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 *, then 0 on your touch-tone 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. 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 fiscal year 2026 that ended on June 30, 2025. 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 statements, quarterly fact sheet, and press releases are also available on our website. Our leadership team is present on this call to discuss our results. We have with us today Mr. K. Krithivasan, Chief Executive Officer and Managing Director. Hello, everyone. Ms. Aarthi Subramanian, Executive Director, President and Chief Operating Officer. Good evening, everyone. Mr. Samir Seksaria, Chief Financial Officer. Hello, everyone. Mr. Milind Lakkad, Chief Human Resources 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 these risks in the second slide of the quarterly fact sheet available on our website and emailed out to those who have subscribed to our mailing list. With that, I would like to turn the call over to Krithi. Thank you, Nehal. Again, good day, everyone. During our April 2025 earnings call, we had call-out delays in decision-making and project start with respect to discretionary investments. This trend has continued and intensified to some extent in this quarter. Global businesses were disrupted due to conflicts, economic uncertainty, and supply chain issues. We saw cost pressures in our customers causing previously unseen project costs, deferrals, and decision delays that resulted in less-than-expected revenue conversion. In this backdrop, our quarterly revenue declined by 3.1% year-on-year in constant currency terms. Our operating margin was 24.5%, and the net margin was 20.1%. Our total value of contracts signed in Q1 FY 2026 was $9.4 billion, up 13.2% year-on-year. These headline numbers must also be read in the context of successful completion of a very large strategic program of national importance last quarter. Looking ahead, enterprises realize the need to invest in being perpetually adaptive and require a dependable partner that can provide them with not only the right capabilities but also the scale and maturity to manage a dynamic environment. TCS aims to be that partner that helps our clients withstand short-term disruptions even while executing their transformation strategy for long-term value creation. In this context, we are very confident of the robustness of the demand as well as the strength of our business model from a medium to long-term perspective. I would also like to inform you that this will be Milind's last earnings call. He has had a stellar and distinguished record of service for 38 years in this industry. Joining TCS as a trainee in 1987, he rose to lead the manufacturing business group and subsequently the CHRO. On behalf of TCS, I would like to thank him for all his contributions. 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. Aarthi will further share an update on our service offering. Over to you, Samir. Thank you, Krithi. Good day, everyone. In the first quarter of FY 2026, our revenue was INR 63,437 crore, which is a year-on-year growth of 1.3%. In dollar terms, the revenue was $7,421 million, $7,421 million, and a year-on-year decline of 1.1%. In constant currency terms, our revenue declined 3.1%, again on a bi-yearly basis. Our Q1 operating margin stood at 24.5%, reflecting a sequential movement, improvement of 30 basis points. We built up capacity and continued our investments during the quarter with a long-term focus. The demand contraction during the quarter had an impact on our utilization and was offset by lower third-party costs and currency. Higher other income and lower effective tax rate for the quarter helped boost our net income margin to 20.1%. Our EPS grew 6% bi-yearly. Our accounts receivable were at 75 days DSO in dollar term, up 5 days bi-yearly. Net cash from operations was $1.5 billion, which is a cash conversion of 100.3% of net income. Free cash flows were at $1.3 billion, and invested funds at the end of the period stood at $5.7 billion. The board has recommended an interim dividend of INR 11 per share. With that, I'll hand over now to Milind. Thank you, Samir. Our workforce at the end of the first quarter was 613,069. Net addition during the quarter was over 5,000 employees. We have honored all the job offers and will do so for the rest of the year. Lateral hiring will be recalibrated based on the demand outlook. We continue to invest significantly in our business to stay relevant to our customers' changing technology needs. In this quarter, our associates invested 15 million hours in building expertise in emerging technologies, enabling them to lead the transformation journey for our customers. It is gratifying to note that TCS now has 114,000 people with higher-order AI skills. Our LTM attrition in IT services was at 13.8% at the end of Q1, up 50 basis points sequentially. I will now request Krithi to speak on the various demand drivers during the quarter. Thank you, Milind. During the quarter, enterprises remained focused on cost optimization, vendor consolidation, and efficiency-led technology transformation. Discretionary spend continues to remain under heightened scrutiny and pressure. However, enterprises' focus on scaling AI adoption across applications, workflows, and data platforms remains strong. Our approach at TCS integrates expertise in deploying technology blended with contextual knowledge of enterprise, data, business processes, industry strength, and change management. You will see our capabilities in action through real-world examples spanning industries and service areas, which we'll go through with the help of a few customer case studies. First, in BFS, in America, BFS clients are cautious with tech investments as they assess the current economic uncertainty. Growth is being driven by rapid advancements in GenAI, cloud adoption, platform modernization, and automation. Clients are focusing on regulatory readiness, data governance, and cost efficiency through technology rationalization. There is growing demand for integrated digital solutions that enhance customer