Ladies and gentlemen, good day, and welcome to the TeamLease Q3 FY 2026 Conference Call, hosted by HDFC Securities. 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. I now hand the conference over to Mr. Amit Chandra from HDFC Securities. Thank you, and over to you, sir. Yeah. Thank you, operator. Yeah, good evening, everyone. On behalf of HDFC Securities, we welcome you all to the TeamLease Q3 FY 2026 Earnings Call. Today, we have with the, today we have with us the management team of TeamLease, represented by Mr. Ashok Reddy, Executive Vice Chairman; Ramani Dathi, CFO and COO; Neeti Sharma, CEO of Specialized Staffing; and Nipun Sharma, CEO, Degree Apprenticeship. I will now hand over the call to Mr. Ashok Reddy for the opening remarks, post which we can open the floor for the question and answer session. Thank you, and over to you, Ashok. Thank you, Amit. And also just to chime in, we also have Suparna, who's joined us now as the CEO and MD of TeamLease. She will take charge on the conversation from the next quarter, but she's come on board and is effectively getting inducted. Also, just to represent the staffing dialogue, we have Bala joining us from the team on that side. With that, thank you all and good evening for joining the call. We had a flat quarter in terms of revenue in Q3. But effectively, on an EBITDA basis, we had about 11% growth quarter-on-quarter and 22% growth year-on-year. PBT grew by 69% on a sequential basis, primarily driven by some element of an interest credit on tax refunds. We lost, as we had indicated, that there was a regulatory headwind in the BFSI sector with a certain client. We lost about 27,000 headcount during the quarter across general staffing and the degree apprenticeship side. However, in line with that, we have started to reduce some of our core headcount to bring in optimization of costs. Our initiatives on digitization and cost optimization have been consistently contributing to operating leverage, and we do see that continuing to play out as we go forward. We did have a second consecutive quarter of net growth on the specialized staffing business. Both for staffing and DA, we do see a healthy pipeline of demand for the coming quarter. So while we've had an element of negative for Q3 in both these businesses, we believe that will get corrected for growth in the Q4 basis the pipeline of demand that we have. With that, I will also just get in the perspective from the businesses and finance before we kind of open up for questions. So I'll have Bala cover the specifics on staffing, moving to Neeti on the specialized staffing, Nipun on the DA side, and Ramani on the finance side. Bala, for you. Thank you, Ashok. Good evening, everyone. In Q3 FY 2026, we continued to see a gradual structural recovery in the staffing ecosystem overall, although the pace remains uneven across sectors and geographies. Fiscal and monetary actions over the past few quarters have begun to support consumption and business sentiment. At the same time, customers remain selective, with hiring decisions increasingly being linked to productivity, compliance, and near-term visibility, rather than just to pure volume growth. Against this backdrop, our general staffing business closed the quarter with a headcount of approximately 2.82 lakh associates, representing a net change of -21,350 associates sequentially. This reflects a regulatory-driven transition with one large NBFC client, wherein they absorbed over 20,000 associates onto their own payroll. This was a client-specific and role-specific transition, executed in an orderly and compliant manner. From a growth standpoint, revenue momentum in general staffing is lower than the past trend, mainly because of higher hiring in non-metros, where average salaries are 30%-40% lower than those in urban areas. During the quarter, we added about 22 new client logos, with 55% coming under variable markup or outcome-linked pricing structures. On the hiring side, we delivered about 16,700 gross joinings during the quarter, reflecting that over 25% of hiring was fulfilled entirely through our own efforts. This reflects sourcing resilience despite off-season downtrends and tepid growth. 19% of this overall gross joiners were first-time employees, continuing our role in workforce formalization. Sectorally, BFSI remains in transition, but we are seeing early signs of stabilization, particularly in frontline sales, collections, and service roles, with demand emerging more strongly in Tier two and Tier three markets, as called out earlier. Greater regulatory clarity and improving rural liquidity are expected to support a more normalized recovery over the coming quarters. In the consumer segment, demand remains mixed. Urban consumption continues to be subdued, while semi-urban and rural markets showed relative resilience. E-commerce and logistics saw seasonal staffing upticks linked to festive demand, though growth remains measured. Clients continue to expect benefits from GST-led efficiencies to play out more meaningfully over time. In telecom and industrial segments, hiring remains selective and productivity driven. While operators are increasingly focused on technology-led leverage, we continue to see targeted manpower expansion in areas such as frontline sales and network operations, which aligns very well with our operating model. Operationally, our focus on technology-led leverage and margin expansion remains central, enabling us to support a larger associate base without proportionate increases in overhead. Continued investments across digital hiring, payroll link compliance, and associate engagement are driving lower costs to serve and improve client experience as well. Alongside this, we are strengthening pricing and margins through disciplined commercial actions and the rollout of new direct-to-associate offerings, including Earned Wage