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00:00The focus on Birla Soft this morning and Kamini Shah, the CFO, with us. Now on the face of it,
00:07their EBIT and margins are better than expected. Revenues a little under expectations. Net
00:16profits are okay, but it is the TCVs, the total contract value, that perhaps
00:20has bothered the street a tad. I must add that headcount has improved, which is unlike a lot
00:27of other IT players in this pack. Kamini Shah with us. Kamini Shah, very good morning. Thank
00:31you for joining us. Let's start with your take on your numbers. I have sort of spelt out all
00:37the qualifiers that have come in since your numbers and what brokerages are saying, etc.
00:42Let's begin specifically on TCVs. That drop seems to be bothering analysts who track your
00:49company very closely. How do you look at that? So first of all, thank you for having me here.
00:55It's a pleasure to talk to all of you, right? I know you want to talk specifically about TCV,
01:00but I'll take a minute to just say that FI, the current year that has gone by, has actually been
01:06the foundation year for us. We put our strategy in place and a lot of it has been working well.
01:11So I think from a year-to-year standpoint, we've grown from a revenue standpoint, if you
01:16do at Ex-InvoCare, almost at a double-digit level at about 9.5 percent and on rupee terms at about
01:2312.7 percent. Now if you look at the TCV, actually we've closed a year at about $875 million,
01:30which is higher than what we had closed the previous year. Our pipeline is looking very
01:35strong at this point of time and our customers are taking a little bit of time in terms of closing
01:42some deals. So to that extent, deal cycles are a little longer. Yes, there is a macroeconomic
01:48situation in place, but we are not too worried given that our pipeline is strong at this point
01:53of time. So there are quarters where the TCV would be very good. There are some quarters where it
01:58would be a little muted, right? But we are very focused to make sure that we continue to execute
02:03on the ground. What are the kind of sort of forward-looking outlook you see for your TCVs?
02:11I know there's no specific guideline this time around, but... We normally don't give guidelines,
02:17but you know I can only reiterate what I said, right? I think if you really look at our client
02:23budgets, and I'll give you a little bit of perspective around that, with the customers
02:27that we work with, the budgets have not come down. So you know the budgets have been more or less in
02:32line with what was there last year. It's just that clients have taken a little bit of time to
02:38decide on where they want to spend as far as the current year is concerned, which is the reason
02:43their Q1, which is our Q4, has been a little slow to start with, right? But I will reiterate what I
02:49said, right? Our pipeline is looking very strong. There are very few deals that we are losing at
02:55this point of time, which are significant to call out, but I think our teams are executing on the
03:00ground to make sure that we work with them. I think the focus will be a lot on cost takeout deals
03:05at this point of time, driving more efficiencies and productivity. The discretionary spends will
03:10come back, but that might take a quarter or two for the green shoots.
03:16Are you seeing green shoots of, you know, in terms of your conversations with clients of those
03:21discretionary spends coming back? We are, we are. I'm not saying we're not, which is why I said it
03:28might be a quarter or two out, right? But we are definitely seeing green shoots around the whole
03:32piece in terms of it. So if you really look back, you see that we've done well as far as the year
03:37is concerned. So I think we will continue to execute. We are here to build the business for
03:42the long term. And, you know, we'll stay focused to make sure that we put all the right building
03:47blocks in place. From what I infer from what you said that, and I'm going to ask this the way it
03:53is. So are you saying this quarter, there's a decline in TCV because of the seasonal element?
03:58Because you started by saying that some quarters are weak, some are not very weak and,
04:02or this is, and you also indicate that budgets haven't reduced, but they haven't gone up either
04:06year on year. So if I look at both those factors, I also add to that, that while commitments may
04:13be coming in execution timelines, it's still a challenge for the IT sector and for you as well.
04:17So keeping those three factors in mind and non-committal clients, next couple of quarters
04:23may still be tough. Would that be a fair assumption for us to make? See, I think the macroeconomics
04:29have not changed too much. I think we need to acknowledge that for the IT sector, right?
