or is this by any chance led by a relative weakening of demand visibility versus March quarter for whatsoever reasons? What I'm trying to understand is that directionally, are we seeing a steady improvement or stability in demand over time, or is demand moving more like a sinusoidal curve over quarters? Sudhir, in the announcement last quarter, I don't know whether we said that there is an improving demand environment. What we said is, we believe, we are confident that FY 2025 will be better than FY 2024. And that is based on how FY 2024 panned out and how we started seeing the early quarters of FY 2025. But it doesn't mean that the uncertainty has gone away. We still see some situations where clients are ramping down programs or reevaluating programs at very short notice. And that's the reason we believe that it's too early to call a sustained growth momentum or a demand stability. It depends a lot on the economic outlook of our customers. It's certainly not philosophical, but it's quite practical for me. Sure, sir. And the second question is on your other statement, that clients are neither going for large-scale technology initiatives nor going for deep spending cuts. So if we were to quantify this qualitative statement, is it fair to say that since the deep spend cuts are already in the denominator, incrementally not having them should still be a mathematical tailwind for us in terms of growth? See, the way I would characterize this, there are long-standing programs. As long as they are delivering incremental value to our customers, they are continuing. And they—if there is a budget or limited budget available, our customers are reevaluating. Should they be starting a new program which gives a better ROI? It could be a discretionary program, or it could also be a cost optimization program, as against next phase of a long-standing program. So whichever is giving them a better ROI is being adopted, and lesser ROI programs are paused. So that's the way I characterize it, and it was a situation last quarter also, and there has not been a material change in that situation since. Okay, sir. Thank you so much, and all the best. Thank you. Next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead. Hi. Good evening. Thank you for taking my question. My first question is more of a request, Krithi. If you could consider starting to give guidance on a full year basis, that would be really helpful, because I really don't understand why a large company and successful one like TCS should not have a guidance when almost every other peer of yours have. And the challenge which at least I face is the operating metrics which you share are not enough to give us a full picture of how the trends are panning out. The deal TCV has a very poor correlation with the revenue trend, and the other operating metrics are also relatively lesser than what the peers have been giving. Now, demand appears to have started stabilizing. You have settled in your office for a few quarters now, so now maybe a good time to relook at this strategy, whether you want to start giving guidance. I understand TCS hasn't in the past, but maybe a good start to give. And if you take a feedback, and if you still conclude that you should not give a guidance, then at least maybe start giving some more operating metrics, such as order backlog or ACV numbers, that we can do our own numbers and come to a sense that what direction the growth potentially could be. Sure, Kumar. We will definitely consider that. You see, it's been a considered stand for a long time because we believe that there is a certain amount of prudence in not giving guidance, because it helps us in driving growth and maximizing growth based on what we see in the market space. But we will consider your request, and we'll have an internal discussion and come back to you. ... That would be great. Thanks. My second question specifically was on the GenAI side. So you did talk about $1.5 billion of deal pipeline on AI and GenAI side. Can you give some sense how the booking and revenue conversion could possibly be? You have spoken about 270 projects you are working on. So is it fair to expect that about triple-digit million dollars of total revenue TCV you may have been working on, on the GenAI side? At this time, at this time, we don't want to give that number, Kumar, because these projects also tend to be not very large. Like we also in the past also you mentioned, many of them tend to be smaller projects, small duration projects. But this quarter we did win a large project as well, like where we are establishing a AI office for one of our customers, which is fairly large. But otherwise, these projects tend to be small. So when we are, maybe we'll consider this request as well, Kumar, like when we are ready to provide a number in terms of the revenue or order book in AI, we will do it. Great, thank you. It has to stabilize before we are able to give it to you, Kumar. Sure, sure. Makes sense. Yeah, thanks. One question on the BFSI side. So it was encouraging to see that BFSI has now returned to growth. So is that a reflection of absence of last two quarters of furlough, or you are, you