Ladies and gentlemen, good day and welcome to the Tech Mahindra Limited Q4 FY 2023 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 start and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. C.P. Gurnani, Managing Director and Chief Executive Officer for Tech Mahindra. Thank you. Over to you, sir. Thank you. Good evening, everyone. I am really happy that FY 2023 has proved to be yet another year of double-digit growth. Particularly proud that our large deal wins have been about $3 billion. I'm also very happy that CME, despite of all the challenges, has continued to grow for 12 quarters in a row. On the enterprise side, we have touched a billion-dollar quarterly run rate, which means really a billion-dollar businesses have been built in BFSI and manufacturing. Also very happy that the technology investments, upskilling investments your company has made on quantum computing, metaverse, on blockchain, Web 3.0 cloud, and the customer experience management are yielding good results. We continue to be driven to make our customers successful, we do believe that while the global economic outlook continues to be little uncertain, the macro indicators and the actions of the monetary authorities, you know, the impact because of some of the regulatory or the policy decisions taken is resulting in, you know, some of our customers, you know, slowing down for the time being. I know if our customers are cautious, we need to be cautious. You know, the other way of looking at it is that, you know, Tech Mahindra as a company has always believed that never waste a crisis. We would like to develop our investment in people upskilling. We want to develop our investment in technology. We want to develop our investment in prioritizing a few markets like Japan or Middle East, because we generally believe that there will be more large deals because our clients will eventually want to move to new platforms, would want to move away from legacy to digital. I think this economic downturn will force decision-making, particularly from legacy to digital. As my clients adopt new technologies, they look at how they will meet some of their customer demands. I think Tech Mahindra will be ready alongside with our clients, to become agile and relevant for the next few quarters. My personal belief is that, you know, that this phase is temporary and we will see a recovery within FY 2024, and hence I remain, you know, more determined to be aligned with our customers, be aligned with our partners and deliver value and deliver more technology benefits. Just a quick, you know, recap on the numbers. FY 2023 constant currency, 13.7% growth. Margins, yes, they've been under pressure but, as I said, if you look at investments, if you look at, you know, the potential for us to, you know, look at certain operating efficiencies, particularly on automation, I think there are enough operating levers for us. We do believe that, because Tech Mahindra has ex-invested a lot in quantum and in AI, you know, we are looking at predictive technologies, data sciences, cloud in a much bigger way. My belief is, as we adopt it to our existing projects, we should be able to bring out some of the efficiencies. You know, the Q4 earnings I know Rohit will cover in detail. You know, annual basis, you know, closing the year with $6.6 billion of revenue. For this quarter, large deal is at $592 million. As I said last year, we did $3 billion, and we will do a lot better this year because our clients want to take some big decisions. They may have a little bit of a hesitancy right now, but they're eventually looking at improving their own utilization also. On the dividend side, our capital allocation policy is consistent. Capital allocation is if we have extra cash, we will return it. Our board has agreed to a recommendation of final dividend, and the total dividend now becomes INR 50 for the year. I again want to repeat that to me, the soft environment is an opportunity, and Tech Mahindra is geared for that opportunity through our own investments in technology and automation. Again, thank you for your support. Thank you for being with us during this, you know, tough time or softer times. I do promise you that the company is a lot better engaged and lot better engineered for both growth and profitability. I'm joined with my colleagues Manish Vyas, Jagdish Mitra, Vivek Agarwal, Harshvendra Soin, CTL. We will have a free-flowing debate. Before we start with the question and answer, I'm gonna request Rohit to take you through the numbers a little more in detail. Thank you again. Thank you, everybody. Thank you, C.P. So good evening to everyone. Let me now cover the company's financials for the fourth quarter and the year ending 31st March 2023. We ended Q4 with a revenue of $1,668 million, marginally up compared to Q3 in constant currency. CME vertical grew 1.8% QOQ on a CC basis. Our enterprise vertical decreased by 0.7%. Our deal wins were at $592 million for the quarter. And revenue in rupee terms was about INR 13,718 crore versus INR 13,735 crore in Q3, down 0.1% QOQ. The EBIT for the quarter was at $186 million versus $200 million in Q3. The EBIT margin of 11.2% versus 12% last quarter. The reduction of 80 basis point was largely contributed by currency, impact of 60 basis point. SG&A impact of 90 basis point. These were offset by productivity actions that we had articulated in the past that we've been working on, mainly around subcon reduction, which gave us a tailwind of 70 basis point. Moving below EBIT. Other income for the quarter was at INR 37 million. We had a Forex loss of INR 1 million compared to a gain of INR 15 million in Q3. There was one-off impairment cost of INR 26 million in Q4, which was reported in the