Thank you, moderator. A very good morning to all of you, and thank you for joining us today for Indegene's earnings call conference for the third quarter and nine months ended financial year 2026.

Today we have with us Mr. Manish Gupta, Indegene's Chairman and CEO, and Mr.

Suhas Prabhu, CFO, to share the highlights of the business and financials of the quarter. I hope you have gone through our results release and the quarterly investor presentation, which have been uploaded on our website as well as the stock exchange website.

A transcript of this call will be available in a week's time on the company's website. Please note that today's discussion may be forward-looking in nature and must be viewed in relation to risk pertaining to our business.

After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team. I now hand over the call to Manish to make his opening remarks.

Thank you. Thank you, Abhishek, and good morning, everyone.

Thank you for joining our Q3 earnings call. Now, it was a good quarter for Indegene.

We grew revenue by 30.8% year-on-year and 17.1% quarter-on-quarter. Even if I exclude BioPharm, which was acquired effective October 2025, the growth was 18.3% year-on-year and 5.9% quarter-on-quarter.

We delivered an adjusted EBITDA margin of 18.5%. Our top five customers grew by 3.1% quarter-on-quarter, and three out of these top five customers are now $25 million-plus accounts.

We continue deepening and broadening our relationships with our customers. The $1 million-plus customers grew by 12 and now are 52.

Our active customers grew by 10 and now are 86. Our revenue per employee now has crossed 70k US dollar annual mark.

This is by far the highest in the industry, underscoring the tangible impact of technology and AI and the very specialized nature of work we do. This was also a good quarter on new business generation front.

We also had marquee deals wins with large and small customers and performed well on the renewal front as well, and I will talk about all this stuff. We won seven large deals exceeding $1 million ACV each across three accounts in Q3.

Let me talk about the first ones. The first, for a top 10 pharma company, we have secured omnichannel orchestration for the whole of US for a multi-product portfolio on the back of Indegene Envisage and BioPharm tandem, combining AI to boost prescription without reliance on on-the-ground sales team.

This engagement is expected to yield $10 million-plus annual revenues with a two and a half quarter lag post go-live, which means revenues will start accruing from Q2 FY27. We also secured a change management engagement for omnichannel operations from the same customer, the value exceeding $1 million ACV.

The second customer, a young emerging pharma has entrusted Indegene with a product launch covering various aspects of both commercial and medical services consisting of three work orders, also aggregating over $10 million. Finally, we won a $20 million TCV business consisting of two work orders for being an end-to-end commercialization partner to a mid-sized biotech company.

GenAI is a key part of this partnership, and this engagement is expected to yield $5 million of revenues in the first 12 months. All these deals have been won on the back of highly specialized resources and AI-based platforms coming together to deliver very compelling value propositions for our clients.

Outside of these deals, there are other places where we increase our footprint as a strategic partner to our customers, again using our domain expertise, specialized skills, technology expertise, and GenAI platforms to help transform our customers' operations across both commercial and medical ops. I'm going to share some of the successes with you today.

For a large medical device customer, we are managing global pharmacovigilance workflows using AI-driven automation, significantly reducing manual case processing and accelerating aggregate reporting. This is a multi-year $7.5 million TCV deal, which has gone live effective January 2026.

For a mid-sized pharma customer, we are reimagining their R&D operations through GenAI and setting up a global innovation center for them. We are deploying our AI-assisted NEXT medical writing platform within the customer's private cloud AWS environment for regulatory use case as a start, with many other document authoring expansion possibilities.

Now, beyond some of these examples, we are also very actively engaging with our existing and prospective clients with what we are calling a agencyless model, where AI-led modular solutions replace traditional, fragmented agency structures. GenAI is creating productivity gains across our commercial and medical segments.

We have been expanding our catalogs to convert productivity into volume expansion by enabling our customers to do more. This has enabled us to deliver more for the same while also adding higher-complexity work to our catalog, which helps penetrate deeper in adjacent spend areas.

The scale and mix of wins, as also the pipeline and discussions, reflect improving industry sentiment, faster custom decision cycles, and the strength of Indegene GTM approach, combining GenAI with domain expertise. All this points to strong momentum in the industry given the near- to mid-term outlook, impact of policy changes, and increasing adoption of GenAI.

Now, with that, let me move to developments impacting life sciences industry and its outlook. The biopharm and life sciences industry remains resilient, led by 20, 25 large companies that have consistently shaped the market over the last few decades.

