Hello everyone. I hope I'm audible.

Welcome to Hexaware Technologies' Q4 CY25 earnings call. In the call today we have with us Mr.

R Srikrishna, CEO; Mr. Vikash Jain, CFO.

In the course of this call we may make certain forward-looking statements which may involve a number of risks and uncertainties. All forward-looking statements made herein are based on the information available currently with the management, and the company does not undertake to update any of these statements made in the course of this call.

In this regard, there is a full disclosure which has been provided in the earnings presentation and in the press release. We consider that as read.

With this, I'll hand over the call to Keech. Over to you, Keech.

Thank you, Neeraj. If you could move slides, please.

Now, one announcement from Anthropic day before shook our stock markets, right, globally for our industry. I thought I'll start with that.

The topic that we were going to deep dive on strategy is on AI, actually I will start with that. One more slide, please.

At the highest level, our goal with customers is that every single day, every single client, the work we do is positively impacted by AI. I think we're going to get there sooner than we originally imagined.

Now to do that, we're doing four things. First, we're building AI into all of our platforms and reimagining our platforms.

Whether it's Tensai for IT operations, RapidX for software engineering, or Amaze. The second thing we're doing is to create and launch new services that develop new revenue streams which are enabled by AI.

The third, our workforce training. We're already in the second generation of retraining our workforce on AI.

Fourth and most importantly, processes need to be redone in AI. For example, SDLC, as we know it in the past, is completely being redone.

Now if AI is in the SDLC, it is not just that the same people, same talent, same process don't run sprints the same way. These are four things that we're doing to get to our goal of impacting positively every single customer, every single day.

What do we tell our clients? At the highest level, there is AI for IT and AI for business.

We tell our clients, when it comes to AI for IT, leave it to us. We know how to get productivity and velocity executed for clients well.

You set the guardrails, you set the rules, and leave the execution to us. Now I think this narrative has found resonance.

I think earlier, I will say last year, people were not quite willing to do that, but I would say far more so right now, especially when it comes to IT operations and data engineering. In SDLC, I think it gets a little more complicated.

We tell them on AI for business, the roles are a little different. Our role is to enable you to meet what you dream of.

Now we certainly have multiple ideas of what they could do, but our first job is to enable the technology to realize with velocity the use cases that they want to execute. Now on AI for IT, we've been first off the block multiple times and consistently so.

We were the first to launch a product, RapidX, that focuses on legacy reverse engineering, which is actually a crucial pre-step required to any coding that is needed. In July last year, we were actually the first company to launch a wide coding offering.

And 3 weeks ago, we launched an offering that goes to the heart of the Anthropic release which says, hey, software products or SaaS products can be replaced by agentic AI. We agree.

We actually think it's a massive opportunity for us, and the service we launched is a reflection of that. Now these ones I spoke about are all as it pertains to AI for SDLC, but in AI for outsourcing, our Tensai platform, we would have built in the next I would say less than two quarters, and quite a bit of it is already done, also 80 supervisory agents and underpinned by 400 what you call atomic agents that can operate in a mode which is assisting humans to all the way autonomous over time.

In AI for business, while we're telling customers we don't know your business as well as you do, for a number of industries we operate in, we detailed out Level 5 to Level 1 process Level 1 to Level 5 processes. For each business process, we have a point of view on how can AI impact that process.

If all of that is executed, what kind of business value will it deliver to customers? We've been, like I said, first off on a number of fronts.

Now legacy modernization, that we've been now talking about for over a year as a growth accelerator for us, is a very specific use case of new revenues caused by AI. We've been making good progress on that.

I think in this year, I can say with confidence that we will have at least two or three scale legacy modernizations completed, and multiple other of smaller ones that we continue to execute. Yet, I think that the biggest opportunities are still ahead of us.

Now we spoke about a three key growth driver for us is launching a technology vertical. We hired somebody last quarter that we spoke about.

We launched new vertical called we name it as TPP, Technology Products and Platform. From Q1 onwards, you will see us reporting on this particular as a separate vertical from where it is currently in HTS.

We did launch three new services on AI this quarter. One of the most exciting things we did is this.

I think we're the first company in the world to implement a completely AI-first global multilingual helpdesk in production. We now have 33,000 employees who if they call our helpdesk, it'll be answered by AI.

I think we're the first company in the world to put it in production. Private equity markets, private markets in a more broad sense, is a critical growth driver.