financial this quarter. We continue to follow from an FX perspective, a rule-based hedging policy, which has helped us deliver good results over a long term period, and we will continue to follow that as we move forward as well. From a tax rate perspective, we were at 26.2% for Q4 versus 27.4% for Q3. As we have said before, our normalized PPR for the year is in the range of 25%-26%. That continues to be the band. The net profit margin for the quarter was 8.2%. A decrease of 120 basis points versus Q3. Free cash flow was $142 million, which was 104% of PAT. Our DSOs have reduced by two days to 96 in Q4 versus 98 in Q3. Moving on to the full year performance. Our revenue stood at $6,607 million with a constant currency growth of 30.7%. In rupee terms, our revenue was INR 523 billion, a yearly growth of 90.4%. During the year, communication business grew as I mentioned, 30.4% and enterprise grew 30.9% in CC terms. Within enterprise technology, retail and manufacturing were the major growth drivers for the year. We ended the year with an EBITDA of $990 million and EBITDA margin of 15.1%. The EBIT for the full year was $747 million and an EBIT margin stood at 11.4% versus 14.5% in FY 2022. This decline of broadly 300 basis points was driven by headwind due to wage inflation that we saw on the supply side, more aggravated towards the first few quarters versus the last quarter. SG&A travel costs with some of the normalization post-COVID increasing, year-on-year. Some of the deal M&A related cost that we had articulated before around 50 basis points, and then the large deal cost where the ramp up in the initial phase of large deal reduces, and the recovery or the efficiency happens in later years. That was around 70 basis points. The offsets for the year were driven at pricing. We had communicated in the beginning of the year that we will target close to 1% of expansion due to price, and that is what we've delivered close to that number. Our subcon perspective has had a reduction, so hence that has contributed 80 basis point, and then we continue to drive more offshoring. That has helped us give a benefit of 30 basis points. Going below the EBIT line. Other income for the year was $119 million. Other income year-on-year was lower because of lower foreign gain compared to last year. When we look at our hedge book, it was $2,335 million, with a mark-to-market gain on outstanding covers as of March 31, 2023 being $13 million. Based on the hedge accounting treatment, a gain of $4 million will be taken to the P&L while the $8.9 million residual has gone to reserves. Free cash flow for the year was $497 million, which was 84% of PAT conversion. DSO year-on-year went down by one day. Cash and cash equivalent at the year-end stood at $905 million and in INR terms, INR 7,435 crore. In line with our commitment to prudent capital allocation as C.P. articulated, we continue to return cash to shareholders. The board, as per our recommendation, has approved a final dividend of INR 32 per share, taking the total dividend for FY 2023 to INR 50 per share, which is an expansion from last year by close to 11%, from INR 45 per share. This translates to a dividend payout ratio of 91% for FY 2023. Now in summary, I would like to reiterate our execution strategy is focused on portfolio synergy, operating rigor and people transformation as we move into the next fiscal. With this commentary, I will open the floor to questions. With all the leadership team, we'll take each question one by one. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Our recipients 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 Abhishek Bhandari from Nomura. Please go ahead. Thank you for the opportunity. Rohit, I had a question on the margin performance for Q4 and the path going forward. If you could help us explain what happened on the SG&A path that there was such a sharp increase in Q4. You know, if I look at the commentary since the start of the year and also in your analyst meet, you know, the visibility on you recovering back to the FY 2022 margin towards FY 2026 seems to be very hazy. If you could help us understand how should we think about, you know, margin expansion from here and Q4, you know, particularly the SG&A, what happened? From an SG&A perspective, maybe we'll start with Q4 first. We continue, I mean, from a investment perspective, we continue to invest more in terms of the business process perspective and system perspective. We are taking a longer-term view here. That continues. We did have some year-end cost which was true up and that will get normalized as we move into the next year. I think our view is that SG&A as a percentage of revenue should be in the band of around 13.5% for us. That should get normalized. You know, when you look at future view in terms of margins, right? As we move from here, I think as I mentioned in the investor meet also in March, I think the levers are same for us, and we've delivered in the current quarter as well. When you look at the direct cost aspect, we said that subcon will be something that we'll keep on working on and that you'll see a dramatic reduction there. We will continue to work on profile levers that we said earlier. I think our large deals will get a little bit of more maturity in terms of where they are to where we want them to be next year. That's one lever. Secondly, we've articulated, we still have almost 4%-5% improvement opportunity in our offshoring rates versus where we are today. That we'll continue to drive. We also said that we'll continue to drive pyramid rationalization, and that's an investment we are gonna make in FY 2024. That's a lever we'll continue. You know, we also said that we will, you know, take some structural