Tech Mahindra Earnings Call for Q1FY27

Ladies and gentlemen, good day and welcome to the Tech Mahindra Limited Q1 FY27 earnings conference call. We have with us today Mr. Mohit Jooshi, Chief Executive Officer and Managing Director, Mr. Rohit Anand, Chief Financial Officer, and Mr. Atul Sona, Chief Operating Officer. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Jooshi, MD and CEO for Tech Mahindra. Thank you and over to you sir.

Thank you and thank you all for joining us. Welcome to our F Q1 FI27 earnings call. Now in April 2024, we had presented a three-year turnaround plan with clear goal posts and measurable markers for success. The first year of our plan was focused on laying the foundations which would lead to margin expansion. And in the final year of the plan, we would see growth outpacing our peers. We also promised to build a future-facing organization with differentiated capabilities and talent, a performance-oriented culture and a proven execution engine. Now in the final year of our transformation journey, we are increasingly seeing the benefits of the investments and the actions taken over the past two years. We have delivered margin expansion consistently over the past two years. More recently, our revenue growth has begun to move ahead of the peer average. We had said that in the third year of our transformation, we would pivot strongly to growth. And as the numbers today show, we have done just that. For the quarter, we reported revenues of US dollars 1.66 billion, representing a 6.1% year-on-year growth on a reported basis and 6.6% growth in constant currency. This performance reflects continued momentum across the business, broad-based growth across our key verticals, progress in our AIE strategy and strong client engagement across markets. Operating margins stood at 14.4% reflecting sustained execution discipline, operational rigor and a continuous focus on profitable growth. This profitable growth is being enabled by our posture of using our experienced talent and domain expertise. This enables us to work more closely with clients, design tailored solutions, and deliver measurable business outcomes.

Let me now turn to our performance across the key verticals. In our communications business, we grew by 1.3% year-on-year. The vertical continued to benefit from stability in key accounts, sustained client engagement, and the ramp up of the large deal secured over the last few quarters. Our communications experience center in Pune which many of you had the opportunity to visit in April is strengthening the way we engage with clients. The center brings together immersive demonstrations, integrated solutions and industry specific use cases in one environment. In the first two months since it launched, we have hosted more than 10 executive sessions with global clients highlighting the breadth and depth of our capabilities. The center is also enabling deeper collaboration with strategic partners including hyperscalers and strengthening our engagement in at industry forums such as digital transmission world DTW. Together these efforts are creating opportunities for richer client relationships and long-term growth. Our BFSI business grew 8.1% year-on-year. We continue to see healthy demand in areas such as payment modernization, wealth platforms, regulatory compliance, identity and access management, and AI transformation. During the quarter, we also announced the acquisition of Avant Technos Solutions, a Canada based firm specializing in payments modernization and wealth platforms. This acquisition is aligned with our stated strategy of deepening our presence in payments and the wealth segments which we have consistently identified as important growth areas for Tech Mahindra. It also strengthens our position in a structurally high growth segment. Payments modernization particularly real-time payment rails and cloud-native transformation is expected to grow faster than traditional IT services. Avant Techno Solutions adds capabilities and talent capabilities and client relevance in areas where we see sustained long-term demand. Manufacturing grows 17.2% year-on-year. Our focus remains on scaling sustainable growth across aerospace, industrial, and process manufacturing. We continue to see strong client interest in intelligent data-driven operations that bring together AI data platforms, engineering, and enterprise systems at scale. In this context, I'm pleased to share that Tech Mahindra was recognized as the 2026 Google Cloud Partner of the Year in services and industry solutions in manufacturing. This recognition highlights our ability to help manufacturing clients modernize operations, improve agility, and build more resilient digital foundations. Retail, travel, and logistics grew 8.6% year-on-year supported by momentum across e-commerce expansion, logistics modernization, automation, warehousing, and last mile delivery optimization. We are bringing together our digital data engineering and experience capabilities to help clients improve efficiency and customer engagement across the value chain. While the macroeconomic environment for this vertical remains mixed, our tailored offerings and focused land engagement approach are gaining traction and we remain positive about the direction of the business. Our healthcare business grew 7.2% year-on-year supported by momentum across providers and life sciences. We are seeing opportunities in vendor consolidation and AIE discretionary spend. Our AI solutions catalog developed in partnership with hyperscalers and other ecosystem partners is helping us with new clients and take differentiated solutions to clients. TechM scale enables us to be agile while also participating effectively in larger vendor consolidation opportunities. We are encouraged by the growing contribution of AI related work as adoption accelerates in the healthcare and life sciences vertical. Overall, every vertical delivered year-on-year growth during the quarter.