Access, loans, learning and assessment services, and curated rewards and benefits. These initiatives enhance associate retention and productivity while creating non-linear revenue streams, and we expect their contribution to increase progressively over the coming quarters. Finally, looking ahead over the next 3-9 months, we expect demand to broaden gradually with BFSI as a sector stabilizing further, steady momentum in consumer-linked roles, and continued benefits from technology-led productivity initiatives. We currently have over 16,000 open positions, and our sales pipeline remains healthy. While near-term sectoral volatility persists, our focus on execution, diversification, and margin accretive growth gives us confidence in delivering sustainable performance through the remainder of FY 2026. Thank you, and with that, I would like to hand it over to Neeti. Thank you, Bala. Good evening, everyone. For the specialized staffing business, we've continued to make steady progress in headcount, revenue, as well as margin growth. The hiring demand continues to be measured, focusing on specific niche skills as against volume hiring. During the quarter, our associate base grew by 115 headcount, reflecting calibrated hiring aligned to the industry's demand. We have had a quarter-on-quarter sequential headcount growth of 2% and a year-on-year 7% growth. During the past quarter, we've added 28 new customers across GCCs, IT services, and non-tech companies. New client additions were well diversified across industry segments, reinforcing the strength of our market positioning and execution capabilities. Overall, our revenue performance during the quarter was influenced by seasonal operational factors. Gross revenue growth was moderated due to a higher proportion of non-billable days during the festive period and year-end furloughs. The impact is temporary and seasonal in nature and does not reflect any reduction in demand, client engagement, or deployment pipeline, which has remained stable throughout the quarter. The GCC segment continued to be a core growth engine in Q3 as well for us, contributing approximately 65% of our net revenue. We today partner with over 100 GCCs across life sciences, BFSI, engineering, consulting, consumer, telecom, and technology sectors, supported by scalable engagement models such as BOT and staffing. At any point of time today, we have over 500 open positions from these GCC customers. Expansion within existing and new GCC continues to support our revenue and margin growth. While the broader IT hiring market continues to be flattish, we have seen demand increase in areas related to AI, data, cloud, and cybersecurity. Conventional hiring in tech stacks such as SAP, Full Stack, Automation Testing, ServiceNow, et cetera, continues to grow in single digits. However, hiring for people managers, manual testers, Java and.NET, software development kind of roles has substantially come down. Technology hiring within the non-tech industries and specialized skills hiring is also picking up pace. About 30% of our hires are with specialized skill sets, such as SRE and engineering skills, and we will expand this going forward. Our global business continues to show steady sequential progress. We are now over 100 headcount across sectors and technology stacks. Our global growth continues to be margin accretive, supported by close integration with India delivery teams and our consulting-led staffing approach, thereby stabilizing the business further. Operational execution remained strong during the quarter. Hiring and deployments were closely aligned to industry demands, while delivery efficiency and recruiter productivity continues to improve. This has been supported by better planning, utilization discipline, and automation-led enablement. We managed the seasonal operational impact effectively in the last quarter while adding new customers, strengthening GCC relationships, and improving productivity, resulting in consistent margin-led earning growth. With festive-related non-billable impact behind us, and recent client additions, we are expected to scale better and provide a strong foundation for predictable performance, margin resilience, and sustained growth in the coming quarters. Thank you, and with that, I would like to hand it over to Nipun. Thank you, Neeti. TeamLease Degree Apprenticeship remains focused on the fundamentals of skill development, making vocational education aspirational, accessible, and affordable through apprenticeship-embedded programs aligned with the national education policy. Led by industry, supported by clear qualification pathway, and delivered in collaboration with the academy and employers. These programs leverage NAPS and NATS as a core framework, strengthened by our technical, functional, and productivity-led learning solutions to help industry with a future-ready workforce. During Q3, TDA recorded a net drop of approximately 5,600 apprentices across NAPS, NATS, and WIP. This was primarily driven by two regulatory-led transitions, one at a large NBFC client and another at a large agricultural client, where apprentices were absorbed onto the client's own payrolls. These exits are being addressed through new client acquisitions and incremental demand from existing clients, with recovery expected in Q4. Operationally, we have maintained the PAPM in spite of a drop in apprentices count. During the quarter, we added 17 new client logos. 