Tech Mahindra Ltd Q4 FY26 Earnings Conference Call | Concall.in

Good morning and a very, very warm welcome to Tech Mahindra Pune. Wow. So what's an event if you don't start with Murphy's Law, right? So past that glitch, hopefully the presentation goes on. I am Vinda. I head internal communications and rewards for Tech Mahindra and I'm going to be your host today. So firstly, a big, big thank you to all of you for being here. While I know Bombay is not too far, we're also acutely aware of the effort it takes to travel in this heat from wherever it is. So a big round of applause to all of you. Thank you so much. Thank you, like I say, for investing in us and investing the day with us. Yeah, thank you so much. We hope you've had a chance to explore the communications experience center and the vertical booths that we have outside. I mean, I'm hoping you've got a chance and a sense of what we are, where we are headed, and what we're trying to build. And today is going to be about connecting those experiences into strategy, execution, and of course, outcomes. So let me quickly walk you through how the session will flow. We will begin with our CEO Mohit Joshi who will take us through our strategic priorities including a focus on AI and share an update on the FI27 transformation plan. We will then hear from our Chief Operating Officer Atul Kunar who will walk us through the operational progress on our three-year strategic plan. And then, of course, the part that tends to get the closest attention, our CFO Rohit Anand will take us through the financial performance. We will close with what's usually the most engaging segment and that's the Q&A with our leadership team. Yeah. So without further ado, I'll invite Mohit and Rohit to come on stage please. Thank you.