experience, ensure compliance, and enable scalable operations across banking, capital markets, insurance, wealth, and payment segments. Banks are actively pursuing legacy and mainframe modernization to streamline operations and improve system resilience. Discretionary spend is under pressure. The softness that we had called out earlier in U.S. insurance continued throughout the quarter. However, we are seeing insurance doing well in Europe. BFS continues to remain cautious in Europe and Europe. We believe the current caution in BFS is temporary as there is a lot of unmet demand. Moving on to the consumer business group, this was one of the most affected sectors in this quarter. Widespread industry challenges resulted in funding delays, project postponements, and delayed milestone completion. However, we continue to work on transformative programs across all industry segments. A leading US specialty retailer partnered with TCS to overhaul its product information ecosystem that is critical for driving sales, forecasting, and data-driven merchandising. This is an initiative of strategic importance that had previously faced significant implementation challenges, including fragmented data ownership and complex system landscape. Leveraging deep domain and contextual knowledge, TCS designed and implemented an end-to-end solution with a robust SaaS-based product information management platform that integrated with multiple legacy systems. TCS established scalable data flows that ensured end-to-end data quality and governance, enabled advanced analytics, and empowered vendor-led asset management. The transformation delivered a 3x increase in SKU creation and maintenance speed, unlocked significant annual savings by eliminating manual attribution and enrichment efforts, improving time-to-market operational efficiency, and enhanced customer management. In the manufacturing sector, although the automotive sector faced significant challenges and reduced spending, the manufacturing vertical as a whole showed minor growth. Amidst the uncertain environment, clients are aiming to lower their overall technology debt and are investing in initiatives intended to prepare the technology infrastructure for future demands. TCS and Jaguar Land Rover have a long-standing strategic partnership encompassing various aspects of technology, innovation, and sustainability. This collaboration is evident in areas like software-defined vehicles, customer experience, and the Jaguar TCS Racing Formula E team. At the Formula E World Championship, our performance depends on time-critical data analytics. Whether at the racetrack or at the team base, Jaguar team racing engineers need timely access to this data to make informed decisions about car setup and race strategy. Undoubtedly, this is where championships are won or lost. While Formula E races often take place on temporary street circuits under tight regulations, Jaguar TCS Racing can't often practice on physical circuits or run in-person tests. Regardless, teams must still find ways to develop top-performing cars. We set out to help solve this challenge by enhancing the team's digital twin technology so that it can run more simulations, generate more data, and validate software. TCS Automotive Data Science Team developed the virtual vehicle validation model, which inspects the digital twin of Jaguar I-Type 7 on how to navigate a track-based app based on various inputs. This model runs continuous simulation, saving engineers critical time during race preparation and enabling them to make last-minute changes to the vehicle software in pursuit of performance gains. Having confidence that the simulator results are accurate enables the team to unlock creativity and innovation as well. Moving on to life sciences and healthcare, life sciences customers were exercising caution. They were focusing on essential business activities with some growth initiatives postponed or their schedules put under review. The pharmaceutical sector is grappling with pricing, supply chain issues, and export risks. Companies are prioritizing R&D, profit margin, and operational efficiency. Leading firms in the U.S., U.K., Europe, and Japan are consolidating vendors and business services while leveraging AI. The recent passage of the Big Beautiful Bill in the U.S. includes nearly $1 trillion in Medicaid funding reduction over 10 years, rollbacks to Affordable Care Act, and $500 billion in Medicare spending reductions amongst a host of other changes. These changes are expected to severely impact the earnings of Medicaid-focused insurers, hospital operators, diversified Medicare insurers, amongst others. In healthcare, payers are trying to optimize costs due to rising medical expenses. Pre-authorization delays and claim denials are causing friction with providers. Key priorities are affordability, transparency, simplification, and improved patient experiences. Clients are modernizing core systems, exploring data marketplaces, cyber resilience, and AI in SDLC, t hough budget constraints hinder approval. The MedTech industry is witnessing regulatory scrutiny, demand changes, cost pressures, regional consolidation, new business models, and higher customer expectations. This has put pressure on supply chain to cut costs. Moving on to energy resources and utilities, this vertical phase reduced spending and capital investment due to policy changes and geopolitical tensions. However, they are working on many transformative engagements like rebalancing of supply chain, grid optimization, etc. For a Fortune 500 utility in the US, they are consolidating and transforming their advanced metering infrastructure solution across their operating companies. This major business transformation includes advanced features such as load profiling, forecasting, settlement, and real-time energy consumption management. The system also helps in proactive outage management and provides capabilities for remote operations. The solution will not only transform the customer experience across multiple states in their service territory but will also set up a strong foundation for network analytics