Companies are staying private for longer and for larger, and there's no more important time than now for value creation in these companies. Amit Vigg joined us as the Chief Private Markets Officer.

He's done this for a living for over 20 years in different firms, most recently in Tech Mahindra. We're pleased to have Amit.

He joined us about 2 weeks ago. Our people metrics continue to be positive.

We closed with close to 34,000 headcount. We continue to have amongst the lowest attrition in the industry in IT.

It was at 11%. Our utilization ticked down a bit in anticipation mainly of growth in '26.

We'll talk about that later. Last year we crossed one customer with $100 million.

This year we crossed two customers with $100 million, and we added one client in the north of $50 million category. Our revenues for Q4 were I would say a tad lower than what we expected.

I would say there are three things to call out. One is that one of the GSCs again had, I would say, a substantial cut, which amounts to about 70 bps annualized.

This had an impact in Q4. It also will have an impact in Q1.

We'll talk about '26 later. The second thing is a client that normally does not do furloughs actually did a significant furlough.

The third, and you'll see in our numbers, that our pass-through revenues are materially lower than normal and average. Given all that, it was a tad lower than what we expected.

On profitability, again, we were, in absolute terms in reported profitability, we were solid. There's a number of puts and takes on our EBITDA and profitability, which I think Vikash will walk you through later.

As always, we had outstanding cash conversion and an outstanding cash balance. If you go to the next slide, please.

The best part of the quarter for us is that we won any number of deals. We won pretty much everything that we expected to win, expected to close, and some more.

Last quarter I had said, hey, just given kind of the volume of closures in Q4 it's actually didn't. Our pipeline continued to go up, and actually it is crossed $4 billion for the first time.

Some of the deals, I think the most important one is a very large consolidation deal in a big tech. This is a process that's been going on for a very long time.

To be sure, this doesn't come with a predefined book of work, but it does give us the right to hunt, and the right to receive RFPs in a very, very large pool of spend. The second one here is a bank that we had won earlier last year, but there was a significant deal in this.

What that deal does is to put us in a position of nice growth for us in '26 and forward. Actually the single largest deal we did is who's now probably the globally largest pet insurance company.

They've been acquiring companies at a rapid pace, and we do multiple things for them, starting from integrating the acquired entities into a common IT framework. Now we are running all of it, everything in tech, infrastructure, applications, and in future, also their modernization for a new platform.

There's another very large insurance company that is modernizing their core to Guidewire, and we have a role in that. We're not the leaders, we're not the only people, but we have a significant role to play in that modernization.

I was talking to you about AI for business, where for multiple industries we've mapped out the process and showing what are the art of possible to clients of where can agentic AI play a significant role in transforming operations. This deal here, global CRO, is an example of that, where we're building agents for multiple steps in a clinical research process that will bring substantial efficiency to the customer.

We had a deal with the world's largest casual dining. It's a holding company.

They own multiple large brands, US and some elsewhere in the world as well. Again, we will do much of tech for them.

A very large tech services company in Asia, this is a scale GCC deal that we won late last year. Finally, one of the large PBMs, which is also happened to be owned by a PE firm, we are doing product development and platform support and engineering support for this organization.

There are more deals. We've stuck to the eight here.

We will talk about '26 later after Vikash goes a little bit into details, but at the highest level, our deal wins were the best part of Q4. Vikash?

Thanks, Keech. If you can go to the next page, please.

A little bit more color in terms of our revenue. Q4 revenue was $389 million, a sequential decline of 1.5%.

In absolute terms, this represents a $6 million of decline. The decline was primarily driven by calendars and furloughs, which are seasonal in nature, close to $9 million; a lower license revenues of $7 million; and marginal headwinds from forex.

FX was a headwind in the current quarter on revenues and also in terms of margins. The $16 million of headwind that we had in the current quarter was partially offset by a robust volume growth and a little bit of contribution from CyberSolve, which we closed in the middle of the quarter.

Now calendars and furloughs are seasonal items and will come back in future quarters. However, the way that calendar days line up in '26, it comes back in a more positive way in Q2 and Q3.

Q1 will still be a net headwind versus Q4. License revenue for the quarter was at $11 million versus $18 million in Q3, a drop of $7 million on sequential basis.

This was also lower than our historical average, which is anywhere around $12.5 million to $13 million a quarter. The volume growth is also reflected in our headcount additions that we have done during the quarter.

