Thank you very much, Sagar. Good evening to all the participants in the call.

Good morning if you're logging in from the Western side. Before we proceed to the call, that these reminders and discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors.

Therefore, it must be viewed in conjunction with the business risk that cause significant result performance or achievements that differ from what is expressed or implied by such statements. To take us through the results and answer your questions today, we have the senior management of Tata Elxsi, represented by Mr.

Manoj Raghavan, Managing Director and CEO; Mr. Nitin Pai, Chief Marketing and Chief Strategy Officer; Mr.

Nalin Rana?] , Chief Financial Officer; and Ms.

Sneha [unclear], Company Secretary. We will start the call with a brief overview of the past quarter by Mr.

Raghavan, followed by a Q&A session. We would appreciate your cooperation in restricting yourself to two questions to allow participants an opportunity to interact.

If you have any further questions, you may join the queue, and we will be happy to respond to them if time permits. With that, I would like to hand over the call to Mr.

Manoj Raghavan. Over to you, Manoj.

Thank you, Shashank. Good evening, everybody, and thank you for joining us today.

I hope you and your families and your teams are doing well. We appreciate your continued interest in Tata Elxsi and are pleased to connect with you to discuss the performance for the second quarter of FY '27.

During the quarter, we remain focused on deepening customer relationships, strengthening execution, advancing our strategic initiatives, and investing in capabilities that position us for long-term growth. I'll now take you through the key highlights of the quarter.

In the second quarter of financial year '27, we reported an operating revenue of ₹1,055.7 crore, growing 2.3% in constant currency. We reported an EBITDA of ₹231.4 crore, growing 7.1% quarter-on-quarter and 19.7% year-on-year.

Our EBITDA margin for the quarter was 21.9%, a 70 basis point improvement over the previous quarter. The transportation vertical reported a quarter-on-quarter growth of 2% in constant currency terms, aided by new deal wins.

A notable win is a strategic multi-year deal from a leading automotive OEM for a next generation cloud-based telematics and connected vehicle ecosystem. In the aerospace segment, we continue to see business traction, albeit on a small base.

I'm pleased to share with you the strategic collaboration with Sarla Aviation to support the development of Shunya, a pioneering step towards India's first indigenous electric vertical take-off and landing, eVTOL, aircraft. We also won a strategic engagement from a global aerospace supplier for development of a test rig and validation of a commercial aircraft systems.

Our Media and Communication verticals registered a quarter-on-quarter growth of 3.4% in constant currency. This growth was driven by sustained ramp-ups across key engagements and AI-led deal wins.

During the quarter, Tata Elxsi secured a strategic AI engagement with a global technology leader to develop a GenAI-powered virtual assistant focused on multilingual intelligence and delivering digital experiences at global scale, further further strengthening our position in the rapidly evolving GenAI's ecospace. Our Healthcare and Life Sciences vertical, too, recorded a healthy growth of 3.5% quarter-on-quarter in constant currency terms.

One of the notable deals in the quarter was a win from a global renal care leader to develop its next-generation home dialysis systems, spanning end-to-end product engineering from user experience and mechanical design to embedded systems and regulatory compliance. During the quarter, Tata Elxsi implemented a wage increase across its workforce as a part of its continued commitment to retaining, rewarding, and nurturing top talent, recognizing that its people remain the foundation of company's long-term growth and innovation.

Our continued focus on delivery excellence enabled us to expand EBITDA margin by 70 basis points sequentially despite the impact of the annual wage revision. Overall, during the quarter, we deliver delivered strong operational execution and resilient growth across customers and in all industry verticals.

In terms of regions, US and India did very well for us, while Europe was soft with the predominance of automotive revenues from that region. While the global business environment continues to evolve, we see sustained opportunities emerging from our clients' priorities around innovation, digital engineering, AI adoption, and product modernization.

Having said that, Q3 is typically a short quarter with fewer week working days. While we await customer-specific direction on possible furloughs, we remain focused on sustaining growth in the second half, while continue to invest in our differentiated AI-first offerings and driving operational excellence.

With that, let me conclude my remark. Thank you for your continued support and confidence in Tata Elxsi.

We'll now be happy to take your questions.