Thank you, Vinda, and thank you all. Thank you all for, like Vinda mentioned, making the arduous journey from Mumbai to Pune. And sure, it's been a very hectic 24 hours for all of you with all the earnings over the past couple of days. But hopefully, apart from the earnings, you've had an opportunity to see the lovely communications experience center that we've set up. And thank you, Mohit, thank you for helping in the buildout and for showcasing the capabilities that we've built from a comms perspective, but also the very important vertical use cases that we have shown outside, really going all the way from manufacturing to the SDLC lifecycle changes that we're building to the work that we're doing in building out sovereign models. Hopefully, it gives you a sense of the very deep R&D and very deep sort of vertical-focused capabilities that we're creating within Tech Mahindra that really gives us a lot of optimism for the future. Obviously, you know, in the course of the next couple of hours, we'll be talking you through the progress that we've made in our journey so far and what we see unraveling or what we see happening in the course of the next 12 months as we work on fulfilling the promise that we had made in April '24 about the three-year transformation journey of TechM. But before we get into the transformation journey, I'm going to walk you through the FY26 financial performance, including the numbers we've reported for the most recent quarter. And again, to start off with, you know, we're delighted with the performance. We're very happy that we were able to close out FY26 on a strong note and really the past momentum that gives us as we go into FY27, really the most important year of the three-year transformation journey. So begin with, FY26 was clearly a very important year from a deal momentum perspective. We closed the year with the highest ever deal wins in the last many years. Notably, we've secured two mega deals over consecutive quarters aimed at accelerating innovation, strengthening digital resilience, and delivering AI-led operational efficiencies. You will recollect that last quarter we reported a large telecom deal and this quarter we've entered into a global partnership with Orange Business. The 5-year collaboration will drive end-to-end digital transformation for enterprises worldwide with a strong focus on AI, automation, secure digital platforms, cloud, cybersecurity, and scalable solutions. We have further enhanced our right to win by making our offerings increasingly AI-led. We have made investments to embed AI across services to augment capabilities and to bring in seasoned industry specialists to drive innovation and execution at scale. Full year revenues stand at US $6.385 billion, up 1.9% on reported basis and 6% in constant currency. During the year, our focus remained on disciplined execution, staying close to clients, and progressing our solution-led approach. Operating profit is $797 million US, up 31.4% year-on-year with margins expanding by about 290 basis points to 12.6%. Rohit will walk you through this in more detail. Moving on to vertical performance for the year. We delivered about growth of 5.9% year-on-year in manufacturing. Growth in the vertical was led by aerospace and industrial process manufacturing, which helped us to navigate a softer environment in US auto. The contribution also came from a ramp-up in European auto clients through our subsidiary. In BFSI, the vertical grew 3.7% year-on-year. Our focus on specific subsegments like asset and wealth management, payments, and core platforms is yielding results. We're receiving an increasing number of analyst recognitions with the latest being TechM's position as a leader and star performer in 2025 banking and payments by the Everest Group. Our approach in strengthening leadership coverage, investing in pertinent capabilities, and winning engagements with Forbes 2000 clients has helped improve momentum across priority markets within BFSI. Within communications, we grew 2.6% year-on-year. This was led by stabilization and increased spend from our largest US client. Comviva also grew double digits for the second year, adding to the momentum. In Europe, we saw improving stability throughout the year, and we are now focused on ramping up these deal wins as we enter FY27, benefiting from scope expansion and deeper client relationships. In retail, travel, transportation, logistics, we grew 7.3% year-on-year. This was our highest growing vertical for the financial year. The growth was supported by a focus on key clients coupled with strong tailwinds in the logistics domain driven by e-commerce expansion, automation, warehousing, and last-mile delivery optimization. TechM was also awarded the Retailer's Favorite, underscoring the trust placed in TechM's reliable and outcome-driven transformation services at the NRF VIP awards. The high-tech vertical declined 2.7% year-on-year. We faced headwinds in the first half of the year, including a restructuring at a semiconductor client and muted discretionary spend. In the second half, we began to see stabilization across clients. We continue to watch spending across high-tech clients with continued investments in data centers influencing their spending patterns, and we are making efforts to partner with these clients to refine and tailor our services to their evolving spending priorities. In healthcare, revenues declined by 6% year-on-year. We continue to see regulatory policy challenges across provider and life sciences segments resulting in muted discretionary spending. At the same time, we are seeing increased engagements with large payer clients across data and AI-led initiatives creating a clear pathway to scale enterprise-wide transformation programs as AI adoption accelerates. From a geography standpoint, Europe delivered a strong growth of 8.9% year-on-year aided by currency tailwinds. Within Europe, we saw encouraging traction in aerospace, industrial manufacturing, and European auto. We are seeing an active pipeline of vendor consolidation opportunities. The Americas was broadly flat overall, while communications in the Americas grew. This growth was offset by softness in US auto. Turning to our client metrics, our $50 million plus clients increased by four year-on-year to 29 and our $20 million plus client base increased by seven year-on-year to 66. This growth reflects continued success in deepening client relationships and expanding the scope of services delivered across the portfolio including AI, data, and consulting-led engagements. Our market positioning and investments over the last year has been centered around AI delivered right and this posture is paying off in our client engagement metrics. Last year we were pleased that our NPS score improved from near the median to top of the quartile in a single year. This growth in customer satisfaction was the highest with senior and CXO level clients and we see this as a sign of trust and deeper engagement. Building on this client relationship momentum, today I'm very proud to say that our NPS score for this year is now the highest in the industry. Coming now to our quarterly performance, we reported revenues of $1.625 billion, up 4.9% year-on-year and 2.4% in constant currency. The manufacturing vertical grew 11.8% year-on-year followed by high-tech and retail at 6.6% and 6.2% respectively. Communications grew at 5.6% year-on-year followed by healthcare at 4.7%. During the year we participated in the India National AI Mission. Our participation was structured around three strategic pillars: industry and sovereign AI platforms, ecosystem partnerships and stack orchestration, and applied AI across manufacturing, agriculture, education, and inclusion. We also launched an education LLM in partnership with NVIDIA with the intent of democratizing education. We are also advancing in our progress as an AI-first organization. We launched our enterprise-wide Claude Code training program, a strategic upskilling initiative designed to strengthen our AI engineering capabilities at scale. We are enabling our associates across three strategic AI engineering platforms: Claude Code, Devin, and Cursor to accelerate adoption, build enterprise-scale expertise, and meet evolving client expectations. We also announced a collaboration with University College London to advance joint AI research and solution development in Gen AI and quantum computing. We will cover our AI strategy in more detail and progress thereof in my presentation shortly after Rohit speaks. The financial year also saw an improvement in the deal wins ratio. We closed the year with total deal wins of US $3.79 billion representing a 42% growth year-on-year. TechM is increasingly positioned as a strategic partner to clients rather than only an outsourcing vendor. Let me share some examples of our notable deal wins this quarter, apart from the other one I already spoke about. A leading North American OEM selected us as a strategic partner for application development and support across mission-critical enterprise systems. A Fortune 500 energy major chose us as the sole strategic partner to run and manage infrastructure, cloud, service desk, and user computing and allied services while driving measurable efficiency across the technology estate. We were also selected by a leading global public health alliance for managing high quality and operational agility while enabling continuous digital innovation to drive efficiency and mission-aligned transformation. Alongside these client wins, we continue to deepen our partnerships and alliances across the ecosystem. With Microsoft, we launched an ontology-driven agentic AI platform that accelerates telecom and enterprise data modernization. This is built on Microsoft Fabric and Azure AI Foundry. The solution is designed to enable explainable, auditable, and real-time AI-powered decision-making while supporting secure and governed deployment of AI agents. With NVIDIA, we partnered to introduce an industry-first AI-powered telco network operations reasoning agent. The solution is intended to help communication service providers accelerate progress towards level 4+ autonomous networks by evolving traditional network operation centers into intelligent closed-loop operations. With FICO, we partnered to help BFSI organizations accelerate value creation through AI-powered decisioning and advanced analytics. This partnership will deliver end-to-end consulting, implementation, and managed services enabling enterprises to fully leverage the capabilities of the FICO platform and realize faster, measurable business outcomes. Tech Mahindra was recognized in the S&P Global Sustainability Yearbook achieving a top 1% ranking in the IT services industry and reinforcing our commitment to building a resilient and sustainable enterprise. Also reflecting our sustained brand strengthening and competitive progress, we advanced to the fourth position among India-headquartered IT services firms and ninth globally in Brand Finance's IT Services Report 2026. As we step into FY27, we will continue on the progress that we've made over the past two years. While the global backdrop can still be demanding and geopolitical volatility exists, we're encouraged by the way we have strengthened our client offerings, built added trust, and deepened our client engagement approaches over the last two years. Our efforts are now paying off in stronger bookings quantity and quality while also delivering margin expansion. Moving forward, we continue to remain focused on scaling our capabilities, driving profitable growth, and leveraging AI to enhance value delivery for our clients. We are reiterating our FY27 financial targets. Sure, you're happy to hear that. Including achieving organic constant currency revenue growth above our peer group's average and achieving an EBIT margin of 15%. With that, I'll hand over to Rohit for a detailed financial performance.