20% of our total client base and 30% of our apprentices have adopted our learning solutions. This reflects the impact of learning on productivity improvement, attrition reduction, and higher apprentice engagement. We also observed strong momentum in the global capability center segment, with increasing traction from clients seeking support in apprentices act compliance, as well as in building steady long-term talent pipelines. A key focus during the quarter was the monetization of apprenticeship-linked product lines, particularly managed training services. Market response has been encouraging and is reflected in a strengthening of sales pipeline. From a market development perspective, we remain focused on evangelizing apprenticeships across the GCC segment and key industry sectors, helping employers better leverage the apprenticeship programs for structured talent development. Going forward, the recent Union Budget provides strong policy tailwinds for the accelerated adoption of apprenticeships and education-integrated apprenticeships across industries. There's an increase of 6% in budget allocation over 2025-26 for subsidy under NAPS, which now stands at INR 1,250 crores. With electronics and semiconductors industries identified as key growth engines, alongside focused support for biopharma, healthcare, hospitality, tourism, textile and capital goods, coupled with tax incentives for GCCs and data center ecosystems, demand for a skilled job-ready workforce is expected to rise meaningfully. Additionally, the proposed establishment of five education hubs across industrial corridors is expected to deepen industry-academia collaboration, enabling scalable apprenticeship-led and work-integrated education models to support sustained economic growth and future talent creation. Thank you, and that-- and with that, I would like to hand it over to Rama. Thank you, Nipun. Good evening, everyone. Revenue growth in specialized staffing and HR service businesses has been upwards of 30% year-on-year on YTD basis. Because of lower gross billing rates in staffing, overall group revenue grew by 8% year-on-year. Sequential revenue growth is muted because of insourcing of about 27,000 headcount of a large NBFC client in staffing and DA businesses. With digitization and cost optimization measures, EBITDA grew by 11% on a QOQ basis and 22% year-on-year. EdTech catch-up billing also has contributed to sequential EBITDA improvement in this quarter. Staffing EBITDA margins have improved by about 6 basis points sequentially. There is dilution of year-on-year margins in specialized staffing vertical, which is in line with the planned MSP business. Group EBITDA margins have been consistently improving on 9-month period YOY. We have received about INR 100 crore of income tax refunds during the quarter, along with INR 12 crore of interest credit, contributing to an increase in other income. Excluding the interest income and EdTech seasonality, Q3 PBT growth is 10% QOQ and 16% YOY. 9-month PBT growth without one-off interest income would be 22% YOY. A major event during the quarter is notification of new Labour Codes. By virtue of our contracts with clients, any incremental liability or cost on account of regulatory changes will be passed on to the client, and hence there is no P&L hit on the gratuity or leave encashment liability of associate employees. For core employees, INR 5.7 crore of provision has been made towards labor code implication and has been disclosed as an exceptional item in P&L. DSO in staffing business stands at 7 days, and the overall group at 15 days. Funding exposure in the staffing business is maintained at 14%. Free cash balance stands at INR 430 crore, and outstanding income tax receivable is INR 250 crores. All balance sheet metrics are stable and steady. We can now move to specific questions. Thank you. Amit, we can move to the questions now. 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. The first question is from the line of Amit Chandra from HDFC Securities. Please go ahead. Yeah, thanks for the opportunity. So my question is on the, you know, general staffing. Obviously, we have seen a steep decline in terms of associate headcount because of, you know, insourcing and specific clients. So it, you know, have you seen the full impact of the insourcing or still, you know, we have the impact left, which is going to come in the next quarter? That is the first question. And also, you know, the corresponding to that is, the margin improvement that we have seen in the general staffing, slight margin improvement. Is it because of the, you know, like, change in the mix, wherein, the NBFC client was at a, you know, lower PAPM and hence, so was at a lower margin? So is it because of the change in mix, or we are seeing some fundamental changes in the, in the business model? And also, if you can also, you know, comment on, the, you know, recent, you know, like, labor code implementation, and how this is going to impact our business in terms of, you know, shift from unorganized to organized, and, you know, the longer-term impact on the, staffing business. Yeah. Yeah. Thanks, Amit. So on the element of the transition of numbers, we've taken the full hit in Q3. So we don't expect any more number loss on account of that. And just given the outlook on the demand side with other clients and some element of the delivery that is moving forward, we expect a positive growth in Q4 on the headcount side. I think even on the margin improvement perspective, it is cost optimization and the productivity playing out for the businesses. As I called out earlier, I think a lot of the digitization initiatives and cost optimization aspects have played out in the staffing business, and I think that will continue to take it forward. On the labor code side, I think it's early call out on how it will impact formalization. I think corporates are first kind of factoring for the cost impact and the implications at their end. As you know, in terms of restructuring salaries and all of that. I think the element of it playing out to administrative ease and so on into the future from a compliance perspective, will really come to play on an element of formalization that could begin. So I think the labor code consolidation of the labor laws and rollout is in the broad