Hi, thank you. A couple of questions.

Firstly, good to see broad-based growth this time. Just wanted to understand how sustainable is this growth momentum over the next couple of quarters, right?

What I'm trying to understand is, was it helped by certain large deal ramp-ups which won't repeat going forward, or is this really more broad-based, and hence, the possibility of this momentum continuing is higher this time around? The second question was on the margins.

Again, good to see margin expansion despite wage hikes. How are you thinking about margins in the second half from a headwind and tailwind perspective, and also you had a lot of one-offs last time.

How much of that has reversed this quarter and how much of that are yet to reverse in the next two quarters? Thank you.

Thanks Bhavik. If if I take that question from a growth perspective, if you look at our you know transportation or automotive vertical, I think we're fairly you know confident of growth in in the US geography as well as the India geography that has, grown smartly for us.

We Japan is something which has been pretty flattish, but we are hoping that that will continue to grow. US continues to sorry, Europe continues to be soft.

There are deals, there are large deals. There are you know opportunities, but again deal closures we are still it's a it's a wait and watch.

I I mean the situation I don't think has changed very much from the last quarter, especially from a US sorry, from a Europe you know perspective. However, I think, other geographies we are pretty confident of continuing the growth growth path.

That is from an from H2 perspective, we are still, positive and we we hope we'll be able to continue that momentum. From a Media and Communication you know vertical, I think for the last two quarters, we have shown, consistent, growth, and and and as you rightly said, some of that is due to deal ramp-ups for the deals that that we've already closed.

Having said that, again, even in the Media and Communication you know vertical, we are seeing some sizable opportunities that are there, and we hope we will be able to continue the growth momentum in in H2. From a Healthcare and Life Sciences perspective, I think we bottomed out last quarter and and and finally, we are able to show growth.

Again, we see a we see a good visibility of you know deal pipelines and so on. I'm I'm hoping that even in the Healthcare you know business of ours, the H2 will be better than H1.

Overall, I would I would say yes, the only worry still seems to be the the slowness in in Europe from the automotive perspective, but other than that, I I hope that, all other businesses, H2 will be, better than H1 for us. On on the margins, Nalin, if you could take that question?

Sure. Thank you, Manoj.

On the margins, just to give you a quick sense of where the growth came from. About 60 to 70 bps was the cross-currency benefits that we had in the quarter and the balance, 10 to 20 bps is basically operational leverage that has played out as well as, Bhavik, to your question, a lot of the one-timers which were there are sort of most of them have gone away.

Now, large part of this was offset by the wage hikes that we undertook. The operational leverage and one-timers going away was sufficient to sort of mitigate the wage hike.

From a margin trajectory perspective, what we expect is operational leverage to continue playing out through rest of the year. While, obviously, there will be associated costs increased with revenue increases, we do see a slightly upward margin trajectory that should be playing out in rest of the year.

Got it. Thank you.

Thanks, Bhavik.

Hi, Manoj, can you hear me?

Yes, we can hear you.

Yeah. Just first, I'll just wanted to harp a bit on the employee costs, right?

You mentioned, yes, that all the one-time benefits that one-time expenses which were going to go away, you're going to use it for wage hikes. Now, this is a structural wage hike which will continue going forward, it's not a one-time bonus as per my understanding.

What I wanted to understand is that Hello? Are you saying something?

I can't hear you.

No, Rishi. Please go ahead.

We've not said anything.

Okay. From what I want to understand is that going forward, will we like I'm trying to understand is there's scope for employee utilization going up, there's is there a mindset of also seeing how we can control the employee wage hikes, because our employee count has been reducing while employee costs as a percentage of revenue has been largely higher and now stabilized?

The salary per employee has grown ahead of the revenue, which means that our profit percentage or margin per deal has come down today. Is or is this naturally going to increase as we are taking longer tenure?

I'm just trying to understand, is there scope, is there a mindset for employee utilization and employee salary coming down as a percentage of revenue?

I think there are two points here, right? One is we still have some more levers from the utilization perspective to go up further, right?

That'll definitely help us. Second is, yes, your point is correct.