Thank you again, Rohit, and it's wonderful to be back here on our third analyst day since I joined. For those of you who would recollect, we done our first analyst day in Bangalore. This was about two years ago. So it is a very happy position for me to share the update on what we've delivered and how we're looking at the next... the current and the most important year of our transformation journey. So if you recollect, right, when we started our transformation journey, we spoke about a new strategic narrative for TechM. We spoke about scale at speed and really at why we thought we were uniquely positioned among all of our peer group to be able to deliver all the advantages of scale that our peers could provide, our very deep presence across multiple industries, multiple geographies, a full set of service offerings. But also given the entrepreneurial DNA of the company and given our agility, we were also able to provide the benefits of speed. And I think the strategic narrative landed very well, even if I say so myself. And then we followed that up with a narrative around AI and we'd spoken about the fact that we're not looking at doing AI, but that we're focused on AI delivered right. We felt that a lot of our clients were really in POC hell, proof of concept hell, and how do we get them to move from experimentation in AI to larger scale adoption. And this is why we chose the theme of AI delivered right. Now as we move to 2026 and financial year '26, clearly this was an area, this was a year of incredible change, right? Incredible change, incredible volatility from the start of the previous financial year between January and April. We saw, you know, the Liberation Day tariffs and the impact that it had on technology budgets and the impact it had on our clients. We've had, you know, to add to the complexity, the more recent war in the Middle East and the impact that that has had on commodity prices. We've seen regulatory changes across a whole host of industries and very importantly, probably the most importantly for our industry, we've seen the adoption of agentic AI and the new models that have been released over the past couple of months promising to unleash a huge amount of productivity for the industry as a whole. So it has been a year of immense volatility. But despite this volatility, we have continued to deliver, right? We have continued to deliver. So despite the volatility, we have continued to deliver and I think the credit for that goes to the fact that while we've had an enormous amount of external environment volatility, we've had a tremendous amount of internal clarity and a tremendous amount of internal... well, this is almost impossible for me to read... an enormous amount of internal clarity about what needs to be done and that clarity is showing up in the number of, you know, new clients that we've added. So 63 must-have clients that we added in the course of the year. The 182 overall clients that we added. The fact that from an NPS perspective, like I shared previously, we are now the leader from an industry perspective as far as NPS scores go. And the journey has been very important, right? The journey has been very important to go from the median to the top quartile to now number one within the short space of two years. From an AI perspective, I want to point out the VE Minds award that we won. This is about how you are able to build scalable and easily deployable AI models. I also wanted to point out the fact that we have continued to stay focused on our ESG agenda by being among the top 1% of our peer group in the 2026 Sustainability Yearbook. And so therefore, all of this taken together gives us the confidence that we are the ascending force in the industry and that we have a remarkably bright future for the company as a whole. Now, there's obviously been a lot of question about how will you deal with the volatility? What does this mean? What does AI mean for the industry? And what I really wanted to point out, right, I really want to take a few minutes to point out that volatility and change is not new to this industry, right? The industry has been through multiple waves of change and transformation and as you see in this chart over here, this is a chart that covers the NASDAQ 100 volatility. You've seen multiple waves. The first wave was obviously after Y2K, was the dot-com adoption. Then we had the financial crisis, mobile, cloud, and more recently AI. Okay. And across all of these transition points, the industry and TechM has continued to thrive. There have always been, you know, for each of these moves, there was always a concern that it would result in significant deflation for the industry and for TechM, but we've continued to thrive despite this. And the reason for that is the fact that each and every single wave of this change has meant a huge focus on modernization. So if we look at the journey from Y2K to AI, the first wave after the initial modernization of Y2K was really a focus on enterprise packages, right? So, you know, the SAPs, the Salesforce, and there was a real concern when this enterprise package adoption happened that it would be significantly deflationary for the industry. So many of you will remember that around the 2006-2007 time frame going onwards to 2011, there was a concern that because these packages were so much easier to deploy than the traditional bespoke packages or the traditional core platforms, that there'd be a significant wave of deflation that would happen for the industry. But that didn't happen, right? This was actually a significant growth driver for the industry. Then we had the wave of digital transformation and again, you know, digital transformation, the widespread adoption of low-code and no-code platforms was felt to be driving down the demand for, you know, for TechM's offerings, but clearly that didn't happen either. And now more recently, obviously, we've had the AI-related technology changes and my own sense is, right, or really our collective sense is that if you look at this, really all of these moves have tended to drive towards greater modernization and so therefore a focus on how SIs and companies like Tech Mahindra can work with our clients to be able to help them thrive in the new age. So I genuinely believe and as a company we believe that this new AI-enabled technology transformation will significantly drive us towards the need for greater modernization and so therefore to greater relevance and greater revenue and profitability for Tech Mahindra. And when I say it has come back full circle, I truly mean that if you look at Y2K again, a lot of the demand was modernization-driven. A lot of the demand was, you know, for people who understood the industry and for people who understood the specific platforms that our clients have and we see the same demand coming back again. And in this case, from a Y2K perspective, we were really seen as the builders and this is really the return of the builder. And from a TechM perspective, there is a very clear sense that we have that we are exceptionally ready for this new age of AI and that is because of the pyramid that we have. As you know, we have on