Thank you, and welcome, folks. By now, you would have received or seen our results that were announced earlier today.

Those are also available on our website, www.birlasoft.com. Joining me on this call this evening are our CEO and MD, Mr.

Angan Guha, and our CFO, Mr. Chandrasekar Thyagarajan, or Chandru, as we call him.

We will begin the call today, as usual, with opening remarks from both Angan and Chandru. Before I hand over the floor to Angan, a quick reminder that anything that we say on this call on the company's outlook for the future could be a forward-looking statement involving significant uncertainty, and therefore, that must be heard or read in conjunction with the disclaimer that appears in our investor update, which you'd have received and is also uploaded on our website as well as filed with the stock exchanges.

With this, let me hand over the floor now to Mr. Angan Guha, our CEO and MD.

Over to you, Angan.

Thank you, Abhi. Good evening and good morning to all of you wherever you are, and wish all of you a very Happy New Year.

Thank you for joining us today as we share some perspectives on our Q3 FY '26 performance. Our performance during the third quarter, which as all of you know is a seasonally weak quarter, demonstrates our ability to hold our revenue steady, secure solid order book, drive operating efficiencies, and generate strong cash flows.

Our revenue for the quarter grew 0.3% in constant currency and 0.1% in dollar terms to $150.8 million. We have delivered a stable performance despite it being a seasonally soft quarter, which is usually a quarter with a lot of furloughs.

Growth in our Manufacturing vertical, which reflects some ramp-ups in projects that were won earlier, enabled us to offset the impact of furloughs and weaker traction in other verticals, including BFSI. On the margin front, we have done much better, recording a quarter-on-quarter expansion of 212 basis points in our EBITDA margins, which now stands at 18.2%.

You will recall that this comes on the back of a similar expansion even in Q2. The margin expansion has been driven by several contributing factors, including improvement in the quality of our revenues, ongoing efforts to optimize our cost structures, and some one-offs.

We have seen our cash collections, and as a result, our cash balances have risen as well. Chandru, our CFO, will provide more color on all of this in his remarks.

On the deals front, too, the story has been much better in Q3. You would recall that on the last call, we had called out that a couple of deals that were committed to us, but we couldn't sign in Q2, had moved to Q3.

That has now shown up in our third quarter results. As a result, our TCV for the third quarter stands at $202 million, which is up 89% quarter-on-quarter, out of the $202 million, nearly half of it is new engagements.

Many of these deals were won on the back of our domain expertise and AI-led capabilities. For instance, in BFSI, we won a strategic engagement with a leading payments and card client to build conversational AI and agentic capabilities for its EGRC platform.

Similarly, we have secured a multiyear engagement to design, build, and deploy AI agents across a customer's business ecosystem in the Manufacturing vertical, encompassing end-to-end business analysis and the development of scalable packaged AI solutions. In the Manufacturing vertical again, we've deployed an AI-enabled smart manufacturing material tracking solution driving real-time inventory control for a large global company.

These will add to our growing base of engagements where we are already deploying advanced AI capabilities, and we will continue to make investments that are necessary to build a differentiated value proposition in the marketplace. Now, in terms of the outlook going forward, as all of from our perspective, we have not seen any material change in the demand environment, and we've discussed this even in the past.

Customers continue to focus on optimizing their spend, and discretionary spending therefore remains constrained. While some verticals such as BFSI and ENU are steadier than others, our exposure is higher to manufacturing-led customers across both Manufacturing and Life Sciences and Services vertical.

In this backdrop, our focus is on shoring up our deal pipeline, driving order book while we are building on our capabilities on domain and technology. At this point, I would like to request Chandru, our CFO, to share his perspectives for the quarter.

Chandru, over to you.

Thank you, Angan, and a very warm welcome to all of you joining us today on this call. Allow me to take you through the financial highlights for Q3 FY '26.

As you would have all seen, we've reported consolidated revenue of $150.8 million for the third quarter, representing a dollar-term growth of 0.1% and a constant currency growth of 0.3% quarter-on-quarter. In rupee terms, the quarter three revenue was ₹13,475 million or ₹1,347.5 crore, a growth of 1.4% quarter-on-quarter.

Sequential growth in our Manufacturing vertical enabled us to offset the impact of furloughs and softness in some of the other verticals, resulting in a stable revenue performance during the quarter. Moving on to our EBITDA performance, this is the second consecutive quarter of healthy margin expansion, even after excluding the benefits of exchange rate tailwinds and some one-offs.

We've been putting in a serious effort over the past few months around our cost structure and continue to do so. This is clearly delivering results for us.