04:34But there are two good things that have happened and I want to call that out, right? One is the
04:38fact that I think a lot of companies are now open to having a lot of tier two players into the mist,
04:44which opens up a lot of opportunities for us from a standpoint. Budgets have not declined,
04:49which I see as a positive at this point of time. I think this with the other factors above, I think
04:55places us in a good position to go all out. But yes, the decision cycles will take its own time
05:01to that extent. It's very difficult for me to say how the next one or two quarters will pan out
05:06because we don't give guidance to that extent. I will keep saying that I don't think there is much
05:12change from a macroeconomic standpoint and the way we've executed in the current year, we will
05:16continue to focus on that. It is tough times and it's unprecedented because it just seems so much
05:21more long drawn in terms of what the IT sector unfortunately is going through and sorry, we're
05:27not trying to pin you down. We just want to get a sense of what really is going on because it's
05:32also surprising for us sitting on the other side, not running your business. Give me a sense of
05:37hiring. Last quarter, your hiring numbers were pretty good. You managed to take into account
05:43those hikes and keeping all that in mind, the company was doing well. Give me a sense of are
05:48you hiring more? Is Gen AI replacing, improving efficiency internally as well? What is recruitment
05:56looking like right now? I think we continue to hire to meet business needs and if you really
06:02look at it, we've not cut headcount. You will not hear that in any of our quarters that we've
06:08executed in the past, nor do we see that in the upcoming quarters at this point of time. The
06:14second thing that we want to call out is as far as Gen AI is concerned, we are using that actually
06:19to drive a lot of our internal productivity to essentially make things easier for our people
06:27internally within the organization. We are running a tech transformation program called Optimus,
06:32where we will drive and simplify a lot of our processes. Now, what it means is that if you
06:37release time for people to do repetitive work, which does not add too much of value beyond a
06:42point of time, we use them to do other things for them, which also keeps the employees satisfied.
06:47This in turn becomes a good platform for us to take to the marketplace.
06:50So, Gen AI is definitely something that will help us, but I don't think we should be worried that
06:55it will be cutting down jobs at this point of time. I think it will only help us drive more
07:00efficiencies and reutilize that workforce into something else. Any big deals that are in the
07:06pipeline that you want to tell us about? Any conversations that are underway? Also,
07:10what we've identified, we've seen with some of those companies as well, a lot of your clients
07:14are spending on cost optimization. The savings are being used for transformational work.
07:20And I think that could be a sweet spot to be in, right? Because if 25 is that, then money saved
07:26is also going to be spent coming back into your wallet. Are you picking that up with some of your
07:30bigger clients? And no clients lost this quarter, right? No, no, no. So, I will answer this in two
07:37parts, right? One is the fact that, yes, clients are focused on cost takeout deals and productivity
07:44and I mentioned earlier that gives us a great opportunity to participate because now they're
07:49opening it up to a lot of players like us. So, there's a great opportunity over there.
07:54Two is, if you really look at our strategy that we had laid out, our focus is on supersizing our
08:00large accounts. So, you would see that our top five, 10, 20 accounts have actually grown
08:05significantly higher than the company average. And we continue with our rationalization of
08:09tail accounts, right? And that is a very specific focus strategy. We were about 288 clients,
08:15end of Q4 in FY23. We have come down to close to about 259, 260. So, you know,
08:21that rationalization will continue, but that's a very focused rationalization because it helps us
08:27overall, you know, even from a margin standpoint or if the clients are non-strategic.
08:32Neeta, good luck, Amini, and we wish you well. Hopefully, FY25 is better
08:37and more directional than FY24 for you and for your industry. We'll connect soon again. That's
08:42Billa Soft, the management, highlighting for us what's worked and what's not worked
08:46for them this quarter. While TCVs have declined,
08:48it does seem that macro environment is still a challenge to navigate.