Keech spoke about the fact that it also had an impact particularly with respect to some bit on the utilization given the fact that we have been building up capacity to service the demand that we have been seeing. On margins, reported EBITDA for the quarter was 17%.

This includes impact of few one-timers during the quarter. Normalized for the one-timers, the margin for the quarter was 15.4%.

Now it's a drop of 210 bps sequentially. The major contributors were forex, which was a headwind during the quarter of 20 bps.

Operationally, it was a tailwind, but then from a hedge perspective, for the hedges that we had started taking, it was close to a 40 bps of headwind. The net of operational tailwind plus the hedge headwind, we had a net impact of close to 20 bps of headwind.

Calendar was a 60 bps of headwind. Utilization was close to another 60 bps, and we did give merit increases, which was close to 90 bps.

If you think about it, a lot of the drop that we had in the current quarter were seasonal in nature and will come back. Forex, we expect will recover back soon.

Calendar is going to come back starting Q2, and utilization, I'll talk through in terms of details how we are thinking about it in terms of recovering some of it. One-timers during the quarter, I spoke about the adjusted view.

One-timers during the quarter in EBITDA were on three fronts. The first one was we acquired Softcrylic in 2024, and there was an earnout related to the deal, which was payable based on the asset delivering agreed financial milestones.

Softcrylic missed those targets, the earnouts are reversed out. This was close to $25 million.

Associated with that and for the other assets, we did an impairment testing. It's an annual exercise which we do every year.

Based on that, there was an impairment testing done on client relationships and a charge of close to $15 million. When you think about the reversals, you need to think about the reversals and the impairment charges at the highest levels in conjunction because they are closely interlinked.

Those were the two items. The third one in EBITDA in terms of one-timers is an additional expected credit loss provision of close to $4 million.

Now last couple of years, we have seen an increase in credit risk on account collections. On a prudent basis, we have taken an additional provision during the current quarter.

Now this is one-timer in nature. This is an additional generic credit risk provision and not related to any client-specific issue.

Now if the collection pattern improves in future, this will come back into the P&L in future years. I just want to call out that what you see as an expected credit loss provision is generic in nature and not associated with any specific client.

The net of the three is close to 160 bps of one-timer credit at an EBITDA level. In addition, there are two more items which are one-timer in nature.

If you recall, in Q2, we had announced a restructuring in one of our European countries. Now that's progressing on track.

Now with the labor footprint reducing in the European country, there's a need to optimize on the rental estate footprint we have. Now some of these leases are committed and are long-term in nature.

Now as these offices are underutilized, we have taken an accelerated amortization towards the unused office space. That impact is close to $3.5 million.

Now this impact has been taken at an EBIT level. That makes the total one-timer credit of close to 64 bps at EBIT level.

Last one is the impact of labor code. All of you are aware of the context on labor code change, I'm not going to get into that detail.

Impact for the same for us is close to $12.5 million in Q4. On a continuing basis, we expect the impact to be close to 20 bps on margins for the full year next year.

Let's go to the next page. Revenue for the full year was up 7.6%, 7.1% in constant currency.

Pro forma growth was close to 6.6%. Now reported margin for the year is 17.1% versus 15.9% last year, an improvement of 120 bps.

Even if we normalize it for the Q4 one-timers, the margin is 16.8%, so that's a significant improvement on a full-year basis compared to where we were from a '25 perspective. Next page.

A little bit of color on the unit-level performance. For the quarter, all vertical except HTS delivered year-on-year growth.

On a full-year basis, all verticals delivered year-on-year growth. Our Financial Services has been the strongest performing vertical and has delivered both sequential and year-on-year growth in all the four quarters of the year.

If you recall, this is after absorbing a material headwind from budget cuts in one of the GSCs in Q1 and some bit of it from a Q4 perspective. The growth in this vertical was delivered by a combination of scaling existing clients and new wins.

H&I, for the full year, growth was largely in line with the company average. The decline during the quarter, as we had called out in the last earnings call, was driven by an increased license revenue in Q3.

This is a vertical where we are seeing the maximum amount of deal traction from a new logos perspective. M&C, Manufacturing and Consumer, we started the year with significant headwind driven by macro and tariff uncertainty.

We called out in our last earnings that the headwinds in the vertical has started to bottom out and we see growth coming back at a gradual pace. There are green shoots both in terms of existing account and new logos.