EBITDA for the quarter under review increased by 14.8% quarter-on-quarter and by 49.8% on year-on-year basis in rupee terms to ₹244.8 crore and up 13.3% quarter-on-quarter, 42.1% year-on-year in dollar terms to $27.4 million. Consequently, EBITDA margin expanded 212 basis points quarter-on-quarter from 16% in Q2 to 18.2% in Q3.

This significant margin expansion was led by a combination of factors. We have seen the quality of our revenues improve, which is the outcome of a conscious effort to focus on a more profitable engagement and delivery model.

We have also benefited from favorable shifts in our revenue mix with a rise in fixed-price business and offshore work. In addition, better operational efficiencies and gains from exchange rate tailwinds, about 70 to 80 basis points, as well as from one-offs, about 110 basis points in Q3, helped us in our EBITDA story.

On a steady-state basis and taking into account some accelerated investments we will be making going forward, EBITDA margin will be about 15%. Our EBIT performance for the quarter under review reflects the impact of a one-time provision that we've taken to conform to the changes in the labor code with regard to gratuity and leave encashment.

That provision, which we have called out as an exceptional item, amounts to $4.6 million or ₹40.7 crore. As we had mentioned on our earlier call, during the current financial year, our effective tax rate had increased on account of provision made for higher tax related to US federal taxes.

You will recall that we had said that this transitionary trend will sustain through the course of the current financial year before settling closer to historical ETR levels in the next financial year. The ETR for Q3 FY '26 reflects the same.

Without the additional federal tax impact that we have seen Q1 onward, our year-to-date ETR would have been about 28%. Adjusted for this incremental provision for tax and the one-time provision made on account of changes to the labor code, normalized PAT for the quarter was $20.2 million, up 20.4% quarter-on-quarter, and ₹180.2 crore in rupee terms, up 22.1% quarter-on-quarter.

This translates into an adjusted basic non-annualized EPS of ₹6.44 per share. We also maintained our robust track record on collections and cash flow generation during the quarter with the highest quarterly collections so far this financial year.

As a result, our DSO has improved quarter-on-quarter and now stands at 54 days, which you will agree is amongst the best in our industry. Cash and cash equivalents at the end of Q3 increased to ₹2,491 crore, up 6% quarter-on-quarter and 21% year-on-year.

We will continue with our efforts to enhance our operating efficiencies and improve our quality of revenue while also making the investment and capabilities that are necessary for future growth. Thank you very much.

With this, let me open the floor for questions.

Thanks for the opportunity and congratulation on a great execution in a difficult time and a quarter. Sir, first question is if I look at the offshore revenue mix, it has jumped materially in this quarter.

Is it fair to assume volume growth is materially higher versus the headline growth in constant currency terms, and this shift to offshore is a deliberate attempt where we want to diversify beyond staff augmentation business to managed services kind of a business?

Yeah. Sandeep, thank you for your question.

Your analysis is exactly right. As you would have seen even in the last quarter and this quarter, our endeavor has been to move away from staff aug and do more outcome-based work.

Our clients are also challenging us to do more outcome-based work. Some of the deals that we have won last quarter as well as this quarter are really fixed-price work.

As a result, moving to offshore is easier for us, and that is reflected in the results that we have delivered. From a volume perspective, mathematically, yes, you're correct.

The volume growth is higher. Since the offshore ratios are higher, that obviously suppresses growth, but improves margins.

Okay. Sir, just second question in terms of vertical mix, which vertical you believe still carry some demand headwinds and which vertical is giving you confidence in terms of a better growth starting from 4Q and next financial year?

Yeah. Sandeep, though Manufacturing has shown growth this quarter, we must not take that as a winning story, quite frankly.

In my mind, the manufacturing business will continue to show headwinds even in 4Q. There will be softness.

You see the growth in Manufacturing and also ERP, because both businesses are quite related, because of some deals that we had won earlier and we got to ramp them up now. As a result, the revenue realization has happened, but that's more one-time.

Sustainably, I think Manufacturing will continue to face headwind at least for one more quarter. I expect the manufacturing business to turn around sometime Q1 or Q2 onwards for the next financial year.

We strongly believe that ENU and Financial Services will continue the growth momentum. As this was a furlough quarter, optically you are seeing a de-growth in Financial Services.

I believe Financial Services will be steady in 4Q, and next year definitely we will see growth. Similar goes for ENU.

Manufacturing will be a lot of headwind. Similarly, like we've always said, that our Life Sciences business is more a med devices business, which is also really manufacturing.