trajectory of the right thing to do. But I don't think in the immediate cycle it will have an impact on driving up the demand or the numbers substantially. Okay. And, now, on the, on the specialized staffing, obviously, we have, you know, strong demand from the, you know, from the GCC side. But you mentioned that we have only 100, you know, clients there, and the, you know, TAM there is pretty big. So how we are targeting, you know, the GCC market? And if you can give some color in terms of, what kind of growth can we expect in the specialized staffing and, from the GCC side and also from the IT services, because of what's happening on the IT services in terms of hiring, how is the demand there? In terms of margins, is it, you know, we can see some, you know, margin expansion there, or is it the range that we want to operate into? So Amit, on the GCC growth front, you know, we've, we have signed up about 20 or 25 new GCCs in the past few quarters. So this is this is primarily because of a focus on working with newer GCCs that are coming into the country. The existing GCCs, so the TAM, which is about 1,800, 1,900 GCCs, many of them have set in processes. They have, you know, identified their resources and are not hiring in a big way. Wherever they are, we are obviously very aggressively going out, reaching out, and ensuring that we get them on board as well. So yes, we have a lot of work to do on that front and expand our presence across many more GCCs. In the five or six segments that I called out, so BFSI, life sciences, healthcare, technology, you know, retail, I think we've identified about five or six segments, and we are actively going out and ensuring that we sign up many more GCCs as we go along. The bot model that we operate with in the GCCs helps us, you know, get better margins, and that's, you know, to your next point, saying how do we, you know, how do we show improvement in margins? If we work on BOT models wherever possible, we will ensure that we have better growth, you know, on both revenues and as margins through that model. On the IT services front, while you know, I think we're still in the lower single digits, hiring is happening. But we're seeing demand increase massively in the newer tech space, which is related to the AIML coding, data security, data engineering, cloud, cybersecurity roles, where while the volumes will not be as high as what it used to be on conventional tech, but the rate cards are obviously much higher because customers are paying better salaries for these niche roles. So that's how we are able to balance the revenue and margin, but not the headcount growth in from IT services yet, because the volume hiring has still not kicked in on the services side. Okay. And on the HR services, obviously, you know, we had a good recovery there, but around bulk of the EBITDA comes in the Q4. So is it the change in terms of, you know, the capturing of EBITDA, wherein it is now split between Q3 and Q4, or still we'll have Q4 as the, I don't know, EBITDA heavy kind of a thing for HR services? And also at the consolidated level, are we still maintaining the 20% on a YOY, on a kind of a target for the full year? Yeah. So I think the seasonality element in EdTech will continue to play out, and Q4 will be higher than Q3. And while we've been trying to work the element of spread across quarters, I think just the admission cycles and the revenue cycles with the universities drives a majority of the revenue slash bottom line into Q3 and Q4, with Q4 being higher than Q2 or Q3. And I think on a broader trend, with the open positions, demand, and growth that we are expecting for Q4, along with the optimization in costs, we do see the margin improvement rate being sustained. Okay, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Bhargav from Ambit Asset Management. Please go ahead. Yeah, good evening, and congratulations on a good performance. My first question is on the capital allocation. So, cash on the balance sheet is now closer to INR 430 crores, which is, roughly 15% of the balance sheet size and about 40% of the net worth. Now that, the buyback has become more tax efficient in this year's budget, are we looking at, returning the excess cash, on the balance sheet? That is my first question. Second question is on the restoring of the headcount loss in general staffing in 3Q. So if you look at, the net headcount, it's now about 282,000 versus, 303,000 in 2Q. When do we expect to, restore, back to 303,000? Is it by the Q4 or maybe by Q1 next year? And the last question is that the insourcing which happened with your BFSI client, can that be replicated with other clients, or this seems to be more like transient and not structured? These are the three questions. Thank you. Yeah. Thank you, Bhargav. On the capital allocation front, yes, the budget has made the element of buyback more tax efficient relative to what was before. But... And we do have money in the bank, on account of the tax refunds and, cash flow conversion from profits. I think the view of keeping that money was primarily to look at opportunities on the inorganic side. Some discussions happening on that front. We did small three earlier in the year, and we will continue to look at opportunities. Having said that, I think, in the Q4 board meeting, the board will discuss on the capital allocation front, and take a decision. So at that point, we will be able to communicate on that front. It is on the agenda for a board discussion on that front. On the headcount growth, as I called out, I think we are optimistic of net headcount growth in all the three employment cluster businesses that we have, as a function of the demand and the pipeline that is there with customers at this point in time. I think between Q4 and Q1, we will be able to bridge the gap and come back on the numbers that we have lost. Also, the specific regulatory