FY26 closed at 29.2% USD growth and 14.4% EBIT.

Hi, team. Morning. Congrats on a great quarter. I think it is great to see, a great print across revenue margins and cash flow generation. Sudhir, my question is, from a two to three year perspective, how are you thinking about optimizing for all these three metrics going forward, right? Because (a) growth remains paramount, (b) in an uncertain macro where demand still remains kind of sporadic, do we expect pressure on margins for both us and the industry, number two. And number three, on cash flow as well, where we are growing so fast, what is the steady state for these metrics for us going forward from here? And given a choice, how do you optimize across these three? That is the first question. And the second question is, a very interesting sort of data point around revenue per employee that you have shared. It seems to be going up and to be honest that looks like how the industry should move forward. I am interested to know your views on how you are doing it so early ahead of the curve and what will ensure this going forward as well. Thank you.

Thank you for the comments and the questions, Abhishek. Let me take them in order. Revenue, our intent, as always, and exemplified by our results over the last nine years, continues to be that over the next two to three years and beyond, we will continue to turn in sustained and robust growth. That is the clear intent. It has not changed. On margins, If we do hit the 14% reported EBIT margin plan for the year, we will, at a minimum, irrespective of the changes in the macros, commit ourselves to delivering on that as the minimum threshold going forward in the years to come. As far as free cash flow is concerned, and as Saurabh had noted in his commentary, there were comments that we received on that last quarter, we believe on a sustained basis, you should expect free cash flow to PAT at around 70% to 80% going forward. We are very strongly focused on the free cash flow metric as well. As far as the second question around revenue per employee is concerned, you are right. Revenue per employee, we called out the revenue per employee for our tech services business. It is nudging 70,000 US dollars per employee. It is a metric that we have consciously called out to illustrate the impact of the AI-led platforms that John has been talking about over the last six quarters and the value that they create for our clients and in turn for us. We have always talked about how high quality growth and the best exemplar of that high quality growth we believe is the RPE metric that you have seen.

Yea, hi. Thanks for taking my question and congrats team on a rock solid performance once again. So Sudhir, on the overall demand front, we have seen multiple macro headwinds play out in this quarter, from the hike in H1B visa fees to a very uncertain macro. Of course, evidently it does not impact our numbers at our level. But what is your take on how these could actually, if at all, impact the industry going forward? And a related question is that in our growth trajectory, if we see, I think the first two quarters growth, of course, has been led by the travel vertical because of the large deal that we had closed out. Going forward, next, let's say two to four quarters, which particles or which segments of the business do you think will take precedence in driving the growth?

Thanks, Vibhor. Demand front, we talked about it over the last few quarters as well. We continue to believe that demand, especially with the advent of AI, has mutated, but the addressable demand continues to grow at a solid clip. When we look at our three core verticals, banking, insurance, and travel, and when we look at the trends that we see observed within them, we see positive trends. Banking, there are several factors that are aligning to create favorable conditions all the way from lower interest rates to the shifts in the regulatory practices. We are seeing financial institutions embrace real-time everything in the areas of payments or global remittances or security settlements. And of course, there are the efforts in terms of moving to T plus zero as well. So banking, demand outlook in general appears solid from our vantage point. Insurance, as we observe it, the global insurance industry is entering an above trend growth phase. P&C insurance, every metric we are tracking is growing at about almost 4.5% per year. And the growth is increasingly coming from our vantage point by more complex risks, higher claims, rate increases, insurers focusing on specialized products like cyber, etc. And even L&A, we see growth of about 5% per year, driven by higher interest rates and more interest in saving products. So that is a quick summary, Vibhor, in terms of demand outlook. We continue to believe that the demand outlook is improving on the margins. It is not a vertical takeover, but it is improving on the margins. As far as your second question is concerned, and then I am sure you have a question for Saurabh, as far as the verticals are concerned, we expect travel to continue to clip along at a solid pace. We believe insurance, in light of the commentary that I just shared, and banking will both do well. The two newer verticals that we have alluded to over the last two years are doing very well for us. One is healthcare, where we think that by the end of this year, we will have a book of business of almost $100 million. We may not touch that number, but we will be within nudging distance. And the second is public sector outside India, which is a book of business that has already crossed 150 odd million dollars and we think that in the coming quarters, we should start nudging the 200 million dollar run rate on the vertical as well.

Hi, thank you for taking my call and thanks. Good to see the margins and cash moving up. First question is on growth. 1H has been exceptionally strong, clearly held by the travel contract. I recall you had highlighted before that second half could also be stronger. Given how the macro has evolved since then, how has your outlook evolved for the second half and generally? On the margin side, you have delivered 14% margins. I think ahead of what most of us expected. Now, several of your larger peers are actually battling margin issues and we hear of pricing pressures thanks to AI-related productivity paths too. In that background, does it make sense for you to expand margins further from here or reinvest back in either into the business or to keep it margins and your price points more competitive.

Both John and I will chip in on this. What we discussed last quarter was that second half will be a growth half for us over H1 because our H1 numbers have been extremely strong. We continue to maintain that the full fiscal will be a robust growth fiscal for us. And H2 will also be robust growth half for us. Ankur, once we hit 14% EBIT, if we manage to hit it this year, we will plan to at a minimum clip along at 14% EBIT, but our primary aim will be to make sure that we prioritize growth over any further EBIT improvement. I mean, if it expands, it expands, but the first imperative will be to prioritize growth and to keep investing in the business and be a very high growth firm. 14% will be the minimum that we will plan to deliver. We will not commit to more than that at this point.