That holds true for Life Sciences as well. Life Sciences, I feel there will be headwind in 4Q, and hopefully in the next Q1 of next financial year, we should see it stabilize and then grow Q2 onwards.

Okay. I have follow-up.

Will come in the second round. Thanks.

Thank you, Sandeep.

Yeah. Thanks for the opportunity and congrats on strong execution, particularly on margin side.

Just want to understand if you can provide some margin walk. Last quarter in quarter two, we have some one-off of roughly around 150 bps.

This time, you indicated around 110 bps. From quarter one onwards, whether one should take is almost 250, 260 bps kind of one-off benefit which is in there in the quarter three margin trajectory?

That is question one. Broadly margin walk and one-off related some explanation, what is driving this one-off and how long is this to sustain?

Second question is about the revenue growth side. Whether furloughs were similar to last year or we have seen higher than usual furloughs this quarter?

If you can provide some color around intensity of furloughs. Last question is about wage hike.

Any decision we made on wage hike? Thanks.

Dipesh, I'll ask Chandru to take the margin question first, and then I will attempt to answer your other two questions. Chandru?

Yeah. Dipesh, in terms of the one-offs, right, you'll recall that both in quarter one and quarter two, we did call out some of the overall one-offs, and therefore, the steady-state EBITDA margins, right?

If you look at third quarter, and if I were to do that math from the second quarter onward, second quarter, we spoke about a steady-state margin of about 13.5%, 14%, if you recall, right? From then to where we are today, I would believe that net of some of the one-offs, there is a forex impact of 70 to 80 basis points that we spoke about.

We spoke about the one-offs of 110 basis points. If I were to remove those, my steady-state EBITDA margin from the 18.2% is down to 16.5%.

Then what we believe is that the 14% has gone up to the 16-odd percent. There is a 200 basis point improvement from a steady-state standpoint.

From there, we do expect that we will continue to invest in our business. Our business, I think requires an investment on a regular basis.

If I were to provide say 100, 150 basis points on that, we believe that 15% EBITDA margin should be a sustainable run rate margin as we go forward, Dipesh. I hope this answers your question.

Dipesh, on the wage hike bit, look, we've already taken a decision that we will do a wage hike next financial year. We are doing promotions this year, this quarter, and we will effect a wage hike between Q1 and Q2 depending upon what level of employees there are in the organization.

That's a decision we have taken and we have already communicated. Dipesh, on the growth question, can you repeat the question, because I didn't quite catch the growth question?

Quarter three, whether we face furlough in line with last year or furlough were higher than last year? Second question is, yes.

No, furloughs were in line, Dipesh.

Okay. Broadly, if I refer to your last quarter earning commentary, you said if furloughs were in line with last year, you expected some kind of revenue growth to continue in this quarter.

Now this 0.3% is what we delivered. Whether that was the expectation or it is higher, lower than what you anticipated at the beginning of quarter?

How one should look quarter four to play out? Thanks.

Yeah. Dipesh, it is exactly in line with what we had anticipated, because as if you recall even last year, we had furloughs which were to the tune of about 0.5% to 1%, and that held even for this financial year.

Now it is hard for me to predict Q4 from a revenue standpoint, but our focus will be on generating pipeline and signings. What we are confident of is we will deliver better signings than Q3 in Q4.

Now how much out of that will be playing out on the revenue, we'll have to wait and watch. Like I've always said, the focus of the management team has to be on revenue growth, but before that, we have to get the signings done.

As a management team, what I can commit is our order booking for Q4 will be better than Q3.

Thank you.

Hi. Thank you for the opportunity and congrats on a good execution.

My question is related to the stand-alone business. If I look at the two-quarter number for the stand-alone business, the revenue has [unclear] all [unclear]

Yes. Is this

Okay. 1 minute.

Is this better now?

Fair enough. I'll do that.

Thanks.

I hope I'm audible. Congratulations to the management team for walking the talk about a growth in Q2, Q3, and Q4.

I'll first start with my first question on the verticals. Data and digital has been the story across the sector, across the IT companies with respect to the modernization as well as the digital revenues.

In this segment, we have seen a decline after growth that was reported in H1. What has been the readings through this?

How should we read this decline? Is it one-off or related to furloughs?

The related question on the infra, which is again a 10% of the revenues, and I'm sure we had given up some pass-through revenues and given up some businesses over here in H1. Again, when I see Q3, we have seen a strong growth, and I suppose this is coming from the ROW market.

How should we look across the growth in data digital, which is segment number one, and the last segment which is infra, over a steady state?

Yeah. Priyank, thank you for that question.