Based on our pipeline and the ramp up of recent deals, we expect this positive momentum to continue, subject, of course, to the broader macroeconomic environment. Equally encouraging is the continued deepening of client relationships. The number of clients generating more than $50 million in revenue increased by seven year on year, reflecting the trust our clients place in us, and our ability to expand strategically within our key accounts. Another important area of progress in the quarter was TechM Helix which represents the next phase of our AIE transformation mission. It brings together our platforms, talent, partnerships and innovation efforts to help clients adopt AI at scale. Atul Sona, our chief operating officer will talk about it in more detail shortly. But let me highlight a few developments from the quarter. In Q1, our focus was on strengthening the foundational elements of Helix. These investments are now translating into skilled execution, deeper client engagement, and stronger mind share in the market. A key milestone has been the launch of our agentic development and modernization services portfolio. The nextG offering is designed to help enterprises reimagine how applications are built, modernized, and operated by embedding agentic AI across the application life cycle. This portfolio enables clients to accelerate their transition towards AIEL autonomous enterprise ecosystems. Alongside this, we continue to scale our agent AI platform ecosystem led by Tech Mahindra, which enables multi-agent orchestration across complex enterprise environments. These AI investments are complemented by a strong innovation engine. Makers lab continues to play a central role in advancing applied AI research in engineering innovation across Tech Mahindra. During the quarter, Frost and Sullivan recognized Orion Marketplace on NextG AI agentic AI solution that enables enterprises to design, deploy and manage autonomous action-oriented AI agents across business processes. Its hyperscaler-agnostic architecture supports rapid deployment across assisted and fully autonomous models while maintaining enterprise-grade governance, transparency and life cycle control. While capability and innovation form the foundation of Helix, scale will come from real world enterprise adoption and a strong partner ecosystem. During the quarter, we continue to expand our ecosystem across hyperscalers, enterprise platforms, and emerging AI players, enabling us to bring more integrated and industry specific AI solutions to clients. One example is our collaboration with Microsoft on AI-driven 5G network, digital twin solutions for autonomous network operations. The solution is designed to help communication services providers modernize the networks, improve service performance, and accelerate the monetization of nextgen 5G capabilities. Another example is our partnership with Kitsa, the AI operating system for clinical startups to advance agentic AI-driven medical writing solutions to the global pharma and biotech industry. In Europe, we expanded our relationship with Telefonica Germany through a multi-year engagement to build an AI first private cloud platform. The partnership combines Tech Mahindra's platform engineering and AIEL operations with Telefonica Germany's telecom infrastructure modernization objectives. The platform will create the foundation for a full-scale private cloud with building blocks across compute, storage, backup, containers, GPUs, and ransomware protection as a service. These examples reinforce an important shift that we are seeing in the market. AI adoption is moving beyond pilots into production ecosystems. Helix is enabling us to support this transition by integrating platforms, talent, partnerships, innovation, and delivery capabilities into a more scalable operating model. It's also bolstering our capability to structure and deliver outcome based engagements. Let me also touch briefly on two of our portfolio companies, Combiva and Pinfirina. Combiva continues to build momentum supported by revenue growth, improved margins, and a healthy order book drawn in a heritage of more than nine decades. Pinfrina is preparing for the AI transformation of its mobility and architecture businesses while strengthening its commercial and operational foundations.