and renewable integration. The tech and technology and services industry sustained growth across all markets this quarter. In this quarter, AI has established itself as a fundamental driver of product innovation across all the subsegments under tech assets. Enterprises continue to defer business transformation initiatives and prioritize targeted technology transformation that delivers significant operational efficiencies and cost savings. In the communication, media, and information vertical, enterprises are re-evaluating their priorities with a strong emphasis on AI and automation, diversification, cost optimization, and vendor consolidation. With subscriber growth plateauing and competition intensifying, AI-driven innovation helps CMI companies rethink business models and diversify revenue streams. With AI, the CMI industry is aiming to transform, e very stage of the workflow, including enabling strategic decision-making, content generation, and audience personalization. Foxtel Group, Australia's leading streaming and subscription television company, partnered with TCS to transform their customer service operations by increasing the consistency and speed of responses to customer queries and addressing the challenge of increasing cost of services. TCS deployed advanced GenAI capabilities powered by leading AI platform models to drive measurable business impact. The transformation began with a comprehensive verification of the knowledge-based architecture, ensuring information was easily accessible and up to date. Implementing the AI-powered solution was a game changer, enabling the automation of conversation summaries and enhancing data security measures. This holistic approach ensured that customer interactions were not only efficient but also secure. TCS played a pivotal role in this transformation, bringing domain and technical expertise, contextual knowledge, and proprietary assets. By integrating advanced AI capabilities, Foxtel achieved faster response times and higher first-call resolution rates, significantly improving the customer experience. Agent productivity saw a notable increase, and customer engagements improved while the total cost of ownership for Foxtel came down. During the quarter, TCS and Foxtel Group also won the AI Face Setter category at the 2025 ISG Paragon Awards ANZ in recognition of this impact. Moving on to our portfolio of products and platforms, they continue to help us in developing bespoke solutions for our clients. ignio, our cognitive automation software suite, saw multiple new dealways. Evolving technological trends in AI, agentic AI, and GenAI are leading to increased investments in AI-based systems and intelligent automation. These developments are accelerating ignio's prominence as more customers implement autonomous enterprise solutions. We continue to build on our leadership position in the U.K. life and pension market with key programs going live on our BFSI platform. Now Pensions Limited, one of the major workplace pension providers in the U.K., offering auto-enrollment for its employers and members, went live on TCS BaNCS. They're also leveraging our intelligent experience solutions for ops, digital, and mobile. The program consolidates multiple legacy systems on TCS BaNCS, leveraging secure real-time seamless integration with Pension Lab, a leading pension aggregator in the U.K. market, to drive business growth. We have migrated over 100,000 employers and more than 3.3 million policies to our platform. Lloyds Banking Group has gone live with TCS BaNCS for wealth administration solutions. This is the refreshed offering we have created and is a major milestone for the transfer agency industry, with innovation being introduced where legacy systems are the norm today. With strict U.K. CAS regulations, the solution has been designed to have high STP of all banking, reconciliation, and controls, reducing the risk of any breach to the regulations. The design allows operations staff to handle customer requests with one click, improving satisfaction for both customers and staff. Customers receive one consolidated communication and can make a single payment for multiple deals or funds, streamlining the investment process. We expect these go-lives to further expand our position in the U.K. TCS iON, our platform for digital assessment, exam administration, and learning, has continued impressive performance. We have partnered with prestigious institutes of national importance such as IIT and IIA. This quarter, we released the latest version of TCS MasterCraft, augmented with GenAI and agentic AI. This solution automates the process of modernizing legacy applications that will significantly reduce the cost and time required for manual conversions. The GenAI and agentic AI enhancements will allow organizations to mine business logic faster and more accurately. The automation driven by the latest version of TCS MasterCraft can save up to 70% in cost and achieve results up to twice as fast as traditional interventions. All the customer case studies we spoke of illustrate the impactful projects we undertake in collaboration with our clients and technology partners. Our solutions are driven by continuous upskilling of our talent, investment in R&D, contextual knowledge of enterprises, and investments in creating products and platforms such as ignio, TCS BaNCS, TCS JDD, and TCS Cognix, all of them supported by strong partnerships within our technology ecosystem. Let me conclude by saying that we had robust deal closures this quarter, and our total value of contracts signed in Q1 of FY2026 is $9.4 billion. North America TCV was $4.4 billion, BFSA TCV was $2.5 billion, and Consumer Business Group contributed to $1.6 billion. Our deal pipeline continues to be very healthy and well distributed across verticals and geographies, and that gives us the confidence on our customer-centric strategy. With Aarthi now leading all the service lanes, we are broadening our leadership in emerging technologies and aim to bring even more seamless integration across our service offerings. With that, let me hand over to Aarthi for giving