Priyank, look, our data and digital business fundamentally is strong. I don't think there is any structural issue in the business.

The reason why you see a little bit of de-growth is because it is in line with Financial Services, which is affected by furloughs. Furloughs have dented the growth a little bit.

We are reasonably certain that that growth will be back in Q4 as far as data and digital is concerned. Structurally, there's no issue with that business.

As far as infrastructure is concerned, as you can see, the major growth of infrastructure is because of the deal that we signed in ROW, which was an infrastructure deal, which we are now executing, and that has contributed to the growth. If I were to look forward, I continue to feel that digital and data will be steady.

They will show a growth. Structurally, there is no issue.

Infrastructure will be a strong growth area. Our ERP business will continue to lag, though it has shown some growth this quarter in line with our manufacturing growth.

We will see softness in the ERP business for another quarter at least before that turns around. Sure.

Just to appreciate the readings between the infrastructure segment, can we get the details around what kind of work we do in the infrastructure as a broader vertical?

Yeah. We do all kinds of work.

We do desk side services, though desk side services is not a big focus area, but we have won some business on the desk side services. We also do data center management.

Within data center, we manage the middleware. We manage storage.

All kinds of infrastructure that runs a business, we manage. We've also forayed into the cyber security business where we've started to serve our customers on the cyber security side.

All in all, it is a growth-oriented business for us, Priyank.

Got it. Coming to the deal win and I'm congratulating the team for the $65 million two deals.

I'm suppose that has been reported now from the signings that were pending in Q2. If I have to carve out that deals which have been flown through from Q2 to Q3, the net new after excluding that again has not been that great.

How do you read through this? When I have to take a view on a YTD deal wins, which is right around $450 million and still it's far away than our aspirational numbers of $750, $850 million for us to get a confidence around the growth for the coming year.

How should we think about ending this year in say next three months, at what size and number we are looking out to end? Given all the background around the sales engine that we are deploying, now what would be the growth outlook on the deal wins and the targets for FY '27?

Yeah. Priyank, you've asked three questions, and let me try and attempt to answer all three.

The two deals that were supposed to get signed and slipped from Q2 to Q3 finally got signed in Q3, right? From that perspective, you are correct that those two deals had to get pushed out, but now finally got signed.

Priyank, you must also remember, both the deals were net new deals, right? They were not renewals.

That's point number one. Which is why out of the total signings of $202 million, $94 million is net new, which is 46% almost of our signings is net new.

What we are confident of, Priyank, is our 4Q signings will be better than Q3 signings. Now whether it'll be $210 million, $250 million, or more, I don't know, but from the looks of it, basis on the funnel, basis on our conversation with our clients, we are pretty confident that our Q4 signings will be better than Q3 signings.

Now as far as revenue targets are concerned, it is a little too early for us to think about that. We have to first execute Q4 on all the parameters that Chandru spoke about: operational rigor, signings, revenue management, etc.

Sometime towards the end of March, we will be able to put our head together in terms of what would be our outlook for FY '27. Look, we don't give a guidance.

Our job will be to execute for the quarter and take one quarter at a time.

Sure. I get that.

When you say Q4 would be better than Q3, is it based on net new number that we should focus on? Because H2 is generally very heavy on the renewals.

Maybe a renewal is something that you would want to call out. If I have to remember my notes, in last quarter call, you did mention that the new renewals will come at a lower margin, and this is what is baking around our guidance of 15% versus what we have been delivering now.

That is correct, Priyank. You're absolutely correct.

Look, renewals are important because as a company, Priyank, we've discussed it in the past that we've faced a lot of headwind in terms of leaky bucket. From that perspective, renewals are important.

What we can say is that all the bad news is behind us. I don't think we will lose any existing business.

They will get renewed at a lower margin because we see pricing pressures, which is why Chandru talked about a steady-state margin of about 15%. In terms of the total signings and the percentage of the new signings within the total signings is something that we cannot guide at this point in time.

I can only say that our overall signings in Q4 will be better than Q3.

Priyank, if I may add to what Angan just said. One of the big reasons why we believe that continuous exercise around it's a spring cleaning on our cost structure to make sure that we eliminate waste, we improve efficiency is anticipating that we will have margin pressure and we still need to deliver strong EBITDA margin for ourselves and our stakeholders.

That is clearly an objective for us, and one of the reasons why we're so maniacally focused on our cost takeout exercise, Priyank. All right.

If I can add to a similar follow-on question. Despite being one of the good quarter on the new deal signings and also the confidence that we carry forward, the number of clients that rationalization exercise is yet not ending or is not bottoming out in terms of the large few clients we have lost a couple of clients over the quarters.