are seeing some recovery on the ground in terms of client engagement as well? I would say there is some positive movement because, as I was telling somebody else, like, our BFSI North America has done relatively well, which is not really impacted by furlough. So, this is BFSI performance to a great extent. I would say North America performance as well. Got it. Thanks a lot. Thank you. We have our next question from the line of Abhishek Pathak from Motilal Oswal. Please go ahead. Hi, thank you for the opportunity. My first question was on the communications vertical. So what near-term catalysts do you see in this vertical, which could, you know, meaningfully alter client behavior, and it could bring it back to growth? We've seen almost 5 quarters of a decline now. So when do you expect the historic CapEx that the operators have done to trickle down to services? That's one. And secondly, on the life sciences vertical, it has been quite strong for FY 2024, another strong quarter. So do you think client behavior here is any different to, let's say, BFSI, where cost takeout is the main theme? Do you see more adventurous projects here, or is the theme pretty much similar? Thank you. So, Abhishek, first on CMI, okay, there are a couple of factors, playing out here. Like, many of the telcos invested, heavily, for 5G rollout, and they have not seen the expected, return so far. So for them, to invest, more, okay, they'll be looking for, they are, we believe, okay, they are looking for a lower interest rate environment before they can embark on new, transformative programs. So from that perspective, like, lowering interest rate, would be a good trigger for us to see. It is our expectation for us to see, project, more investment and hence more IT projects to be kicked off. Life sciences, like you said, has been bucking the trend. Okay? That is also more to do with the, non-cyclical nature of the industry. Like, people tend to consume more of those services in good times and bad times, and, which also because of that, creates more opportunity for drug discovery, drug research. So to some extent, it's behaving in a very secular way. Got it. Thanks. Thank you. We have our next question from the line of Ravi Menon from Macquarie. Please go ahead. Hi. Thank you. Ravi, you spoke about, you know, how we've finally seen America and North America come back to sequential growth. I don't think even during the financial crisis, we've had a situation where we had five quarters of sequential decline. So, you know, this was an unusual time, but do you think that we're finally bottomed out here and, you know, should we see sequential growth from here in North America? Ravi, I don't want to say this now because it's the first quarter of growth we have after few quarters. See, while in 2008, what also happened, as soon as the crisis hit, we also got multiple M&A opportunities. So which actually increased our growth because some of the clients started investing towards the merger, the consolidation of the system. Today, we don't have that scenario. It is a scenario of more wait and watch, because of which we don't find new investments either towards cost optimization or the, particularly discretionary spend not happening. So, that's the reason we are hesitant to say we have bottomed out. We are watching this space and working closely with our customers to maximize the opportunities in front of us. Thank you, Ravi. And if you look at the trailing twelve months book to bill as well, you know, this is when we started seeing that drop, that's when I think revenue also... Should we think about that as a leading indicator? And now we've seen that, you know, trend up. Last quarter, of course, you had a pretty extraordinarily good-looking quarter, so that moved that up as well. But you're trending above 1.35, 1.37, now for three, four quarters. So should we think about that as a good leading indicator, if not for a quarterly indicator, but at least for the full year? ... So, Ravi, I did not get the question fully, but from a book-to-bill perspective, like, last quarter was very good. This quarter we had a lower TCV. As we are explaining, our overall pipeline has remained strong. Both qualified pipeline and total pipeline has remained strong. The TCV has been lower this quarter, more it's a timing issue. Okay? Some of the large programs that we thought that we would close were pushed back by a few weeks or maybe a month or so. But we are confident those orders will be booked in Q2. So I don't want to, you can never read too much into a TCV on a single quarter, you have to read it on a longer period of time. It remains within our stated guide, this thing of $7 billion-$9 billion. $7 billion-$9 billion per quarter is a comfort zone we have set for our order booking, which is, we are currently well within that range. Thanks. And one last question, if I may. You were, I think, moving to a pattern of onboarding all the fresh graduates you make offers to in the first half of the year, right? This year, are you planning to continue that, or should we see this more spread out over the quarters? So we have onboarded 11,000 trainees in this