Hi, thank you. So a couple of questions. Firstly Sandeep, you know we have seen the constant currency sequential growth slow down significantly this time to 3.3 versus an average of 4.5 in the last few quarters. Now obviously there was a mention of delayed ramp up to an extent but how should we think about the trajectory going forward given how the macro is behaving right now? Is 3.5 to 4 the new normal or should we expect to go back to that 4 - 4.5 we used to enjoy a couple of quarters back?
So first of all, look, we don't give forward-looking guidance, so I'm not going to give you a number per se. All I can say is, if you look at the overall growth, it was 3.9% in USD terms. The constant currency, the currency movements are not necessarily in our hands. I'll leave it there but if you look at the order book - order book is healthy. If I look at the pipeline - pipeline is healthy. We don't quantify the pipeline for people so I'm not going to give you a number on that. All I can say is, the environment has been cautious. Decision making has been slow. If the environment becomes a little bit better and not just for us, for everyone, I think things will be easier. So, if we can deliver good growth in a tough macro, I'm pretty sure that as things move through the next several quarters and if the market improves, you can yourself do the math. [Follow-up on healthcare]: I don't think there will be further degrowth in the vertical. It will definitely be a growth vertical for us during the year. Some of these are planned movements as well and I'm pretty reasonably confident all the three verticals will grow and we have said publicly in our last earnings calls as well. BFSI will lead the growth for us this year, followed by hi-tech, followed by healthcare life sciences but all of them should grow.
Yeah. I have just two questions. First of all, if I look at the hedge position, there is a sharp increase, so is there any change in terms of the way we look at our hedge strategy? And second question is about the SASVA. Can you provide some sense about, let's say, SASVA influenced deal intake, deal pipeline, revenue, whichever way you can provide some sense around it? And how it is changing compared to maybe a year back?
[Vinit Teredesai]: So, Dipesh, there is no change in the policy. We constantly keep on looking at our hedge position on a regular basis. There is a well-defined policy within that and we continue to take our positions on a regular basis. All these numbers are pretty much within that range. [Sandeep Kalra]: Now, coming to the SASVA part of it. We don't necessarily give any data points with respect to SASVA bookings or SASVA influenced bookings and so on. SASVA is a flagship platform for us. It helps us do two things. One, wherever there is a use case where the customer is willing to adopt SASVA, we are able to leverage SASVA to deliver things faster, better, provide more productivity, reduce cost for our customers, and so on. Where the customers are wary of taking a third-party platform like ours, it basically gives us a capability showcase and we are able to leverage technologies from other providers whether it's Microsoft, whether it's a GitHub Copilot, whether it is a Cursor, Windsurf or any other tool, which is an engineering productivity tool. There are further use cases of SASVA, for example, in private equity. We've been working with multiple different private equity using SASVA as a part of their tech due diligence evaluating platforms, building tech debt reduction business cases based on which we are winning businesses and so on.
Hi. Good evening and thanks for taking my question. My question is again on SASVA. We have heard from most of the peers that product development is where AI-led productivity has been the highest and many of these players have been proactively passing back those productivity gains and our sense is, that results in some revenue deflation. But for us, it seems that, given our core a lot of what we do is product development. This is resulting in net new revenue for us. Just wanted to understand if I'm thinking right. And if so, what is driving this? Are we taking wallet share, market share or is SASVA helping us unlocking new opportunities?
Yeah. So, first of all, it is definitely helping us unlock newer opportunities. As I said before, SASVA is the pinnacle of how you can use AI and it is much beyond just the coding aspect of it. It is how we define the requirements, how we groom the requirements into a backlog, how we code it, how we test it, how we release it, how we support it. It's also about technology modernization, from legacy platforms or legacy technologies on to new. There are many different use cases of SASVA and the way we have been able to articulate that to our customers, our customers definitely see us as a company that can lead from the front using AI to help them do this. Even after all this, if they want to do a GitHub Copilot implementation and productivity gains through that, we have even won a number of those things. So, from our perspective, SASVA definitely is helping us expand our addressable market and is getting us good traction. Second, in terms of revenue deflation, we have not necessarily seen revenue deflation from existing customers. [Follow-up on margin trade-off]: Well, look, two parts there. One, is there a hurry to reach to a $2 billion mark or any billion dollar mark? There's no hurry to reach there. We want to reach there in a healthy manner. We'll deliver revenue growth but a profitable revenue growth. It's not about achieving revenue growth at any cost. At the same time, if it is about diluting the margins, a small bit, to create capabilities that can get us larger deals, we'll take a prudent call.
