Thank you. Good morning and good evening to everyone on the call, and thank you for joining us today to discuss Coforge's financial results for the third quarter of fiscal year 2026 that ended on December 31st, 2025.

As Indva indicated in her introduction, we have Simon Pearson filling in today for John Spaye. Before we begin, a reminder that today's discussion may include forward-looking statements which involve risks and uncertainties.

Actual results may differ materially, and Coforge assumes no obligation to update these statements. With that, I'll hand the call over to Sudhir for his opening remarks.

Thank you Manish, and a very good day ladies, gentlemen. Thank you for joining us today as we share our quarter three, fiscal year '26 performance and our outlook for the years ahead.

As Manish has shared, John is on vacation in sunny Kerala. He sends his regards to all of you, and he is keen to rejoin our calls starting next quarter.

Simon, my colleague, shall stand in for him during the call today. I shall provide an overview of our performance, touch upon the current market context, and then do a deep dive on results and operations data along with my colleagues.

In quarter three, we registered a growth of 4.4% in CC terms, and our year-to-date dollar revenue growth is now 32.8%. What we find particularly reassuring about our growth performance is the large deal velocity and the key accounts growth that underpins it.

The six large deals that we signed in the seasonally weak Q3, our next 12-month signed order book that is 30% higher than where it was at the same time last year, and sustained growth across almost all key and top accounts has set us up for continued, robust growth performance, not just in fiscal year '26, but in fiscal year '27 and hopefully beyond. Equally importantly, on the margin front, it is pertinent to note that our reported 13.4% EBIT for the quarter and our plan to register a 15% EBIT in quarter four will lead us to the 14% EBIT guidance for fiscal year '26.

In the current quarter, excluding hedge losses, the underlying EBIT for the firm is 14.4%. Finally, free cash flow for the quarter came in at 110%, significantly ahead of our guidance of around 70% to 80% FCF on a sustained basis.

We believe we are set to close a very successful fiscal year '26, and we are headed towards an exceptional fiscal year '27. With that, I shall now move on to the current market context.

Outside the usual narrative around discretionary spends linked to macro environment, it is important to note that the tech services landscape is shifting in ways that we at Coforge believe create extraordinary opportunities for firms with the right capabilities and, importantly, resolve. While two years ago every board was asking how can we adopt AI, that question has now fundamentally changed.

Our customers are no longer interested in AI strategies or pilot programs. They are demanding proof of business impact.

They want measurable KPI improvements. They want clear paths to operational transformation.

The age of AI experimentation is over. What we're witnessing is a market inflection point.

The new era of enterprise tech is emerging, one where AI driven by cloud and data is becoming the engine of enterprise reinvention. The next-gen enterprise will have its business capabilities defined and executed via a combination of humans and AI agents, underpinned by an enterprise data core and a cloud foundation that is purpose-built for AI.

This shift is separating those who can talk about AI from those who can actually deliver it at enterprise scale. Today, let's be frank, most enterprises aren't truly AI-ready.

Decades of technical debt, fragmented data landscapes, patchwork infrastructure block AI ambitions. Clients need partners who can modernize their foundations while implementing AI, not as separate multi-year initiatives, but as one integrated transformation.

In this emerging world, enterprises are done managing fragmented partner relationships. They're asking for partners who combine digital-native innovation velocity with enterprise-grade delivery maturity, partners who can move at start-up speed while managing enterprise-scale risk.

It's in this context that the acquisition of Encora is a defining moment for our organization. It establishes a scaled, AI-led engineering, data services, and cloud services-based capability moat for the firm.

This, allied with Coforge's hyper-specialized industry expertise and execution intensity, is likely to further accelerate our industry-leading growth. It also sets us up as the tech services firm that is likely to be the first to deliver upon the promise of the AI-infused future that lies ahead of our industry.

With that, let me walk you through how all of this translated into our quarter three performance. I shall start with the revenue commentary first.

As mentioned earlier, the firm registered a sequential revenue growth of 4.4% in CC terms, 3.5% in US dollar terms, and 5.1% in INR terms. The 4.4% sequential CC growth came after registering 5.9% and 8% CC growth in the two previous quarters.

At the end of quarter three, we are now growing year-to-date at 32.8% in dollar terms. On a year-to-date basis, healthcare and high-tech verticals, which now together contribute 10.5% to the total revenue, have nearly doubled from where they were just a year back.

The travel vertical has grown 66% year-to-date, BFS has grown 21% year-to-date, government outside India has grown 20% year-to-date, and the other vertical buckets, which includes retail and manufacturing, has grown 23% year-to-date. Ally this data with the six large deals that I talked about.

Two out of the six large deals in quarter three came from banking, one came from travel, yet another one came from insurance, a fifth came from the new healthcare vertical of the organization. In healthcare, interestingly, that one deal was a large NN contract that we won.

Our top five clients and our top 10 clients grew 51% and 47% YTD respectively in dollar terms. They contributed 21% and 30.7% respectively to our overall Q3 revenue.

Moving on to order intake, quarter three was yet another strong quarter both from an order intake and a large deals closure perspective. During the quarter, and I've said this earlier, we signed six large deals.