Over the next half year, we really have to now focus on our pyramid management, right? That is something that we are going to focus on to see how we can manage the pyramid actively by moving some of the engagements that we've kick-started where we needed to bring in very senior resources and technical experts and so on.

Over a period of time, we need to manage with more junior staff and so on. That is a plan in actively seeing how we can sort of look at a pyramid and correct some of the pyramid related changes that have happened over the last I would say four to six quarters, right?

To that extent, we have a bench that we have been training and at lower levels and so on. That is something that we have to work on actively over the next half year to see how much we can benefit from that.

That's something that we will be actively tracking.

Okay. If I have to just understand where we are in the saber market hiring cycle for talent that we require.

We've seen the post-COVID boom in salaries for IT sector, then there's been a lull period over the last couple of years and now, but for us, it's not come to that lull period. I'm just trying to understand where we are for our talent.

Are we at the fag end of the cycle where now demand for our talent is kind of reducing or it's still going strong and hence we will have to compete on salaries? Secondly, when you said, right, you've brought in senior leaders to acquire new business, is there a potential to increase the variabilization for such talent linked to safe business, or are we looking in that direction so that the operating deleverage in the business ramp-up fits our P&L lesser going forward?

That that is already in play you know. Rishi, at in the organization, right, right from the middle management to the senior management, a sizable percentage of the salary is is is variable, right, based on performance and so on.

That you know we've we've sort of you know already, implemented. What's [crosstalk]?

In terms of talent demand. Rishi, just one additional point to give context, right?

I think we are currently seeing a period where the salary hike has taken place now, and if you recall in the last financial year, the salary hike was not in the similar period. It was a bit more back-ended, which is why also you are seeing probably this trend in the last two, three quarters of salary per employee.

For the rest of the year, we are done with the salary hikes, right? The idea is that the operational leverage should play out through the rest of the year and there shouldn't be any material movement in employee costs except for where we are investing in selected ads, etc.

Back to your first question regarding talent and so on, I think we need to differentiate from the larger IT industry. I think the talent that we have and the areas that we're focusing on is still, there is a huge demand with GCCs continuing to set up shops and ramping up resources.

Especially in the ER&D space, we need to work hard to retain our talent, right? Let me put it that way.

Got it. Finally, just one request, if you could start mentioning the utilization rate in the PPT so that I don't have to ask you every quarter.

If you could just provide me the utilization rate for this quarter?

Utilization is about 78%. We have sort of moved up from the last quarter.

There's still possibly some room to grow. In parallel we are also calibrating junior hiring.

We still see some room for this to improve.

Got it. Thank you.

That's it from my end.

Hi. Am I audible?

Hi. Thanks for the opportunity and congrats on a good quarter.

My first question is actually on the quarter itself. Just wanted to understand versus the start of the quarter, where we ended up in the quarter, did the quarter pan out as per the plan, or were you positively surprised during the quarter?

No, I think given the deals that we were tracking and so on, we were pretty confident of our MCV numbers, right, Media and Communication numbers. Healthcare also, we were very confident because of the deals that we had closed and so on.

It was only the automotive, because of the situation in Europe and so on, we were not fully confident that we'll be able to show this growth. I think some of the deals that we closed in the US and India geography actually helped us to show the growth.

I think automotive, in some sense, I wouldn't say it was not unexpected. I think we were pretty happy with what we delivered at the end of the quarter.

Okay. Understood.

Secondly, within the auto vertical, just wanted to understand that the deal that we have announced this quarter, has that ramped up already in this quarter? Also, what was the growth in the aerospace part that you saw in this quarter?

No, it just started. It's not fully ramped up yet.

I think the aerospace business, the volume is still small. I think it showed a smart growth.

I think it's too early to report it because it'll be misleading if I say we grew X percentage, because the growth is over a very small base, right? I think we will disclose this at an appropriate time.

Understood. Lastly, when you think about the future, let's say the next one to two quarters, the growth is typically always driven by what you've already won as a deal and what you will win in the coming days.

Where we stand today, what deals we already have in the bag, do you think that those deals are sufficient for us to continue on the growth momentum, or we'll need support from the newer deals to be won during the quarter?

Typically, in our business, if you ask me, right, you need both. You need existing customer wins and ramp-ups to happen.