Despite a year filled with policy-driven headlines, pharma tariffs, MSN pricing, H-1B visa discussions, the actual impact to the industry and consequently to Indegene has been minimal. Although MSN pricing has generated attention, its near-term impact remains limited.

All the pharma majors have now inked deals with the US administration in return for pharma tariff reprieve and expedited drug application reviews, while conceding on pricing impacting a very small segment of consumers, limiting the adverse impact. Further, price increases for other segments are expected to offset the price reduction.

The pharma industry enters 2026 with a stable growth outlook, strong innovation momentum, and significant operational pressures, and is expected to grow 5% to 8% CAGR through 2029. While patent expiry and pricing pressures will persist, broader trends, M&A activity, increased access, strong innovation pipeline support the industry's growth outlook.

Importantly, as revenue for approved drugs steadily declines, pharma companies are under pressure to improve efficiency, accelerate launches, and modernize commercial operations. This creates a structural demand for Indegene's offering across content, medical, regulatory, safety, and omnichannel operations, with accelerated adoption of digital and AI-led transition.

Now, with this, having talked about the industry, let's spend some time diving slightly deeper in everyone's favorite theme and topic, AI. One of the big benefits of GenAI would accrue to the healthcare and life science industry, using GenAI to accelerate discovery, and hence more drugs getting into clinical trials, clinical trials being made more effective and efficient, more specialized and effective drugs being marketed and reaching patients.

That's what GenAI could enable, and this vision, of course, will require per-unit cost of trials, compliance, sales, and marketing to come down over time as the volume of drugs increase. This is what we at Indegene are excited about, the role we can play in this industry.

At Indegene, given our scale, nature of engagements, specialized talents, and very strategically thought-through platform approach of GenAI products, we are positioning ourselves and getting recognized as a strategic cutting-edge partner to deliver superior outcomes and not a point solution or a legacy provider stitching partnerships with point solutions to stay relevant. Our platform approach enables us to help clients reimagining their value chains, shifting from isolated productivity wins to holistic transformation.

At this point of time, it will also be useful to throw light on our three GenAI platform approach, which helps us to re-engineer, reimagine the entire process in three key areas. Content SuperApp, the first one, which integrates agency of record, Techtonic, content production, and MLR workflows.

As an example, a top 20 pharma customer adopted our Replicator module, which is a part of the Content SuperApp, for a few markets in Europe for two assets in a channel. As we successfully complete this deployment, we also have the ability to scale seamlessly across additional content formats and channels in global markets.

I already alluded to our NEXT medical writing platform getting implemented with a mid-sized company, and this is enterprise-level engagement. Third, Audience Intelligence platform powers omnichannel operations and analytics with modular AI components, where we are combining the power of Tandem IP acquired through BioPharm with our Envisage.

Now, let me move to an update on the progress made with BioPharm post the acquisition effective October 1st. On the integration of BioPharm, specifically transition of services such as IT, HR, and finance from the seller to Indegene is on track for completion by March 31st, 2026.

BioPharm has seen no disruption in active engagements. Client response has been positive, with many exploring combined Indegene-BioPharm capabilities.

Employee integration is progressing well, with a strong retention across the organization. Technology IP integration is progressing as planned and will conclude by year-end.

Joint business development has begun delivering results, including two omnichannel wins with large Indegene customers integrating BioPharm capabilities. Cost synergy totaling to around $1 million per annum is expected to accrue progressively in FY27 and have been identified for actions.

Now, finally, let me talk about the segment integration which we've gone ahead and done. In our previous earnings calls, we had mentioned that BioPharm is integrated Enterprise Commercial Solutions, also Techtonic, which is a combination of enterprise commercial capabilities with capabilities acquired through CultHealth, is part of Enterprise Commercial Solutions commercial segment.

There is an inevitable blurring of lines across the enterprise commercial segment and brand activation segment, with many capabilities and engagements start off as brand-specific, but morph into enterprise segments or capabilities. We also are very clear that in the long run, the enterprise part of the business will continue to scale, and that's a very robust business.

Reflecting this reality, we have integrated brand activation and BioPharm into Enterprise Commercial Solutions. Going forward, the company will report results under three segments: Enterprise Commercial, Enterprise Medical, and Others.

I will now hand over to Suhas for a deeper dive into financial performance. On to you, Suhas.

Thank you, Manish. Once again, a very good morning to everyone.