The total order intake during the quarter was $593 million. It was almost within kissing distance of $600 million.

The executable order book, which reflects the total value of signed orders over the next 12 months, is now at a record $1.72 billion. This number is 30% higher than at the same time last year.

People front: our total headcount at the end of quarter three stood at 35,341. We saw a net people addition of 445 during the quarter.

We continue to hire aggressively from campuses and laterally. Utilization during the quarter stood at 81.8%.

This is a metric that we think will sharply increase in Q4. Last 12-month attrition for the quarter fell further and is now at 10.9% only.

We remain, as always, one of the lowest attrition firms across the industry. I will now hand over the call to my colleague Simon Pearson, who is the Head of Consulting and Solutions for Coforge, and I'll request him to provide insights into our operations and our capability creation.

Over to you, Simon.

Thank you, Sudhir. I'll now highlight this quarter's delivery and capability milestones.

We continue with our strong progress in agentic AI, delivering business impact at scale. Through our AI assets, we are making engineering faster, smarter, and more resilient, enabling speed to market, architectural modernization, and precision in delivery.

For example, in a recent landmark win at a leading global systemically important bank based in Europe, we deployed autonomous agents across data silos to transform cash flow forecasting for its corporate clients. It was a win that proves, at the intersection of deep domain expertise and emerging technologies, Coforge is the partner of choice for mission-critical transformation.

This quarter, ForgeX, our integrated agentic AI engineering platform, delivered on further strategic engagements, each addressing complex engineering challenges. Some examples include a leading global airline, where we've accelerated delivery and improved operational resilience for a critical program through an AI-led software development lifecycle.

In a large US financial services provider, we have built a platform with a roadmap of more than 20 domain-specific agents to industrialize automation and governance. We have modernized the legacy architecture of one of Australasia's largest general insurance brokers, using agentic AI accelerators to automate the refactoring processes, strengthening reliability and quality.

In a leading investment management company, we have deployed intelligent agents for product ownership and quality engineering to automate testing and defect analysis. Along with ForgeX, our AI asset portfolio continues to grow, with two further additions this quarter: Integration Studio and Extender AI.

These assets, along with the broader portfolio, are deployed at scale across 54 clients, solving complex engineering and business challenges. Our cutting-edge GenAI-powered platform, CodeSight AI, is a state-of-the-art legacy modernization toolkit, available directly in the Microsoft marketplace.

Deployment-ready in Microsoft Azure's secure, cloud-native platform, it is already in use across large-format programs in travel, insurance, and banking, reducing risks, bridging legacy skill gaps, and accelerating transformations. On to our successful engagements delivered in quarter three.

In banking and financial services, we have been acknowledged by a leading UK bank for our work in secured loan migration, advanced mortgage transformation, and deploying end-to-end bereavement automation. This program was recognized as their Transformation of the Year.

At a global bank, our conversational analytics solution went live, reducing turnaround time by over 60% and improving case resolution quality. We executed platform upgrades and experience modernizations across multiple financial institutions, rebuilt a core digital interface for a major US utilities provider, enabled process-led savings for an Australian-New Zealand financial institution, and completed a complex SAP HANA upgrade for a global manufacturer.

In insurance, we delivered a surety claims platform for a large US insurer, migrating bonds and payments from a legacy estate into a modern digital platform. For a major supplemental benefits provider, we completed one of the industry's largest conversions, migrating more than 5,000 groups and 2.6 million policies to a new policy administration platform.

We also implemented governance uplift for a specialty insurer's excess and surplus casualty clearance process, reducing manual entry by about 80% and enabling straight-through processing via AI-driven rules and digitization. Moving on to awards and recognition.

This quarter, analysts have reaffirmed our leadership positioning across AI-based analytics and automation, AI-driven ADM services, application development and application managed services, and the travel and hospitality ecosystem. ISG has recognized Coforge with a Star of Excellence Award in IT operations and secured two ISG Provider Lens Awards in multi-cloud public services.

Additionally, ISG has positioned Coforge as a leader in insurance ITO services specialists in the ISG Provider Lens quadrant study, Insurance Services, Strategic Capabilities 2025. Finally, NelsonHall have positioned Coforge as a leader in AI-based analytics and automation, GenAI use case capability, overall QE services, and SAP testing capability in the NelsonHall Quality Engineering 2025 NEAT.

With that, I will now hand over to our CFO, Saurabh Goel.

Thank you, Simon. We're pleased to report revenues of ₹41,881 million in Q3 of FY '26, reflecting a sequential growth of 4.4% in CC terms and 5.1% in INR terms.

EBIT margin for the quarter stood at 13.4%, up 191 bps Y-on-Y and down 60 bps quarter-on-quarter. The reduction in EBIT was mainly on account of wage hikes, which had an impact of 150 bps on margins, which was partially offset by various margin initiatives that we've been delivering within the organization for last three quarters and lower ESOP cost.

We also had a headwind on account of increase in hedge loss during the quarter. The hedge loss reported for the quarter amounted to ₹434 million as compared to ₹307 million in the previous quarter, reflecting an adverse impact of 26 bps in the current reported EBIT.