element, you know, it is an ad hoc directive from RBI to the NBFC. We haven't seen the same kind of play out elsewhere. So we would have to kind of take it as it comes, kind of a thing, because we do provide resources in the BFSI space. And, you know, any specific action from an RBI and, as a directive, is really where this plays out. It did play out once last year, in Q4. And then this is the second time a directive has been passed, which has impacted the numbers. But there's no specific call-out at this point in addition. Sure. So just to highlight a data point that if you're looking at a decision in your Q4, I think a INR 200 crore cash return back to shareholders can boost your ROEs by 3%-4% next year. So, I mean, do keep that in mind- Yes. - because it's hurting your ROE. So thank you for your answers. Thank you and- Yes, thank you, Bhargav, and put it as a consideration to the board. Thank you. Thank you. The next question is from the line of Deep Shah from B&K Securities. Please go ahead. Yeah, hi. Thanks for the opportunity. The first question is for Ramani. So Ramani, in this quarter, what would be the contribution on the profit side, which has come from inorganic route, say, on a year-on-year basis? That is one. And second, on the two years scheme that potentially allows us a PF reimbursement for first time employees. Now, as I understand, this will start from July. So next July, maybe one quarter we may not be, but would it be a fair assumption to make that from Q2 onwards, our net headcount will be higher on a year-on-year basis, so that we can take benefit of that scheme? So these are my two questions. Thank you. Hi, Deep. On the first part, inorganic contribution in the quarterly profit is about 1.5 crores, roughly about 1.5 crores. This has been maintained at the same level, and on top of this, we have started building, especially on TLD Global, we have added about 70 headcount since acquisition, and that has been profitably contributing to the bottom line in specialized staffing segment. On the second question of ELI schemes and PF reimbursements, as you rightly mentioned, this is going to be effective July 2026, and we have to see how this is going to be implemented by the EPFO. As of now, we are not able to give any kind of indication on how this is going to contribute to our bottom line. Maybe only by end of Q1 we would have better visibility on this. No, fair. So no, Ramani, I understand that, if I just follow up. So I understand on the implementation in the regulatory part, there isn't too much clarity. But I'm saying on that first condition, which necessitates that our headcount route, or our headcount, needs to be higher, every month. So do we have that comfort that by the time the scheme starts, because it's just a 2-year scheme, right? And 4 years of manufacturing, but 2 years for everything else. Our headcounts on a year-on-year basis at least will be higher. Do we have that comfort? Yeah, definitely, Deep. On a full-year basis, our headcount is going to be higher, and also it's not month-on-month, it has to be positive. It's from beginning of the year to the end of that period. So, on that front, we are quite positive that on overall basis there'll be a net increase in associate headcount. Okay. So, just to clarify, when you say on a year-on-year basis, it means the headcount needs to be higher on thirtieth June 2026 or thirtieth June 2027, over thirtieth June 2026? How, what would be that first period, thirtieth June 2026 versus thirtieth June 2025, or how would it be? Yeah. So it would be from June 25 to first- Okay. July 2026, thirtieth June. Understood. This is right here. Right. No, this is right here. Thank you so much. Thank you so much. Thank you. The next question is from the line of Dipesh Mehta from Emkay Global. Please go ahead. Thanks for the opportunity. Couple of questions. First, about on general staffing. Even after adjusting for NBFC impact of roughly around 20,000, associate headcount addition seems to be muted. Can you help us understand reason for those? You know, even other, outside of the NBFC impact, it seems to be sort this quarter. Second question is about the headcount mix across vertical. Now, because of the sizable hit, which we have taken in last few quarters in NBFC, I found. Can you help us understand what will be the mix across vertical of 282K, what we have? And whether any implication of it on the margin, considering each vertical might have a different margin trajectory. So that is first question on general staffing. And that, and if I add one more in PAPM, how it has changed quarter-on-quarter? Maybe if you can answer it, then I have a to follow. Thank you. Sorry, Dipesh, if you could ask the last part once more? I just- Second question. PAPM, PAPM, per associate per month, what is our numbers? Okay. Yeah, so, Ramani. Yeah. On the general staffing, so overall there has been a general slowness during this year. We have seen headwinds in BFSI starting Q4 of last year. So most of the hiring in BFSI has been much lower than the trends that has been historically in the last two, three years. Seasonality. And also there is a seasonality impact, specifically in this quarter, because all the 15 hiring that has been onboarded during Q2 and early Q3, so that headcount typically gets rolled out by end of December. So that impact also has taken into the Q3 closing number. However, with the pipeline of new onboardings that we have for Q4, we are confident that we would be closing the year with a net positive or just about positive number on general staffing front. Overall, in terms of composition, BFSI currently would be at about 19%-20% after considering the Bajaj headcount loss. Consumer verticals, both FMCG, FMCG put together would be about 25%. Retail, e-commerce, quick commerce, that segment would be contributing to about 10%, and manufacturing