Let me walk you through the key financial highlights for the quarter. Q3 was a strong quarter with revenue rising to ₹9,421 million, reflecting a robust 30.8% year-on-year growth and a 17.1% quarter-on-quarter growth.

Our growth in USD terms remains solid, with revenue up 24.4% year-on-year and 15.1% quarter-on-quarter. Even excluding BioPharm, which we acquired during the quarter, we continued to deliver healthy progress, achieving 3.9% sequential growth in US dollar.

EBITDA adjusted for one-time expenses came in at ₹1,747 million, marking a 15.7% year-on-year and a 19.6% quarter-on-quarter increase. Notably, our adjusted EBITDA margins expanded to 18.5%, an improvement of 30 bps quarter-on-quarter.

One-time non-operational expenses related to the three acquisition transactions executed during the quarter and restructuring was ₹105 million or $1.2 million. During our last earnings call, we had outlined 150 basis points of impact due to planned investments towards enhancing our go-to-market capabilities and supporting business expansion beginning this quarter, quarter three.

In addition to these planned investments, quarter three also witnessed elevated costs related to upfront investments and go-live costs in large deals won in the recent past, which has been already mentioned on this call. As indicated in the previous calls, we continue to expect EBITDA margin to return approximately to 20% over the next six to eight quarters.

EBITDA is expected to begin sequential improvement from quarter one of FY27. Moving on to PAT, PAT for the quarter was ₹1,026 million, reflecting a 0.5% sequential increase and a 6.5% decline year-on-year, with a PAT margin of 10.9%.

Adjusting for one-time expenses net of tax, PAT margin would have been 11.7%. Beyond these one-time items, PAT performance was primarily impacted by lower interest income given the $65 million reduction in investments and surpluses in the US following the BioPharm acquisition, also coupled with lower yields due to declining interest rates in both India and US.

Further, higher depreciation and more specifically amortization costs, which are non-cash charges, increased from ₹234 million in quarter two to ₹396 million in quarter three, reflecting amortization of the intangibles from the recent acquisition. Amortization is expected to remain elevated for the next three quarters before reducing by ₹50 million per quarter starting quarter three of FY27 and a further approximate ₹25 million per quarter decline beginning quarter three of FY28.

We have presented additional details in the investor presentation uploaded on our website. Both these impacted about 205 basis points at a PBT level and 156 basis points at a PAT level.

With BioPharm integration-related synergies beginning to take shape, M&A-related costs tapering off, and the underlying business momentum remaining strong, we expect PAT to strengthen and support EPS expansion. The geographic mix of the business remains stable, with 97% of contribution continuing to come from the US and European markets.

North America more specifically accounted for 71.8% and Europe 25.5% of our revenues. These numbers have moved up specifically for the commercial segment and North America, following the impact of the acquisition of BioPharm, which is entirely a US-based business.

Moving to renewals, most of our annuity business and work orders are renewed in this period as most customers have a Jan to December fiscal. While formal documentation is underway for a few, we have closed or nearly closed terms with most contracts which are due for renewal.

During this cycle, we identified pockets of customers where, depending on the centralization maturity of the client, we proactively approached them with our GenAI-enabled solutions and have been successful in offering certain benefits on price in lieu of volume or scope expansion. Overall, the renewals were stable in value terms, with these GenAI-led forays expected to yield positive results as volumes for the new deliverables included in our work orders ramp up through the period.

Overall, we head into 2026 from a position of strength, with stable renewals, significant deal wins that Manish has already mentioned, both of these providing confidence and momentum for the year ahead. With that, I'll pause here and move to your questions.

Happy to take them along with Manish. Back to you, moderator.

Hi, sir. Thank you so much for the opportunity.

A few questions from my side. One, we've added about seven to eight clients in the $1 million in this quarter, and that is organically.

Anything which helped this, and what kind of momentum can we see going ahead?

Hi, Vinay. I think our teams are in place, and now after a bit of consolidation which happened in the industry, what we see, clients are back on the table, right?

Everybody is now thinking about what next to do, right, what to be implemented. I would say that at least in the smaller companies, decision-making cycles are also more agile and shorter, right?

That whole trend, coupled with the fact that we had our teams in place, right, we've got a solid team executing on this ground, has helped this. Suhas, you want to add on anything?

Yes. Vinay, thanks for the question.

This has always been our approach at Indegene: to get the breakthrough, expand, get into the doors, get into larger projects. As we transform those projects from one-off projects to larger annuity businesses and enterprise deals, we see our customers growing into that million dollars and beyond.