When should we see this bottoming out along with the new signings that we are doing? Is it the existing clients being minted further more in their wallet share or the strategy would be to see as the headcount on the sales has been added, this would also get reflected in the coming quarters in terms of the client's profile on the number of clients?

Yeah. Priyank, look, we've not lost a single client, right?

The reason why you see the total clients coming down is we are rationalizing businesses that are not profitable for us or businesses that don't show potential for growth, right? We are trying to concentrate on lesser number of clients so that we can deliver and serve those clients meaningfully.

Which is why you will see the client list coming down. Now, that doesn't mean that we are cutting a tail any further.

We've done a lot of rationalization of clients, and I think we are at an optimum number. Now, three or four clients in a quarter we add or three or four clients we rationalize is a call that we take based on what kind of margins we can do.

However, if you look at our million-plus clients, right, that has expanded from 78 to 85, which also should tell you that our focus on growing clients which have the potential is very, very sharp.

Hi. Thank you for the opportunity, and hopefully this time it is better.

you are

audible. Perfect.

Thank you. Congratulations on a great quarter.

Sir, my question is regarding the stand-alone business. The growth rate in that business is phenomenal.

The expansion in margin is even more better. Can you give a color in terms of what is driving this efficiency in the stand-alone business?

A part two question is, is it that it is being driven by any Salesforce or any other particular business which was predominantly the old Birlasoft business? The cost rationalization or the one-offs that are we reporting, are those the reduction in the employees predominantly being driven in this part of business?

Thank you for taking my question.

Yeah. Abhishek, thank you for the question.

Right? I'm happy that you looked at the stand-alone results as well.

In the stand-alone results is where a lot of the ROW revenues are captured. Okay.

Which is what you're seeing in the consolidated financial. It is ROW revenues having gone up on a quarter-on-quarter basis, right?

Specifically, we had a couple of customers where we achieved milestones, and as a result, we were able to book additional revenue in the quarter. Okay.

These are customers in the ERP space, and therefore, you will find that the third quarter ERP revenues went up on a quarter-on-quarter basis. Very precisely, that's the reason.

Also, the impact of forex benefits, right, pretty much sits in the stand-alone financials. That's the other reason why you're seeing the bottom-line uptick on a big time in the stand-alone financials, Abhishek.

Perfect, sir. This is helpful.

Just the second part of the question. Can we relate the reduction in the employees to the stand-alone business?

Is this any service line which is driving this business? You mentioned the geography, but any color on the service line would be helpful.

Service line, I spoke about ERP, Abhishek. I said this geography, specifically the ERP service line is where we saw the growth, right, in the third quarter.

I also want to hasten to add that there were specific milestones that we hit that allowed us to book some revenues in ROW. We still need to steady our ERP business, as Angan earlier mentioned, the Manufacturing and ERP businesses.

That is a work in progress as we speak. That's the short answer to your question on the service line part of it.

In terms of the headcount reduction, the headcount reduction, as you rightly said, is to a big part in the offshore side of our business. Having said that, not all offshore headcount actually gets accounted for in the stand-alone, right?

Because a lot of them work for our global businesses, and therefore, the accounting will be in the respective P&L of the countries from which the business accrues. That's point number one.

Point number two, we do, as we've seen business shifting from onshore to offshore, and so there is some rebalancing within this headcount portfolio as well that happened during the quarter, Abhishek.

Perfect, sir. Thank you for answering my question and best wishes for 2026.

Hi. Thanks for taking my question.

Angan, just couple of questions actually. One question was on the healthcare segment.

If you look at the healthcare segment, right now it's undergoing a turmoil. Even day before yesterday, the US government spending on the healthcare was increased very marginally year on year, whereas it has historically been around 5%.

There were challenges from the Big Beautiful Bill also which came into the force some time back. How are our conversations with the clients in this vertical looking like at this point of time?

What is the outlook that you have for this vertical, maybe over the next two to three quarters? Second question is on the deal wins part.

As you mentioned, this quarter deal wins had a couple of large deals because of which that number got boosted. If I let's say look at the last three quarters, we've done approximately $150 million of deal wins every quarter.

Now this number used to be in the 250 range some time back. You mentioned next quarter we are looking at Q4 better than Q3, which should be north of 200.

The pipeline that we have, do you see us, let's say, post Q4, do you see us maintaining that 200-plus trajectory and possibly hitting 250 also in the coming quarters? Your outlook on that will be really helpful.