We delivered a healthy year-on-year growth for the quarter and back to green from a full-year perspective. High-tech and Professional Services, on a go-forward basis, which is starting next quarter, we'll report it as two different verticals: one as a Professional Services, the other as TPP, which is going to be Technology Products and Platforms.

Now on a combined basis, performance for the quarter was impacted by decline in two large accounts of the unit. Now these are in line with what was expected, and Keech had in fact called it out in the last earnings call.

We expect both the units to get back to the growth from a '26 perspective, and more color on that Keech will anyway provide subsequently in the presentation. Banking, a third straight quarter of strong sequential and year-on-year growth, and again here growth is being driven by a combination of scaling existing accounts and opening new logos.

Travel and Transportation delivered a healthy year-on-year growth both in Q4 and full-year terms. On geos, for the quarter, all of the geos grew year-on-year.

Sequentially, what you see as a decline in North America was actually driven by lower licenses and calendar plus furlough. The underlying volume growth continues to be very strong from a North America perspective.

On a full-year basis, North America growth was contributed by FS and Banking, which were one of the best performing even from a unit perspective. APAC is trailing growth, however, we expect to see a turnaround in '26.

More commentary on the '26 outlook will be covered by Keech later during the call. If you go to the next page.

We continue to add meaningful clients to our client base. Keech spoke about the fact that now we have two $100 million clients, and we have also added one to our $50 million client base.

Next page, please. Now this chart lays out the key operational parameters.

On the offshore mix, now offshore mix has improved by close to 440 bps on an year-on-year basis. Now there's a bit of a decline in the current quarter is a mix of a few aspects related to how the deals have shaped up.

At the highest level, if you zoom out and look into it, on an year-on-year basis, there's an improvement of close to 440 bps. 100 bps of this was contributed by SMC.

SMC being in the GCC space is completely offshore centric, so that is helping and aiding. Outside of SMC, too, we continue to make significant progress in terms of improving our offshore mix.

On the headcount side, during the quarter, we added close to 254 resources, 10th straight quarter of headcount addition. Now during the quarter, IT was a net headcount add of 585, and BPS was a decline of 331.

On a full-year basis, we added close to 1,535 resources, with IT adding close to 2,000 and a net reduction in BPS of close to 500 resources. Utilization, Keech spoke about the fact that we did have a bit of a softness from a utilization perspective.

There was a 300 bps decline in utilization compared to the prior quarter. The 300 bps is contributed 100 bps each by three factors, two of which are seasonal in nature and is expected to sharply recover in the next quarter or the quarter after.

Close to 100 bps of the decline was furlough driven. The next 100 bps was on account of employees taking higher number of leaves during the quarter, being the year-end and how the holidays stacked up, the employees took a higher number of holidays in Q4 compared to Q3.

The last 100 bps drop was driven by the bench we are building during the quarter to support the new deal ramp-ups. We expect the utilization to materially improve next quarter.

Let's move to the next page. We continue to generate very healthy cash.

Our closing cash balance is close to $235 million plus. Now balance sheet is completely debt-free.

DSO for the quarter came in at 67 days. It's a combination of both billed plus unbilled and is one of the lowest in the industry.

In fact, the 67 days is lower than our guided range of 70 70 to 72 days, and that helped a lot in our cash conversion. Our OCF to EBITDA on an LTM basis was 76%, which was higher than our guided range of 70%.

ETR for the quarter came in at 10.4%. This had a one-time impact associated with earnout reversals.

Adjusted for that, ETR for the quarter was at 25%. We expect the ETR for CY26 to be between 25% to 26%.

EPS for the quarter, what you look at 4.79 obviously has a one-time impact associated with labor code. If we adjust for just the labor code impact, our EPS for the current quarter is close to 6.15.

With that, I'll hand it over back to Keech.

Thank you, Vikash. If you go to the next slide, please.

I'm going to end by talking about the future,

okay?

First, I'm going to say demand environment is improving, and decision-making is better. I will say this specific to the customer base and the deals that we are fighting, okay?

Need not It doesn't necessarily mean macro. I think macro is still spotty, right?

You saw the jobs report from yesterday in US was pretty bad. Certainly the customers and the deals we're seeing, it is better in the long term.

Like I said, we are progressing very well on deals. In Q4, we won pretty much everything we expected to win and more.

The headline was the consolidation deal in big tech. The other there is one the one deal that is not decided yet, which was, could have been late Q4, early Q1, is the GSC consolidation deal.

That is still WIP. Now a little more on that, later, okay?