You also need some percentage of it to come from new deals, right? It's a combination of both that really delivers for us, right?

Just only based on the deals that we've closed, because the deal ramp-up takes time, right? It is not an IT deal where you can put so many resources and so on.

These are very, very specific talent that we need to onboard and so on. It takes that time.

Right, and usually, the deal ramp-up takes couple of quarters, three quarters, and so on to reach the full level of ramp-ups and so on, right? At the same time, you should also understand that because still, a good portion of our revenues come from project-based business, there are also ramp-downs of projects, right, that are ending closures and so on, right, at any point in time.

We always need to plan for that replacement projects and so on. Which is why we also need new projects to come in.

Understood. Lastly, maybe on that point, when there is a typical leakage in the business, given there is this nature of the business, I'm trying to understand the rate of this leakage today versus the last 1 year or so, do you think that that leakage rate is stable, or it is improving, or it's coming down?

Just trying to understand where we are.

Yeah. Maybe I can comment on this, Sulabh.

I think, in general, I think we've seen an improvement on that position from a year back. Simple, two facts.

I think you have seen large deals that have built the revenue base across both automotive as well as Media and Communications. They typically are multi-year deals, they stay protected.

In that sense, you have better foundations. In many ways, that itself provides that year-on-year, quarter-on-quarter improvement on the foundation.

Two,

yeah, and part two is, I think you have to remember that over the last five, six quarters, we have leaked quite heavily on the supplier side of the automotive business, because they were the first and the most badly hit. You have seen that swing of revenues from OEM suppliers to automotive OEMs.

Once that base gets protected, the leakage coming from the rest of the portfolio becomes smaller and smaller. I'm just illustrating the fact that the bucket, if it was leaking heavily because of the weight of the water there coming from the supplier base, that itself is reduced.

Understood. That's very clear.

Thanks a lot for taking my question.

Sure.

Hi. Thanks for taking my question.

Maybe the first one, I think the last quarters, we did comment that AI expenditure was a little bit stepping into the ER&D budget cycles, and given the backdrop of the quarter and the confidence we are showing now, do you want to update that comment and maybe give a little bit of a color on how that dynamic is playing out?

Shivam, this is Nitin here again. I think that continues, right, because I think enterprises are committing AI budgets meant for enterprise transformation, not necessarily only for R&D, right?

To that extent, that does take away from what could otherwise be discretionary budget. I don't think there is a big change in that signature to say enterprises are no longer earmarking budgets for AI, for AI transformation, and so on.

They continue to. I think there is to some extent, I think there's a little more pragmatism that is starting to flow into what enterprises are earmarking as funds.

I think experiences of burning out tokens too fast with no value returning, and so on, I think has started to make enterprises wiser. On one hand, it does continue, it does have an impact, but I think it is starting to become a little more thoughtful and a little more ROI based.

We believe that there's a slight qualitative improvement coming forward.

That helps. Maybe just a follow-up, small follow-up there, Nitin.

The little bit of a movement away or a little bit of a prudence that enterprises are showing around demanding ROI from their spends, at the end of the day, who do you think will ultimately be responsible for kind of helping them determine or outline the ROI that actually AI can deliver for them? I'm just asking, you have different stakeholders in that equation.

You have got the enterprise internal IT teams, internal engineering teams, you have the whole LLM stack vendors, and then you have all service providers. That we hear each of them, everybody is kind of passing it around, that, yes, the ROI needs to be figured out.

If you have to take a stab, who's in the driver's seat to help enterprises get this equation?

I think the answer lies in the heads of the functions, right, ultimately. Because if I think about it, where are the largest costs, especially if you look at our business, we work with companies that build products and sell them in the market, right, products or services?

If I look at car companies, where is your largest cost? It is not in people, it is not in R&D.

It is in your supply chain and manufacturing. To that extent, I think the ROI is linked to where are your costs the greatest and where is your volatility the greatest?

If you ask me, in automotive business, it's the highest in supply chain. Because your material costs that are moving, you have tariffs that are coming in, you have questions on the country of origin and where is this coming from.

They have to sort that part out. In my mind, I would actually double-click on my business, what matters most, what contributes to costs and my margins most, and how do I make an impact there?