more colors on our service offerings. Thank you, Krithi. This is my first quarterly earnings call after I took on the role, and it's a pleasure to be here with all of you today. I would like to provide some updates on our service line offerings and the impact they have created for our customers during the quarter. I would like to first begin with AI and data. We are seeing enterprises move beyond small-scale use case-centric pilots to discipline production-grade rollouts that tie GenAI directly to business outcomes. Customer spend is clustering around three big themes: AI-led business transformation, AI-enabled SDLC, IT operation, and data platform modernization that sets the foundation for agentic AI. Vendor consolidation plays and sovereign AI cloud deployments are starting to point to a maturing AI and data market that now demands security guardrails and observability by default. TCS is leaning into this opportunity with new offerings in agentic AI and AI infusion in our services. Our investment in TCS WisdomNext, our leading AI platform, is expanding with the addition of agentic AI capabilities. We continue to scale our workforce on AI and deepen AI and data partnerships across both hyperscalers and native AI and data companies. I would like to share a couple of examples. AmTrust, the New York-based multinational property and casualty insurance company, chose TCS to develop a solution using large language models to extract risk information, generate quotes against the competition, and create a personalized summary. This new solution replaced the previous method for doing the same, which had brokers re-keying a lot of data manually and also reduced the time for quotes extraction and generation from 30 minutes to 5 minutes. Brokers also benefit from comparison, recommendation, and personalized summaries as it reduces the need for manual analysis and comparison to understand the customer quotation. This innovative solution received the Celent Model Insurer 2025 Award in the Customer Experience Transformation category. TCS is collaborating with Owens Corning to co-develop GenAI-powered solutions that enhance knowledge search and enable intelligent automation. These efforts are aimed at empowering employees with faster access to relevant information, streamlining routine tasks, and improving decision-making. By reducing manual effort and supporting greater efficiency, the partnership is helping build a foundation for a more agile, responsive operation without disrupting existing business processes. Moving on, I would like to share a couple of highlights of marquee engagement. On the leading Hyperscaler Public Cloud platforms, TCS helped the leading electronics retailer in the US to relaunch the midnight store opening model and successfully completed a gaming product launch within a very short window. TCS leveraged its peak season framework to plan forecasts and demand and implement cloud-based real-time monitoring of the traction, traffic, and ensured stability of the store operation. The TCS solution helped open more than 1,000 stores across the Americas at midnight to drive additional sales of more than 100,000 units within two hours, resulting in substantial incremental revenue for the retailer. Enterprise Solutions continue to be an area of focus for our customers. Clients are increasingly investing in streamlining their business workflows and modernizing their digital core by adopting AI-powered SaaS platforms. I would like to share a few examples. An American multinational energy conglomerate chose TCS to help embark on a commercial transformation journey to establish new business models. This included modernizing their existing commercial platforms to introduce subscription-based models as well as deliver enhanced customer experience and reduce technical debt. TCS designed and modernized their current commercial platforms with the implementation of a robust subscription management system, leveraging leading SaaS-based CRM and CPQ platforms. Expected business outcomes include a 70% reduction in cycle time in the lead-to-cash cycle and a 20% increase in customer satisfaction. A large European pharmaceutical and agrochemical company partnered with TCS to redesign and harmonize their end-to-end processes and create a resilient backbone across their businesses, leveraging a leading ERP platform. As part of a transformation across all the client businesses, with a view to create a single source of truth for their downstream analytics in order to achieve increased productivity, improve time to market, and reduce inventory. This is a multi-country, multi-year program, of which the pilot country go-live went very successfully this quarter. \ All of us know organizations are prioritizing cybersecurity to protect sensitive customer data, ensure trust, and safeguard brand reputation. This quarter, the focus of our customers has been on identity and access management, managed detection and response, and governance risk and compliance services. We are also seeing increased traction for enterprise attack surface management, cloud security, data security, and network security. For a leading transport organization in Europe, we recommended information security and IT governance practices for AI assets, a gainst various industry standards, including the EU AI Act regulatory requirement, thereby enabling the customer's organization to establish revised security governance and controls. We also provided strategic recommendations for a leading global biopharmaceutical major aimed at maturing identity and access management practices towards industry-leading standards, enhancing the robustness and efficiency of IAM controls. By adopting AI-powered threat detection, secure transaction frameworks, and a robust compliance solution framework, businesses are strengthening their defenses against evolving threats while maintaining operational integrity and customer confidence. The last service line I would like to talk about is TCS Interactive. During Q1, businesses focused on operational excellence and innovation, harnessing data and AI for better performance. TCS