Transportation 7.3% QoQ - anchor customer vs other growth; YoY recovery
Manoj Raghavan: Multiple factors - large deals ramping + previous quarter customer issue accelerated catch-up + adjacency. All 3 together drove growth. Top 5/top 10 - more auto customers came in due to large wins. YoY transportation still not back. Quarter or two more catch-up. Europe customers ramped, Japan ramped previous quarter, in consolidation phase.
Media top account challenges; wage hike Q4 impact; revenue contract mix
Manoj Raghavan: No challenges in top media account - growing well. Confidence from other customer outreaches and bids closing this quarter. Healthcare similar. Gaurav: Junior to mid hike covers 2/3 of organization, in Q4. Expect 60-70% of Q3 impact. Manoj: Combination of T&M and fixed bid/outcome-based. Not all large accounts T&M.
Co-innovation vs cost efficiency; capital allocation
Nitin Pai: Both run together. Strong bottom line pressure. Cost takeout focus. Best cost countries delivering outcomes vs headcount. Gaurav: Internal discussions on capital allocation with management and Board. Plans tracked. Q4 year-end AGM announce distribution. Strategy not disclosed at this moment.
Q4 better than Q3; 85% utilization possible
Manoj Raghavan: Don't give indicators. Analysis is correct - Media/Healthcare recovery + transportation top account catch-up + adjacency. Nitin Pai: Historically hit 85-86% at peak growth. Without AI/GenAI tools then 85% felt stretched. Today AI/GenAI gives more room. 85% comfortable now.
Auto momentum sustaining; utilization and margin trajectory
Manoj Raghavan: Worked hard on momentum. Things came together this quarter. Beyond auto OEMs - leveraged large deals + adjacencies (off-road). Steady growth forward. Accelerated momentum next financial year. Sustainable growth coming financial year. Gaurav: 35 bps exchange. Operating leverage 200 bps including utilization. Other expenses 80-85 bps. ~310 bps positives. Wage hike junior staff -110 bps. ~200-210 bps net positive. More utilization scope. Cannot commit short/midterm but go back to historical margins by exit of next year.
Macro headwinds; healthcare/media trajectory; hiring
Manoj Raghavan: Macro headwinds still there. Value proposition strong - best cost country, proven offshoring. 50% business in good shape. Other 50% (Media+Healthcare) - Q4 should see positive media signs. Healthcare bottomed out Q3, turnaround Q4 onwards. Optimistic midterm. Gaurav: Q3 200 bps operating leverage to bottom line. Future model not headcount-tacked to revenue. AI productivity. Calibrated hiring. Demand-supply optimal model towards 80% utilization. Manoj: Quarter or 2 before hiring kicks in, low numbers, specific customer requirements.
Auto deal ramp-ups; OEM decision-making; operating leverage capacity
Manoj Raghavan: Significant ramp-ups in late Q2 and Q3. Reached steady state. Still opportunity to grow. Adjacency businesses opportunity. Decision-making slow but customers making careful calculated additions. Value proposition key. Operating at ~75%, can go to 85%. Target around 80% before adding capacity. Gaurav: We are hiring selectively. Large-scale hiring couple quarters away.
Q3 growth - anticipated ramp-up vs demand environment; Q4 high base; utilization without media
Manoj Raghavan: Both - successful ramp-ups + pent-up demand from cyber-affected customer + new deals adjacency. Confident of growing over Q3 number. Hoping Media and Healthcare (45-50% of revenue) recover. New customer outreaches, large opportunities. Some turn around in Q4. Improves utilization. FY27 double-digit aspiration intact for transportation and healthcare.
Transportation growth areas; SDV deals in pipeline; concentration
Manoj Raghavan: SDV closures primary growth driver. AVENIR own SDV suite traction. Electrification BEVs and hybrids. AD-ADAS continued traction. Connected car platform. Top 5-10 accounts ramp-up. Across geographies, derisking from geography dependency.
Commercially successful idea initially deemed irrational; creativity vs delivery discipline
Nitin Pai: Engineering company - very rational. Most product/platform bets future-looking - sometimes ahead of time. NEURON network automation/orchestration platform - elegant cost reduction but telcos hesitant. Engineering schooling makes concepts manufacturable, feasible, productizable. Pure creativity for heart, not mind.
Healthcare regulatory pent-up demand; defense business rationale; non-PV transportation 20% target
Manoj Raghavan: Regulatory not pent-up. Moving manual to AI-based digital. AI/GenAI larger work piece. Some acceleration. Aerospace/defense - global opportunity, UAVs, drones, warfare changing, electrification. India - DRDO, labs, HAL. Capability built, doubling down. Overseas no profitability/payment concerns. India needs business model tweaks. Non-PV currently 7.5-8%, target 20% in next 2-3 years.
Anchor client (JLR) trajectory next year; share gain vs spend
Manoj Raghavan: Many marketplace changes. Focus on steady growth path for top 15-20 customers including anchor. No indication of difficulties. Optimistic. Share in customer spend has only increased over 5+ years. Value proposition very strong.
Labour code adjustment; transportation pent-up demand; new project margins; demand discussion improvements
Gaurav: Q3 catch-up done for new labour code. Exceptional item. Going forward 15-20 bps impact compensated by utilization levers. Larger part baked in. Manoj: Pent-up demand part will continue subsequent quarters. Focus on top 5 top 10 for diversification. Geography risk diversification - Japan, India helping when US/Europe tough. New project margins - basket approach, no set rule. Auto already discussing - new deals, new customers, new logos. 2 quarters trajectory will indicate.