Everything else becomes secondary. We're hoping more and more people start to look at it that way and spend more on R&D.

I have a vested interest in promoting this view, too. Right.

Nalin, if you have any other point to add, right? ]: No,

looking at our projects, right? In our projects, of course, where we are involved, we would be involved discussing with the customers on the project cost, etc.

If there is AI required, we would build it into our costs for those projects. Obviously, customer is operating on a much larger AI landscape, right?

Most of that will be outside our purview. That will be their own internal sort of dynamics.

Got it. Just one last this kind of a data kind of a question.

When you mention the 78% kind of utilization number, historically, could you contextualize it that maybe, pre-COVID, what this utilization peaks used to be, and where does this 78 number square off on that band? If you can give any color, I just want to know where this number is.

I think we peaked it around 81, 82% utilization. Even

higher than that, yes.

Yeah. I think we still have some headroom from that point of view.

Got it. Thank you.

Thanks for the opportunity. My first question is on the transportation vertical.

Obviously, we have seen some healthy growth there. If you can provide some more color in terms of the sub-verticals, which sub-vertical within transportation has been driving growth?

Also, if you can give some more color in terms of the demand environment, especially in the transportation side, like what kind of change in demand you're seeing, especially in the last one or two months, especially in the US auto, like European auto, is there any kind of a change in terms of stance of the OEMs and the Tier 1s? Also, we mentioned about the drag that we're seeing from European OEM.

If you can just quantify ex of that, what could be the growth in the transportation vertical? It would be helpful for us to understand what is the extent of drag there.

The growth in the transportation industry clearly has come in from the auto OEMs, very, very clearly, right? Of course, as we also discussed, adjacencies including aerospace and defense have also helped, but at a smaller base.

This growth has come in primarily for us from the US geography as well as the India geography. The rest of Asia geography has been pretty flat, I would say.

Same, I would say even Europe, we have seen a little flattish tendency. Our outlook, we as I explained earlier in the call, we are pretty confident to continue the growth in US and the Asia piece, right?

We would definitely continue to see sort of sustained growth there, because we've won some large deals and that resource, that ramp-ups are happening and we are hopeful that the adjacency piece will also pick up. Whereas from a Europe geography perspective, there are large deals that are in play and that has been in play for, I would say, the last few quarters also.

Unfortunately, because of the situation with the OEMs there, especially the big OEMs, we are seeing a delay in decision-makings and so on. We are there in the final shortlist in many of the deals there.

However, these deals have not been signed, and it is still a little bit like a wait and watch in terms of when those decisions will be taken and so on. It's very difficult to give a timeline or at this point in time, but we are closely working with these OEMs, working with these customers, and hoping to see that to take some of these to a closure, right?

It could happen in this quarter, it could happen in the next quarter. That's the color that I can give you at this point in time.

Okay. Sir, the aerospace and the large deals that we have signed in defense and aerospace, typically, for such a deal, how many quarters or how many months it takes for it to reach to the scale that we want it to, or is it more like kind of a deal where it will take enough time for you to scale it up, or we can scale it up in one or two quarters?

No, it'll take at least two to three quarters is what I would say. Yes, these are pretty complex deals and so on, you need to resource, ramp up the right teams.

The initial stages of these programs are very crucial. We need to get it right.

Then, once we deliver those initial milestones and so on is when we will be able to ramp up and move forward. Yeah.

We are, I would say, we're still very early in the execution cycles of these deals.

Okay. Most of these large deals that we have signed, these are mostly outcome-based or fixed price kind of a contracts.

If you can give some color in terms of how the margins we can see. Is it initially we have lower margins and then maybe the margins will scale up?

Overall, in terms of the company margins, obviously, wage hike is behind and we're seeing all three segments now getting back on track, and the overall growth getting back on track. In terms of the margins, where are we heading?

In terms of the historical margins, we were operating much higher. What's the steady-state kind of margins we can work with?

The EBITDA margins?

Maybe I'll take the first part of the question, right? Maybe I'll lean on Nalin to take the margin part.

If you look at the deals that we have announced and we have won, you'll note that these are oriented towards doing the new. These are innovation, these are product engineering, and so on.