average about 9 years of experience in the company and when clients are looking at modernizing their stack, this is the skill set they're looking at, is people who understand the AI platforms but equally are able to truly understand the legacy platforms and are able to identify pathways for them to move to the new AI stacks. If you look at something like, you know, which has been a source of great panic for the industry, which is the new Anthropic Mythos platform, but if you look at Mythos for instance, right, and if you look at any large customer, they certainly have billions of lines of code that need to be understood and that potentially need to be remediated. So there is just an immense amount of relevance for the industry that also comes from our deep understanding of our clients and their technology estates. We've always had the entrepreneurial agility as a firm and this is important because at this time I believe we are the right size and the right temperament to be able to make the sort of pivots that clients are looking for. There is a deep amount of modernization experience and a couple of the examples that we'll be talking about today go towards the modernization imperative that our clients have. We have a significant amount of intellectual property in our core IT services business, whether it's from a mainframe modernization perspective or a VMware migration perspective and we have significant intellectual property in our Comviva business. We are geographically diversified which means that we are not overly exposed to a single market and therefore the currency fluctuations or the business and regulatory fluctuations from a single market. And finally, we have worked to build an ecosystem of partnerships across the software vendors, across the hyperscalers, and now across the model builders that really enables us to offer a complete and very rounded offering to our customers. We've spoken about AI delivered right and I feel that from an AI delivered right perspective, this really goes towards showing how the two stacks, right? So there is the traditional technology stack and there is the new AI stack and there really the need for today is to build a bridge between these two stacks. There's not a single client who has moved to a new AI-only stack. Every single client has a legacy stack that they're looking to modernize. And if you look at the modernization imperatives, right, on the data layer side, on the platform side, on the application and the experience side, and while you're building out the new AI stack which is focused on data, is focused on agentic orchestration, is focused on the AI enterprise layer, what we're really able to do is to bring our very deep knowledge of the traditional or the legacy estate. So how do your data structures work in your old application? How do you make sure that you're able to modernize those estates and equally building out the new AI estate from the ground up, right? So for instance, as telcos are looking to build new, are they looking to provide GPU and AI services to their clients? How do we build and maintain those NVIDIA clusters or those Google Tensor clusters? That's a capability that we have. And so as clients look to also to agentic orchestration across legacy and the new stack, this is a significant new opportunity for us. And when we think about this opportunity, when people talk about the AI opportunity, this really is the AI opportunity to help modernize the old, build the new, and then build a bridge across both of these, right? This is a very significant opportunity and this requires not one capability but requires a mix of capabilities. And so when we talk about building out the TechM capabilities from an AI perspective, we're really talking about building out what we call the new TechM Helix. And the TechM Helix really is a combination of the human capabilities and the agentic and the AI capabilities that we're building out. And from this perspective, when we look at it, we're looking at building out a set of eight areas where we're building out capabilities. These go towards the industry use cases that you're building. We spoke about the work, for instance, that we've done with NVIDIA in building out a network reasoning model. We've spoken about, as you looked at our manufacturing capabilities, the work that we're doing in physical AI, how do you build the factory of the future. So these are the industry use cases that need to be built. There is the partnership ecosystem. There is the platforms that you're building and we've spoken previously about Tech Orion which is our agentic AI platform. We've also spoken about the various domain SLMs that we've built for our clients including our Telefonica. We're talking about reinventing the core and building the new. So both offense and defense. We're talking about the need to really completely transform our own sales and marketing but also look at how our clients are looking at next best action, at marketing analytics. We're talking about the talent, both our talent and the client's talent, and we're looking about a new commercial model, right? A new commercial model in the age of AI rather than just looking at AI as a deflationary factor and just looking at AI as a productivity enhancer, thinking about how you build the new commercial model. Like we moved from T&M to fixed price to outcome-based, how do we look at the new commercial model that truly incorporates AI and is an AI-native commercial model. So these are the eight themes that we've been working on, that we've been building capabilities and this has both a human and agentic or AI or a technology-driven component. I'll talk a little bit about the new commercial model that we're building and this really goes towards how you build for the new age of AI. So I would say that the easiest thing, you know, if you're thinking about AI and the only thing that you're doing is going and talking to your client saying I'll give you 20% productivity or 30% productivity, it's really a very simplistic way of looking about how clients are thinking about deriving the benefit of AI because really where is the 30% coming from? How can I have the confidence that you can deliver 30%? Why 30? Why not 40? Why 40? Why not 50? Why not 80? Right? And so you really have to be able to think about how you look at the work that is being done by a combination of digital labor and human labor and think about work in terms of tokens. So the way we think about it, so if you take the work that we do in F&A for instance, right, that's a good example. We run the F&A function in our BPS business that BN leads for a number of our clients. We do the work end-to-end and we measure with targets on accuracy, cycle time, and compliance, right? So the way of thinking about running an AP function, for instance, for a client in the age of AI is thinking about the work overall in terms of the number of service tokens that you will deliver to a client. So a service token in the context of an AP could be a subprocess of AP that you need to deliver for a telco and then within that subprocess, what is the work that is being done by human agents? What is the...