Interactive enhanced customer experience and marketing through creative engineering powered by AI. In Q1, we successfully executed a precision marketing campaign for the after-sales division of a global automotive OEM. Leveraging our AI-powered TwinX Digital Twin platform, we simulated over 100,000 campaign variants, systematically filtering out low-performing strategies and replacing conventional prey-and-pray emails with data-driven personalized targeting. To rigorously validate the platform recommendations, we reduced the randomized control trial. We conducted a randomized control trial comparing outcomes between TwinX-driven customer groups and traditional approaches. Within just one month, the pilot delivered a statistically verified 5x increase in dealer visits and 2x increase in service and parts revenue. Building upon these robust outcomes, we are now collaborating with the client to embed TwinX into subsequent service campaign cycles. With that, I would like to open the line for further questions. Thank you very much. We will now begin the question and answer session. Participants who wish to ask a question may press * and 1 on their touchstone phone. If you're using a speakerphone, please pick up your handset while asking a question. This is required to ensure optimum audio quality on the call. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Sudhir Guntupalli from Kotak Mahindra AMC. Please go ahead. Hi, team. Thanks for the opportunity. Krithi, just a couple of questions. So apart from the BSNL deal, is there any other client-specific situation you might be going through in any vertical or geography? In which geography, Sudhir? No, in general, in any vertical or geography. Apart from the BSNL deal, are you seeing any other client-specific situation? There is no specific client-specific situation, no. Okay, sir. And just some clarification on your comment in the press meet. Are you still reiterating that FY'26 will be better than FY'25 at the overall company level, or more so you're talking about the core markets? Sudhir, at this time, we are confident the international market would do better in FY'26 than FY'25. However, it is our aspiration to continue to drive growth in other overall growth as well. It is a high bar to cross, but we work towards that. Understood, sir. Last question from my end. You mentioned that by July end, probably, there will be some clarity and pent-up demand. From the time that you started announcing the trade deals with major trading partners like China, U.K., etc., are you seeing that the peak of the uncertainty is already behind and some amount of improvement in the client decision-making process? We are not starting seeing that so far, Sudhir. Because, as you know, even with China, they have a framework deal. The actual deal and tariffs have not been announced. My guess is that till most of the trade deals are announced, there will be this lack of clarity. Got it, sir. Thank you so much. Thank you. We'll take our next question from the line of Kumar Rakesh from BNP Paribas. Please go ahead. Hi, good evening, and thank you for taking my question. And welcome, Aarthi, to the TCS team, m y best wishes. My first question was, it appears like decision-making, which you spoke about, deteriorated towards the end of the quarter. What are the risks to the September quarter? What I'm trying to understand is all the project delays and the pauses which happened during the quarter. Is it fully reflected in the number which we have reported, or there's more to come into the September quarter as well? See, if there are no further because whatever issues with the delays that we had have been to a great extent factored into Q1 number. Of course, there'll be some small residual effect in Q2 as well. If there are no further delays, Q2 should be at least better than Q1, but we need to wait and watch based on what happens in the market. Thanks for that. My second question was on margin. Before we entered with the BSNL deal, our margin was trending about 25-26% at EBIT level. Understandably, after that, the margin came down. Now we have exited from the BSNL deal, but our margin is below the level where it was prior to the BSNL deal. Now, between this period, you have lowered your SG&A expenses. I would imagine that your employee pyramid also would have improved. You have spoken about how productivity has improved over the last one year, and pricing also seems to be stable. What is pulling down your margin compared to where it was before the BSNL deal? A good comparison would be the year-on-year margin. Yes, it is certainly where business finds down. On a year-on-year basis, through the year, like we have called out on the quarterly basis also, we have continued to make investments, investments in people, like we had called out in Q4. Overall, the investments which are required for long-term growth in this quarter as well. We invested in capacity. We invested, continued our investments, and that is what is reflecting into it. Having said that, if you look at it. The capacity versus the demand contraction mismatch leads to we are carrying excess capacity or additional capacity, which should help us in our future demand. Going forward, we should be able to further tighten our operating leverage. Kumar, if you remember, last quarter, we had said that if uncertainty continues, we might have an impact on lower operating leverage. Thanks, Samir, for that. Just one clarification on the international revenue to be similar to last year, which you have spoken about. Is that in USD terms you are talking about or constant currency? Because on a full-year basis, we will have a sizable cross-currency impact. No, constant currency terms. Like-to-like, the national revenue to international revenue is constant currency terms. Got it. Great. Thanks a lot. That is all from my side. Thank you. We will take our next question from the line of Ankur Rudra from JP Morgan. Please go ahead. Hi, thank you. The first question is on terms of the weakness you've seen across a range of industries, and you did highlight it's to do with the trade-affected sectors