To that extent, they are not consolidation deals that get back-ended in terms of margin improvements and you'll build and improve margins over time like typically IT deals do. These are, in that sense, reasonably flat.

I would not expect that there is margin improvement that is going to follow simply because you won deals now and you'll continue to improve margins over time. If at all there is margin improvement, that may come more from what Manoj talked of, which is how do we rebalance the pyramid and you do it carefully in a calibrated manner.

That will happen across the organization, not so much for only the deals that you've won. Right.

That would be my commentary on at least the new deals, right?

Okay.

I think from a margin perspective, I think, as we said, right, there are steps that we need to do in, of course, operational leverage that Nalin talked about, improving the utilization further as well as correcting the pyramid over a period of time, right? We have to do it very carefully and it can't be done at one shot.

This is a work in progress. We will have to progressively move towards, over the next, I would say, two to three quarters, we will see that gradual improvement in our margins, right?

We don't want to give a number at this point in time, but, yeah, we are working on it to see where we can reach at the end of the financial year.

Sir. Thank you, and all the best.

Thank you.

Thank you.

Hello, sir. Am I audible?

Yes, sir, I just wanted to ask, are we doing any guidance revisions as compared to H1 last year, we've already grown around 15 percentage, 14.5, 15%? Do we have any guidance revision for the rest of the year, FY '27?

And

Yeah. Maybe I'll just answer that right away, Gaurav.

As a policy and in general, we don't provide guidance at all. Therefore, there is no guidance.

Therefore, there is no revision to guidance.

Sir. The next question was, can we see EBITDA margin improvement in H2 because in H1, both the quarters, you've said we've taken hit for one-time costs?

In this quarter, it was employee salaries. What could be the margin profile towards the end of the FY?

]:

Yeah. Hi, Gaurav.

From a margin perspective, right? In Q2, just to clarify, there was no sort of one-time cost.

It was more a bridge that I was providing versus Q1 movement bridge. Going forward for Q3 and Q4, what we are basically saying is that as sort of our revenues continue to improve, there'll be operational leverage at play, right, with the wage hikes already having been done.

That is what we are targeting. We are targeting to keep our costs under control and let the operational leverage play out, as well as make some other interventions which Manoj just spoke about.

Sir. Thank you so much.

That helps. Good luck.

Thank you. ]:

Thanks, Gaurav.

Sir, am I audible now?

Yeah. Thanks for the opportunity.

Sir, I have a few questions on our new growth vectors that we have talked a couple of quarters ago. Like we have stated that aerospace and defense, battery energy storage systems, and off-highway, and few manufacturing verticals that we are keenly focusing on.

Can you talk about the opportunity across these three sub-segments and can you provide some color on it, like how will these three verticals scale over the period of next three to five years?

Sure. Hi, Shankar.

This is Nitin here. Maybe I'll take that.

If you look at aerospace and defense and off-road, you will see that that growth is baked into the automotive growth that we are showing. While it is dominated by the revenues and the growth from the automotive business, pure-play passenger car and commercial vehicles, but we are starting to see traction, and you'll see that reflected in the deals that we announced, too, right?

The kind of MOUs that we have signed, the kind of deals that we announced, you will see that reflecting. That always has a bearing on the future, because, like Manoj said, some of these deals take time to deliver revenues and scale revenues on.

I think the good part is that we're seeing that traction and we're seeing that momentum. As far as other areas like smart manufacturing, BESS, etc., is concerned, you will see that that is actually in many ways, and we have said this even before, that we typically provide for almost like a skunkworks.

We experiment. We experiment with a set of customers.

We make sure that we're cutting our teeth. We understand what is needed to create differentiation there, what creates margin there, because we don't want to do low-margin business.

All that is reflected in the others part of our SDS. If you actually look, you will see that while quarter-on-quarter, it may be volatile because it's a very small number, on a year-on-year basis, you'll see I think about a 75% growth in that piece.

On one hand, it is just about 2%. If you look at it on a year-on-year basis, you'll find that it has grown 60, 70%, right?

That should give you a directional view that, yes, we are continuing to build that muscle and continuing to experiment deeply, continuing to engage with more customers. It is still early days, and that is why we are very clear that we're not calling them out as yet.