Moving to deal momentum, we delivered total deal wins of US dollar 1.078 billion. These wins were broad-based across key verticals and geographies with the largest deal wins coming from manufacturing and SLS verticals. This performance reflects continued client confidence in Tech Mahindra's ability to deliver transformation programs anchored in domain expertise, operational execution and AIEL capabilities. Based on the annual contract value won over the last 12 months, ISG named Tech Mahindra among the top 15 sourcing standouts across all regions global, Americas, India and Asia. Let me share a few notable wins from the quarter. A leading regional healthcare system in the US selected Tech Mahindra as a strategic partner for integrated applications and infrastructure managed services engagement. Leveraging our experience supporting 200 plus health systems and deep healthcare transformation expertise, we will help strengthen operational resilience, accelerate modernization and enhance caregiver and patient experiences. We were selected by an American autonomous driving technology company to enhance the scaled rollout of fully autonomous technology across US cities and global markets. This deal will leverage Tech Mahindra's strong GIS domain expertise to deliver high-quality HD map development and maintenance services for the customer's technology. A leading global aerospace and defense company selected Tech Mahindra to provide end-to-end database administration services across a complex mission critical environment and enhance the customer's long-term digital transformation objectives through AI-driven operations, strengthen cyber security and compliance and cloud ready operations. We were selected by a leading global payments technology company as a preferred technology partner to support its nextgen product and program roadmap leveraging Tech Mahindra's product engineering expertise, payments domain knowledge and agile delivery capabilities. The collaboration will help scale innovative payment solutions, reduce technical debt and drive tailored outcomes across global operations. During the quarter we partnered with Perplexity and deployed Perplexity Enterprise Pro across our sales and client facing teams. By embedding AI powered intelligence into account planning, pursuit strategy and client conversations, we are enabling our teams to develop more relevant insights and shape stronger transformation propositions. Lastly, I'm proud to share that Tech Mahindra has once again been recognized as one of the world's most sustainable companies by Time and ranked number one among Indian corporates. This recognition reflects our continued commitment to environmental stewardship, responsible business practices and long-term value creation. It reinforces our focus on extending sustainability beyond our own operations and working closely with partners and suppliers to build a more resilient and sustainable ecosystem. Cameron Sinclair once said, 'When sustainability is viewed as being a matter of survival for your business, I believe you can create massive change.' In many ways, that captures our own belief that sustainability and business performance are increasingly interconnected. As we continue to grow, we remain committed to driving positive impact alongside long-term value creation. And with that, I will hand you over to Atul Sona who will take you through our operational performance and AI progress for the quarter.

Thank you Mohit and thank you all for tuning in. As Mohit mentioned, we delivered a strong quarter with solid topline and bottom line performance and the ramp up of large deals remains on track, positioning us well to sustain this momentum. AI is increasingly central to our performance and how we deliver value to our clients. For TechM, AI represents a significant opportunity because enterprise AI is not a single layer technology shift. It cuts across the full services value chain including consulting, domain use cases, data modernization, agentic platforms, application engineering, infrastructure operations, testing, customer experience, business process transformation, and increasingly AI cost governance and operating model redesign. This is where our AI first strategy across IT and BPS comes together. In IT, we have launched Agentic Development and modernization services, a next generation portfolio that gives Tech Mahindra a unique opportunity to help customers modernize their tech and enterprise functions using Agentic AI. In BPS, our AI strategy is built around three vectors. New markets, new services, and internal transformation. Together, these vectors are helping us drive growth, create differentiated offerings, and improve operational efficiency across the enterprise. Across Tech Mahindra, we now have more than 350 deployable AI agents developed across industry and functional use cases and we are deepening our strategic partnerships with hyperscalers and foundational AI players. This puts us in a strong position to help our clients move from experimentation to enterprise scale deployment of AI solutions whether in applications, data platforms, infrastructure or operations. Our approach remains anchored in AI delivered right through project Helix. We are bringing together domain expertise, agentic AI platforms, partnerships, delivery transformation, talent, commercial models, and internal AI adoption all into one integrated operating model. The objective is simple. make AI part of how we build, sell, deliver, run and scale services across both IT and BPS rather than treating it as a standalone initiative. Project Helix is to AI transformation what project 40s has been to margin improvement.

We are seeing a clear shift in client demand. Clients are looking for agentic workflows, AI native engineering, autonomous operations, AIE modernization, responsible AI, model governance and better control over AI consumption and cost. This is bringing AI spin, token economics, model assurance, responsible AI and outcome linked delivery to the forefront. We are working with clients not only to deploy AI but to make it measurable, governed, cost managed and scalable within their operating environments. Let me share a few examples of how this is playing across our industry. In healthcare, we run a transformation engagement where AI is embedded in operating model from day one. The client is moving towards an AI enabled digital operation center with self-service, self-healing and shift left capabilities. The program is designed to improve reliability, reduce manual effort and enhance the experience across applications, infrastructure, service desk, data, cyber security, cloud and synops. The commercial model is tied to measurable outcomes. Roughly 40% fewer tickets, 20% lower meantime to resolution, 30 to 35% reduction in technical debt and significant productivity improvement over the deal duration. In telecom, we secured a recent win where AI is central to the managed operations model. The roadmap moves from AI ops to agentic AIEL root cause analysis, agentic assistance and eventually self-sealing operations. Close to 30 AI and automation use cases are already live with more under development. The program targets doubling the release velocity and about 40% reduction in incident handling effort leading to significant cost reduction. For one of our clients in life sciences segment, our AI vector squad approach has compressed upgrade timelines from months to weeks while improving quality through an evidence-based repeatable model.