I think AI, I'll say it has two factors, okay? One, it does have a dampener for our for, whether it's software engineering, testing, IT operations, it is a dampener on our revenue.

We have whatever best estimate we have, we've included that, okay? There's, I'll say, for now two, maybe three quarters, every single deal we do has kind of productivity and impact from AI baked in, and we expect more of that will continue through the year.

That's why I said there will be a dampener on revenue growth due to IT, which we've accounted for. On the other hand, I think it is creating exciting new opportunities and avenues for growth.

The most recent one, we've been speaking about it for a while, for a bit, but, suddenly, the whole world is speaking about it, an opportunity to replace SaaS. Now if you think about it, that's a massive opportunity.

I'm not sure about, of course, some of the reaction is initial, but if you think about it, SaaS is not going to replace itself. You need somebody needs to work on it.

I think there are two parts to it. One part is if you know what to build, you still need somebody to work on it to build it.

There's the bigger part of knowing what is in something you want to replace or react. That is a pretty tough problem to solve.

Frankly, that's a secret sauce that we've built, and that's one of the services that we launched this quarter. I think eventually, all these services will create net new after accounting for the dampeners, positive growth for us.

Now what does kind of all this mean for '26, right? Now we've given where we kind of how '25 panned out, clearly we've have some lessons learned on how to communicate.

What we're saying is that we expect our revenue growth to be better than what we reported in '25, which is 7.6%. I I don't want to mention we don't think of this as like a new baseline.

Our core thesis of growth in base growth in teens, low teens, and acceleration levers to get us to mid to high teens remains completely intact. We've been through many bad growth cycles in the past, and we've recovered pretty quickly, okay?

In the last 11 years, I think we've been through three times when we've grown less than 10%. One was COVID.

The other, interestingly, was in 2016. For those of you that may have followed us then, at that time, one of our largest clients, who still is, had a significant drop in that client.

We recovered very quickly from there in the following years. We fully expect that that theme will continue.

Now CY26 can be better depending on the following, okay? Better depending on deal ramp-ups.

I told you, for example, the consolidation deal in big tech, and actually even the consolidation deal we announced the prior quarter on a big bank, these don't come with big books of work attached. Ramp-ups and how well we execute in those and how much market share we can grab.

The fact that the largest consolidation deal is still WIP. Here, unlike in other cases, we're an incumbent, we've actually accounted for some downside in that when we called the 7.6 number.

Depending on how all of those pan out, we can do better. Now I'll come to vertical outlook in a second.

Q1 is always seasonally weak for us, and you already heard Vikash say this year actually Q4-Q1 also there will be a headwind on calendar. That doesn't happen every year, but it is going to happen this year.

We're also going through some additional one-off negatives, okay? I told you about the GSC that cut another significant chunk.

This is the one where the the consolidation deal is still WIP. That impact for us full year is 70 bps.

There was some impact in Q4. There is a full quarter impact in Q1.

Every year, I think customers have there is a lag between when they get budgets at a company level to when it gets allocated to projects. That's one of the reasons why Q1 is seasonally weak, but I'll say this year it's a little more than what we see normally.

It was in the beginning of the year, but, even a few days lost revenue means a lot. We've baked that all into kind of the full-year growth outlook, and we're saying Q1 will be weaker will always be is seasonally weak and it will be weak for us this year.

We will accelerate kind of growth every quarter after Q1, and you will see that in in our numbers. From a vertical perspective, Banking and H&I will lead growth for the company.

They will be higher, probably quite a bit higher than company average. M&C will be back to growth.

Professional Services, I called out the two clients last time that were that led to kind of one which had a significant ramp-down, the other which had a specific beginning-of-the-year budget issue, will kind of get back to growth, but lower than company average. Now TPP, which is the new vertical, will grow, but from a small base.

Finally, GTT and FS will grow at company average. Those are expectations to begin the year.

M&C and H&I lead. FS and GTT will be at or thereabouts of company average.

M&C and Professional Services will trail. TPP will be faster, but from a small base.

Finally, on margins, we will change our reporting to EBIT from Q1. This is, of course, based on feedback from you, what we see in the market.

There were various reasons from an IPO, we had to do EBITDA, but which we're going to change it. Our EBIT outlook for the year is at a 13% to 14%, which is lower than the current year.

What will happen essentially is that in the first half of the year, you will see actually quite a reduction. This is on account in Q1, apart from other things, it's also an account of a 100 bps headwind in calendar.