The success of those forays is what reflects in the increase in our million-dollar-plus customers.

Okay. On the BioPharm side, how are we looking at that?

Because last few years, in terms of growth-wise, it was a little tepid. Are we seeing some good momentum on BioPharm post the acquisition?

I'd say it's just a quarter, but the customer conversations have been very positive. We've been taking them to our customers, and customers are excited about the joint proposition.

The pipeline is building up. We also had done shows with their customers, right?

There, I think the acceptance was very high, right? Everyone was super thrilled that a company like Indegene has become the new home for BioPharm, which was much more specialized capabilities.

Going to see how this plays out, but overall we are very bullish about what we can do with this business.

To add on to that, BioPharm during the quarter did $10.3 million of revenue on a standalone business, and this does not include certain pass-through costs, which are the media buying costs which are reimbursed by our customers. While typically the calendar quarter four is a strong quarter for BioPharm, we feel encouraged by a couple of deals that we have won which include BioPharm capabilities.

Manish already mentioned in his commentary the Tandem IP getting integrated and being offered as a single offering to our customers. It's early days on transforming the brand engagements to enterprise engagements, but we are having very serious and exciting conversations with our customers, both at BioPharm and Indegene customers.

Okay. Just one last question is we've always kind of given a guidance of mid-teens growth, but this quarter even apart from BioPharm we did about 18%-plus growth.

Are we looking at a stronger market ahead, and would we look at maybe growing at higher teens instead of mid-teens going ahead?

Vinay, we would refrain from giving out any guidance going into the future, but having said that, our performance quarter-on-quarter has increased, as you saw last quarter as well as in quarter three, and the deal-win pipeline that Manish already mentioned has been robust. We believe that this would be steady and increase here on.

Yeah. Yeah.

Thank you so much, sir. Those were my questions.

Thank you so much.

Hi. Thanks for the opportunity.

A couple of questions. One is now with the brand business after acquisition of Cult and BioPharm are becoming significant for Indegene, we are seeing that growth in the brand business is lower than the enterprise business.

Any risk of drag on growth from this business in the near term? Second is what is outlook for growth in the top accounts, and is the pipeline normalized for some of the accounts which were impacted earlier?

Good morning, Satish. Let me start with the last point.

Our pipeline in the large accounts is robust. It's just the conversion has taken more time than what we expected it to.

Overall, we believe that over the next few quarters you will start seeing growth in top few accounts, right, top accounts overall. Even some of the customers where we had issues, right, I think we are gaining momentum and getting back in those businesses.

That part of the equation looks right now, I would say, robust. Now, as far as brand and enterprise is concerned, we don't see a risk of drag on growth, right, because strategically what we are doing is Indegene has grown from the enterprise route, right, but now with GenAI, with more centralization as a theme, right, which is also driven by GenAI and the pressures on the industry, we clearly see an opportunity of moving upstream, downstream from a centralization perspective.

A lot of the upstream processes, right, especially are with the brands, right? That's where centralization will play out.

It's super critical to have credibility with the brand teams, and we've acquired those capabilities, built those capabilities. Using that, we drive centralization theme at an enterprise level, right?

That is clearly how customers are thinking. It's still early days.

A few customers have moved on that, and that's where we are seeing traction. Given what we have seen in the industry, over time these things become a trend, right, and we will be benefiting from this trend.

If you think about it, there's nobody which will be able to bring capabilities the way we do from an enterprise and brand perspective.

Got that, Manish. Thanks a lot.

Yeah.

Yeah. Hi, thanks for giving the opportunity.

A couple of questions. You mentioned that the current stage is of a renewal cycle from calendar year perspective.

Can you shed some light what volume increase we are witnessing from the existing top accounts? Second, also from the new logos, what volume increase we are witnessing on YoY front?

Also, from the pricing point of view, what are the trends at the moment?

Sorry, could you repeat the second part of the question, Chirag? We didn't hear you clearly.

Yeah. I was asking what pricing trend are we witnessing in the renewals?

Suhas, you want to...

Yes. Thanks, Chirag, for your questions.

Firstly, as I mentioned, renewals have been fairly stable, right? I would say on value terms, we are seeing this net-net to be in line with our expectation of what we started the year from a order book.

On top of it, we have added new customers where the six-month, three-month kind of engagements have now converted to a annual annuity business, and that is the volume increase or net value increase that we are seeing on the renewals. Now, more specifically on the pricing front, we're not seeing any specific trends.