Yeah. Vibhor, first on the LS business, right?

Like I've always maintained, for us, the majority, almost 80% of our Life Sciences revenue is coming from med devices, and the balance is 20 from pharma. From my perspective, I don't see an issue from a market standpoint, right?

Our issue was more to do with the tariffs that the manufacturing companies and med device companies faced, and as a result, we had a little soft quarter, not only this quarter, but even if you remember Q1, 1Q. 2Q was okay, but 1Q also we had a soft quarter.

I personally believe that one more quarter, we will see some softness. Equally, I'm very bullish about this segment, and I think come 1Q or worst case 2Q of next financial year, this business will turn around and start showing growth.

Now, what was your second question, Vibhor? I forgot the second question.

On the deal wins. We've done $150 million of deal wins.

Do you think post Q4 we can do north of 200 and maybe touch 250 sometime?

Yeah. Again, Vibhor, look, our entire focus now is on pipeline creation, order booking, and revenue growth, right?

As you heard Chandru say that rest of the business our business is very strong. We're generating great cash flows.

Our DSOs are great. Our margins now have really come back.

We are very pleased with the way we've executed on the other parts. The one thing that ails the company is revenue growth, right?

Keeping that theme in mind, what we are confident is the immediate quarter, which is 4Q. 4Q, we're pretty confident that we'll deliver better order book than 3Q.

Equally, we are working towards increasing our pipeline. Now, as 1Q for us and quite frankly for our industry, it is a little soft quarter when it comes to signings.

I don't believe that 1Q we will be able to deliver at the same level as signings as 4Q, but our endeavor would be that we continue to build pipeline and win deals. That's all I can say for now.

We are doing a lot of investment in sales, a lot of investment in capability building so that we can increase our pipelines and drive revenue. That's our endeavor.

Got it. Got it.

Really helpful, Angan. Just one last bookkeeping question for Chandru.

Sir, you mentioned that we are looking at 15% sustainable margins. Just on that part, you're talking about these margins excluding any one-off provisions.

Also the provisions that we have taken in the last quarter and this quarter, are we done with those provisions or there's still amount of provisions which are left which would probably come in Q4 or Q1? I'm sorry if you had answered this question before.

I probably missed that part in the initial part.

Yeah. Vibhor, just to clarify, we had received some one-off benefits in the last quarter and this quarter on account of some one-off items, Vibhor.

I was trying to explain what would be our steady state net of some of those one-off items, and that's why from the 18.2% reported EBITDA margin, I'm saying that the steady-state margin going forward should be looked at at 15% plus, right? That's one.

What it also excludes is some forex benefit that we got, right? Because as you can imagine, we do not speculate on what forex is going to be.

What we look at is at constant currency, and we're trying to look at what should be our sustainable EBITDA margin as we go forward. That becomes our own internal benchmark as to how we should perform as a company, right?

That's really what I was trying to explain.

Got it. Got it.

No more provisions in the next quarter or you think there could still be some more provisions, reversal of provisions, I mean to say, in the coming quarters?

On that again, I'm not aware of any one-timers in the next quarter unless there is something new that comes up based on any accounting practice changes or accounting requirement changes. Right now, I'm not aware of any new one-timers, Vibhor.

Got it. Got it.

The currency benefit in 3Q was around 70, 20 basis points, right?

That's correct.

Got it. Got it.

Great, sir. Thank you so much for taking my questions and wish you all the best.

Thank you.

Hi. Thank you for the opportunity and congrats on really good margin performance.

Looking at the tailwinds for this quarter, it looks like you actually signed up with some large customers. The payments client, for example, or even the you mentioned that it's a large US P&C insurer.

Do you think that you've moved somewhat closer to your goal of trying to get into some large accounts with a huge addressable wallet?

Yes. Ravi, yeah, that is exactly right.

We are using our domain capability, the capability that we had invested in all this while. Now it is bearing some fruit, and we are able to win some outcome-based deals.

Like I've said that we are moving away from the staff aug work to being more outcome-based. Some of the deal wins that we have mentioned is an outcome of the investments that we have made.

Now, they may be large or they may be medium-sized accounts. We can't comment on individual clients quite frankly, Ravi.

We are very pleased with the fact that now we are having conversations with our clients which are more domain-orientated, and most of our wins have an AI component built in.

Thank you. The employee numbers, does that include subcontractors as well?

This shift offshore, have you reduced subcontracting?

I think what you're talking about is subcontracting. I didn't quite hear the question properly.

If subcontracting is the question, yes, our endeavor is to continue to reduce subcontractors. As a business today, about 8%, 8%, right, Chandru?