There's lots of deal ramp-ups in the first half of the year, including two or three that include rebadging components, quite a bit of rebadging components that will depress our margins. It will recover pretty sharply as we kind of right-shore those deals that we execute in the first part of the year in H2.

Actually you'll see funny H2 exiting at better than the current year, but in aggregate, because we start with a low lower start point, in aggregate, it will be at 13% to 14%, but with a stronger exit. That's on margin.

With that, I will pause and take questions. Thank you all.

Hello. Thank you for the opportunity.

Keech, I had one question around the expectation for next year. I understand that probably 1Q has a lot of headwinds, both around the calendar days and some client-specific issues, right?

To hit again the mid-teen guidance, right, how do you think probably 2Q and 3Q will pan out, right? The deal wins and the deal pipeline is very strong, as you've said.

It seems that it'll be a very high ask rate for those two quarters as well. If you can double down on that.

Hey, Pratik. I said our growth will be better than 7.6%.

I said our long-term thesis of low teens to mid-teens is intact. You're right, no matter what number you pick, the growth ask in Q2 and Q3 will be high.

Like I said, we do expect to kind of accelerate growth every quarter from Q1. Yes, that is expectation that there will be a growth.

Now, the calendar in itself this year actually is going to give a little bit higher than usual growth from Q1 to Q2. Much like it is a tailwind for Q4 to Q1, it's a little more than normal headwind for Q1 to Q2 as well.

Okay. Beside the headwind from the GSC client, do you think the headwind which company faced from the Professional Services client is curtailed now and probably that's to start growing as a run rate basis?

There were two clients in PS. One, where we kind of won the consolidation deal, we've been gaining market share, there was a kind of plateauing at the beginning of their fiscal year, which is July, and that will come back to growth.

The other one, where we had a very sharp decline, I'll say 75% decline from where we were a year ago, that stabilized. I think what you will see is that we will get good growth again from Q2 in this vertical.

On the other one, the GSC, our best read is this right now, that they still haven't decided on the consolidation deal. The cuts and the lack of allocation of budgets early in the year is essentially kind of, we think, pending the decision.

We expect that once they make a decision, those factors will change. Nevertheless, again in our base growth that we've put here, we haven't assumed that.

In fact, because we're an incumbent, we've assumed some downside case because they haven't decided we could win or lose. We've assumed the downside case, too.

That's the commentary on the GSC.

Okay. Thank you, Keech.

Those were my questions.

Thank you. Just thank you for your comments on AI, Keech.

Just zooming out a bit, what's the best way to assess your relative competitiveness here? I'm asking this because in the lack of anything else, investors normally look at growth.

On that basis, if one looks at the growth trajectory in the last five quarters, we've gone from 16% organic growth CC basis to perhaps flat this quarter or maybe 1%. That's a bit of a contrast versus what we've seen in your peers with broadly similar mixes.

Maybe you can highlight why the investor should not assume AI is more negatively impacting you versus others?

Okay. If you recall in I think last quarter or even last quarter prior to that, I said that for '25, our performance issues are not to do with AI, okay?

I'll say that my view in general for the industry. I do think there'll be an impact on growth for the industry and for us, and we've accounted for it in '25.

Now, I will reiterate why I think actually not only are we at par, I think we are way better. We've been first off on a number of fronts, okay?

I'll recount some of them again. What you'll see is that these are all long-term, large opportunities.

Don't necessarily translate to bookings or revenues in a material term in the short term. We were the first to launch a legacy modernization platform.

There are any number of clients that have given us a trial run. These are very large customers that don't do it only with us.

They've benchmarked us with any number of others in the industries, and they think we're the best. I could potentially think of having one of these clients speak to you guys, okay, if it's of interest.

We can certainly show you what we do, and I think seeing will be believing. July last year, we launched a wide coding offering.

Essentially, we said we can build software 10x faster, and nobody else went to market with that at that point of time. 3 weeks ago, we launched an offering called Zero-License.

Essentially, think of it as a SaaS killer. What we're telling clients is we can exit all your licensed software over time.

We've identified a number of what we think will be easier to execute use cases and types of software to do initially before people kind of start getting closer to the core. Lastly, these are all the more, I'll say, esoteric stuff.

The base stuff is the AI embedded in our platforms for outsourcing. We certainly went through a phase where that was weak.