Let me start by getting the force at the right place. It's fallen down.

Thank you Mohit. And hello everyone. Good evening and as both Rohit and Mohit said, first of all thank you, thank you for joining us here. Thank you for your support over the last two years of the transformation journey. As a leadership team I think we are very very proud of what we have accomplished in the last two years. We are very well aware of what lies ahead. We have a plan to achieve the commitments that we have made for the entire FY27 transformation journey as well.

And what I will speak today about is what are we really doing as part of the operation strategy. So if you look back two years back we had spoken about operation strategy not just as a Project Fortius which was focused around margin improvement. We spoke about how are we going to build a resilient, relevant and a responsive organization. Those were the foundation blocks of our entire operation strategy.

Obviously it was about building the right capabilities both on the domain side as well as on the horizontals. We had identified the industry verticals be telecom, manufacturing, banking and financial services, insurance, high-tech, manufacturing, all these were the verticals that we had identified and we had also identified the horizontal capabilities that we will excel in, enterprise applications, engineering services, AI, cloud, consulting and this is where we have focused on.

But it was also about not just building capabilities but about being able to take it in a meaningful way to our customers. It was about creating a delivery organization which was simplified in its operations so that we can be very responsive to our customer needs which were continuously and fast evolving. So that is a journey that we have really been on and again as I said we are proud of some of the outcomes that we have delivered and we know what it takes to deliver our FY27 as well.

So if you look at our focus on productivity gains, it was about bringing in the right technology levers. Obviously automation, AI, principles of lean has helped us drive the right kind of productivity improvements that we wanted to drive. It was also about making sure that we bring in the right kind of platforms within the organization which will help us drive better outcomes.

So we invested and Rohit had made a commentary of this about a year back and two years back as well as to how we will continuously invest in different interventions as we continuously scale as an organization. So we have invested in technology platforms for example entire demand and supply management platform which is AI enabled which helps us being more responsive to our customers. That is something that we have invested in which helps us improve our fulfillment time, that's something that we are good at now.

We have also been focused on making sure that the companies that we had acquired in the past, there was this real value about these companies in terms of the quality of the services that we could take to the customers. But the integrated offerings combined with the service lines was something very very important for us. So the last year and a half, two years we have worked relentlessly as part of a separate team that we created to get all these portfolio companies integrated. Very happy to see that 100% of all these portfolio companies have been integrated from the back end and from the front end and the middle end. Backend work is in progress, should get over this year.

Obviously when we looked at our operational parameters, this was about really getting the right rigor within the organization focusing on very simple things but focusing on it to make sure that we are able to drive the difference. It was about making sure that we focus on utilization, we focus on the right pricing. It's okay to invest in a platform which is AI enabled to do the demand supply management but it's also important to make sure that we are charging the customers the right price for the right capabilities that we are bringing in.

Mohit spoke earlier about how we have this golden pyramid which is very much relevant in the current era of AI as well. Now how do we price for that right experience and the expertise that we have in the organization was very very critical for us and that is what we have done as part of our entire pricing track in the operational excellence as well. We focused on the high margin service lines but more than high margin service line it was all about the focus about the capabilities that are relevant to the customers in the current environment and that is how we have been building our services and our solutions to our customers both on the domain as well as on the horizontal side.

Delivery excellence, it was about making sure that what we commit to our customers gets delivered. What are the right kinds of early warning signals that are in the organization which help us understand the risks that we are carrying in multiple programs that we are executing for our clients. How do we ensure that there is right governance so that these risks are captured and then we have the right governance to make sure that they are escalated in a proper way. It was about making sure that there's a predictability to the entire delivery model.

Now again for me the best reflection of what we have been doing is in some of the outcomes that we have been able to deliver here. Mohit spoke about 10 quarters of continuous margin improvement, something we are very very proud of. And we had said that this will be almost linear in nature, we will not have too many ups and downs from that perspective and as you can see from the graph here this is something that we have been able to deliver.