action to pivot or stop and seize some non, you know, profitable or low profitable businesses. We did some actions last year, and we'll continue to execute on the pipeline we have to expand margins on that front as well. Within subcon as well, while we continue to reduce it, we'll also drive better margin mix there by, you know, improving the mix. Those are, you know, few actions that we will continue to drive as we move forward. I think directionally, our commentary is the same that we have more opportunities to continue to expand it. Obviously, the macro environment in last two quarters as we look at the next two quarters, then it will be different work that what we've seen in the last beginning of the year. Our view is as we move into the second half, it will get better again to where we were. In terms of your macro first half will be more cautious versus the second half. If I can understand you correctly, the margin improvement for FY 2024 is contingent on a better second half of FY 2024? I would say margin improvement will be irrespective of target or, you know, view that we will go for. When we look at our demand scenario and our overall macro environment, you know, vis-a-vis, the verticals and all the mix that we have, from a view perspective, second half, in our view, gets better than maybe until. That's not the basis on which we will drive our margin action. Okay. Thanks, Rohit, for that. The second and final question is on your top five, you know, client outlook. While you had already, you know, kind of signaled it in the last quarter that, you know, the top five clients might remain soft for some more time. You know, if you could help us, you know, understand how should we think about this bucket going into FY 2024. How long do you think, you know, the decline in this, you know, particular thing would continue? Yeah. I think, as I mentioned, it is, you know, bottoming out at peak peak. There are certain plus and minus there. You know, generally the trend, it seems to be stabilizing. As, as we move forward, while I can't share any customer-specific information, but, you know, we've had majority of the impact and should be towards the back end of that. Okay, thank you, Rohit, and all the best for FY 2024. Yeah. Thank you. Ladies and gentlemen, request to please limit your question to one per participant. Should you have any further questions, you may join the queue back. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah, thanks for the opportunity. This is our second quarter in a row where constant currency growth is almost like a plateau. Rohit, you also mentioned that the first half would be cautious. How do you see FY 2024 in terms of the growth rates? Will it be second half heavy? Will it continue to remain tapered in the first half, despite you believe the top five client-specific issues are largely getting behind? How do you expect whether there will be a growth bump up from the last two quarters in the first half itself, or you still believe first half would be cautious and growth revival would be only in the second half? Yeah. Hi. Thanks, Sandeep, for the question. You know, yeah, as I mentioned, while I won't give a number of a guidance, but directionally that is true. I think the headwinds that we've seen from a growth perspective when you compare our second half this year versus the first half. From a headwind perspective, macro side, that trend in our view and looking at our mixed customers, verticals, all that, our view is that trend continues in some form or shape for the first half. The pipeline is still robust right across the segment. There are good deal discussions happening. There's a mix change in terms of deal dynamics also. You know, from a pipeline discussion perspective, it's quite favorable overall, right? You know, the trend-wise, yes, first half versus second half is kind of a reflection or a reverse mirror reflection of what we saw last year as of the current year. As we move forward, you know, we keep on updating you on what changes are we seeing across industries, verticals, geography. I can also request, you know, Manish is here. We've got Harsh and Vivek. They can add some flavor on their side of the business to give you perspective as well. Thank you, Rohit. Well, I think I'll just add that the broad sentiment continue to remain, that the investments from a tech standpoint, I think remains a top priority for most of the customers that we talk to. Either it is to find operational efficiency or to continue to modernize. What clearly happens in uncertain times like these, and some of that story is playing out in the second half of the last fiscal, is some of the discretionary spend and the transformation projects do, you know, they do go through another added lens of evaluation before the money is released. That's what we are seeing at this point in time. That of course, sometimes has an effect on the OpEx as well. We do believe that as things become more certain, the second half of the fiscal, I think we'll start seeing the, you know, the positive upswing and some of the large deals that we are pursuing now, as some of them have got delayed from a decision standpoint, they nevertheless remain extremely important for each of these customers to decide at some point. It could be a month, it could be sometimes more than four months. As those decisions manifest, I think it will start translating into revenues, towards the second half of the year. I hope that helps you, Sandeep. Yeah. Commentary on enterprise? Hi. Jagdish here. Sandeep, thank you. I think pretty similar in terms of behavior. The digital transformation journey, as we all recognize, is a train that's definitely not stopping, and it's a lot of demand in