As we take hedge losses in the top line, the same had an impact of 90 bps on reported EBIT margins. There were exceptional items to the extent of ₹147 crore during the quarter, out of which ₹118 crore is on account of new labor code introduced by the Government of India.

There is ₹13.5 crore related to expenses for the proposed Encora acquisition, and there is ₹16.2 crore on account of legal expenses which have been booked on conservative basis related to the cybersecurity incident. We have E&O cover and part of these expenses will be reversed once we receive the money from the insurance company.

As we have just concluded a large acquisition and are in process of taking regulatory approvals, we are expecting expenses associated with the transaction, including integration, funding, and W&I insurance, and others over the course of next two quarters. That would be in a range of $10 to $15 million, and details of that would be shared as we move along, but that's the ballpark range we are expecting.

Excluding exceptional items during the quarter, earning per share for the quarter stood at ₹10.9 per share. EPS for 9 months stands at ₹31.6 per share, which is 83% higher than the last year same period.

This is further expected to go up post approval of Cigniti merger because minority interest will get added back to profits, and the impact of that will be far more than the impact of increase in number of shares. Coming on to the cash flows, we are pleased to report that FCF increased to $45.7 million, resulting in an FCF to normalized PAT of 110%.

We have excluded the impact of exceptional items to arrive at this ratio. Billed DSO at 67 days, unbilled at 28 and contract assets at 14, totaling to 109 days.

We also have deferred cost, deferred revenue, and current liabilities to the extent of 60 days, reflecting a working capital of 49 days. This was 48 days in the previous quarter.

Capital expenditure for the quarter stood at $3 million. During the quarter, the company entered into a share purchase agreement for the acquisition of equity shares of Encora for an enterprise value of $2.35 billion, out of which $1.89 billion are getting financed through a share swap arrangement, and balance through term loan to retire the borrowings of Encora Group.

During our last call on 26th December, we had mentioned that we were looking for multiple options like bridge loan, or a term loan, or QIP of $550 million to retire the term loan of Encora. We are very close to finalizing a term loan of $550 million for a period of 3 years with a consortium of 4 to 5 banks.

We're comfortable with the pricing that we've negotiated with the banks and have concluded that we will not need a QIP for retiring the term loan in the target company. The guidance related to no dilution of EPS in FY '27 of the combined business stays intact even after this debt.

With that, I will hand over the call back to Sudhir. Thank you, Saurabh.

Proceeding to the summing up and the outlook. Over the last 8.5 years, the revenue run rate of Coforge has gone up almost five times, and the market cap has increased almost 20 times.

As we've shared in the past, it remains our intent to ensure that the next eight years see us maintain and improve upon the sustained business performance of the previous 8 years. We hope to continue to be the industry leaders when it comes to growth, with increasing margins and investor value creation.

5.9% CC, 8% CC, and now 4.4% CC sequential growth are the growth numbers that we've recorded in the first three quarters of this year. Top 10 accounts growing at a 47% YTD clip, our next 12-month signed order book which is 30% higher year-on-year, a sales execution engine that signed 14 large deals last year and this year in three quarters has already closed 16 large deals, a pathway to 14% EBIT in fiscal year '26, all of these factors cumulatively set us up to close a very successful fiscal year '26 and head towards what will hopefully be an exceptional fiscal year '27.

With that, I conclude my prepared remarks, and my colleagues Saurabh, Manish, Simon, and I look forward to hearing your comments and to addressing your questions. Thank you.

Hi. Am I audible?

Hi, team. Morning.

Congrats on a good, strong quarter. Couple of questions, Sudhir.

Firstly, on the vertical mix, very very strong showing in healthcare, high-tech, transportation, etc. BFS and insurance seem to be a little bit soft on a Y-o-Y basis for the past couple of quarters.

Just wondering on the BFS side, is this temporary? Sort of, is this partly attributable to the transition in leadership we've seen in this vertical?

Do you expect this to kind of reverse meaningfully over the next couple of quarters considering BFS remains a very strong vertical from a macro discretionary perspective as well? The second question was around pricing the deals and how the delivery is changing for us in context of using AI tools.

Just wondering sort of, how are we pricing deals differently? How are we structuring these deals differently from a year back?

Do you see more and more margin gains coming in as we change that balance between humans and AI? Just lastly, a bookkeeping question for Saurabh.

The unbilled revenues long-term seem to have kind of increased a bit Y-o-Y and Q-o-Q. If you could just explain sort of, what's happening there and how should we kind of model that going forward?

Thank you.

Abhishek, thank you for all the three questions. As you've noted, I'll take the first two, and I'll request Saurabh to take number three.

Vertical mix, let me start off by saying, just reiterating, Abhishek, that we signed six large deals in quarter three, a short quarter, and one-third of those, two out of those six, were from banking. Given the large deal momentum we've seen in quarter three and what we think is likely to happen in quarter four, we would suspect that while healthcare and high-tech will continue to grow at a tier that they are, banking might be the fastest-growing core vertical of the firm next year, given the growth momentum that we see ahead of us, both in terms of large deals and in key account growth that's ahead of us.