In our BPS business, we are seeing this AI momentum reflected directly in deal wins. The largest this quarter was a marquee AI engagement with a large high-tech player, one of the largest AI-led BPS deals. This is not a technology experiment. It is a large-scale AI operations engagement where BPS is embedded as the AI delivery infrastructure for the client. Across our wins this quarter, AI operations contributed an overwhelming majority of our total BPS field PCV. On internal transformation, our focus is not simply deploying tools but reimagining the way we work. Our approach is tailored by work type, life cycle stage and delivery context. So productivity gains are linked to both efficiency and quality, predictability and customer outcomes. Our AI belt certification program continues to help Tech Mahindra associates become increasingly relevant to client AI needs with over 65% of our associates certified as white, blue or brown across our delivery and internal adoption initiatives. We are seeing measurable progress. 70% of eligible developers are now enabled to code alongside an AI pair programmer. We have established more than 100 productivity benchmarks across SDLC activities and technology combinations and thousands of bots and agents supporting internal adoption and automation programs.

A key element of our differentiation is our platform and IP foundation. Orion is being deployed as an enterprise-grade agentic AI platform and is available through major hyperscaler market places. More than 20 Orion agents are listed on the Google Gemini marketplace with over 100 users actively using Orion to develop agentic AI solutions for clients. We are also investing in domain specific and sovereign AI with purpose-built models that understand industry terminology, operate securely, reduce inference cost, and provide stronger contextual accuracy than generic models in specialized environments. This work spans across industry segments like telecom, BFSI, healthcare and other domains and complements our AIEL BPS offerings. When we look at AI, we see both opportunity and a fundamental operating model change. Some traditional work will become more productive and require new commercial constructs. At the same time, AI is creating new demand across modernization, data readiness, agentic operations, trusted deployment, industry specific AI, sovereign AI, platform engineering, business transformation, and AI governance. Our focus now is on disciplined scaling, accelerating deployment velocity, scaling adoption, building repeatable offerings, strengthening our platform and partnerships, developing AI ready talent, ensuring governed adoption and converting innovation into measurable business outcomes for our customers and for Tech Mahindra. AI is not just a technology theme for us. It is becoming a structural lever for growth, delivery, modernization, productivity, talent transformation, and long-term competitiveness. With that, I will now hand it over to Rohit to walk you through the financial performance.

Certainly, sir. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Kumar Rakkesh with BNP Pariba. Please go ahead.

Hi, good evening and thank you for taking my question. My first question was around growth. So in this quarter we saw pretty strong growth delivery driven by Europe and manufacturing as a vertical. Going into the second quarter especially when you won't have the palm viva seasonality as well impacting, do you see this growth momentum continuing into that quarter and what would be driving that?

Thanks Mike that's very reassuring. My second question was on the margin side. So in this quarter we have seen the margin expansion led by SGNA. Earlier had spoken about that we expect gross margin to drive the margin. So how much of the gross margin lever is still there in our hand and what kind of exit margin we are targeting to get to.

Got it. Just some clarification, we have seen strong improvement in DSO and free cash flow generation as well. So how sustainable from here on we should see? Should we expect a similar performance in the coming quarters? And thanks a lot, that's my last question.

Thanks team.

Our next question comes from the line of Sudir with Kotak Mahindra. Please go ahead.

Yeah, hi Moit and team, congrats on a great performance. On the comms vertical, we have two large deals. So what percentage of the ramp up impact was already there in the current quarter and how does the revenue ramp from these two deals stack up in terms of growth impact in the subsequent quarters?

Look, I think one of these deals will only start to ramp up, has not ramped up in Q1 at all. So we will see the impact in subsequent quarters only. I think as we had shared with you previously, for coms we had the Combiva seasonality as a negative impact. And the second impact as Rohit pointed out in his notes was the case of a client where cloud consumption was being routed through us as part of a larger deal and as part of their takeover by a larger tech company, that cloud consumption is now being sourced directly. So I think these were the two headwinds for us coming into coms for Q1. But despite that we delivered a positive year-on-year growth number. I think going forward, we feel positive about the possibilities and the opportunity in coms. There is clearly volatility in a large US telecoms client, but despite that we remain optimistic about coms being a growth driver for us for the remainder of the year.