Hi, thank you for this opportunity. If I look at the client-wise revenue and if we check this plate like the 6th to 10th customer or be it 11th to 20th customer's bucket, these customer buckets have grown at like double digit 10%, 12% QOQ whereas the top 5 customer's bucket is flat. And I understand that's because of the largest client in healthcare. So, if one were to remove that largest client in healthcare, how would the rest 4 customers revenue look like, the growth?
Yeah. So, look, we don't bifurcate like that. Today it's a question of how would the rest 4 be, tomorrow it could be in another bracket. So, look, it's like a portfolio of customers that you have. Just like in any good investment strategy, you have a portfolio of investments that you need. At the end of the day, Persistent is some of the parts. These customers are those parts - the verticals, the sub-verticals, geographies. The way we are looking at it is, our endeavor is to grow every part of it but there will be quarters when one customer may not grow at that extent that the whole company does. So, this is a part of the entire game. Overall, if you look at the top 100 customers, on a year-on-year basis 22.4% growth in current environment. We're very happy with that and we'll try and do better. [Follow-up on new verticals]: Yeah. So, look, we work in 3 industry verticals - Software hi-tech, second part is our banking, financial services and insurance, third is healthcare, life sciences. Each of these segments has multiple sub-segments under it. The first endeavor that we have is to basically go deeper into these verticals. And as we grow these verticals over the period of next 1-3 years, we'll see if we need to go into other verticals - whether it is auto, whether it is industrial, whether it is others.
Hi, thank you for the opportunity and congratulations for the steady performance. Sandeep, on the healthcare vertical, we see that the top customers seems to have declined sequentially and you mentioned in your opening remarks this might be driven by certain offshore shift of projects. While we saw strong growth in healthcare outside of the top customers, could you essentially talk about what drove the sharp growth there? That's question number one. And the second question is, when I look at your segmental margins despite this offshore shift, the margins on the healthcare vertical have actually come off on a sequential basis. And a related question to this one, how should we be reading the aspect of delayed wage increments for us given historically we continue to retain the timelines? That's it.
Sure. So first of all, if you look at the healthcare vertical, healthcare vertical for us is basically a combination of four different things. Scientific instruments, medical devices, think of equipment makers, diagnostic companies and so on and so forth, pharma companies and biotechs, third one is providers, fourth one is payers. And if you look at our overall growth in healthcare, it has been very strong over the last several quarters. Now, if you look at the largest customer that you're referring to, obviously we have grown very well and as a part of the entire exercise, we have done vendor consolidation. We have to move certain amount of work over a period of time offshore to give back the benefits in terms of reduced cost and so on. And when you do that, there's a certain overlap that you have as well. If we are adding headcount offshore, moving work offshore, we are not declining our subcontractor headcount, which is vendor consolidated. So, there is a certain overlap that you can match with the second part of your question, which is - the margin coming down a little bit in healthcare. We have a fairly good pipeline across various subsegments of healthcare and depending on how those orders close, we are relatively confident of healthcare continuing the growth. Will it continue the growth at the 30%, 40%, 60% year-on-year that we had last year, may not be, but there'll be definitely growth in healthcare as well. Now, in terms of the wage part of it, look, the market conditions are such right now that there is a lot of uncertainty whether it was uncertainty caused by India-Pakistan situation for a little bit, whether it was the Iran situation after that, whether it was the tariff situation after that. So, there is a little bit of uncertainty continuum that is happening and the order book is dependent on people taking decisions. So, as I said before, pipeline is good, we'll let it pan out. And as a cautionary measure to make sure that we are being prudent, we have delayed the increase by a quarter.
Yeah, thanks. Thanks for the opportunity. Sandeep, if I just look at book-to-bill, we were consistently at 1.5-1.6 in last many annual years versus last two quarters we are between 1.3-1.4. So, does that give you some amount of discomfort where near-term growth could be slightly lower than our strong history of Q on Q growth? Though the growth is still better but could be relatively lower versus our own history? And how do you see the TCV opportunity in the coming quarters? Can we go back to book-to-bill of 1.5-1.6X?