For banking, we're very assured about where things are. Banking again, as you'll notice, YTD is still growing 20% plus.

As far as insurance is concerned, insurance has not de-grown. Insurance has grown on a Q-o-Q basis.

One out of those six large deals was insurance. We expect robust growth in insurance.

FY '26 is almost done. Very robust, possibly higher growth in insurance in FY '27 than what we've registered even in FY '26.

That's the growth momentum there. We feel extremely assured.

Finally, the sector that did see a Q-o-Q decline was government outside India. We expect to close one of the largest deals that we've ever signed in that sector in quarter four.

So [laughter] outside the Q-o-Q mix, if you were to look at YTD numbers, they are strong. Given the large deal velocity and the very strong growth of our top accounts and key accounts, I guess you're going to see them getting stronger starting Q4 itself.

That was answer to question one. Question two, pricing delivery, we've talked about delivery.

We've always talked about execution in the context of delivery and the fact that our clients believe that the age of AI experimentation is over and they need digital-native velocity with enterprise-grade delivery maturity. We have transformed our core delivery model.

We're not adding AI as a separate offering, but we're infusing it into every engagement. Our platforms: CodeSight AI, BlueSwan, ForgeX, Quasar have helped us now for almost 2 years to embed AI in the way we deliver value to our customers from day one, and that's important.

We've restructured how we deliver. We are moving towards hybrid delivery models that combine agentic workflows with human expertise.

Finally, to the other subtext around that question, Abhishek, critically, we're also willing to underwrite outcomes. Our risk-reward commercial models tie our fees to our clients' achieved results.

We believe in the integrity and the strength of our delivery execution to be able to do that. When we say we put skin in the game, we mean it contractually as well.

That was answer number two. Saurabh, I'm going to request you to take number three, please.

Sure, Sudhir. Abhishek, the increase in whether it is debtors or it is long-term unbilled, it is tied to the nature of the contracts that are being signed up.

The way we are tracking our numbers internally is we're making sure that there is FCF to PAT as a ratio that is getting delivered quarter-on-quarter-on-quarter. That are the guardrails that we've put which will restrict the investments beyond a certain point in any particular account.

I think that's the short answer to that.

Got it. Thank you, and all the best.

Thank you.

Hi. Thanks for taking my question.

Congrats Coforge team on a rock-solid performance yet again. Sudhir, my first question was on basically the changing mix of the business that we might see over the coming quarters.

You had mentioned in the analyst meet that healthcare, high-tech, and public services are the verticals that we are focusing on going forward in terms of diversifying our base. This quarter also, you mentioned that we have won a large deal in healthcare and probably another in the public service coming in the coming quarters.

If you could just take through the dynamics of these two sectors, how are we positioning ourselves in this pre-Encora, of course there is Encora also which will start contributing into it, in healthcare, how are we looking in terms of payers and providers, in public services, are we looking more at UK public services or is it in the US as well, and what are the kind of growth avenues that we're looking in these verticals as we look to expand these verticals?

Thank you for the question and for the kind comments, Vibhor. As we discussed earlier in the investor meet that we'd done in Mumbai, we believe healthcare, high-tech, public sector will grow on steroids next year, if I were to put it euphemistically.

Even if you were to reflect on their performance right now, these two verticals, just healthcare and high-tech, and this is all pre-Encora, we're not factoring in everything that will happen after Encora comes in on high-tech, are already 10.5% of our aggregate revenues. If I remember my numbers right, we're growing 95%.

We've almost doubled it over the last four quarters. As I'd said earlier, we signed NN large deal in Q3 in healthcare.

We believe we'll sign another NN large deal in the quarter that has started, Q4. We also believe that in the allied vertical, which you referred to, UK public sector, we'll sign one of the largest deals that we ever have in that sector in the current quarter that's going on right now, which we haven't announced because this was Q3 result call for now.

In healthcare, we continue to focus on life sciences and we continue to focus on payer. However, please recognize that we are still relatively small.

The Encora and the Coforge business once it comes together will only be about $170, $175-odd million, and therefore we will also look for tactical wins. The large win in healthcare that we do expect to close in quarter four is likely to come from a provider client, NN client, even though our primary focus longer-term is going to be around life sciences and payers.

Public sector, we continue to focus, as we have, it takes a long time to build those relationships, on UK and on Australia public sector largely. We have no plans, no intention of approaching the US public sector.

I trust I've answered your questions, Vibhor. Thank you once again for the question.

Very much, Sudhir. Thanks a lot for that.

In that context, do you see that, going forward, the breakup of our deal wins are also going to change a bit maybe? For example, in this quarter out of six large deals, four were in our traditional segments of banking, travel, and insurance.

Do you think we could see a mix of more large deals in healthcare and public services maybe going forward? Or do you believe banking, travel, and insurance will continue to remain the forte of our growth and that is where still the large part of the large deal and the demand remains?

We believe that the total number of large deals on an average will go up. Banking, as I said earlier, we feel really confident about the pipeline that's building up.

Banking, even this time, two out of the six large deals came from banking. Banking is likely to do extremely well.