Got it, sir. Secondly, from our group customers,

Is it clear now?

I hope it is better now.

my second question is on our group customers, especially Tata Motors and JLR. Specifically from these two customers, what kind of opportunity are we seeing in terms of their spending on SDV?

I think there are a lot of news going around these companies regarding the challenges that they are facing and also the pipeline that they are going to see in EVs. Especially from this context, what kind of opportunity is currently visible for Elxsi over the next two to three years?

I think both are important customers for us. We know JLR is going through its own challenges in terms of their own business performance and layoffs and and so on, right?

We are watching that pretty closely. We will get to know about it, maybe across the H2, right?

Having said that, it's an important customer, and we are closely engaged with the R&D teams and the engineering teams at JLR. In most of the new programs and new car releases, there is an element of Tata Elxsi in each of the cars that they are launching.

I think similarly is the case with Tata Motors, especially on the electrification journey that they have, both from a design perspective, the cockpits and infotainment, and all of those designs that you see, also on the connected car perspective, and a big piece on the electronics and the engineering in Tata Motors, right? These are definitely important customers for us.

As they launch new programs, launch new vehicles, launch new variants, these are all opportunities where we can get engaged. Some part of that R&D or some part of the development is actually done by Tata Elxsi.

I think, yeah, I think we continue to closely monitor the situation at JLR and continue to be engaged with Tata Motors at a very senior level and from their new programs, new vehicle programs, and R&D spend. I think it's been a pretty good relationship with both the companies.

In our automotive vertical, what is the concentration of revenue that we are currently receiving from these two clients?

We don't really disclose that information. Let me tell you that, I would say a lot of the growth that we are seeing in automotive business is sort of minus the group customers.

A lot of the growth has come in from outside the group customers, especially in US and in India and Asia.

Got it, sir. Thank you, sir.

Best of luck for the upcoming quarters. Sure.

Thank you.

Hi. Thank you for taking my question.

My first question is on the Healthcare vertical. Now, because this vertical is quite concentrated, we have seen in the past that it has turned unfavorable all of a sudden in multiple quarters.

The health of all clients in this vertical becomes extremely important. With respect to that, how confident are you that all clients now are healthy and we would not see an impact like we have seen in the past in the Healthcare vertical?

That would be my first question. My second question would be on the sustaining growth comment.

Now, how do we see growth from here, because there will be furloughs as well in 3Q? When you say 2H better than 1H, is that on a Y-o-Y basis?

Is that the CQGR that you're taking for 1H? With the furlough there, how do you see the trajectory going?

Those are my two questions.

Yes, Ankur, maybe I'll answer the first one with respect to HLS. We did recognize the risk and the issue that we see with client concentration, because I think we have said that, look, this is a small business, we built it around very high-quality customers among some of the best and the leading medtech companies in the world.

It was very US-centric in terms of the revenues. The last five, six quarters have been largely a journey about how do we add more customers, and we have talked of this, too, right?

Therefore, I'm reflecting on what we have publicly disclosed, too, which is very smart addition of customers both in terms of number of customers, as well as regions. I'm just quoting names because they are again in the public domain.

While everything was US in the past, you'll find a Bayer that we announced from Germany. You'll find a Terumo that we announced from Japan.

You're seeing diversification both in terms of geos, as well as in terms of the customer base. I think that is the confidence that we carry beyond anything else.

Right, that would be the simplest answer that I would provide for HLS as a business.

Ankur, I think I discussed this topic on growth very early in the first or the second question, where we talked about growth, business by business, right? How we see automotive growth being sustained by growth in both the US and India and Asia geographies.

Yes, Europe being a little bit uncertain at this point in time, still uncertain at this point in time. We're still waiting and watching.

However, the other businesses, Media and Communication and the Healthcare businesses, we, based on the deals that we have signed and so on, we are pretty confident that H2 is going to be better than H1. That is how we see two of our businesses we will continue to grow.

On transportation business, it's a lot dependent on on how Europe turns and how we are able to sustain the growth in both US and India.

Thanks. Just a clarification, 2H better than 1H on a Y-on-Y basis?