Again if you look at what we have been doing across IT, Comviva, BPS, across the entire organization it is not something which is very very different. It's about doing things in a disciplined way with the right rigor focusing on some of the basics while we obviously take some of the high margins service lines to our customers as well.

When we look at our FY27 ambitions clearly commitment to deliver the 15% EBIT, we know what are the headwinds, we know the tailwinds that we are entering the year with. But if you look at the FY27 ambitions ahead again you will see it's about doing the same thing again and again repetitively but with the same rigor and discipline. But this year obviously the big focus is around using AI to drive and enhance the productivity that we can drive from our fixed price programs majorly. We have made a very good start around that and that is something that we will carry on this year.

Anyways, this is something which our clients expect and I'm sure you would have heard it from other industry players as well. So this is something that we have already started as a journey and this is something that we will carry on as we go forward.

When we talked about building the relevant capabilities, how do we win in this era which has got multiple of these macroeconomic challenges as well. We looked at what are some of the things that will hit us in terms of potential headwinds. We know what the GCCs are continuously expanding. We have adopted different models as to how do we partner with these GCCs. In some areas you are competing with the GCCs, some areas you're almost acting as a vendor to the GCCs as well. But whether the GCC is from a cost perspective or a capability perspective, depending on how the GCC itself has been set up, we are trying to optimize our way of partnering with them to make it a win-win for them as well.

When we look at some of the changes that have happened with respect to AI, again for us it was very clear as to how are we going to build an AI first delivery organization. And if I look back, as an organization who had built its own LLM with the Indus coming in, being part of the India AI mission as well, taking lead of all the great work which was happening on AI in Makers Lab led by Nikil and his team. We had crafted out a very clear strategy as to how we will deliver AI to our customers.

It was about making sure that we lead the customers on the consulting side as to how they should approach their AI programs. Which are the use cases that they should prioritize? How should they set up looking at the ROI of their AI investment that they are doing? What should they be thinking of in terms of building a COE or partnering with some other partner to deliver their AI programs. So we had led through a consulting lens on the AI side clearly focusing on building the right platforms which will help us deliver AI programs both to our customers as well as from within the organization.

So when we launched Orion earlier in the year, the idea was not just that we are just going to monetize Orion. It was also about using Orion for our internal consumption. How do we create agents? How do we use Verify in terms of agents having both the maker and checker model in the same platform? How are we going to use a platform which can not just operate with its own agents but with agents created by anybody else in the entire environment as well. So the successes that we have seen with respect to Orion being accepted and being very very widely requested by a client is something great and we'll continue on this journey.

So we lead through consulting, we build our platform and IP through what we have as part of our CTO organization and then we said we are going to democratize AI. Every single service line be it the application development and maintenance services or engineering services or enterprise applications or cloud and infrastructure services, each of them are going to approach AI in a different way. So how do we enable each of these service lines to figure out what works best for our client leveraging either the tools which are provided by the clients or our own platforms to deliver the right value to our customers was the approach. So democratized AI delivery led through consulting by building platforms at a central place. That's how we have been delivering value to our customers again something which we are proud in terms of how it has been accepted by the customer as well.

Now when we look at what kind of services are we being able to use AI for, Manulife is a very classic example where from a starting point where the customer wanted to bring in Tech Mahindra from an insurance domain perspective in a geography, Japan, where they wanted multilingual skills. How do we go about ensuring that we ramp up quickly in a domain and a technology and a language which we were not too conversant with. The ramp up is a very clear reflection as to how we have been able to use both technology and a very quick learnability of our associates and Sep who's our CTO and CIO of Manulife actually gives us the credibility in terms of how the team has ramped up and made a difference to the customer as well.

Bombardier. Now again a classic example where a lot of work which has been happening on our engineering side and the work that we are doing on the aerospace side as well. We got the diamond certification, supplier certification from Bombardier for the third consecutive time and this is something that we are very very proud of because it shows the diversity of the experiences that we are being able to bring to the client. Obviously it is about and some of these examples that you would have seen outside as well. It was about bringing in the integrated manufacturing experience services solutions that we took to Bombardier which was again very very well received by the client.

AIA, very interesting case study because when we started doing the transition we realized that there's a whole lot of work that will require in terms of understanding what the code base is, in terms of understanding what the code base is, creating the right kind of documents for the customers and building a knowledge repository that can be used by the people coming in. So we actually ingested all the incident logs that we had with the customer for a period of two to three years, brought it into a model, used the normal search feature and actually made the transition a very very seamless exercise which could have actually been very very cumbersome and again something which Susan was very very appreciative of how smooth the transition went which could have actually been a very complex exercise.

So transition through multiple other life cycles of the program we have been able to deliver these successes using technology as well. Now Mohit has spoken a lot about the work that we have done, our NPS scores and I do believe that the best return of investment, I mean the best success for me as a delivery leader is about showing that customers are happy and a good NPS score, continuous improvement over the last two years, being an industry leader in NPS is a very clear reflection of what we have been able to drive value, being responsive to our customers, taking the relevant solutions I spoke about. I think it stitches in together as well.