to about 12%. Manufacturing, engineering, allied services would be about 12%, and all other segments would be about 4%-5% contribution. And just from a PAPM perspective, we are at about INR 680, up from about INR 669 last quarter. Whether the mix change in terms of vertical, whether it could have some bearing on margin trajectory, considering BFSI has reduced now as a percentage? I mean, marginally they will be, because typically, as we have always called out, the large clients do tend to pay us a little less than other customers. However, some element of the cost associated with the clients is direct and will get adjusted in terms of headcount and direct cost adjustment in the organization. But some element of the allocated costs will still continue to play out across a broader spectrum. But as we've always called out, the large client PAPM is normally lower than other clients. Also, one of the reasons for steady improvement in PAPM is also the contribution of hiring revenue has been improving. So compared to last quarter, we are now standing at 49% of hiring on overall offer letters rolled out. Last quarter, this number like to like was 36%. Okay. Okay. Second question is on the other HR services. How we expect, let's say last year, EBITDA for the year was around INR 8.5 crore. Are we confident to grow on that number for the current year? Because last year Q4 was very strong. Just to get sense on that strength from full year perspective, I understand there would be quarterly ups and downs, but when you look from full year perspective, how confident we are on to grow on that base? And last question is on the DAU indicated some regulatory action even for agri client. Can you give some more detail around it? And how you expect it to play out? Thank you. Yeah. HR services, there'll be a marginal improvement in EBITDA because, as we called out, in the beginning of the year, in HR tech segment, we still continue to make investments both on sales as well as on the product front. And, while there'll be an overall net improvement, it would still be in low single digit on year-over-year EBITDA at tech HR services level. And on the second question regarding, the DA client, where there is a regulatory impact, this is specific to a client which is, in the business of agri. And, earlier, they have taken GST exemption on some of the associate profiles which are involved in agri activities, but subsequently in their, I mean, subsequently, the GST department has come back and, said that these particular profiles cannot come under exemption category. So because of that, they have insourced these profiles. Understood. Thank you. Thank you. The next question is from the line of Madhur Rathi from Counter Cyclical Investment. Please go ahead. Sir, I wanted to understand that last we did share buyback in 2023, and in the recent budget, the buyback taxation has been made very favorable and, whereas our stock price is lower than what it was even in the COVID crash. So, are there any plans to do a share buyback so as to increase shareholder value? Madhur, as I called out, there is a dialogue with the board in the Q4 aspect on the capital allocation. So a decision on any action on that front, we will have an idea in the Q4. Right. And, sir, how do we see payroll processing business, in terms of adoption as well as scaling this up with the new labor law changes? Sorry, could you come again on that, Madhur? Sir, how do we see our payroll processing business? Like, if you could help us understand, how do we see the payroll processing business going forward with the new labor law changes? And how do we see in terms of adoption of third party or outsourced payroll processing versus for the in-house or either doing through the banking channels? Yeah. So I don't think the labor code element has a direct impact on the payroll outsourcing business. Obviously, there is a element of a consulting aspect involved at the early stage, for corporates to identify what the impact is, what they need to do, how they need to restructure, what elements are applicable, and the basic, non-basic, and stuff of that sort. While that's a one-time activity, I think the continued element of corporates who decide or want to outsource, on the payroll front will continue to play out as it was before. So I think the aspect of us continuing to drive, corporate acquisition both in the SME segment as a SaaS solution and the medium to large corporates on the service front, are focus areas that we are continuing to have, on the payroll outsourcing business. Got it. And sir, we acquired two subsidiaries, TSR Darashaw, and Crystal HR. Sir, so what kind of margin profiles do these subs businesses currently have? And sir, if I would consider these businesses who are competitors like Alldigi or ADP or Workday. Sir, so how do we plan to differentiate ourselves or how do we plan to... Sorry, sorry, yeah, please go ahead. Yeah, so TSR is primarily more of enterprise service provider on payroll outsourcing. So this is a payroll service provider where we maintain the records, we process for the corporate and address the output for them. On average, it's at about a 15% margin play. WalletHR is more of a SaaS platform for the SME segment on the aspect of payroll outsourcing, where companies do self-service using the technology platform, and there, the margin is roughly about 30%. Sir, I wanted to understand, pardon my ignorance, I'm new to the company. Sir, when I'm comparing our margins with our peers, like Quess Corp, or even a very tiny player like Aarvi Encon. So they are enjoying margins of, like, almost double of our margins, and even Quess Corp is doing over 2% margin. So, and Aarvi Encon is doing 3.5% operating margin. So basically, what has to happen for our margins to increase to our peers' level or even reach the earlier margins that we used to do few years