Travel, we think, is likely to do exceptionally well. Out of the three core verticals, insurance, we think, next year will do better than it has even in this year, fiscal year '26.

Having said that, banking and travel should outpace insurance. High-tech, healthcare, and this is all pre-Encora, will, we believe, continue to grow on steroids going forward.

Got it. Thank you so much for the detailed explanation.

Just one last question for Saurabh. Sir, I think this time the numbers are quite very well explained and there.

Just on the timelines of the two things. I think Cigniti shareholder approval, as you mentioned, I think we've all seen, have all come.

When do you think Cigniti could finally get fully integrated into our company numbers in terms of financially? In terms of Encora also, what is the timeline that you're looking for the share swap to be executed and thereafter the term loan to be retired?

Vibhor, two things: one, shareholder approval was received and the second motion application to NCLT was filed in the month of December itself. There's a hearing with NCLT in March, and I guess we should be able to get a result in one or two hearings.

Our take is that maybe by March end, latest sometime before our results for sure, we'll be able to get the approval for Cigniti merger. As and when the merger notice is received, as I mentioned earlier, the effective date of the merger is 1st April 2025.

Which means we will, if we have not reported our numbers for Q4 and the financial year FY '26, we will restate the three quarters, and when we report the full-year numbers, hopefully there'll be no minority interest and new shares to Cigniti shareholders would have got issued. From a financial perspective, the integration would happen or the merger would get consummated by the time we report FY '26 financials.

That is point number one. Number two, when it comes to Encora acquisition, number one, we had mentioned last time and I had mentioned that in the call as well that we're looking at a bridge loan or a QIP.

I think with the discussions that we've had with multiple banks and the rates that have got negotiated, we've finally decided that there is no need of QIP that we need to kind of do to retire the term loan in Encora. The interest rates are very, very lucrative.

The other terms and the term sheets, the agreements with the banks are now getting finalized. The period of the loan will be 3 years.

More details around the loan that we will take will be shared once we have kind of signed up the loan with the banks. That is one.

Second, on the timeline for acquisition closure, we've already filed all the regulatory approvals that had to be filed either with RBI, or with the exchanges, or with the US Competition Commission, which is HSR, or any other geography. Approvals will start coming in.

The HSR approval, which is Competition Commission equivalent approval in India, is expected sometime in Feb. I think by March time frame, we should be able to get pretty much all the approvals between March and April, and that's the time when we start consolidating Encora as well.

Got it. Great.

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

Sure.

Hi, thank you for the opportunity, and congratulations for the steady performance. I basically had a question related to some of the cost split up during the quarter, as well as the segmental margins first.

Saurabh, basically is there some sort of a one-time element to the other expenses line item in 3Q because that seems to jump up very sharply in 3Q? If you could help us understand that, that's question number one.

The second question is with regards to our segmental margins. If you could help us understand what drives the sharp move across segmental margins on a quarter-on-quarter basis, that will be helpful.

The last question is with regards to Sabre deal. Given we've been executing on that through the course of now I guess probably about anywhere between 6 to 9 months, if you could help us understand how that essentially shaping up, are we on track with regards to some of the product delivery there, and talk more about the progress there.

Thank you.

Manik, the other cost typically includes a cost related to either if there is any large SI deal which includes any third-party component. That cost is included there, and that goes up and down depending upon when a milestone is achieved.

The cost gets recorded accordingly, and then it goes up and down. It had happened the same quarter last year also, when the third-party cost had gone up significantly.

I'm not referring to the subcontractor cost, but the third-party cost. That is because of that.

You will also note that when we look at the expense lines and we look at people cost, this was a quarter wherein we gave wage hikes and, but the cost lines around people cost is not significantly gone up, purely because of the optimization initiatives that are going on within the organization. That is the answer to other cost.

Yes, it is seasonal, it's not that it will continue to stay where it is. It keeps moving up and down depending upon when the costs are hitting and when the revenue is getting recognized.

Now what was your second question?

My second question was with regards to the segmental margins from a geography standpoint, given the volatility that we see across regions through the period.

One is because of the currency. I think that's the biggest impact that we're seeing, because hedge losses get allocated not to the overall revenues, but largely to Americas and Europe.

That is where the amount of hedge losses that we're having in our top line, because we report hedge losses in top line, that is impacting the reported EBITDA margins of the segments that we are in. The third thing is about Sabre deal.

I think from a Sabre deal standpoint, when we look at the ramp-up that was expected to happen in quarter one and quarter two, the deliverables that had to be delivered during that time frame, we're on track, and the costs that had to be incurred, we are lesser than the plan that we had to incur. I think from a Saber deal standpoint, we feel very, very comfortable in terms of what we have delivered so far, what our roadmap is as we move along and we get into next calendar year, which is calendar year '26, and from a contractual obligation standpoint, I think we're on track.

Sudhir, maybe if you want to add something on Sabre.

Thanks, Saurabh. Manik, to your question around how the Sabre project is doing, we would characterize it, and I guess John and Sunil would characterize it more appropriately, possibly aptly as it's going swimmingly well.

We had a meeting earlier this month around the first week of the new calendar year with the CEO, the CAO, the CIO, and the head of the transformation program. The feedback from them was exceptional.