What I would mention here is that there have been more customers where our cost of living adjustments have been accepted, and very few where there were negotiations, and the net impact from a cost of living adjustment is positive. This impacts a very small portion of our business given that this applies only on the time and material part of the business, and our larger business is the catalog pricing or the fixed price contracts.

Further, as I had already mentioned in the call earlier, there are pockets where we have proactively gone ahead and offered certain benefits to our customers coming largely out of sharing the GenAI-led productivity benefits that we anticipate, and we have expanded the scope by way of adding new deliverables that we would also start witnessing in the future. Now, those volumes need to crystallize in the future, there would not be an ability to put a hard number on that at this point in time.

Hopefully, that clarifies on both your questions, Chirag. Okay.

I want to probably just take a minute to explain this because this is fairly important what Suhas explained. If you go to think about it, brands and marketing gets budget.

GenAI is enabling per unit more to be done, right, at a per-unit level. Now, any savings, the brand doesn't pass it on back to enterprise, right, because they're not incentivized to do that.

They're incentivized to hit revenue targets. They come back to us and say, "What else can I do?"

Right? That is what we are seeing: with the increased catalog, moving upstream, downstream over here.

Okay.

One question: at BioPharm, in your other expenses line item, anything one-time came during this quarter which earlier not mentioned?

Yes. As you rightly observed, what we earlier mentioned, these were one-time expenses, which are the legal fees, diligence fees, and the like that we pay to the advisors, and for the three transactions that we did and certain associated restructuring, this was $1.2 million in dollar terms.

These are transient costs and not expected to recur going forward.

Okay. Thank you.

Good morning to the team. I have two following questions.

My first question to Mr. Gupta is, as global life science companies increasingly emphasize on digital engagement, data-driven commercialization, and AI-enabled solutions, how is Indegene positioning its platform and service offerings to deepen client relationships and expand its role across the pharma value chain?

In addition to this, how are you balancing scaling your digital capabilities with maintaining execution excellence and long-term differentiation in the competitive space? That's my first question.

I'll ask my second question after this. Thank you.

I could talk about your first question for half an hour. It's a very question.

Listen, we are very excited about what's going on in the industry at this point of time. While we started the company 27 years back, it's almost that we're waiting for this moment.

Our broader positioning right from day one when we started the company was that we integrate deep medical expertise, healthcare expertise with technology expertise, right? We continued on that part.

Technologies evolved over time. From early days, we were working on very, very early days on mobile, I keep on giving the example of PalmPilot, right, to SCOM-based platform, digital, mobile, and AI is something which we have been engaged with from the last nine years, right?

2016 is when I remember setting up the office of CTO and saying we're going to take machine learning, computer vision, and NLP and start driving productivity across the board, right, and effectiveness. That's our broad positioning: a company which brings domain expertise and technology, right, knows how to deploy technology and also reduces the risk of any non-compliance, right, and customers spending much more time in educating their partner given the specialized nature of work we do.

Today, we are positioning ourselves and in the market and what we are building is a next-generation company which enables this global pharma industry to take a drug from the lab right to a patient's hands, right? Whatever needs to be done for that, whether it's sales and marketing, patient engagement, regulatory services, medical affairs, and part of clinical trials, those are the areas where we are changing how they are done using GenAI, right?

Customers are seeing that happen. Now, as far as your thing about how we maintain scale and operational excellence, I think that's as Indegene we've been pretty good at that, right?

You see our track record over so many years: how we've grown customers, how we have maintained ESAT, CSAT, right, while preserving the margin. That DNA is pretty strong in the company, and we continue to invest in that.

Now, there are multiple other things which we are doing, right? We're implementing a Malcolm Baldrige model in the company to strengthen processes.

We are automating a lot of our internal processes. We have upskilling for our employees, right?

We have GenAI for all as an initiative for our employees. I can go on and on, right, across the board on some of these internal initiatives, which is something which we have been traditionally very good at.

Suhas, you want to double-click on anything?

Yes. Let me probably try and put some financial metrics out there in relation to this.

The office of the CTO or our investments in these kind of forays that Manish already mentioned in financial terms is in the region of 1 1.8% of revenues, and this has been fairly steady over the last three, four years now. This continues.

On top of it, what we mentioned, the 1.5% or 150 bps investment for enhancing growth in future, a significant portion or major portion of that is towards some of the accelerated initiatives in GenAI. Therefore, we don't see any significant change in our margins here on, because we are already investing, and our financials already factor these costs in our past performance itself, Sukrit.