I think in Q3 and Q4, significant wins. To be sure, that performance is not demonstrated in our numbers yet, but you will see it in future.

Thank you. Just if you could clarify, you mentioned you've baked in the AI as a dampener in the existing business as you renew things for this year also.

How should we think about the level of impact on an existing renewal? Is it 30%, 40%?

Is it a lot more? Given it's evolving at a very rapid pace, as you mentioned as well, how is this changing?

Yeah. I'll say if the scope were to remain the same, it could be in that 30% to 40%, or I'll say 20% to 40% depending on the type of work.

In some cases, actually, I think it comes with a higher volume, but for the same scope, that's the order of magnitude of reduction.

Thank you. Just the last question.

You mentioned 1Q is going to be softer than seasonal, fourth quarter is seasonally soft, the bulk of your ability to beat last year's 7.5% number overall, perhaps organic of 6%, falls to the two quarters. Just wanted to know how much visibility do you have to hit those sort of mid-single-digit kind of growth rate you need sequentially for those two quarters?

Like I said, we kind of have some lessons learned from communicating and setting expectations. Based on the deal wins, there's a lot of confidence in these numbers, okay?

What can happen more is if the deal wins that don't have a number, like some of the consolidation deals, if they grow and we grab a lot of market share there, talent group. The base is based on deals that are won.

Appreciate it. Thank you, and best of luck.

Thank you.

Hi. Thanks for taking my question.

Keech, a couple of questions from my side, and then I have one question for Vikash. On the healthcare vertical, just wanted to pick your brains on how are you looking at the outlook given that the US government Medicare spending next year is expected to be flattish as against it has been growing around 5% historically.

This quarter also we saw basically a sharp correction in the healthcare vertical. How do we tie these two things together and the overall outlook for the healthcare vertical for us specifically and maybe for the industry in CY26?

My second question was on the margin outlook for next year. From the face of it, it looks like that we're kind of downgrading the margin band by almost 100 basis points.

If you could basically call out the puts and takes for this, that what are the major reasons for this. Also, do we expect this band to be back to the 14% to 15% in CY27, or do you think this is where we will kind of settle it and find the new equilibrium?

Okay. On the first one, on healthcare, for good or bad, we don't have much exposure to payers or providers, okay?

Now, that's a huge net new opportunity for us. We do have some, but our historic presence is in the insurance side and life sciences, less so on core healthcare.

That's a net new opportunity for growth. Notwithstanding the headwinds in the industry, our start point is at a much lower level.

The person we hired, Shantanu, was, by something, rated as top 25 healthcare IT execs. We feel good about where we're going in that business, and we will do very well.

On the second question, I'll reiterate a couple of things I said. The margins are going to be lower because of deal ramp-ups in the first part of the year, including some [unclear] Sorry, somebody needs to mute.

Sorry, moderator, can you figure out? Thank you.

The margins will be lower in the first half of the year especially, primarily because of deal ramp-ups. Three of them actually have rebadging components, which will depress our margins.

As we normalize the shoring for those deals, it'll actually improve in second half of the year. Actually, if things go right, we will not only get back to normal in '27, actually we'll get back to normal or a little better even in the second half of the year.

The margins that I'm talking about in this are not the new base. Actually there'll be quite a bit of difference you'll see between H1 and H2.

H2 will be higher than or at least as much as the normal base.

Hi. Thanks for the opportunity.

A couple of questions. Firstly, a bookkeeping one.

If I look at a note 13 in our BSE released results, then the impairment there is written at around 107 crores. However, in our PPT, the impairment is near about 3.7% of revenues, which comes a little higher than that.

Wanted to understand where is this 60 to 70 basis point kind of difference coming from? No,

there's no difference in terms of the numbers. It's the same number what I called out in terms of the impairment.

Basically what I'm referring to is in the note 13, the impairment charge written is around 107 crores, whereas we have indicated 3.7% of revenues in our PPT as one-off.

In the notes, if you see, there are two notes with respect to the impairment. You need to add both the amounts to the impairment to get to the same number what we have from a presentation perspective or what I covered.

It's been split into two different line items in the notes. I'll give you the specific note reference numbers.

If you have any other questions, you can continue. I'll come back on the specific note references.

Sure, sure. Second question is basically on the growth for next year.

There will be some incremental impact of CyberSolve as well, which will add in around three-odd quarters or 3.5-odd quarters of impact. Are we saying that growth next year would be better than that, excluding the acquisition impact as well?