The feedback from our team to them around the partnership and where we are against the agreed-upon milestones again was exemplary and of the highest order. Things are moving exactly where we expected them to be, and possibly slightly better than that.

Did we answer your question, Manik?

No, that's quite helpful. Thank you, and all the best for the future.

Thank you, Manik.

Hey, hi, Sudhir, Saurabh. Congratulations on a good print.

I have a couple of questions. First is on the nature of deals that drove strong growth in India.

Can you just elaborate on the type of deals that would have contributed to such a large number, and would this end up being a headwind to your growth as you move into 4Q? That's the first question.

Saurabh,

I'll Sudhir, go ahead.

Saurabh, I'll start off, and please add on. Kawaljeet, at this point in time, we aren't reliant on one, two, or even three access for growth.

We referred earlier to the kind of growth that we see around healthcare, around public sector, potentially getting accelerated post-Encora coming together around high-tech. Banking, we've alluded to the fact that two out of the six deals came from banking itself.

Banking is likely to do really well next year, as is travel, given the large deals trends we're looking at. We think, and I think we've said this earlier, we think fiscal year '26 has been a very good year for us.

Fiscal year '27 is likely to be an exceptional year if the growth momentum continues. A lot of our confidence is also coming from the balanced nature of the growth across account-sized cohorts.

The pipeline, the relationship status across the top 10, the top 20 clients is extremely robust. Then it's also coming from the next 12-month signed order book that we talked about.

It's 30% higher than where it was four quarters back. We have a lot of prompts that give us significant confidence that what has been a very good year is likely to be followed by an exceptional year coming our way.

Did we answer your question, and Saurabh, would you like to add anything else?"

Sudhir, if you can just elaborate what were the nature of contract in the India business that drove that sharp growth in the December quarter?

Kawaljeet

In India biz, sorry, go ahead, Saurabh. Yeah.

Kawaljeet, a couple of things: one, when we look at the other direct cost, okay, it has grown almost 4.5% Y-on-Y. There was a seasonality, similar spike in quarter three last year had happened in the other cost.

It happens in case there is any third-party component which is included as part of the solution to the customer, and you recognize revenue and book cost once the solution is delivered. That spike came in in quarter three, which led to increase in DSO and also increase in liabilities and also increase in direct cost.

Right. Got that.

The second question that I had, Saurabh, is that what is your hedging policy, and are the hedge losses purely on account of the euro leg of hedging, GBP, or USD? If that's the case, what's the average rate of cash flow hedge book that you're carrying right now?

One, Kawaljeet, we've been using the same hedging policy consistently for last, I guess, a decade or so. We take 90% of the we hedge the 90% of the exposure in the respective currency for next quarter, followed by 80, 70, 60, which is total exposure of 75% over a course of 1 year.

We do cash flow hedges, and our hedges are effective because of which the hedge gains or losses goes and sit in the top line. The reason why the hedge losses have come in, it's not because of just dollar-pound, it's largely because of dollar, because dollar has just continued to run up quarter-on-quarter, month-on-month.

We are also now revisiting the hedging strategy wherein we will stop taking the cash flow hedges, which will then allow us to at least take the hedge gains or losses as part of the other income, so that it does not impact our EBITDA or operational EBIT performance. That's where we are, yeah.

Are you going to basically pull back from hedging of cash flows, it will be largely balance sheet hedges in future?

No, yeah, again, nothing finalized yet, but yes, it is between cash flow and balance sheet hedging, maybe we'll do something balanced, maybe something to do with debt that we're taking, maybe there'll be natural hedge that will come in. Allow us a quarter or two, and we'll be able to provide more clarity on that.

It is under works, and there will be some update on this if not later, but maybe next quarter for sure.

Thank you so much for answering my questions.

Thanks for the opportunity. Couple of questions.

I think first about you said risk-reward where we are taking a risk of about let's say deliverable kind of things. Can you help us understand how we get the sense about it, whether it would be part of contingent liability about the potential risk which we are taking as a part of contract, some color around it?

Second question is about the employee cost. I think Saurabh partly touched upon about some of the cost optimization actions or initiative which we have taken.

Can you elaborate and provide more detail around it? Thank you.

Let me take a quick stab at it. Risk-reward, as you can imagine, is multiple flavors.

Each one of those goes through our own risk assessment framework. This is something that Saurabh, as the CFO of the organization, owns, and this is something that our controller also gets into as does the pricing head.

When it comes to commercial constructs, there are decisions that are made strategically around engagement structures, whether they are joint ventures, BOTs, reverse BOTs, standard fixed-price contracts, or milestone-based deliverables. Decisions are taken jointly by the CFO's office along with the CDO's office, which is Sunil Fernandes, the global head of delivery of the organization.

These are reported three times in a year to the Risk Management Committee of the board to make sure that we stay aligned with where we are. You will have noticed, given the increasing margin and the very sharply increasing growth rate, not over one, two, or three years, but for now 8.5 years, that this approach, where we've been commercially judicious, but also been open to newer paradigms, has worked very, very well for us.