And so your earlier guidance of doing better than industry growth obviously that statement will not have much of a predictive power right now because you are already way ahead of the industry getting into this year. So if you can help us understand that on a year-on-year basis, do you expect the growth to accelerate further from here on maybe into high single digit or how to think about the full year growth that would be very helpful.

Sure. So look, like I said, as of now we see a strong order book. We see strong continued execution on large deals. We see very high NPS scores. We see an expansion of service lines into existing clients. We see strong opportunities especially in continued strong opportunities in areas like ServiceNow building out a strong set of AI capabilities. On the whole, we are very optimistic about our business and what we see, but clearly we are operating in an environment with enormous volatility. So it would be foolhardy of me to give you any specific numbers, but standing where we are, we have confidence that we will have strong execution through the year and we will more than achieve the targets that we have set for ourselves in terms of beating peer growth. Now, beating how much percentage that is harder to say at this time.

Evening capabilities.

On your second question about competitive rationality, I'll give you a couple of examples, right? I think one example is obviously the level of productivity baked into five or seven year deals. Now obviously we want to make sure that we are aggressive, but getting into a 70-80% productivity benefit over a 5-year deal I feel is getting into productivity benefits that are not visible today without very significant process or system changes by the client. So that is where we would hold back. I think a second area is on the infrastructure side as you know memory prices and chip prices are increasing significantly and we are not willing to guarantee those for the customer. If you're seeing a pricing inflation of 20% year on year, to tell clients that you will hold the price for a three or five year deal we think is a forward call which doesn't really make sense. So I think these are two examples of rationality where we have stepped back.

Okay. And not looks like D values are getting an Olympic treatment. Fantastic. Thank you so much.

Thank you.

Thank you. The next question is from the line of Nitan Padmanaban with Invest. Please go ahead.

Yeah. Hi, good evening. Congrats on a very solid quarter. Had a couple. One is there are a couple of puts and takes both on coms and manufacturing as we get into the following quarter. Just wanted your thoughts on do you believe that both these verticals can actually grow or do you think we could see declines? That's the first one. The second is when are we sort of planning wage increases? And finally, Mohit, are you seeing any instances of delays on ramp ups due to the macro that you would worry about incrementally or is just business as usual at the moment?

Okay. So let me answer your first question. We fully expect to see growth in coms and manufacturing to continue. In manufacturing, like we said, a proportion of the year-on-year growth came from the fact that we were able to deliver early for our client project in Europe. But even if you take that off, we remain optimistic about our ability to drive growth in manufacturing on a year-on-year basis. Obviously the quarter-on-quarter piece is attributable to an increase and that will pull back. For coms it's the other way around. We had growth but we had a relatively softer quarter because of one is the Combiva seasonality and the second like I said is cloud pass through within a complex project that got pulled back by a client which will go away in Q2. So I remain optimistic or we remain optimistic about both coms and manufacturing growing through the remainder of the year bearing obviously any unforeseen surprises. As far as the wage piece is concerned, we expect to be able to announce it effective Q2 obviously in a phased fashion which we will be announcing to our employees in the days to come. So that will start becoming effective Q2 in a phased fashion. On signs of delays in contract signing, candidly I've seen one or two examples where clients have been if it's a multi-year contract there have been questions about should we do this in house, is this really very strategic and should we outsource it, what will do with the AI piece, are we getting enough benefits, but candidly it's not very different from what I used to see in my 25 plus years in this industry. So I would say I'm not seeing an outsized or a very large level of client delays or cancellations and hopefully this is proven by our own large deal track record over the past three quarters.

Uh anything on ramp ups of deals that you have already won that's getting pushed out that would worry you?

No, nothing out of the ordinary. Nothing.

Perfect. That's very helpful. Thank you so much and all the very best.

Thank you.

Thank you. Our next question comes from the line of Surendra Goyel with City. Please go ahead.

Yeah, good evening and thank you for the opportunity. Couple of questions. Firstly on the IT services headcount, it's down 7% year-over-year. So based on the plans, do you see it kind of continuing to decline further or are you at a point where this may need to start going up?

Sure. So look, IT services revenues has continued to go up year on year as you know. As we have shared in the past as well, our productivity for our fixed price engagements was below our expectations and so we've driven with the help of the new AI tuning higher level of productivity which has meant lower headcount at times. That headcount has therefore been repurposed to other engagements either FP or TNM and that has meant that we have not had the need to backfill as much as we traditionally would have. I believe we're running a healthy utilization but we also see a good trajectory for revenue growth for the remainder of the year and I assume that that will mean hiring in the remainder of the year absolutely, which will be a mix of fresh talent and experienced talent, so that should absolutely happen. The decline so far, which is not a revenue decline just headcount decline, has been driven by our ability to drive greater efficiencies in our very large fixed price portfolio.