Thank you. That answers my second question also.

Thank you, and best of luck for the next quarter.

Thank you.

Hi. Manish, I have a couple of questions.

First is that from your presentation and initial comments, it seems like AI will augment and accelerate your growth rate rather than acting as a headwind, which is the case for the rest of the industry. Is that understanding correct?

If yes, can you just lay out in simple terms as to how AI will augment or assist your growth rate?

Good morning, Kawal. You're absolutely correct.

We're very clear that AI is going to be a positive tailwind for us. Here is why we believe AI is going to be a positive tailwind.

Let me start with a very specific thing of sales and marketing, right, which is where we get a significant portion of our revenues from. Enterprise Commercial Solutions was the largest segment, and we won a lot in that area.

Enterprise Commercial segments happened, even came into existence over the last 15 years because of a few things: that as digital started happening, the content volume increased many times, right, which was getting pumped to doctors and patients; the tech stack complexity increased for customers; and the compliance risk increased. Companies had to do more centralization and started taking as the theme.

Some processes got centralized; we took a share of that. With AI, customers are saying that I could do much more, right?

AI is not going to be done in a decentralized way. If you think about a large pharma company with operations in 50 countries, 25, 30 brands, right, they can't be having all their brand managers trained and requesting them to do AI.

They will have to drive more centralization. That's what we are seeing with some of the early companies.

They're driving more centralization in more processes, upstream, downstream, many more high-value-added processes, and as that is happening, right, we are positioned very well to take a large share of that, as I said, the specialized skill sets and the internal tech stack which we have built. Now, I can extrapolate the same marketing example I gave to regulatory, to safety, and over time, right, to clinical trials.

Okay. That's reasonably clear.

Thanks a lot for that. Just a couple of questions for Suhas.

Suhas, first is that cash is back to where it was on a YoY comparison despite cash outflow for acquisitions. Have you taken on debt on your books, or is that basically just an indication of strong underlying free cash generation?

What would be your OCF to PAT conversion, given that there's a fairly high amount of non-cash charge in your P&L?

Yes. Thanks, Kawal, and very important observation.

Thanks for bringing this up. Cash flows have been significant, and we continue to generate significant cash.

The balance is back to the past-year levels despite the $65 million for BioPharm and a little more for [unclear]. The OCF ratios to PAT is actually in excess of 150%, 154% to be more precise, given that there is significant non-cash charge, as you would understand, that the intangibles on the book need to be amortized over the period.

This doesn't obviously impact cash flows. Our cash flow to adjusted EBITDA is also very healthy, 90% during the quarter.

This enhanced ratio would continue given that the non-cash charge has increased in the P&L.

Noted. The third question is that, Suhas, and actually for Manish as well, now when you look at acquisitions, they can be fairly expensive when it comes to a P&L hit due to amortization and the consequent earnings dilution that it causes.

When you look at acquisitions, is that a consideration? If yes, how do you embed that into your decision-making on whether to go ahead with an acquisition or not?

Kawal, I think, when we look at acquisitions, the first thing which we look at it is what value does it add to our customer stack or the solution set, right? Can we take whatever we are buying and combine with what we have and take a larger market share, right?

That's the, I would say, primary objective. Then subsequent to that, we are also very disciplined in terms of what we are willing to pay, right, for customers and for a acquisition, which is what you saw.

This is actually a deal which will be sub-10 EBITDA multiple, right, and a company which has IP, has technology platforms. We are very disciplined on the price overall which we are paying.

That's the next filter, right, after the strategic filter. Of course, after that, we spend time in terms of how the goodwill, amortization, all the stuff will play out and what will be the impact, and we try to do the best over there.

We are also very clear that we are being slightly more conservative, right, from an accounting standard perspective. We are not going very aggressive as we have seen some other companies do, right?

We've been conservative on that. Suhas, on the last point, you want to double-click on and give your approach?

Yes,

sure. Kawal, we have also provided some additional color even in the investor presentation on the amortization, including how these would ramp down over a period.

We understand that in the short term there might be some non-cash impact which impacts the PAT margin, but as this is a transaction, these are for the long term. What we have also consciously done is provided you and the street with how this would impact the margins going forward.

The ramp-down in the amortization over the next four quarters and then the eight quarters, this should get back to the sub-1.5% kind of a charge on our P&L, while in the near term this might be having a higher impact on the PAT. Our cash flows, as I already mentioned, will not get impacted, and we will continue to accumulate cash profits and grow stronger on the balance sheet despite the non-cash charge.