8% of our population is subcontractors, but our endeavor will always be to reduce that even further. We are within the industry norm, Ravi.

Right. Thanks.

I saw that the pass-through revenue, that's actually now practically nil, right? That's another factor that I guess that's aided margins.

As you do more fixed-price, should we expect that to go up slightly, maybe, is there a level that you think would be more natural, like 2%, 3% or 4%, something like that?

No. We want to deliver more outcome-based work for our clients, right?

To deliver that outcome, basically we may work with technologies or we may work with tech stacks, etc. We will have zero pass-through revenues going forward outside of a one-off infrastructure deal if it necessitates us to do something.

We are very clear that we are moving away from staff aug work or pass-through work. It'll be more linear than anything else, Ravi.

Thanks so much, Angan. Best of luck.

Hi. Thank you for the opportunity.

I had a couple of questions. The first question was for both Angan and Chandru.

You've spoken about investments, and that's where you're essentially guiding for about 15% EBITDA margins on a sustainable basis. How should we be thinking about these investments because you've also called out certain pricing or margin concessions that you have given to certain top customers?

How much of that is just pricing or margin concession, and how much of it is investments around sales, solutioning, delivery, etc.? Would be great to get your thoughts on that one.

That's question number one. The second question is specific to the quarter or the quarters or Q4.

How should we be thinking about the lower number of working days if you could just help us understand what's the exact number of lower number of working days for Q4 and how does that impact you? Those would be my questions for now.

Manik, let me take both questions, right? The first thing you talked about is on the margin concession.

Truth be told, none of the investments that we are looking at has anything to do with margin concession, right? As a company, we firmly believe that providing concession in margin is not a way to gain revenue, right?

That's our stated objective. Now, there will be pricing pressure is what Angan was explaining from some of the new businesses and some of the renewal.

That pricing pressure is coming from productivity improvement that we've already delivered and we are expected to continue delivering as we go forward, right? That's point number one.

Point number two, the investments that we're talking about, for the most part, will be in people and in capabilities, right? These are specific capabilities that we will continue to require as we go forward based on where we see our business going and where we see our business coming from some of our existing and new customers.

The investments will be made in people, leadership, and in training of our resources in that direction, Manik.

Great. The second question was with regards to the Q4 in terms of what's the exact number of lower number of working days and how does that impact or is that an headwind?

Yeah. There are, I think three working days lower in Q4 versus Q3, Manik.

Yes, that will have an impact. As we move more towards outcome-based deals, and that's exactly why we are doubling our focus on fixed-price outcome-based deals where the working days should not necessarily have a direct impact.

They will have some impact, but they will not have as much impact as we move more and more towards outcome-based work that we've started to measure on, Manik.

Great. Thank you and all the best for the future.

Hi, good evening. I have two questions.

First is it's so heartening to know about the cash pileup that has happened and also the improvement in the DSO. I just wanted to know this is a drag on the balance sheet, and the rightful owners are the shareholders of the company.

What we have thought about the possible buyback, and what is restricting a possible buyback which is so common with the other IT companies in general, unless and until you have a plan for an acquisition and you are closer to doing an acquisition? I would like to know the thoughts of the management on this.

Manish, thanks for the question. This is a topic that is for the board of directors to look at.

I can assure you that this is a topic that the board is fully seized off. We will continue to look at opportunistic, look at capabilities, investments, and anything that fits into our strategies as we go forward, Manish.

The capital allocation, which is the point that you're making, is certainly part of the entire exercise for us to ensure that as we look at how we get the best outcomes from our balance sheet, the board will take the right decision at the appropriate time.

I would be glad, Chandru, if you could offer a conference call with all the board of directors, and I could enlighten them that how to create a value in the current circumstances. I'll be very glad to do that.

My second question is related to the appointment of Komal, and if you could add up something about the role and responsibilities related to his role and would he be a part of the conference calls going forward because he would be driving the critical relationships in the most critical market? Thank you.

Yeah. Manish, as the Americas contribute almost about 85% of our business, and Komal has been hired to drive our Americas business.

Manish, he's just joined the company. He's just 4 months in the company.

He's meeting clients, meeting people. He's getting the right leadership hired.

He's doing a lot of good things, right? We are very pleased and we're privileged to welcome Komal to the team.

As he settles down and starts driving the business, at some point in time, we will definitely ask him to speak to all of you and give his strategy. Please allow some time for him to settle down.

Also, Manish, you must have seen, and Chandru also commented on, all our investments in the ROW region is playing out. ROW region has delivered amazing growth for us this quarter, and I think they will continue to show great growth even next year.