Yeah. So, two parts to it. See, our revenue conversion, when we look at it, revenue conversion is ACV conversion and TCV conversion. What you don't see and what we measure ourselves is the executable order book. And, so, we are reasonably confident of the growth journey. I don't want to put a number to it because we don't give forward-looking guidance. Now, can we do better in terms of the TCV to ACV ratio going ahead? That's the endeavor at any point in time. And I can only tell you this, the pipeline of larger deals is there. Again, we'll let the quarters pan by. And as we announce the results, you should see whatever comes out. But we are confident of growth, we are confident of larger deals in the pipeline and so on. [Follow-up on margins/ESOP]: [Vinit Teredesai]: So, Sandeep, we still continue to maintain our stand in terms of improving our trading margin. We have mentioned in the past that it needs to be improved by 200-300 basis point by the time we reach FY27. If you look at our last year, it was 14.7. Last two quarters, it is 15.6 and 15. So, we are pretty much confident that from a going forward basis we are pretty much on the track as far as the margin trajectory is concerned. As far as the stock options cost is concerned, I had called out in my opening comments that there is a reduction in the stock option cost. That reduction has already happened. Now, this will continue to remain flat for the next couple of quarters before you'll see further reduction.
Yeah. Hi, Sandeep. Congratulations on a good set of numbers. I know Vinit answered this question partially earlier but does it suffice to say if the ESOP cost would have not been there we would have seen a significant margin compression? And the second question is that the attrition rate has gone higher and now we are basically delaying our increment by another quarter, right. How do you see that impacting the business? And do you see any significant challenge or this is one-off quarter and we will move back to our original attrition rate? What's your thoughts on that?
So, ESOP cost has been there for the last several years. It depends on the cost that basically comes in, depending on what ESOPs are given in what year because there's a Black-Scholes valuation and so on. So, it's not that it came all of a sudden and so on so forth. So, it's a part of our overall operating fabric. So, there are options that we have given, there's a time where we covered 80% of our employees. There are, outside of that, about 800 odd employees covered in significantly differentiated options depending on their responsibilities, et cetera. So, it's a part of our operating cost. I wouldn't want you to think about this being delinking from that. The cost will vary over a period of time. [Second question]: Look, I don't think it is a question of this wage hike decision that has impacted this attrition. Overall, if you look across the industry, there's a slight uptick in attrition and that may be to do with the GCCs being more active, the product companies coming here and setting up their own captives and large banks, large enterprises, et cetera. So, I wouldn't link the two that strongly. We don't have any such analysis that we have done, which points to this two being correlated. And, again, forward looking attrition, we can see the trends because the notice periods, et cetera, show up. We don't see anything which points to a much higher attrition in the near future.
Yeah, super. Yeah, hi. Good evening. Are you seeing any near-term headwinds to margin? I'm asking from the perspective that you have pushed out the wage hikes but at the same time I do see that some of these costs will reverse, right. The higher onsite resource costs, that should reverse. And so from that perspective, is there anything that you're seeing as a headwind in the near term? That was the first question. The second thing was, which verticals are you basically seeing this prevalence of delayed ramp-ups? Is it very homogeneous or is it specific to any vertical? And, finally, is this higher amortization? What's driving that? And is it sort of an ongoing number we should assume or is there a one-off there? What's driving it?
Yeah. So, Nitin, I have mentioned actually the near-term headwinds. What I mentioned will not be headwinds, these will get normalized over a period of time. As a result of that, this will benefit us in terms of our margin going forward. But I don't want you to count everything that will go in margin. On the way as we grow our company, we have to also make investments. So, some portion of that will get back into investments. The second portion in terms of higher amortization, as we closed a couple of our asset acquisitions, et cetera, last year like the SoHo, et cetera, after the full valuation report came in, the full impact of that amortization has started as a result of that full report. And you should assume that this will continue without any substantial increase going forward. [Sandeep Kalra]: So, on the delayed ramp-up, it was basically in healthcare life sciences and I wouldn't want to paint a picture for the whole industry. I would say it may be a case of our own customer-related delayed ramp-up and that basically will happen over a period of time. I don't want you to take it as an industry trend for others as well. So, it's basically some of our customers, they have their own nuances. And it was a one-off where we saw a delayed ramp-up, so I don't want you to take too much from it. [Follow-up on utilization]: So, look, attrition, utilization, growth of other companies, growth of the overall sector, all of these are kind of different parts of the equation in how easy it is to hire or retain or other things related to that. So, as of this point in time we don't see a reason for us to loosen on the overall utilization side.