What 2H better than

second half better than the first half. ]:

We are referring to, just to clarify Ankur, we're referring to this financial year only. We are sort of on a YoY basis, yeah, for 2H to be better than 1H, it would imply that our revenues would be higher even on a YoY basis in H2.

Margins, of course, as you are aware, right? The H2 margins of FY '26 were at a certain level, and now we are coming off a certain base and we are talking about a gradual calibrated improvement.

Yeah. Thank you.

Just one last bookkeeping question, if you can disclose, in the automotive vertical, can you disclose how much of the revenue comes from Europe versus North America and APAC? That would be all.

Thank you.

Yes, Ankur, we don't talk of that. That's not a factoid that is in the public domain.

You'll see

a Yes, you'll

see a correlation to Europe. You can derive it from.

]:

I think the takeaway, Ankur, from our perspective would be what was being highlighted, right, that a lot of growth is coming from US and India over recent parts while Europe by itself is obviously muted over the last few quarters. As the quarters keep progressing, right, the proportion of other geographies are increasing.

We expect that trend to sort of continue. The relative importance keeps decreasing with each quarter.

It, of course, continues being a very important part, though.

Sure. Thank you so much.

All the best. ]:

Thanks, Ankur.

Thank you for the opportunity. I just wanted to know what is the margin difference between the fixed price contract and time and material contract?

Do we have any internal target for the split?

You're referring to margins and not proportion of fixed bid versus time and material. Is that correct, Mayank?

Actually so the difference in margins in the fixed price contract versus time and material, so.

Understood. I can take that.

In general, we don't look at it that way, right? The idea is not to make fixed bid better than time and material, or time and material worse than fixed bid.

I think we always look at it from two lenses. One is what is the overall impact on the business and that account, and how does that particular project add value to the customer?

If certain projects mean that we'll have to do it at lower margins, even in the fixed bid, be it, because that is what creates value and stickiness, while there would be certain areas where time and material is the model to deliver, but the skills that are being utilized are very high-end. In which case, there'll be a premium attached to the skills that we're delivering and nothing to do with the engagement model.

Right, I just want to make that point that, look, don't associate margins only with the model. Sometimes, it's about what are you doing and who are you doing it for.

Okay. Sir, can we also look at the on-site mix as a lever for margin, or that might not necessarily play out?

I think if you notice, I think we already are at industry-leading onsite-offshore ratios, right? Of course, there is always room to move that ratio further, but in our minds, I think we are at a reasonably good band.

Where we are in terms of revenues, it's roughly about a 25:75 that we've been running with for many quarters now. I think that's a good place to be in.

Sir. Got it.

Thank you very much. All the best.

Thank you.

Hello, am I audible?

Hi. Thanks for taking my question.

Just wanted to double-click on the demand environment in Europe that you've been describing. You said it was it was the same as last quarter in terms of the in terms of decision making and things remaining slow.

On the deals that have already been signed and were going on, has there been any change to those? Are there any ramp-downs or are those also continuing to ramp up slowly as mentioned last quarter?

Yeah. No, we have not had any ramp-downs there.

It's more of a slow ramp-up or status quo, right? At the same time, yeah, it's also been some of the projects that have come to a close and so on.

Those deals runoffs have also happened, right? That's why we are still cautious about Europe.

Okay. Understood.

I think there was a recent announcement there's news doing the rounds that there might be some limits imposed on the import of Chinese vehicles into Europe and sale of those. Do you think any development on that front will translate sort of quickly into spending by European OEMs, or that will just take its own due course and this is not really going to change trajectory in the near term?

Definitely, I don't think it'll change any trajectory in the near term because the real issue is that many of those OEMs are, there are systemic issues, right, including the cost base and so on, right, that they have to address. The entire electrification, they need to address.

There are a number of things they need to address. The Chinese car companies coming into Europe is one of the many issues that they have to address.

I don't think it'll immediately change anything for us in the near term.

Understood. That's it from my end.

Thank you so much.

Thank you so much, Rohan.

Thank you, everybody. This was I would say a satisfying quarter with revenue growth across all the verticals.

We hope to continue this trajectory, and look forward to talking to you again next quarter. Thank you, and have a good day.