quarter. You know, and we also have concluded the National Qualifier Test, and this will, you know, further add to that number. So obviously, some freshers induction will continue during the quarters. To what volume? Something will determine over the next few quarters. Thank you, and best of luck. Thank you. We have our next question from the line of Nitin Padmanabhan from Investec. Please go ahead. Yeah. Hi, good evening. I had three questions. The first one is on the press conference, you had mentioned that you look at three indicators broadly, when you look to assess the recovery. So I think it was reevaluation of ongoing projects, how much people want to spend on cost optimization and how much people want to invest. Could you give us, could you please expand on that, at least some of the FSI and, retail, CPG perspectives? So that's the first one, on how you're seeing trends across those three buckets. The second is on margin levers. I think last year, after the first quarter, we saw almost 100 basis points margin expansion each quarter. But since then, I think we have sort of brought down subcontracting fairly well. We have also improved utilization fairly. So just wanted your thoughts on the puts and takes on margins, on how we should think about it on a going forward basis. And lastly, I, I, ISG basically spoke about some 30% cost savings in ADM and infra from due to GenAI. I just wanted to understand your experience on that and how you are seeing this that pan out. Thank you. Nithin, while I did talk about reevaluation of projects and then also focus on cost optimization and discretionary, the point I also may keep mentioning is we don't see a material change between the customer sentiment between last quarter and next quarter. They continue to validate projects, and cost optimization projects get a priority over new discretionary projects if they are not able to see a short-term ROI. And this will change only when there is a long-term certainty on the economic outlook. Until that happens, the pattern of whatever is happening, whatever happened in the previous quarters will continue. That's the reason also why we are not calling out that growth is back or this will be sustained, because customers do take decisions at a very short notice. Before I hand it over to Samir on margins, on the your cost saving of 30% on GenAI, okay, this is depending on the type of engagement, type of project. We have done POC, close to more than 150 projects, where we have tested this out on terms of software productivity. It varies anywhere between 5%-25%. Okay? And also it depends on, on which phase of the project that you saw. Some, if you are talking only about a testing project, that could probably yield a better, productivity gain. We are seeing software engineering projects give anywhere, as I said, between 5-20. And, some others, or also it depends on the type of, technology employed. We do see about 5%-20%, depending on the type of project, there's some rule, it's quite possible. Nithin, on the margin part... You were saying something, Nithin? Sorry. No, I just had a small follow-up for K. Krithivasan, but I'll go after you. Sure, Nithin. So on the margins, the good thing for us is the biggest headwind, which we have in terms of wage inflation, is taken upfront. And as you rightly called out, we typically inch up from that in the following quarters. Last year, our execution rigor ensured a good trajectory sequentially each quarter. And as you rightly called out, subcontractor cost was one of the critical levers in that improvisation. This year, we believe the subcontractor cost has bottomed out or will remain stable around this level, need not be an incremental lever. In the short term, pyramid, productivity and utilization. ... still, would be the labor and utilization, though we have harped upon it considerably last year. Still provides some opportunity. Sure, sure. So Krithi, just had a follow-up. So the revaluation of ongoing projects, I think last quarter was pretty bad. Not the recent quarter, the quarter before, was pretty bad, not only for you, but for everybody. There was a lot of reprioritization of projects. From a trend perspective, are you seeing that come off, or it is still very extremely uncertain? Well, it may have been better this quarter. Do you see that it is still very uncertain on the reprioritization bit? I think this quarter, that is Q1, has been relatively better for us. But we don't know, like, but the overall situation remains volatile. Okay, so that's the reason we are continuing to stay cautious on our outlook for the next few quarters. Sure, that's very helpful. Thank you so much, and all the very best. Thank you. We have our next question from the line of Sandeep Shah from Equirus Securities. Please go ahead. Mr. Sandeep Shah, your line is unmuted. Please go ahead with your question. Yeah, thanks. Thanks for the opportunity. Krithi, just wanted to understand, is it fair to believe that the first quarter performance has been higher than the management expectation, and what has led to this? Is it largely better than expected discretionary spend revival or better than