As you would see from the amortization schedule, FY20 FY28 itself you start seeing bumps because of the lower amortization, and, of course, FY29 it gets more or less normalized.

Right. That's clear.

Let me just sneak in a couple of more questions if you permit. The first one is that, of course, the focus is always on the long term, but you have to balance that with, let's say, near-term considerations as well.

I think one of the areas where there is basically some apprehension is on EBITDA margin because that seems to have declined. Let's say if you were an investor, how do you get that comfort that, let's say if you had to lay out a trajectory on profitability, how would that shape out over the next 1, 2, 3, 4 quarters?

If you can just provide some broad direction, that's the first question. Second is that can you detail out or flesh out your hedging policy, and does that need a relook in the context of the sharp currency moves here?

I'll kick it off and then pass it on to Suhas. As an investor, if you look at our track record, even the published one, right, as a listed company, which is available, right, FY22 we took a hit on our margins to take more market share, and then bought back the margins within a few quarters, right?

We have very clearly laid down that in the next six to eight quarters we will get our margins back to the levels we war at, right? We have an internal game plan to that, right?

Some of it is volume-driven, but also we see pockets where we can drive efficiency over the next few quarters. Between me and Suhas, we're very actively tracking that and executing on that.

We have laid that out, and going back, I would also see that there is a track record of doing that as recently as few years back. Suhas, you want to double-click and give more details?

Sure. Margins at EBITDA level, we believe, will hold and start improving going forward.

Kawal, and as Manish already mentioned, there would be certain transient costs with higher growth rates meaning higher upfront or setup costs, but these would get normalized progressively through the quarters going forward. Coming to the second part, hedging policies, these are reviewed periodically.

We had done a review in the recent past, I should say six months ago, where we looked at the hedge accounting versus the mark-to-market accounting. We'll be doing that again in the current quarter.

We'll seek inputs from experts. We have currency experts who are advisors to us on retainers as well as people from the industry and review our practices to keep it consistent with what the industry does, but also importantly, what that means for us as a business.

We believe that our policies have resulted in our financial performance not getting impacted adversely. This is a risk management policy, and therefore adversely, whether positively or negatively, given drastic variations, and we believe that objective has been met.

Having said that, we do review this on a periodic basis.

Hi, thanks for the opportunity. My first question is on the change in classification.

What's the reasoning behind merging omnichannel with ECS? Second is on the margin impact, which has been very sharp.

How has the absence of wage hikes and one-time costs not resulted in material tailwinds for us? That's it from me.

Sure. Seema, as far as the merging of the segments are concerned, omnichannel brand activation was single-digit as a percentage of our revenues, right?

I think, if I'm not wrong, it was around 8-ish percent of revenues last quarter, and on top of that, what we were seeing is the lines between these blocks were blurring, right? As I mentioned, we have Techtonic, and what Enterprise Commercial Solutions is moving upstream, is on the back of all the capabilities that reside in brand activation, right?

We have an omnichannel business sitting in Enterprise Commercial Solutions. We also believe it's going to significantly benefit from a lot of the deep BioPharm capabilities that exist at a brand level, right?

These lines were blurring, and we believed that these distinctions no longer actually held, right? Over time, we would see more and more larger deals happening in the enterprise space.

That's the direction we're heading into, because we also believe that when change happens, enterprise wins, right? We leverage the capability on brand activation.

It was more strategically on how we see the business growing, and that's why we collapsed these segments. Suhas, you want to again give commentary on the margin?

Sure. Thanks, Seema.

If I understood your question correctly, the wage hikes that we had in quarter two, why is there no impact of that in quarter three? Actually, the EBITDA margins on a consolidated basis has increased by 30 bps from the last quarter, which saw the wage hikes.

This quarter specifically, there has been no additional wage hike. The one-time costs which is adjusted in the EBITDA has caused a 110 bps impact on the EBITDA margins, and therefore the reported EBITDA would be 17.4%.

Maybe you're also alluding to the labor code impact on our financials. Actually, there has been no material impact of the new regulations in India on the labor code resulting in salary component charges given a higher gratuity and leave encashment for many companies.

However, at Indegene, our comp structures have been such that we meet the threshold of 50% of our base pay being part of the total comp of our employees, and therefore for the past many years now, our gratuity and leave encashment provisions have been at a enhanced level exceeding 50%, and if there are further changes, we don't anticipate that to be material.