Thanks. And just one clarification for Rohit. Rohit from the SGNA, is there any one-off provision reversal, bad debt related provision reversal, anything to call out which could impact going forward?

Sure. Thank you so much.

Thank you. The next question is from the line of Sep Sha with Equirous Securities. Please go ahead.

Yeah, thanks. Thanks for the chance and thank you. Congratulations on a very strong performance. Just first question Mohit, in terms of this is consistently third quarter in a row where the DDTCV is above 1 billion and which is in line with what you have been indicating earlier, but now we are near to the aspirational margin of 15%. Is it fair to assume that TCV has an upward scope in the coming quarters because the discipline approach on the margin challenge is reducing quarter out?

Thanks. Look, I think as far as TCV is concerned, TCV is also feeding through to growth and we're very happy about that. We will continue to be very competitive in the deals where we think it makes long-term economic sense for us. But as you know for large deals specifically, it's quite a binary outcome, it's a zero or one, and our ability to forecast beyond a quarter or two is quite limited. We are very confident that our capabilities on the large deals front have built up quite significantly, our pipeline looks quite strong as of now, but I candidly don't know what it would look like two or three quarters down the line so it's hard for me to forecast. We will continue to stay aggressive. And on the margin part, all I'll say is while we're very happy with the margin growth that we've been able to deliver, I'm also mindful of the fact that we have the wage bill coming up in this quarter. We will certainly have some productivity pressures from an AI perspective, and we still have to deliver the 15% margin, right? So we're not taking that for granted and losing our discipline on large deals and on profitable growth.

Okay. And just a last question Rohit, I think we have done a postmortem of many of the acquired entities and wherever required we have taken a control or started liquidating, but if I look at the IT head mix on the offshore it has been going down on a Y basis. So this is still a lever which we have not fully utilized and can be a big margin driver ahead.

Okay. Thanks and all the best.

Thank you. Ladies and gentlemen, we will now take one last question which will be from the line of Vibore Singhal with Noama Equities. Please go ahead.

Yeah. Hi. Thanks for taking my question and congrats for a solid quarter. Was just one question from my side. In the manufacturing vertical I think a large part of our manufacturing vertical still pertains to the auto segment. We are hearing a lot of commentary by peers about weakness in the auto segment especially both in US and Europe especially on their EV programs and other parts. How is that playing out for us? Are we also seeing that kind of a weakness and despite that there is the strength that we have seen in the manufacturing vertical, are we not really present in those parts where the typical cut down in spend or weakness is happening and how do you see this vertical playing out given the auto segment? Any color on that would be very helpful.

Sure, so I think it's a little bit nuanced. First of all, we look at industrial manufacturing, so we look at auto and aerospace together from manufacturing perspective. Obviously in aerospace there has been an uptick in demand. We are especially seeing an uptick in the IT function but also in the engineering business function. In auto, customers are looking for AI for cost reduction. They're looking for faster turnaround of system changes, which is a little bit of a downer. But on the whole, I think some of our auto customers, especially some of our US auto customers, we had significant hits last year which we had called out if you remember. Our manufacturing growth last year had stalled because of auto cutbacks. Some of those we see coming back, so it's a little bit of a nuanced picture. We are not certainly seeing the same level of stress that some of our other competitors have called out. There is some pressure, certainly there is a huge ask of productivity. But in some cases this has also meant consolidation opportunities. In some other cases we have seen growth. For instance, while the auto sector is a little bit challenged, auto finance has actually shown reasonable resilience. So because we have a reasonably diversified portfolio we've been able to manage through, and if I look at the combination of aerospace and auto together, then certainly feel positive about it.

Great, thanks for taking my question and I wish you all the best.

Thank you, thanks.

Thank you. I would now like to hand the conference over to the management for closing comments. Over to you, gentlemen.

Well, thank you. Thank you so much. Thank you all for making time for us today. Again, just to reiterate, very pleased about the very strong start that we've had to financial year 27 with really strong growth, strong large deal performance, strong addition of large clients, strong margin performance that has been aided by a strong team, strong customer satisfaction and NPS performance, and we're very confident that in the last year of our transformation these trends will continue and that we will continue to deliver on all the promises that we had made to all our investors and stakeholders. Thank you all for your support. Again, thank you.

Thank you. On behalf of Tech Mahindra Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.