expected ramp up in the cost takeout deals? Sandeep, we were, probably we knew the beginning of the quarter, this is where we were heading towards. This talk is what we, I would say. So to that extent, I won't call it better than expected. The beginning of the quarter, we were sort of going towards this number. So, so it... I don't want to call it better than expected. Okay. Okay, fair enough. Secondly, in terms of, ramp down pace in the discretionary project, are you witnessing any kind of, declining pace in the ramp down of discretionary project on a Q-on-Q or a Y-o-Y basis? Or do you believe the, pace of ramp down continues to remain at the same elevated level and there is no change in the pace? See, as I mentioned before, Q1 was slightly better, but we think it is too early to call that the trend has set in already. Like, we have to be watchful because the overall sentiment has not changed. Okay. Okay. And Krithi, last question in terms of, annuity projects, which are larger projects coming for renewal, what is your experience in terms of clients negotiating for a productivity gain because of the GenAI? Is it the earlier response also being true for such kind of an experience on a large renewal, where you expect 5%-20% reduction in those, renewals? No, no. See, Sandeep, just to make it clear, I said a 5%-20% productivity on certain phases of the programs are possible. I didn't say that. I didn't say the entire project end-to-end life cycle, we can get 5%-20%. It depends on the individual project and depend on the technology, architecture, everything they use. Okay, coming back to renewal. See, during renewal, it's a common enough experience that the customers do experience a productivity improvement. But what they also do at that time is, usually they add more scope at the time of renewal, so that it is, to a great extent, top-line neutral for us, and we also flow, bring back productivity. So those discussions continue. Sometimes we see opportunities for using GenAI, and wherever you are able to use GenAI and then to offer some productivity, we offer those productivity to the customer. But if you ask me that, is it widespread? I won't say it's very widespread at this time. Like, customers do expect productivity, but asking for extreme or a high level of productivity gain through GenAI is not very commonplace. Like, the discussions happen, we do offer to a customer to explore GenAI for software engineering and bringing productivity, but it is not becoming a huge demand yet. Okay, fair enough. Thank you and all the best. Thank you. Next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Yeah, hi. Thanks for taking my questions. So two questions from my side. One, Krithi, just wanted to understand on the retail segment. I mean, this is a quarter in which we've kind of maybe we've turned the corner. But for us to be able to report growth on a sustainable basis in this, what exactly are the clients' worries in this sector at this point of time? So, like, in BFSI, we know that. I think the U.S. macro improves. I think that should lead to some, let's say, incremental spending or a revival of tech spending that they have put on hold. Interest rate cuts could be possible triggers and all. But what is that is keeping these retail clients their spend on hold? What could possibly change in the coming quarters for us to start reporting growth in this segment on a sustainable basis? Vibhor, like, there could be couple of points. One is overall consumer confidence. The second is also inflation, okay? Because what we see is a varying trend, like even in the last few quarters. We have seen some quarters where the essential segment does well, some quarter the essential doesn't do well, specialty does well. So it's a fairly complex situation on which segment does well. But I would say broadly, it should depend on the interest rates and the consumer confidence in the market. We have seen growth in the last two quarters, but we need, as I said, if the confidence on, if your consumer confidence or outlook is poor in the coming quarters, it may take a hit again. Got it. But then, improving macro situation in which maybe inflation is coming down, with the CPI data today, or let's say there's some possibility of, say, interest rate cuts, you expect this segment, those should act as tailwinds for the sector? Yes, like if overall confidence goes up and the inflation comes under control, we should expect a pickup in the medium term in this segment. Got it. Got it. That's really helpful. Just my last question, on the manufacturing and healthcare verticals, these two verticals have done really well for us, especially over the past three quarters. They've been doing well for almost the entire industry with the kind of spends in that. Any possible headwinds that you are seeing in this segment? Or at least at this point of time, the growth momentum should continue? By and large, we are fine, but that could be in terms of like, if you take automotive industry, okay? With the advent of EVs coming in, the whole industry is being reshaped. So there would be some of changes in the spending priority or investment priority in this