and geopolitics in general. Could you also mention if there's any kind of, I wouldn't say pricing pressure, but any kind of out-of-turn demand for productivity pass-through that you may be seeing across industries, perhaps more because of the current demand environment? One, the overall pricing has been reasonably stable at an overall level. If you ask, is there any demand on productivity, there are instances where large deals are coming up. There is a demand for productivity. We don't see much coming as a pure discount, but coming as AI-infused productivity or otherwise also normal productivity, w e do see demand coming for that. It is not industry-specific. I would say it's more based on the size of the deal or the tenure of the deal. Will this impact the revenue conversion from the signings? Because we've had our book to bill at about 1.3 for a while, but our revenues just haven't picked up. I understand some of it is more near-term because of the recent trade uncertainties. Do you think AI-infused productivity pass-throughs might impact the revenue conversion we might have in the medium term? Revenue conversion from signing is not impacted because of the productivity. Usually, the productivity is given up at the time of signing. Once we sign, we don't see demands on productivity during the term of the deal, normally. If at all, it happens to be very, very rare. We are giving AI, as I said, AI-infused productivity, but it's based on when we sign the deal itself. Okay. Thank you for the clarification. Could you talk a bit about how the pipeline replenishment is going on? I understand in the near term, there's been some deferrals and delays. In terms of overall pipeline formation, how is [crosstalk] that progressing? Ankur, the overall pipeline has remained quite strong. Both, see, we measure it in terms of whether the pipeline from multiple industry verticals as well as geographies. On both dimensions, the pipeline has remained strong. We've been able to replenish all the deal closures that happened in Q1. Okay. Just last question on margins. You did highlight that you're investing in talent, which is why margins haven't picked up despite the BSNL ramp down. Now, you have a new BSNL contract that will be ramping up perhaps from the next quarter onwards. Is not there going to be a significant headwind on margins? How should the margin trajectory be for the rest of the year? Are there any levers you might pull to hold your margins here? Yeah. So, Ankur, like I said, we invested into capacity and anticipating growth this quarter while we saw demand contraction. We are at carrying capacity. We will focus on, so in terms of levers, we will focus on improving our operating leverage into Q2. The key levers would be on improving our utilization, which took a hit this quarter, improving our productivity, and focus on pyramid. These would be the levers, as you rightly called out, from a headwind perspective. As we start delivering the second phase of the order, the revenue mix might get slightly impacted. But overall, as a portfolio, we'd look towards improving margins from here. Just as a quick follow-up, how much of the utilization improvement is dependent on revenue growth on the international business? How much of the utilization? This quarter, the international business saw a de-growth. It was 50 basis points de-growth versus if you see, we have added people through the quarter. I get it. I was asking about second quarter or second or third quarter. For you to be able to improve utilizations or optimize that, isn't that growth-dependent? Yes. In In the future of it, we would want to drive revenue growth, but we would look at optimization because there is capacity which has built up into the system. We will not leave demand on the table, but we'll also look towards optimization. Okay. Appreciate it. Thank you, Best of luck. Thank you. We'll take our next question from the line of Ravi Menon from Macquarie. Please go ahead. Great. Thank you for the opportunity. Sudhir, it looks like there has been significant hiring, probably at the mid and senior levels, because I see that despite the BSNL contract pass-through costs going down, our direct costs have not gone down as much. Would that interpretation be right? Sorry, Ravi, can you repeat the question? The early part of the question? Yeah. Sorry, I'm down with a bad flu. So I was asking whether there has been significant mid and senior-level hiring because your direct costs have not gone down much in proportion to the BSNL pass-through costs. We haven't called out whether, I mean, our hiring has been across, and based on overall costs not going down? [audio distortion] Is that a no? I can just repeat that one more time. I was just saying that with the BSNL pass-through cost, we would have expected to see a lot more decline in the direct costs. It looks like employee numbers are not up too much, but I think we've probably done a lot more mid and senior-level hiring apart from the junior-level hiring that we do normally. Ravi, you would see a 70 basis points decline or positive impact because of lower third-party expenses. A similar like-to-like for employee costs. This includes, as you rightly called out, not just the hiring. We have given additional QVA here. Okay. Right. Thanks. In BFSI, we've actually seen a slight decline Q-o-Q. This is, I'd say, kind of reset the momentum that we had seen beginning of last year. Banks have actually been reporting good results. Any positive signs that you're seeing from banks' customers now, or this is expected to continue? No. See, this decline is coming from some of the, actually, to a very good part, positive side of it is the BFSI North America and BFSI U.K. have a marginal growth. The decline came from BFSI in Europe. That is also more driven by a completion of a large engagement that we have taken. Otherwise, structurally, yes, there is some amount of delay, but I think North America and U.K., particularly in BFSI, are continuing their growth path. One last question. The high-tech side, that is where we had seen the spending cut start. Now, that seems to be