back? Yeah. So one major difference between Quess and TeamLease margins is they have a much larger share coming from their international business on IT staffing, on the specialized staffing. We have entered very recently, and right now that volume contribution is hardly about 100 headcount. But other than that, in terms of general staffing, our margins are not that different. Plus minus, we are at the same levels. So the main variance is coming from specialized staffing segment. Just as a like-to-like, Madhur, I think certain businesses are common, and we should compare the element of the margin profile in those businesses. Certain businesses we are not doing or certain areas, our regional play, like the global that Ramani just called out, is relatively small for us, and that's a higher margin business in the long run. And that is really what accounts for the difference. And sir, the second part of the question that what needs to happen to the macros for our margins to go back to the previous levels that we were doing few years back? So I think that's largely the element of the portfolio play for us, which is effectively, specialized staffing, and DA, had either stagnated or declined as a function of the element of how the market was. The two of them coming back to the table from a growth perspective, will start contributing to the margin improvement. The continued growth on the staffing side, coupled with the productivity enhancement, leading to cost optimization, will also contribute, to the margin improvement to bring it back to the old levels. And so what percentage of our total revenue is coming from the IT sector? Because now we are hearing a lot of disruption in IT sector due to AI and so on. So, so what kind of impact can it have on our business? 6% is the revenue contribution coming from IT, this is including GCCs. But however, on bottom line, the contribution is almost 30%. 30%. Okay. So madam, is there a risk of... I mean, now IT companies are not increasing their payroll, so in fact, there is a decline in the payroll in absolute numbers. So madam, can our profitability get hit due to some AI-related disruption in IT sector? So Madhur, in fact, within IT services, we have kind of corrected the headcount over the last 2 years, and almost 50% headcount has come down. And since last 2 quarters, the headcount has been steady, and GCCs have been consistently adding numbers. Maybe Neeti can also add on. Yeah. So Madhur, to add to what Ramani is saying, we are also seeing hiring actually happening in newer skill sets, like for AI, data security, cloud. So while conventional skills are not being hired, and that's where we're seeing a volume drop, but there is a high value hiring that is continuing to happen, and I don't think that's going to go down in the near future. So it'll balance out in terms of revenue growth and margin growth. It'll not give us the volume growth that IT services gave us till about three years ago. Okay. Madam, lastly, madam, I can see that our absolute headcount has decreased from 3.6 lakhs to 3.35 lakhs. So just directionally, madam, again, pardon my ignorance, madam, until our total headcount increases, does that not indicate the growth? I mean, if until the headcount increases, then how else will the growth materialize? So, as we called out, this has been a specific instance, driven largely by a regulatory directive, leading to about a 28,000 headcount moving away from a specific customer. Net of that and the seasonality element in Q3, we broadly see continued growth. And that reduction in headcount has been largely across general staffing and degree apprenticeship. Specialized staffing has a net headcount growth. Okay. Thank you so much and all the best. Thank you. The next question is from the line of Ashay Mehta from Dolat Capital. Please go ahead. Hi, can you hear us? Yes, Ashay. Hi. Hi, this is Mahesh, Ashok's colleague. Thanks for the opportunity. My question is on the transition which is going to play out. So first of all, kudos to Ashok, you, and the founding team who's really built this commendable business. The question really for us as an investor to understand is: as you thought this transition through and went through the process of identifying professionals who were to come and run it, what sort of, what sort of person or ideal candidate you were looking in terms of coming and taking this forward from you? To the extent what you can share, of course. Not really trying to get into very specific, but just trying to get a sense of, as you sort of bring someone from outside running in, what is sort of brief and mandate and what should we be signing up for? Yeah. So primarily, Mahesh, I think it was a logical transition that we've been working on in saying that, you know, bring in the external CEO play that enables us to effectively continue to work with the person in the long haul through the board and kind of direct the company to be a board-run company that outlives the promoters. By having said that, I think the key skills or the capabilities that we were looking at was obviously TeamLease is a large organization. It is large in volume and in terms of, in a sense, the portfolio. So continuing to maintain the element of traction and keeping the train running on the tracks was an important variable. But also, I think what we have always been calling out is the drive for some element of a transition from B2B to a B2C, for a revenue stream. Improving our margins, from the low margin to a portfolio that enables margin improvement to come in. Also kind of complement the service offering that we have, with a stream of a product portfolio into the future. And I think from those perspectives is really where we were looking at, the probable person, and I think Suparna fits well into, what we saw on that front. She's clearly from outside the industry, and we will