Yes, thanks for the opportunity. A couple of questions. First about the 5 large deals, if you can provide some colour on those deals and particularly if you can touch upon how those deals are changing in terms of size, shape, and complexity, how Coforge is evolving, if you can provide some colors around it, maybe for H1 also helps. Second question is about the DSO. If I look, DSO is steadily inching up. I am including all the contract asset. It is almost eight days up. How one should look this overall working capital cycle evolving for Coforge. You think now we should stabilize or there would be further kind of uptick possible? Last question is about the healthcare. You say others is doing well and you attributed part of it to healthcare. If you can provide some sense about our focus area and what is working well for us in healthcare and what kind of investment you plan to ensure this growth momentum sustaining in that area? Thank you. And one small question, if I can add, any expectation about furloughs?

Sure. So, four questions in all. I shall take the large deals questions. Saurabh shall address DSO. John and I will look at healthcare together. And John has just closed a highly complex health care program in this week itself. And we will finally, furlough is an easy yes, easy question. So, we will just take that in advance. We do expect furloughs as we see them every year and we expect them to be at the same scale as we have seen over the past few years, which has been significant. With that, the five large deals, three of the large deals came from North America. Out of those three large deals, two came in, interestingly, from the insurance vertical in North America, and one came in from an airline, a new airline for us that was an NM deal. In insurance, out of the two large deals, one was an NN deal, a new client. So interestingly, out of the three large deals in North America, two were new clients opened with a large contract. The other two deals came in from the Asia Pacific region. Each of these deals, what we found very interesting is the one of the three deals in North America was around legacy modernization of the mainframe. The new airline where we started a new relationship with a large deal. This was fundamentally focused around digital transformation across all data services and IT services. And the third deal from North America in insurance centered around optimizing operations by implementing AI-infused modern AMS and QE using our own platforms.

Hi, thanks a lot and congratulations on a good all-round performance team. My questions are all data-related, so it is all for Saurabh. Saurabh, the first question that I have is, I am trying to reconcile the big gap between constant currency revenue growth and dollar revenue growth this quarter. Your constant currency is 6%, dollar is 4.5%. I do not, that is like a chunky 150 basis points gap between the two numbers, which seems a little bit at odds with what I have seen for the rest of the players in the industry. Just trying to understand the mechanics and the calculations behind it here.

So two parts to it, Kawaljeet, one hedge loss is in the top line. There is a, almost the hedge losses in the top line have doubled, which is all reported in INR. So from Rs. 15 Crores last quarter, we are sitting at Rs. 30 Crores this quarter. So that is one line item which impacts our reported revenue number in either currency. I mean, the tailwind would have been otherwise much, much higher in terms of rupee terms if the hedge losses were not there in the top line. So that is one. Second is the exposure to pound and euro is very significant in our case. And over there, there was a headwind rather than a tailwind because of which between dollar and pound there was a significant tailwind because of which the dollar revenue went down. And the third thing is because of the India business growing this quarter. So, these are three reasons because of which the dollar number is lower as compared to and then rupee number is higher.

Yes, hi. Thanks for the opportunity. So, question for you Sudhir, you said that you are seeing demand improving on the margins. So, can you just highlight, is it for Coforge or for the overall industry? That is one. And secondly, do you believe AI is actually a headwind or a tailwind for the IT services industry. And one question for Saurabh in terms of ETR, we can see the tax rate is pretty volatile quarter to quarter. So what are you expecting for the full year this year, and probably next year as well?

Coming back to your earlier question around the demand, as I shared, demand is from our vantage clearly increasing on the margins. And we play in the same sandbox that the other players do. So, we believe that for folks who have the right set of offerings, demand should be increasing on the margins for them as well. We believe that AI is a clear tailwind for firms that understand the domain and also have an appreciation for how to apply the relevant AI-specific technology. There can be no better example of this than the fact that the velocity of our large deals, despite the macros, continues to increase very, very appreciably. As I had noted earlier, at the end of the first two quarters, the first half of this year, we have already logged in 10 large deals. If you were to contrast that, we had a number of only 14 for all of last year.

Yes, thanks for the opportunity and congratulations on a strong execution this quarter on many fronts. Just wanted to understand a few things about margin. So, when you plan to give a wage hike or this time it may not be there because we have distributed some bonuses in the first quarter. And how does that will impact the margin in the coming quarter?

We already announced the wage hike effective 1st of October, Sandeep, for the entire organization. So, Sandeep, we are not giving quarter-on-quarter margin guidance, but historically, we have had anywhere a drop of 100 to 150 basis point on the wage hike and then there are other levers wherein ESOP costs will go down. Depreciation and amortization as a percentage of revenue will go down, there will be levers to offset partially the impact of wage hike. So, that is how we are looking at a quarter three phasing out.

Thanks for taking my question and congrats on a good quarter. I just had one question related to the deal wins and the executable order book. So, in the last two, three quarters, while we have had a run rate of 500 million odd on the deal wins front, excluding the large deal from Sabre that we have won. The increase in the executable order book this quarter has been quite sharp relative to past few quarters. So just trying to understand what has led to that. Is it more of a quarterly phenomenon or would you say that you have seen tenure of deals going down this particular quarter.

No. Sulabh, so see, one, it is a function of the deals that are getting signed outside of the large deals also. Plus, the deals which have been signed in the previous quarter, when they start ramping up, the next 12-month revenues have started picking up. So, it is a function of the deals which were signed in the previous quarter and the current quarter and the ramp up getting stabilized because of which you are seeing the pickup in the total 12-month executable order book. It is not just the impact of the deal signed in the current quarter.

Yes, thanks for the opportunity. Just one question. So, any sense on the contribution from Sabre this quarter? Are we at steady state here or further ramp up is expected in 3Q? And did we take over any people in this deal in this quarter or most of it was done in 1Q itself?

Ashwin, we are at steady state. We do not expect any further ramp up from Sabre and the rebadging exercise is completely over.