trending up. This is where we've also seen some of your peers have to pass on significant productivity improvements. Looks like you're not seeing any such demands, right? By and large, we are seeing a growth in accepting one or two clients. We are seeing strong growth in the high-tech segment. All right. Thanks so much, Best of luck. Thank you. We'll take our next question from the line of Abhishek Pathak from Motilal Oswal. Please go ahead. Yeah. Hi. Thank you for the opportunity. The first question was around the new BSNL order we received in May. When do we expect this to ramp up? I mean, is this going to be a one-shot ramp-up into Q and then a ramp-down in the next quarter? That's the first question. The second question is around margins again. I understand that we are carrying excess capacity. Considering we have attrition trending upwards of 13%, why would we carry this capacity? I mean, do we expect a materially better H2 with regards to growth in anticipation of which we are holding this capacity? Because our cost of revenues, the employee cost at 47.6%, is probably at an all-time high, and c onsidering we will have BSNL headwinds coming into Q as well as a potential wage hike, I just do not understand how much of this will be offset by the operating leverage that we are expecting? Those were the two questions. Thank you. Okay. Abhishek, first, on the BSNL deal, we have just received an advance purchase order. This is not in the TCV yet. We are awaiting circle-wise POs. Once we get it, then the execution starts. Once the circle-wise POs are available, you can expect execution on a similar trajectory to the one we delivered on the 100,000 cells. Coming to margins, your question was in terms of, w hy are we, is it in anticipation of demand? We added people in Q1 in anticipation of what we want to service in Q1. What happened through the Q1 was a reduction in, or contraction in, demand. demand. That is where we carried that excess capacity. We pre-planned it, but Q1 did not plan out as we had planned for. Understood. Just to sort of follow up, our employee costs are, as I was mentioning, almost at an all-time high. As growth picks up, we expect that to materially trend downwards towards the 45% range, let's say over the next two-three quarters. That is where we should be expecting those gains to come from? Two clarifications I would like to do, Abhishek. One is, if you are comparing sequentially Q4 versus Q1, the employee cost as a percentage of revenue might not be directly comparable because the, r evenue mix is different. There was a significant third-party component sitting in the revenue. Having said that, your question in terms of current revenues or employee cost at 47%, should we be trying to optimize it? Yes, we'll look towards optimizing that and bringing that percentage of revenue downwards. Understood. Thank you. Thank you. Thank you. We'll take our next question from the line Nitin Padmanabhan from Investech. Please go ahead. Yeah. Hi. Good evening. Thank you for the opportunity. You sounded pretty cautious on BFSI overall in the commentary. If I look at the deal wins on a trailing 12 months, BFSI deal wins seem to be up 12%. If you could just help contextualize, are you seeing any rescoping downwards or any such thing, or it was just a broader comment? See, like every other industry, Nitin, there are some places where there is a project pause or scope reduction. Otherwise, I say we continue to be quite positive on a medium to long term on the BFSI, based on, like rightly pointed out, the order book closures in the last year. There are instances where there are delays or the scope reduction that has also come up. Right. Just to understand. On a sequential basis, last quarter versus this quarter. Would you characterize that the demand has actually, at least from an environment perspective, has got worse, or it's the same? For BFSI specifically and across the board as well. See, if you look at a revenue basis, you can see that our revenue has an overall drop, but there's a very minor growth in, as I mentioned before, in North America and U.K., but it's a very minor growth. It is, I would say, to some extent, geography-specific. North America and Europe demand in BFSI has remained stable. Europe, we have seen a contraction. If you take it from a TCV perspective, we don't want to get a quarter-on-quarter comparison on TCV because it tends to be lumpy. Some quarters, you sign very big deals, and some deal closures also happen towards the end of the quarter. We don't want to go by a quarter-on-quarter TCV comparison. Got it. Just from a pure, because there is a dichotomy, right? Our deal wins over the last three quarters, including this one, have been pretty decent, actually. On one hand, the deal wins are decent. You seem to have a good pipeline. On the other hand, we seem to be seeing maybe the rescoping and the negative surprises on demand, like we saw this quarter. From that perspective, what exactly, how would you sort of explain this? Because people seem to be signing, but they do not seem to be executing. Nitin, what is happening is some of the deals where the clients decide that they can reprioritize, or as I was explaining or de-scope, I was explaining in the earlier question, there was one particular large client where they decided that m aybe the particular work can be done, they can delay the work or extend the period over which the work can be done, and they ramped down the number of people that were engaged. Here, the deal was neither canceled nor paused, but the duration of the deal was increased to give them more time to manage their spend. There are some places where we find the projects are started but started on a lower pace. There are some places where the projects are paused for a duration. You see a combination of all these things, which together bring this scenario of overall deal signings are okay, pipeline is okay, but the immediate quarter revenue numbers are not in sync with what we should be expecting. Got it. Just one last clarification from my end. For the, you are actually currently assuming that the