industry. So that would be one something to watch out for, like adoption of EVs and how the OEMs themselves, because OEMs are going towards vertical integration. How much they do that vertical integration, how much they impact the Tier 1 s, those are the areas that we have to watch out for. Got it. Got it. Sure. Thank you so much for taking my questions, and wish you all the best. Thank you. We have our next question from the line of Gaurav Rateria from Morgan Stanley. Please go ahead. Hi, thanks for taking my question. The first question is around the nature of deal pipeline. If you could just a little bit elaborate more on what kind of deals you're seeing in the pipeline, and has there been any shift in the mix of the deals towards more smaller deals that get consumed into revenue faster, or it continues to remain the way it was in last few quarters? Yeah. Gaurav, the type of work, the deals come from, like, broadly, if you say cost optimization and discretionary spending. Within that, you can have programs like vendor consolidation, operating model transformation, application modernization. I would say there is, it's not a major shift, okay? But we do hear more about application modernization compared to the past. On the discretionary spend side, you also look at supply chain modernization, customer experience transformation, those kind of programs we keep seeing. From the nature of the opportunities, typically, the cost optimization programs tend to be more tenured because customers give us a large chunk of their AMS for a longer tenure, but whereas the discretionary programs tend to be more short tenure. Overall, if you look at the average tenure, I would say tenure is slowly inching less like instead of a longer program, three or four-year programs, we tend to see a program, programs of shorter nature at a global level. Got it. Secondly, on the BFS, you did talk about some better trend in North America this quarter. Is there any reason to believe that the projects that you have embarked upon would not continue in the near term? I'm just trying to understand that from a visibility perspective, at least some of these projects should continue, if they are longer tenured, right? So then from a visibility point of view, in the BFS vertical, there should be a decent visibility, at least for the near term. As we see, as we, I told you before, Gaurav, as we see today, we don't see a bad, or a increasing trend of project cancellation. But at the same time, we have to be careful that, customers do pause these programs at a shorter notice. So as I see today, it is, continuing the same pace as it was before, but, there's been a tendency to pause these programs at a very short notice, so we have to be careful about that. Got it. Last question from me. The headcount, we have seen the positive addition in last several quarters. So is this a reflection of that utilization has kind of peaked out, from like... or, or reached an optimal level where we should be? Or is it also a reflection that, you know, our order book is to be executed in the coming quarters and hence we will, we'll be needing more heads on, on the roles? Thank you. I think our hiring, we should not look at it from a quarterly standpoint. We look at it with our training, hiring. We look at it from an annual standpoint. And that is an annual thing, core part of our strategy, and that's how we hire, you know. And there is no direct linkage straightaway to the demand because it is also, this will go through a significant amount of talent development and everything else, and then eventually get, they get deployed to the projects. So yes, no, some of it can be the factor because of the fact that we have utilized on all the investments we made last year and the year before that. And some of it is also because of the fact that we want to plan for this year properly. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Over to you. Thank you, operator. We are very pleased with our first quarter performance, growing at 4.4% year-on-year in constant currency amid the caution prevailing in the major market. Deal momentum continued to be very strong in Q1, with our order book at $8.3 billion for the quarter. Operating margins are at 24.7%, declining 130 basis points sequentially following our annual wage hike, with effect from April 1. Our net margin is at 19.2%. We'll be honoring all the job offers we have made, but remain focused on utilizing the capacity we have already built up. Our LTM attrition in IT services fell further to 12.1%. We plan to build the largest AI-ready workforce in the world by organically reskilling our employees. We continue to deliver industry-leading metrics, winning market share and creating value for all our stakeholders. We have an experienced and stable leadership team and an extremely dedicated workforce. It has been the hard work of the 600,000-plus TCSers, which is helping us achieve excellence every day, and I would like to thank each one of them for their contribution to our shared success. With that, we wrap up, our call for today. Thank you all for joining us. 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.