the customer base of what to do in terms of bringing transformation at different levels. Even cost takeout is ultimately leveraging these tech technologies which C.P. talked about, that we've invested in and we are starting to see a lot of engagement on that, whether it is AI, whether it's data analytics. Whether it's some of the work that we're doing in quantum, et c.. Pretty similar to what Manish said, decision-making is going to be prolonged. People will look at it a multiple few times. You know, the conversations are there, and obviously the more the discussion is towards cost take-out related deal structuring. Transforming their core functions, whether it's supply chain, whether it's back office operations and so on and so forth. It's pretty uniform across enterprises, industry verticals. Some little more than the other, but more or less, the good part of it is the tech conversation and the transformation conversation continues. Confident and bullish that the transformation journey is definitely not slowing down. Okay. Okay. Just to follow up, in this, outlook for growth, which may be tapered in the first half, how do we see wage hikes, and timing of the wage hikes? Will it fall into place by 1Q to 2Q, which we generally do as a whole or there could be some delay in the same? This is Harsh, and thank you for asking that question. Like we have done in the past, you know, we continue with the same strategy of straddling the hike suitably, as we view, quarter on quarter. We'll follow the same strategy this year too. It will be across four quarters or a five going forward. We will stagger it. We don't know if it'll be two quarters or four quarters. We'll stagger it for sure. Okay. Okay. Thanks. Thank you. The next question is from the line of Sudheer Guntupalli from Kotak Mahindra Asset Management. Please go ahead. Thanks for the opportunity. One of our competitors saw a sharp decline in communications. Thereafter, the expectation is that we should see a sharper impact given our concentrated exposure to this vertical and some of our top clients are from this vertical. However, your performance in communications is fairly decent. Sorry, what? What's the question? What is driving the optimism that top account issues are still bottoming out, close to bottoming out? Is this being led by the fact that we had already gone through a relatively longer period of softness in this vertical and accordingly you think a lot of it is already in the base? I think, on the contrary, I think you heard in the opening comments. I think I've also been saying it for some time. We've actually seen a consistent growth in the telecom vertical now, for the last three years. I think, this is actually a quarter of celebrating a few interesting important milestones in our lives. One, we did say and give all of you an early indication on 3rd of March that we should be getting to close to a billion-dollar run rate as far as our 5G business is concerned. As you know, we invested mostly organically in capability solutions across the broad range of the 5G spectrum, from software to services, to integration, to test, to managed services, automation included. All of that has translated indeed into that billion-dollar number that we from a run rate standpoint that we have hit. The other very interesting and important I'm sure all of you would recall, that back in the days, 2015, I mean, I'm taking you 8 years back. We did invest in LPC and that didn't play out that well at the time. We have been consistent in saying that our commitment as a technology agnostic, independent integrator and managed service provider to the networks, both carrier and enterprise networks, I think is a huge differentiator for your company. That also played out extremely well. I think while we don't break those business unit numbers often, but at this point I'm happy to report that it's seen one of the fastest growth. We should be close to $1 billion by the end of this year, as far as even our network business is concerned. Where our, you know, I don't know whether you call it optimism or our strong belief in this industry vertical is, I think it's largely because of the support that all of you have provided in continuing to invest and becoming a market leader in this space, with a wide margin. As far as telecom is concerned, there is not a single telecom service provider in every market that we want to operate in that we do not serve today. Now granted that one quarter or two or a little uncertainty at a macro level does not define our presence, our strength, our investments, and our performance in this sector. I think from a long-term standpoint, I wish I had a crystal ball to say whether it'll be third quarter or fourth, but I definitely can say this that from a midterm to long-term standpoint, the discussions that we are having with this sector are absolutely all-time best. I don't think we need to be concerned about that. Okay. Thanks, Manish. That's a very encouraging set of answers. Thank you. The next question is from the line of Girish Pai from Nirmal Bang Institutional Equities. Please go ahead. Yeah. Thanks for the opportunity. You mentioned that, there's probably a pickup in growth in Edge. What is this optimism based on? Is it based on some client conversations you've had, or is it like merely hope? Overall, I'd say that pipeline is quite robust from where we were last year. I think that is sort, ray of hope, if you will. Second is, you know, client conversations which Manish just mentioned, which is what is saying that it's quite positive. There is a slowdown in terms of decision-making, which is what you were saying, that there are more, you know, approval cycles and hence the final sign-off is taking