And when we are looking at the year ahead, obviously it's not going to be the same, right? We have to continuously evolve as an organization and sometimes evolution means looking at how we're going to be responsive to the changes that are happening on the AI side. So for example, we are repurposing our application development and maintenance services to agentic development and modernization services. And it's not just a name change. It's about how are we driving value to the customers.

We all have heard about how significant the productivity improvement can be looking at AI to drive work or productivity in application development especially in greenfield scenarios. Now how are we bringing that experience in the agentic form to our customers for building application agentic development is something that we are very very focused on and that is something that is happening today.

When we look at our BPS services for example, close to one-tenth of our current business in BPS is working with technology players, high-tech players creating their AI models, continuously fine-tuning them and managing them over a period of time and more and more work we are doing on the BPS side is actually towards that. Now in the BPS itself if you look at it they have more than 200 agents which are currently there on our Orion platform itself and more and more you'll start seeing in the hyperscalers environment as well and more than 20,000 bots which are currently running with BPS helping them bring in the efficiencies within the internal organization be it in finance, be it in HR, be it in procurement, be it in people supply chain, multiple areas.

So what we are really doing as you can see from here is basically re-imagining the way we deliver work to our customers and taking a very very proactive approach in terms of eating our own dog food first. Making sure that we can drive those efficiencies, building the right platforms and stitching together the industry and technology solutions that we can take to our customers.

Some of the metrics on AI that I would like to start reporting on. Number one is about the percentage of people who are trained on AI and we divide it into two which is AI trained talent and AI certified talent. As people keep coming into the organization we have 80% of the people who have been trained on AI on the different models of AI etc. But we also have a very specific intervention where we have created a four-tiered certification process for all our associates. So it's a white belt, blue belt, brown belt, black belt kind of a certification and our attempt is not just to train people because training doesn't mean anything. It's about certifying people across the different belts so their capabilities are continuously improving as they go through the journey working with their clients.

And for us rather than just focusing on a single partner or a single product that we will train our people on, as Mohit said we are training our people on Claude, we are training our people on Devin, we are training our people on Cognition, Cursor, everyone. So what we have really done is taken an approach because customers need different platforms, different tools that they have selected as partners of choice so our associates should be ready to work in any platform that the customer has or bring in our own platforms as well and that is the approach we have taken towards our training.

Percentage of CL accounts which are our peak and prime accounts that have any version of GenAI is 95%. So 95% of our peak and prime accounts have some version or the other of GenAI offering or solutions being done today. We started measuring the true AI only productivity improvement in our programs starting last year and 7% improvement might not sound much but I think it's a very healthy start with respect to AI only productivity improvement. It includes everything else that we have done from an optimization or bringing in lean principles etc. This is an AI only productivity improvement.

Happy to see the top two AI leaders in analyst positions. I mean we have 90% there. Obviously as Mohit mentioned building our own LLMs has given us the credibility. Now using that credibility, using that experience and expertise we are able to start building the sovereign LLMs, starting to build the right kind of models that we can take to the customers. So the entire domain specific language model that people are talking about given the capabilities that we have developed creating our initial version of Indus is something that is helping us take the right kind of sovereign LLM and DSLM offerings to our customers as well and multiple agents which are industry specific which are there in the client environment which is around 350.

As you can notice, we have not reported a number that you might have been expecting which is around the revenue from AI. But I think as we progress over the next year, we will start making sure that we start thinking about it differently because as I look at it from a delivery organization lens, every single project is using some version or the other of AI. And we just need to find a meaningful way to report a metric to you which is credible. And I think over the next quarter and the year we will work on it and start reporting it as we go along with it as well.

So with that I'll hand it over to Rohit who will take us through our financial performance. A more commentary on what the outlook is. So not the outlook Rohit but yeah the financial performance.

Thank you. I think we want to be boring but with exciting solutions and exciting numbers like for this quarter. I think I just want to close with the fact that I feel that we've been very focused on consistency, predictability, building the foundations and I do feel that the work that has happened to build the foundations over the past couple of years is now bearing fruit, right? It's bearing fruit in terms of outperformance and clearly as a company we spend most of our time thinking about what is it that we can do for our clients and what is it that will take for us and for our clients to win in this new age of AI.

And we've sort of boiled it down into three things, right? This is what our clients expect from us. They expect us to be able to outthink the competition. They want us to be able to think very creatively about their challenges and their transformation and really deliver the value that comes from AI which is where the work that we're doing on Helix is very important. Given the speed at which the world is changing, the macro volatility, the AI-driven disruption, clients are looking at speed. Speed is very important. So, we need to be able to help our clients outpace their peers and their competition. And finally, because there is just so much of work that needs to be done, right? There is so much of work that needs to be done. There is so much of technology debt. There is so much of a legacy estate that needs to be modernized. There is so much of work that needs to be done to make operations truly world-class and truly AI native. There is the amount of work that is required and these are the three sort of focus areas for us which is outthink, outpace and outwork the competition and do it for the benefit of our clients, right?