That's the broad risk management framework that we apply. I'm going to hand this over to you, Saurabh, to address the employee cost issue that was asked.

Sure. Also on the contingent liability piece, Dipesh, typically what we do is we contain the revenue recognition, because there is a risk and reward.

We do a balanced assessment, and we contain the revenue recognition, and once we pass the tollgate which is a contractual tollgate, then the revenue gets recognized. There is no contingent liability in the balance sheet that you will see, but it is the revenue recognition which is contained.

That is one. Second, employee cost: you would recall, in quarter four of last year, we had said that we're taking margin improvement initiatives, maybe we've actually been talking about it for over a year now, wherein we were looking at improving ARCs, we were looking at containing bench, and we're looking at containing overheads.

I think those initiatives were on, and we have taken a lot of actions between quarter two, quarter one, and quarter three is the period when at least we have seen the impact of those in the P&L, because of which, even after wage hikes, the salary costs have not gone up. Because we've not only been able to optimize the headcount, but even after headcount addition and wage hikes, the salary cost has not gone up significantly.

You will continue to see this, and which is a function of actually reduction in ARC, and you will continue to see this benefit flowing down, and that is what gives us confidence for quarter four EBIT margins as well.

Whether it partly reflect your pyramid change kind of thing?

It is function of everything, Dipesh. Even not just the pyramid, at the same band people getting replaced with lower cost, it's even function of that as well.

Thank you.

Yes, thanks for the opportunity. Two questions.

Firstly, Sudhir and Saurabh, ESOP costs have been a lever for us over the last year or so, has given us 100 bps on margins. We have mentioned in the past that we do not expect this number to go up.

In fact, if at all, it may trend downwards. With a large acquisition like Encora, do you think the trajectory may again change on the ESOP side, given any potential retention through ESOP schemes in there?

As a percentage of revenue, Rishi, you will not see impact on margins. Absolute number might change, we're not going to come right now for any incremental pool, but even if ESOPs are getting issued, the margins that we've spoken about will continue to be intact.

Fair enough. The second question is on headcount, right?

If you look at in the last 1 year, our headcount has grown at about 8%-9% year-on-year, 3Q to 3Q, without any material improvement in utilization, which Sudhir called out as a lever going forward, whereas our revenues of course have grown at 25%. Is it possible to just give a breakdown in terms of what is driving this gap between revenue and headcount into how much of it is non-headcount linked revenues versus how much of it is driven by automation, productivity, and some of the other initiatives?

How do we expect it to trend going forward?

I'll answer that in two parts: one, obviously it is a function of the kind of contracts which are outcome-based which are getting signed, which gives you higher realizable revenue, and that's what you see which is getting reflected in revenue per employee that we report. You look at current quarter, we've crossed $71,000 per annum, so that is reason number one.

Second, the utilization levels that we're reporting today, I think there is significant upside that is possible. The reason why we're right now not seeing an upside is because we continue to induct freshers, and that's why we continue to maintain lower levels of utilization.

As those freshers are getting built, that has helped us in bringing down our ARC. That is answer number two.

Number three is that the point that Sudhir was making, that not just contracts which involves third-party cost, but outcome-based contracts which has now become a significant portion or which is now continuing to become part of our deals as we're signing those deals. Over there, it's not just the revenue per employee, but the margins are high because of the risk that is being taken in those deals.

That is leading to higher revenue per employee and leading to lower headcount addition as compared to revenue growth.

Understood. Thank you.

All the best.

Hi, thank you for the opportunity and congrats on good revenue performance. Two questions here.

One, this unbilled revenue trend, as we take on more of these system integration contracts, is this likely to continue going up, and is there an absolute kind of unbilled DSO number that you'd be comfortable with because this is a level of risk that we are taking on, and how do you actually plan controlling that? Second is on this other direct costs, once again, there is seasonality that we understand, and this is also something that we should see going up because as you do these large system integrator contracts, this is another line item that might go up.

I'll take one by one. Ravi, when we look at our balance sheet, we look at total working capital cycle.

Okay? I think today sitting around close to 48, 49 days, and I think that is a number So there are two lenses: one, you look at overall working capital cycle; second, you look at FCF to PAT.

We're committed to make sure that we continue to deliver on FCF to PAT that we've already talked about and also maintain a working capital cycle which is closer to 50-odd days. If these two guardrails are kind of there in place, we will continue to sign large deals, we will make sure that, as I mentioned, FCF to PAT is getting delivered, EBIT margins are getting delivered, and within these guardrails, we'll continue to kind of invest in the customers or sign deals which if requires investment in the customers upfront, we'll do that.

That is answer to question number one. Number two, other cost: it's not that this will continue to go up.

As I said, over last 1 year, the revenues have grown almost 28-odd percent, but if you look at year-on-year, this cost has only grown 3%-4%. It's not that this line item will continue to grow.

It is seasonal in nature, it will start coming down from quarter three or quarter four or quarter one onwards, and you will also see, as a percentage of revenue, even the subcon cost for us has now as a percentage of revenue started coming down. I had mentioned that it has gone up because of certain either deals getting signed or certain acquisitions that were done, which had a larger subcontracting cost.