time, which is what we kind of cautioning out from a first half perspective. We'll continue what we've seen in the second half of this year. You know, from an industry perspective, if you look at cloud penetration is still low. In communication, the 5G penetration is still a lot to desire for. AI work is a target, right? I think data analytics on top of cloud, all that from a technology penetration standpoint, when you look at all the metrics, is positive. One, two, or three quarters really doesn't define the long-term trajectory that the business has to offer. That's what gives us the optimism, including the discussions we've had. Maybe some of them are interested parties, and Manish, you, Vivek, Satish have had, maybe you can elaborate some examples as well. I think the only thing I would add to this, and we may have mentioned this earlier, this is not the first time this story is playing out in this tech industry theater, where we have seen these pressure points and the decisions that typically get made are around modernization, around transformation, around cost takeout. Those conversations have begun. Now, like we said, we can't really predict whether these decisions will happen in six months or eight, but they will happen at some point in time, and that's when we will. I think it's also not a function of hope, but definitely a function of the busyness that we have at this point in our conversation. If that answers your question. Thanks. Just one last one. What's your view on pricing in FY 2024? I believe you did get some price increase in FY 2023. How are you looking at that in 24? We have some carry forward impact from last year to this year that will flow through of the impact of Q2, Q3, Q4. Incrementally, while we continue to drive those conversations, where are our opportunity on where we should be versus where we are is there. On a broad-based perspective versus last year is gonna be quite limited, right, as an opportunity. I would say, you know, we would continue to work on, you know, proactively providing solutions to our customers. We are right now focusing ourselves to be very close to defining, you know, how they look at future. Hence, positioning ourselves on driving efficiency outcomes for them, which gives us opportunity to get more, you know, business as well as expansion with the same customers. Hence, the cost of acquisition and other effort goes down, improving the productivity from a business standpoint. That's kind of what we drive. Pricing as a lever is gonna be limited this year versus last. Okay. Thank you. Thank you. The next question is from the line of Manik Taneja from Axis Capital. Please go ahead. Thank you for the opportunity. Rohit, I had a question with regards to the way our headcount usually has been coming off through the course of last two quarters, and on the IT consulting side has been declining for the last three quarters. How should we be thinking about our optimization around fulfillment in the context of the fact that our headcount has been coming off for the last three quarters alongside utilization almost running close to peak limits? Okay. This is Harsh, and thank you for asking this question, Manik. In fact, we have gone up to from about 46% to about 71%. Clearly, our focus, as we stated in the last quarter also on upskilling, giving opportunities for within, has really worked out. Now, add to this the fact that our attrition is also the lowest in our peer set, gives us a lot of confidence that the strategy is working and folks are getting more opportunities internally. We don't have to go out for every single vacancy. I think that's a good sign for the organization going forward. Sure. Thank you. If I can ask one more. Given the fact that you expect first half to be relatively subdued, should we expect the deal wins number potentially also remains below the typical deals that you are targeting? I won't give a guidance, Manik, specifically on a number, but I think from an overall year perspective, we feel just the fact. Manish added to the comment that the discussions are quite favorable and encouraging. From a year view to look at the year versus last year, we feel that, you know, as it moves today and what the quality of those discussions are, we should not be far off from where we were last year. Sure. Thank you. Now with this for future. Thank you. That was the last question for today. I would like to hand the conference over to Mr. Rohit Anand for closing comments. Thank you. I just want to reiterate that we as a company will, you know, as we've committed in the past, we'll continue to drive towards the goal of driving productivity. We will continue to expand margins as we've communicated to you. We will continue to drive return to shareholders. We returned back INR 50 share this year and which is 11% impact from last year. Rohit, I just want to. Policy. As a company, just, you know, continue to our goals of driving growth, margin, improvement from where we are today, capital returns. With that, you know, we'll move into the next year with those goals in our mind and thanks everybody for joining us for today's call. Thank you. Rohit, C.P. wanted to say something, I think. No, Rohit, I just wanted to reassure all the analysts and investors that, you know, company is conscious of, you know, some of the macro challenges, but I think, we are in a better position to address some of these challenges. You know that old saying that opportunities, you know, are best discovered during the crisis and the company is geared up, to take advantage of the crisis. Thank you so much. Thanks, thanks, everybody. Thank you. Thank you. On behalf of Tech Mahindra Limited, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.