handhold the element of learning the industry. There is a lot of leadership and bandwidth within the organization, that is kind of steeped in the industry and the businesses that we do. But I think she brings a fresh set of eyes and perspective to what we've been doing for a very long time. And I think also her capabilities, from her past experiences are primarily from the B2C side, from a high margin side, and from a product portfolio side. And I think those are great complementary skills, into the leadership of, TeamLease, that we believe will play out to strength, in the coming quarters. So it's two days since, Suparna has been on board, so she will, be inducted, into the team, into the structures, into the business, into the customers. And we believe that, just given, again, past experience and seniority, the onboarding process will be quick. We are here to work with her and handhold the element of the way forward. No one is kind of leaving, per se, in that sense of the word, but she will have the ownership as we go forward, on the executive element of the business. Thanks, Ashok. Very helpful, and wishing all the best to Suparna as she take charge and look forward to interacting with her. I had a second question for, maybe Ramani. Just to confirm the understanding on other HR services, is the understanding still holds in terms of the fact that a lot of CapEx investments are behind us, and as HR tech, RecTech scales up, there is gonna be operating leverage on those revenues because bulk of OpEx is already, sort of invested in. Is that understanding fair, Ramani? That's right, Ashok. So, in RecTech, in fact, we don't have much of incremental CapEx as such. So now most of the, sales investments, our product investments are fully charged to the P&L. HR tech is one business where we still need to do more investments in product. And also now, in light of the new Labour Codes, we may also come up with, other solutions, especially once the Shram Suvidha Portal gets launched, we may have, another line of business wherein we can have APIs for direct filing it, seamless filings on those fronts. So we will continue to have more CapEx investments on HR tech. And, the rest of the team-related investments have been fully operationalized and been charged to the P&L. Got it. Thank you so much. Thank you. The next question is from the line of Priyam Srivastava from KC Capital. Please go ahead. Yeah, hi. Thank you so much for the opportunity. Can you please discuss the contingent liabilities from the tax cases? Like, what is the quantum in the current legal status? So with respect to tax liabilities under 80JJAA, there have been open items specific to whether outsourced associates can fall under the 80JJAA claim or not. However, we don't have any open demand as such, so all the refunds have been released, but the completed assessments have been reopened. So there are new—no new items on tax contingencies as of today. Okay. Got it. Okay. Okay, and, my second question was, what is the impact of Labour Codes on the transfer business? Which transfer business? Sorry, can you- I think, correct me if I'm wrong, there's a certain business which the employees are already there with the client, and then they are transferred to the company's payroll. Yeah. The TeamLease payroll. Here we have two categories of employees. One is associate employees, who are deployed at client location, and then core employees. For core employees, there is a net impact of about INR 5.7 crore, mainly towards gratuity and leave encashment liabilities pertaining to past period. So that provision has been made, and it has been disclosed as an exceptional item, in the P&L statement. Okay. Coming to associate employees who are at, working at client location. So we have back-to-back arrangements with the client, saying that for any new liability or any incremental cost arising out of any regulatory changes with respect to statutory remittances and others, so it will be passed on to the client. So as of now, if you can, if you can see our balance sheet and the disclosures that are being made, we have back-to-back, recognition and disclosure of, these gratuity and leave encashment liabilities, as well as receivables from clients. So there is no net impact to the P&L on associate employees. Okay, got it. Thank you so much. Thanks, bye. Thank you. Ladies and gentlemen, we'll take that as the last question for today. On our conference over to Mr. Ashok Reddy for closing comments. Over to you, sir. Thank you very much. As we look back and then look forward, I think, yes, we had a head count decrease in Q3 on account of a specific regulatory impact. But we do see positive outlook across the degree apprenticeships, staffing, and specialized staffing for Q4 in terms of demand and a net positive outlook on head count growth. We do also believe, as was called out, that we will be able to work on and improve the margin aspect in Q4 on account of cost optimizations and the digitization initiatives that we have been driving. Also there would be some element of seasonality impact coming in from the EdTech in Q4. We do believe that a lot of the leadership and structural elements are play, are in play at TeamLease and for the various businesses, and will continue to give benefits as we go forward. We will work the transition on the executive roles front with Suparna, for her to come up to speed on the business, on TeamLease, on the team, and on the customers. And we do believe that the skills that she brings to the table will hugely complement the aspect of the requirement for TeamLease as we go forward. With that, we do look forward to giving you a strong quarter four, and take leave from here. Thank you very much. Thank you very much. On behalf of HDFC Securities, that concludes this conference. Thank you all for joining us today, and you may now disconnect your line.