We're saying our growth will be better than the 7.6%, which is reported this year. This year also there was an impact due to acquisitions.

Next year also there will be some carry-forward impact. What we're saying is our reported number will be better than 7.6%.

Understood. One last thing, just want to tie up utilization dip in this quarter along with the headcount increase that has come in, and with that we are indicating that 1H particularly would be slight negative during the quarter.

Why are we inching up headcount over the last couple of quarters? Just wanted to understand.

Preparing for deal ramp-ups.

Sure. Just one last thing is on the license so we have indicated that there is a $6 million to $7 million license drop during the quarter.

Is there any resale component as well into this license or this is something which are our own products?

Sorry, I didn't hear the last phrase. Is there a resale component or

Or these are our own IPs that we are selling?

No, no. These are not our own IP.

These are third-party licenses. It's, gets baked in into the work we do, but it has renewal cycles.

Sometimes it gets baked into the work we do. Sometimes independent.

For example, ServiceNow, we do quite a bit of work. Some of the clients do the licenses also with us.

Though these are not our IPs.

Assuming

Sorry, there was a question I

just wanted to clarify on one thing. The impairment numbers what you were trying to look for from a balance sheet perspective, if you look at note 10 on the balance sheet, it calls out the consol impairment impact of INR 1,302 million, you can look into that.

Thanks for the opportunity.

Over to you, operator.

Can you hear me? Hello?

We can hear you, Dipesh.

Thank you. Thanks for the opportunity.

A couple of questions. First, just want to understand about the acquisition, how those acquisitions are playing out.

If you can give some sense about SMC and CyberSolve, how those acquisition are playing out because now I think number of quarters have played out in terms of synergy benefit what we envisaged as well as capability expansion help us to extend our overall addressable market perspective. If you can give some sense.

We made some impairment provision in some of the past acquisitions, if you can help us understand it pertains to what. Second question is about the overall deal intake.

We say we have a good healthy intake in quarter four, but can you provide some sense about how the ACV played out in CY25 compared to let's say CY24 kind of? Any change we made to guidance practice, the way we guide for future, if any changes we made to give some comfort about the way we guide.

Thank you.

Okay. There are a number of questions in that.

So,

First was on M&A performance.

M&A performance, okay. I think our Softcrylic, which was not in '25, which was in '24, is not doing well.

That's why you've seen the impairments. To be sure, the payout kind of goals were aggressive and they are for the other acquisitions we've made as well.

Reversing payouts doesn't necessarily mean bad performance, but in this case, I will say the performance was not good. I think that's part of the reason why we didn't do well in '25.

I'll say kind of, two of Softcrylic clients went bankrupt during the year, two substantial ones during the year as in '25. Majority, vast majority of the work is also in the consumer sector, manufacturing and consumer sector, and that's not a sector that's done well, did well due to macros.

One of the reasons are, in aggregate, it didn't do well. CyberSolve is still too early.

It is not even a quarter, not even a full quarter yet, it's still too early. We expect it'll do well.

It's very adjacent to what we do in cybersecurity. It's a service that we sell otherwise, and we have been selling.

We didn't have the capability to execute, we actually subbed a bunch of that work. Very adjacent, we expect it to do well.

SMC, the world, is going to GCC. Whoever is not there is going to set up one.

Whoever is there is going to grow. Of course, it's not only India, right?

I think the fact that you need a capability to do what SMC does is necessity, I think. It gives us visibility, lots of customers who are thinking about GCCs who are not thinking about us before clearly do now because of this acquisition.

Every quarter since we acquired, we've announced a deal, including in Q4, we said a major IT services firm in Asia, scale GCC deal we won. I think

the question was on guidance practice, Keech.

Yeah. I think our most important kind of is to be more conservative, right?

Is to make sure that we can meet what we say, we'll do it too.

ACV trend, if you can give some sense how it played out CY25 versus CY24?

Where we ended in '25 is better than where we ended in '24 quite a bit so, in terms of bookings that we carry forward into the year, and in addition our pipeline is also materially better. Now, what we've kind of spoken about some structural things that went into this.

We built a new hunting team through '24, through the second half '24. Essentially the current team as it stands came together in end of '24.

I think it took some time for them to learn, settle in, become productive, and it is now working well. The results for us were in booking in second half of '24.

That's why I said where we ended the year was much better than where we ended '24. You'll see that translated into revenues through the course of '26.

Understood. Thank you.