international business should be better in the following quarter, and BSNL, it will take time until the POs come through for the actual execution to take place. Those two are a fair understanding? Nitin, as you know, we don't give any specific guidance. On the international revenue part, we are more optimistic on the coming quarter. What is the other question? Awaiting the BSNL PO. We are awaiting. Got it. Got it. Thank you so much and all the very best. Thank you. Next question is from the line of Abhishek Gupta from Axis Asset Management. Please go ahead. Hello. Thank you so much, sir, for taking my question. Mostly, the question is on the North America side. If I take the last 12 quarters CQGR, it seems to be kind of flat to slightly negative. North America being one of the biggest markets, where are we losing in this market, and is it not growing in absolute basis for us? [crosstalk]. Abhishek, can you please mute your line? There is background disturbance on your line. Thank you. Sir, p lease go ahead. Abhishek, I will not characterize it as losing any market share in North America. For starters, we are participating almost in all major engagements, and we are also winning our fair share, and that is consistent or improving. Overall, as we explained, while we are winning, there are instances where you have project delays or ramp-downs, which is causing the growth to be offset. That is what the end result you see. I do not think that we are actually losing anything in North America, Abhishek. Got it. The last three from my side is, if I look at your client metrics, there seems to be two clients in size have gone down from $100 million bucket. Is it a concerning point for, as an investor, or how do you look at the metric? Abhishek, whenever there is a revenue reduction, it is concerning. We are worried. At the same time, it need not be. See, while the client could be, for instance, we are measuring it based on last twelve months' revenue. If the particular client is in the borderline of, let's say, $101 million, and because of this overall reduction in revenue, the client moves from $101 million to even $99.5 million, we will no longer count that particular customer as a $100 million client. So, It is a concern. Is Is it something that you should worry about? I will not. Because once the growth returns, these customers will be back onto the $100 million plus range. There are some cases, even because of the cross-currency movement also, customers move back and forth. If they are in the borderline case, they may move back and forth between $100 million up or below because it is counted in dollars. Got it. That is informative. Thank you so much. Thank you. Next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead. Hi. Thanks for taking my question. My first question is trying to understand the investments that we talked about on creating capacity as well as on building a talent pool. Is there some specific hiring going on that is upfronted in the cost? That is why the employee cost, in absolute terms, is up by $150 million, w hile the number of employees have not increased significantly? Just trying to understand why there is a big jump in employee cost in the last two quarters, whereas our international revenues have largely remained flat. As I clarified, it is not just adding people. We have given a higher QVA as well this quarter. Last quarter, we had called out about tactical interventions, which was in terms of promotions. Got it. My second question is on the conversations that we are having at the time of renewals. Have you seen more conversations around infusing the generative AI technology on the renewals? And where would we be in our journey of taking this technology to our top 100 clients? Let's say, have we already reached out to our top 100 clients and trying to proactively use this technology and infuse that in all our existing work package? Just trying to understand where are we in the journey. Hello. You're right. Whenever there is a renewal, there is, we g o back to them with a come-up with an AI-infused solution. To be honest, we don't wait to infuse AI for the renewal in most of our clients. Whenever we see an opportunity, the AI-infused solution can give better productivity and better outcome for our customers, w e proactively do that. We do it in almost all kinds, whether it's a cost optimization program or it is a transformation program. Whenever we look for the opportunity, we look for it in every phase of the project and every type of project. Got it. Last question, Krithi, on agentic AI solution. How are the contracts structured with the clients? Is it largely in the form of fixed-price projects, or is it also being sold as some license fee? Just trying to understand how are we trying to monetize our solutions around the agentic AI. Thank you. This is an evolving space. What we find is there are some customers that you'll see multiple opportunities. There are some where we do based on the outcome. There are some customers that expect that this is better to do it on T&M. Because as it is evolving, they also want to see how the results are. They're able to benefit from the results. So they want to do it on T&M, and then after a period of time, move towards a fixed-price model. We are seeing both options here as well. Thank you. Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to the management for closing comments. Over to you. Thank you, operator. In Q1, FY'26, our revenue declined by 3.1% year-on-year in constant currency, with an operating margin of 24.5% and a net margin of 20.1%. Our TCV was robust at $9.44 billion in Q1. We are closely monitoring developments worldwide and remain committed to maintaining strong client relationships, positioning ourselves as a strategic partner. I would like to express my gratitude to all TCSers for their hard work and unwavering dedication in realizing both their own potential and that of the company. With that, we wrap up our call today. Thank you all for joining us. Thank you. Thank you, members of the management. On behalf of TCS, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.