These costs will start coming down, because end of the day, if these costs continue to go up, there is no way we can keep delivering the EBIT margins. Right.

Thanks so much. Sales people cost has gone up a little faster than revenue.

Is this because of payouts related to some of the large deals we signed, or is this a sign that we are investing a bit more in sales to scale up some of these smaller verticals?

You're referring to quarter-on-quarter or year-on-year?

Year-on-year. Looks like it's a bit faster than revenue.

Year-on-year of 23%, 25%, if I look at growth between 23% is revenue growth year-on-year, sales people cost is 25-odd percent. I think it's the function of the investments that we've done, but you will look at the G&A cost has gone down.

What our focus has been that we make sure that the investments in the sales is there, because it's not because of the commissions, but it's because of the absolute investments in the sales

people. Right.

One last question on travel, because of the Sabre deal and the whole new platform that Sabre's creating, do you think there is a cross-sell opportunity with airline customers and their own transformation programs?

I think Ravi, thanks for the question. It's not in the realm of the hypothetical, when we look at the post-Sabre scenario for Coforge, we are on the verge of standing up a $20 million relationship with an airline which was not a material customer by any stretch for Coforge, but was one of the biggest customers of Sabre.

That cross-sell has already happened, and we believe there is significant runway for more such relationships to get constructed over time, because Sabre is not just a client for us, it's also a partner for us on an ongoing basis.

Thanks, Sudhir. With Encora, is that something that you think you can replicate in other segments too where you do more product engineering work and use that to cross-sell into different verticals?

You're right, Ravi. That's the intent.

If Cigniti is any reflection, the success of that acquisition, hopefully Encora at a minimum will be as good as Cigniti was, and the intent of course is to take it up a few notches from even the Cigniti success.

Thanks so much, and best of luck.

Thank you, Ravi.

Congrats on good set of numbers, team. It was a great performance.

My question is on Encora integration. As you said, the approvals will be done and by the end of March, should we see the integration taking off in terms of numbers during end of the first quarter, or how should we look at it?

Some qualitative in terms of numbers post-EBIT margins with the integration would be helpful.

Saurabh, would you like to take that?

Dhanashree, we have to, again, as I said, regulatory approvals are going on, and there are expenses related to regulatory approvals wherein the legal expenses are getting incurred. That will be coming in quarter four, and the integration expenses will not be very significant in the current quarter.

There will be expenses related to, again, legal expenses around funding that we're going to tie up with banks. I don't think other than that material and there will be W&I insurance expenses also.

I think as of now, I have only this much of detail. The whole integration-related expenses would largely hit either towards the end of quarter four or March start coming in then when we're closer to the approvals from all the regulatory authorities or in quarter one.

Again, right now too early to say. The only three line items that I can expect between now and next couple of months that I have visibility of is the line item I just mentioned.

The balance integration-related expenses should actually come in Q1, which would be largely on account of there could be short-close of certain contracts, the licenses, and what not. There could be other expenses also.

I'll provide more details once we have more clarity, but we'll have to just wait till we get closer to the regulatory approvals, and then I'll have more details around that.

If can just to get some color on the rates at whatever interaction we are having with the banks, whether lower single digit, or if that would be helpful?

Oh, it will be around mid single digit.

Thank you. That's it from me.

Sure.

Hi, thank you for the follow-on opportunity. This was once again a clarification on the other expenses line item.

You said there is some seasonality to it related to certain contracts. Just trying to understand, is this largely into pass-through license sales?

That's one. Given you're talking about very strong, robust growth going into the next year, how should we be thinking about, while you've given wage hikes only in the prior quarter, but how should we be thinking about some of the supply-side factors going into FY '27?

Manik, as I said that when we look at our P&L, which is year-on-year, the revenue growth in the P&L is close to 23-odd percent from a dollar perspective, and the other direct expenses have actually gone up only 4.5%-5%. If you're looking at the result sheet, then it also includes the subcon expenses, which actually shot up for us in quarter one of this year, and which have now started getting contained at $50-$51 million levels.

This is the first quarter it has actually started coming down. Yes, there is seasonality to it.

Q3 last year the same thing happened, this number then came down to close to $40 million in Q2, and again gone up. It is a number which will move up and down.

We expect this number to come down either, as I said, in Q4 or Q1. Despite that, again, the pipeline that we have in place, the deals that have already got signed or are on the verge of signing between now and next few weeks or so gives us confidence in terms of the revenue growth that we will see in coming future.

Also Manik, to your last question around supply-side pressure, as you can imagine, given where the industry is right now, on the cost side, supply-side pressure is very muted. A wage hike has just been announced, it is obviously not going to be done at least for the next four-odd quarters, four quarters at a minimum.

Therefore, the confidence around margin increase, further margin increase in FY '27 over '26 is also strong.

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

Thank you, Manik.

Thank you, Indva, and thank you, ladies, gentlemen. We know it's early morning for those of you joining in from India.

We really appreciate the time and the intent. We always find these calls extremely productive and instructive from our vantage.

We look forward to meeting all of you over the virtual call 3 months from now. Thank you very much.

Have a great day.