00:00Are we looking at potentially better quarters ahead?
00:02What are your own assumptions?
00:06Well, see, if you look at what we have gone through in the last few couple of quarters,
00:10like when we discussed Q2, we did mention about improving demand scenario.
00:15And we see that for us Q2 is the quarter ending September.
00:21And the current quarter ending December, we continue to see those trends of improving demands.
00:27And so that gives us optimism that going forward into the CY2026, the overall demand situation should be good.
00:36And we also see our clients increasing their spend in A.
00:40Previously, there was a lot of hesitation or they're waiting and watching on seeing what is the best way to invest.
00:47But now we find increasingly clients are looking at the ROI, where the ROI is better or the payback period is shorter.
00:54Those projects are also getting approved.
00:56And so in some say, at least in some pockets, the decision making cycles are improving.
01:01So all these put together, we are more optimistic for the quarters to come.
01:06So more optimistic.
01:08What does that necessarily mean for your margins?
01:11We know they are pricing pressures and we know that companies are increasing their investment in A.I., in cloud.
01:17That impinges on margin.
01:21Not necessarily.
01:24We've been, TCS has been working at a margin, one of the highest in the industry.
01:30And we always set our goal to be playing somewhere between 26 and 28 percent A.I.
01:36And given what we see today and given what we have gone through in the last couple of quarters, we also went through a restructuring exercise we did.
01:51All of that put together, like, we should be, like, currently we are at a bit of 25.2 post the one-offs.
02:00So excluding the one-offs, we achieved 25.2 in line with what we did previous quarters.
02:05And we are quite comfortable in maintaining this level.
02:08In fact, as I said, we would target to be in the 26 to 28 percent range in EBIT.
02:15The focus is when A.I. will, I guess, add to revenue materially.
02:22Right now, the focus is on, you know, programs to move from pilot to perhaps revenue contribution.
02:30When will that happen?
02:31When are you expecting that to happen?
02:33So, like, in this quarter, we announced our, see, we classed because there could be always a tendency to do some A.I. washing.
02:44So internally, we decided that what we are going to call A.I. revenue, what we will not call.
02:50And we also decided to publish those numbers.
02:53So this quarter, we said, we announced that our annualized revenue or annualized revenue of A.I. is about 1.8 billion.
03:04And it has shown an increase since the previous quarters also.
03:07Like, it's roughly almost a 20 percent increase quarter on quarter on our A.I. revenue.
03:12So if you ask me, it has started improving on a quarterly basis.
03:20But is it also compensating for the deflation or the overall challenges we have in the macro and economic scenario?
03:29Not it.
03:30But our guess is within a year, you would see A.I. revenue becoming really material.
03:37You've made some small acquisitions.
03:40Are there plans to make further acquisitions to boost your, perhaps, your A.I. capabilities?
03:47So we did, if you have, we announced the acquisition of ListEngage.
03:51It's a small Salesforce consulting organization.
03:55And in this quarter, we are also completing the acquisition of this company called Coastal,
04:01which is focused on Salesforce consulting, particularly in the marketing and sales globe.
04:08And together, it places TCS in the top five of the Salesforce consulting overall league table.
04:17And similarly, we are looking at opportunities where we will be able to attain some capability and competencies at speed and scale.
04:27So we have changed our position towards M&A.
04:32Now we declare that the market will be more acquisitive going forward.
04:37And we are looking at a number of opportunities where we can improve our competency, either in a technology or in a business domain.
04:45So that might happen in the next, what, six to 12 months?
04:51We are, Luxi, we are not putting a timeline on what we would do.
04:57We are looking at a number of opportunities.
05:00And some may happen soon, some may happen later.
05:04But we are not, as I said, it is more for acquiring certain competencies at scale and speed.
05:10So whenever we see opportunity, we will move fast.
05:13But we are not putting a timeline on ourselves.
05:16You said earlier that certain pockets of the tech sector is spending, recovery is coming.
05:24But could you give clarity on which sectors, which segments are actually, you know, embarking on the spending plans and which are showing some restraint?
05:35Asalinda, if you look at, compared to previous quarters, what we saw in the last two quarters, there has been a general uptick, even the telecom sector for us, which was quite sluggish.
05:46In the last two quarters, even telecom has started recovering.
05:49And our slow, what, the challenges we had in the last quarter, or there is a quarter that ended in December, primarily because of the seasonality, there is some, some of the regions, particularly in Europe, UK and Asia Pacific, they go on a furlough.
06:07And we have a bigger impact in the banking, financial services and tech services sector because of that.
06:14But if you exclude the seasonality and the furlough, you would see that there has been a general pickup in almost all the industry verticals.
06:23There could be some pockets.
06:24If you take airline, domestic airlines, we have some softness.
06:30But otherwise, it's been quite strong across the consumer segment.
06:34So at this time, we see that there's a general pickup across the board.
06:39So particularly, customers are looking at both the cost-record projects and short ROI projects, yeah.
06:47Very quickly, Mr. Kritivasan, how are you thinking about hiring and the impact from the H-1B visa?
06:56See, the way we have been looking at is our dependence on H-1 in the last few years has significantly come down.
07:04Of the overall workforce we have in U.S., less than 50% are visa dependent.
07:10And we continue to hire more and more locally.
07:14And the number of people we send from India to U.S. for H-1 is limited.
07:19Wherever the clients want the particular individuals for the continuity or for the knowledge they have on the UN program,
07:26only when then we send people from India, otherwise we hire locally more.
07:30And the number of people we send people from India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to India to
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