The margin profile has also significantly improved because of the revenue uptake. We are very pleased with that investment that is paying off now.

Similarly, Komal is going to make a lot more investments in the US, and over quarters, you will see that business turnaround as well.

Wonderful. Nice.

Thank you. Thanks a lot.

Thank you, Manish.

Hi. Thanks for taking my question and congrats on a good margin performance.

Angan, my first question is for you. In the last quarter, you did highlight that 3K 3Q and 4Q will be sequentially growth quarters.

I think today, you're slightly shy of saying that. You have highlighted that you'll see a better deal wins in 4Q, but you probably slightly shy of staying whether 4Q will be a growth quarter.

If you could just confirm if that is still true. Second, on the 110 bps impact the exceptional items that you've reported in this quarter, if you could just throw some color around it.

Is it similar to the last quarter, and will it continue for the next quarter as well? Sorry if I missed out on that part.

Thank you.

Yeah. Thank you for the question.

See, look, we still maintain that H2 will be better than H1 as far as signings are concerned, right? On revenue, you've to give us some time.

We showed solid performance in a seasonally weak quarter, right? We hope to continue that performance even in 4Q.

The only reason I'm not giving a number is because we do not guide anything, but our order booking performance should be an indication both in 3Q and 4Q. Look, I'm also acutely aware of the fact that we've not shown great growth over the past many quarters, and our entire endeavor going forward, like I've said earlier, is going to be order book and revenue growth, because all the other parts of the business now is fixed.

We will be sharply focused on that. We will execute and take one quarter at a time, and we will see where we go with it.

On the exceptional item, I'll ask Chandru.

On the one-offs that you talked about, the 110 basis points that I was talking about comes from a few write-backs that we have done based on some provisions that we had made in the past quarters, which based on our assessment were no longer required. That constitutes the 110 basis points, and we do not expect that this will come again for us in the following quarters, and therefore, I called it a one-off.

The run rate EBITDA margin that I spoke about is net of this one-time item, Pulkit.

Sure. Thank you.

That's helpful.

Thanks for the follow-up. Most of the questions been answered.

Just one thing, Angan, despite new business TCV being better in this quarter, plus you expect order intake could be better even in 4Q and there could be some recoup of furloughs, why the fourth quarter growth commentary is a measured? Is there any headwinds in some of the verticals you foresee, and what is the nature of such headwinds?

Sandeep, the only reason we are cautiously optimistic, and the reason we are cautiously optimistic is because of two things. One is the manufacturing growth that you see in 3Q will not be in 4Q because it was a one-off growth that we saw from deals that we had won about two quarters ago, and the ramp-up had not happened because there was a stop on the program which came to life sometime in October, which is why you see the growth in Manufacturing and ERP, and that will not continue in Q4.

Which is why we feel both these segments, right, Manufacturing and ERP will be soft in Q4. That is point number one.

Point number two, even though we will recoup all the furloughs, like Chandru was mentioning, we have three lesser working days. Though like Chandru mentioned that doesn't have a complete impact on us because we've moved a lot of our business into fixed price and outcome based, but still some part of our business will face lesser working days in 4Q.

It's a combination of all of this. Look, again, I'm not saying that we will not be focused on growing Q4, far from it.

That is a management's responsibility. I'm just not being able to commit to what would be the growth percentage.

That we will work on as we go through the quarter. I am equally saying I'm confident of the fact that we will see growth coming back in the future quarters if we do great signings in Q4.

In Q4, if I can deliver 10%, 20% extra signings over and above Q3, then we'll be very certain of growth going forward.

Anything to read about healthcare in terms of a growth headwind in the fourth quarter? If yes, then it could be volume ramdown or could be a pricing pressure, because you are saying renewals are coming at a lower rates?

I don't foresee any ramp-downs, Sandeep. What will happen, though, is we will see immense pricing pressure in the healthcare business because of the uncertainties that my clients face thanks to the tariff situation, right?

I see that pressure continuing in 4Q, and I see that pressure partly continuing in 1Q. Overall, I don't see any volume de-growth, if that was the question, Sandeep.

We don't see that.

Okay. Thank you.

All the best.

Thank you.

Thank you. Thank you once again for joining us on this call today, and thank you for all your questions.

We appreciate your interest in Birlasoft. I look forward to speaking with you again next quarter.

In the meanwhile, please feel free to reach out to Abhinandan for any clarifications or feedback. Thank you once again, and I look forward to the conversation next quarter again.

Thank you.