Hello, can you hear me?

Yeah. No, I think one question I had on the margins and EBITDA.

I think initial comments you mentioned that EBITDA is expected to begin sequential improvement from quarter one of FY27. Are we expecting some EBITDA decline in the next quarter, or am I getting it wrong, or I just wanted to understand that.

Yeah. Siddharth, we expect the next quarter to be fairly stable and increasing thereafter.

As we have mentioned in the past, there are certain seasonalities on margins. Our January to March quarter has the mid-year wage hikes, which are typically minimal.

The main wage hikes are in the July quarter, which is already behind us. In the US, we have the payroll taxes and benefits reset, and a significant presence in the US, about 700 employees, would have, again, a enhanced cost in the coming quarter, while the rest of the operational costs, we believe, would actually improve.

These would offset some of those gains, and therefore quarter one would be where the increase is anticipated. Also, the integration benefits, the cost synergies that we mentioned earlier in the call, have been actioned in this quarter, the benefits of which will also be seen in the coming quarter, which is quarter one of FY27.

The short answer is you'll see a steady thing. It's not declining.

Then the increase will start from Q1.

Got it. Thanks.

Hi, Manish, Suhas. Good morning.

Thanks for the opportunity. Manish, you gave little depth on the GenAI strategy.

My reference slide is number 10. I'm more inquisitive that if I look back 70-plus clients or maybe top 5 and 10 clients, this scale-up or the implementation or execution or inquiries, to what percentage of clients it would have happened in top five?

I would say, Shirish, that all our clients, right, GenAI and AI-based products are being used. It's a very core part of our propositions, right?

It's not a shift which is happening. Again, if you think about it, all our revenues were digital earlier, and as a natural evolution and by the way, our pricing was per unit.

Remember that. That's a very important part.

Our commercial construct was that. Right from day one, we were incentivized to drive automation, right, efficiency, and effectiveness.

Hence, we have been investing and deploying earlier AI-based solutions, right, which over time became GenAI-based solutions in pretty much all our engagements. It's a very integral part of our operating model.

If I split ECS and the other segment, EMS, where do you see this aggressive demand or maybe use cases ramping up from the client side?

Yes. I wouldn't say that there is any specific trend on the demand side, Shirish.

What we are witnessing is that the pace of adoption or change in the current or the near term is higher on the commercial side, which tends to be typically in our past experience faster in some of these initiatives compared to the enterprise medical side, wherein a lot of this is also risk management, compliance management functions, which tend to be a little bit more conservative or very deliberate and calculated in the adoption journey. On the demand side, I would say there's no specific trend.

Both places we are seeing conversations, pipeline, and demand shaping up with the GenAI embedded.

You can actually, if you just peel the deals which I spoke about, right, they are in both commercial and medical space.

Hi. Thanks for the opportunity.

I have only one question. I wanted to have clarity on the investments that we are doing.

We said EBITDA margin compression of 1.5% due to this investment, I wanted to understand what exactly is the nature of this investment.

We have hired a bunch of senior folks in our go-to-market teams, people who are solutioning people, domain experts in Enterprise Commercial Solutions and Enterprise Medical Solutions, both. We have hired senior talent with some very specialized skill sets in markets, right?

That's some of the large investments which are there. Of course, as Suhas alluded, in this quarter especially, actually in Q3, we also had some costs associated with projects which got started, right, where we signed up orders and we started incurring costs where the revenue ramp-up will happen later.

Suhas, you want to double-click on this?

Thanks, Mohammed. I would also request you to go through our Q2 commentary where we have provided the breakup of the impact, the 150 bps that we mentioned.

To again emphasize on that, these were on three vectors, Manish already mentioned: the go-to-market; the second was capabilities, senior folks who work with both operations and the go-to-market to provide the right solution, bringing in new technologies into these solutions; and finally the GenAI licensing, cloud infrastructure, and security costs that have been enhanced to ensure that there are the right infrastructure and controls and checks mechanisms as we start making more and more investments in this foray. We can't be left behind on those fronts.

To again make it clear at the cost of repetition, these have already impacted us in Q3. These are not costs that will enhance in the future.

This is already in the past. We had already provided that as the likely impact in quarter three, the full quarter impact, and that is already behind us.

Thank you.

Thank you once again for your active participation and continued interest in Indegene. We look forward to your participation in the earnings calls and such opportunities going forward.

Appreciate all your questions once again. Thank you, and have a nice day.

Thank you, everyone. Thank you.