Yeah, hi. Thanks for taking my question and congrats on a solid quarter again. Sandeep, two questions from my side. The BFSI segment reported a very strong growth in this quarter. We've seen this vertical basically pick up over the past 4 quarters from a single-digit YoY growth to almost 30% growth in this quarter. So, any color on basically what is driving, which sub-segments of BFSI are driving this growth? You mentioned that BFSI will lead the growth, do you expect this kind of momentum to continue in coming quarters as well? Second question is on the healthcare vertical. You mentioned again that this will be the lowest growing vertical in the 3 segments but it will still be a growth. Have you seen any, apart from the client impact that we saw in this quarter, in your conversation with this vertical client are you hearing any concerns about the big bill that the Trump administration had brought in and if that could impact the healthcare spends of some of the clients in the segment?
Sure. So, let me take the healthcare segment first. If you look at the healthcare segment, there are multiple segments within this or sub-segments within healthcare. So, if you look at scientific instruments, medical devices depending on where the tariff levels settle in, especially with China, because a lot of the supply chains are linked to China. Anyone who is an equipment manufacturer is dependent on China for the equipment manufacturing, for the supply chain components, nine yards. So, if the tariffs hit them badly then obviously the stress on the cost part will become even higher. And that's what we saw in the last 2-3 months. People looking at alternative plans, people looking at even supply chain movements and so on and so forth. So, there is definitely stress because of the tariff part and we will see where it resolves. Second part in the healthcare side is the impact of the federal or the DOGE part of it. The DOGE part of it impacts the research funding to universities, the funding across various countries, the USAID, et cetera. All of these things, at the end of the day when the universities were doing medical research or healthcare-related research, they were consuming products and services from our customers. So, a lot of these uncertainties definitely are playing more in the healthcare life sciences sector where the name of the game right now is Plan B for cost control, looking at vendor consolidation, more offshoring and so on. Now, if I look at banking financial services on the other side, again little less cautious as compared to that. We are seeing larger deals there, AI discussions, optimizations. We've been brought in as challengers to look at the existing landscape of much bigger players and seeing if we could partake a part of that, how would we do it differently and so on and so forth. So, different dynamics of different verticals. This year, for sure the way we have our BFSI segment, it will grow well.
Yeah. So, I was saying, you spoke about some delays in ramp-ups, could we also say that there were some delays in deal awards as well? And if so, then can we think about some improvement in deal wins next quarter because some have actually slipped from this quarter to the next?
So, the way I would put it is not deal award delays, I would say overall decision making cycle is a little longer. And, so, you need a little more pipeline if you want to continue to do the bookings the way you are for any company. So, from our perspective, please don't treat it as all of a sudden the next quarter is going to be a big windfall and so on. So, we'll let the quarter pan by. And the market environment is such, it is taking more. If there is certainty in the market, if these tariffs are behind us, there are more positive things that come out in the U.S., it definitely will impact the bookings and hence the revenues going forward. But too early to say anything like this. [Follow-up on healthcare offshore costs]: So, look, as we have grown over the last 5-6 years from being a half a billion dollar company to nearly a 1.5 billion dollar run rate company, we are also fighting bigger deals. As we fight bigger deals, this will become a flywheel motion where something comes down in terms of cost and something goes up. So, we'll have to get used to an environment where at any point in time if we are ramping up deals, we may do vendor consolidation, we may have subcontractors onshore and so on and so forth.
Yeah. Congrats on good set of numbers. My question is again regarding our aspiration of $2 billion in revenues. So, just wanted to understand like is there any specific plan laid out for this in terms of how it will be inorganic and organic mix? I mean, since we are leveraging more AI-related platforms and all, so if you can give more color on your own whether we will be growing more organically? And if inorganic component is there, then what would be the size that we are looking at?
Sure. So, if you look at it, where we are today, we have to get to $2 billion by FY27, which is ending in March, 2027. We need a compounded annual growth rate in the range of 19%-20%. We are tracking to that and definitely within that, between now and then, we will do tuck-in acquisitions or if we get a good scalable acquisition in geographies like Europe, where we have clearly said that we want to be 15% in revenue terms as we go ahead in the next 2-3 years, we'll look at that. So, the way to look at acquisitions for us would be, most of these would be capability-led, smaller acquisitions. The only place where we would do a scaled acquisition would be if we get some good asset in Europe. And a combination of these two should lead us to the growth aspiration that we have of $2 billion. Again, please keep in mind, that's a growth aspiration. We are in no hurry to get there at any cost. It will be at a profitable, sustainable revenue and a combination of organic and non-organic.