So these are the three things that we're focused on as a company. I really want you to, you know, if there is one message that we would want you to carry which is the same thing that I had mentioned the first time when we had the session in Bangalore which is that this is a team that knows what it's doing and this is a team that is moving in the right direction and has the confidence, right? Has the confidence that we will deliver the numbers, we will deliver the growth and we continue to see, you know, a tremendous amount of opportunity for us, for the sector and for Tech Mahindra specifically. So with that, thank you all and we will now begin the Q&A.

Thank you all.

Yes, we will come to the most awaited segment and I request Atul and our chief people officer Richard to please join us on stage. And till they join us, there's also a short film that will probably help you think more about the questions that you want to ask. Yeah.

Thank you. So yes, we move on to our Q&A round and the rules are very simple. If you've got a question, please raise your hand. Second, do state your name of your organization and yourself of course. And third and most important, do try and keep it short because given the constraints of time we'd be able to pack in more questions if your question is shorter. Yeah, and of course this is not the end of the Q&A, we are all going to be having dinner after this. So please feel free to ask any questions to any of our leadership present. Yeah, and while they're setting up the chairs, if you do think your questions, and yes I've already got the first question going. The first one is always the toughest so I'm very happy. Yeah. Yeah. You may go ahead and ask a question.

Hi, thank you. This is Ankul from JP Morgan. So you know you've reiterated your target of growing faster than the industry for FY27. Some of your peers who have reported so far and give formal guidance seem to suggest growth is slowing down. In that context, how easy do you think it is to achieve and sort of accelerate for you versus where the industry is doing? And if you can comment, where do you think industry growth will be next year?

Sure. Yeah. So Ankul, I think look if I look at the, if you look at our own trajectory, right? We've clearly had a trajectory which gives us a good exit as we get into FY27 because we have gone from being negative year on year when we started the journey to being, you know, sort of almost flat to slightly down at the start of the year to progressing on a positive trajectory. So that is the number one thing that gives us confidence. Secondly, we see our pipeline. We see the deals that we have won which will convert through the course of the year and we see the existing pipeline that we have where we have the confidence that it will close. We also see that the existing pipeline that we have in our sort of our current book of business, what are the open positions? What are the sort of projects for which greater expansion will be needed. So all of that gives us confidence for the year.

Now again, you know, obviously it is possible in the course of the year things may change, projects get cancelled, discretionary work gets called off, but as we stand here today there is confidence that growth will be certainly higher than it was in FY26, that a certain amount of growth is locked in and that while there are a couple of clients where we are also concerned about will they make sharp discretionary cuts, on the whole we feel that we have enough stabilizers and enough resilience in the system to be confident about growth in FY27. Obviously, growth is always linked to what happens in the industry overall. It's very hard to predict an industry growth number. As you know, the number that's predicted at the start of the year always ends up, you know, sort of rationalizing in the course of the year for the past two, three years. Having said that, if I was out on a limb, I'd probably say maybe the industry growth would be, you know, in the 2 to 4 or 3 to 5% range. That is certainly in the estimates that we're seeing now.

Thank you. Just to follow up on margins if I can. You know a lot of your margin improvement for the last two years and especially FY26 also was been cost-led and a lot of efficiencies have been gained. How much of the margin expansion for FY27 is cost-focused versus growth-focused if you can sort of break the between the two. And a related question was you've had a lot of success in mega deals, large deals in the last few quarters. Congratulations. How does the margin profile of these deals look versus maybe the 2024 vintage or the older contracts and what are the risks from there? Thanks.

The margin profile of the mega deals, the very large deals won in the last couple of quarters. If you can comment about them versus the older, you know, vintage of deals.

Can we have the next question please?

All right. Yeah. Clearly, clearly dinner is on mine.

I think more one-on-one questions are dinner.

Yeah. Yeah, I was thinking of that.

Then thanks for hosting us and great things on display outside. Some of the things which I saw was quite impressive. The work which you're doing under Orion and some of the bots which you are building on the BPS side as well. One question on those side. So the agents which you have built, about 350 of them. Some of the frontier model companies are also starting to build agents and launching them. Do you see them as threat and how would you handle the enterprise adoption of your platform of Orion while competing with some of these frontier model companies?

So yeah, I think see a lot of these frontier models are getting built, right? What we are really bringing together is a very strong domain expertise and how do we stitch these models, the bots that we are creating, the agents that we are creating and then how will they be interoperable with agents which are being created by the ecosystem players as well, right? Because for the true agentric workflow to happen, it's not about just one agent working. It's how they work together in harmony, right? I mean, and that is what our attempt is. So if you look at what we have tried to build as part of our Orion is not just the ability to create an agent but to orchestrate the agent workflow as well and that is what our attempt is, right? So it is about creating agents but also about being able to orchestrate the agent.