Wipro Ltd (WIT) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Wipro Limited Q1 FY27 Earnings Conference Call. 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 the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded and the duration for today's call will be for 45 minutes. I now hand the conference over to Mr. Abhishek Jain, Vice President, Corporate Treasurer and Head of Investor Relations. Thank you and over to you.

Thank you, Yashashree. Good evening and warm welcome to our Q1 FY27 earnings call. We'll begin the call with the business highlights and overview by Srinivas Paliya, our Chief Executive Officer and Managing Director, followed by updates on financial overview by our CFO, Abana Iyer. We also have our CHRO, Saurabh Bawil, and our Chief Strategist and Technology Officer, Hari Shattia, on this call. Afterwards, the operator will open the bridge for Q&A with our management team. Before Shini starts, let me draw your attention to the fact that during this call, we may make certain forward-looking statements within the meaning of Private Security Litigation Reform Act 1995. These statements are based on management's current expectations and are associated with uncertainties and risk, which may cause the actual results to differ materially from those expected. The uncertainties and risk factors are explained in our detailed findings with the SEC. GIPRO does not undertake any obligation to update the forward-looking statements to reflect events and circumstances after the date of filing. The conference call will be archived and a transcript will be available on our website. With that, I would like to turn over the call to Shini.

Thank you, Abhishek. Good evening, everyone. Thank you for joining us today.

Remain resilient. continues to shape technology investment has continued to invest in ai data modernization led trans and longer the ai disruption is expanding the market not shrinking it at the same time conversations around ai are becoming more intense as the tokenization landscape evolves. Clients are focused and require a tighter linkage. We continue to see strong industries. Executing a consulting-led AI-powered strategy reimagines and redesigns their enterprise around financial performance. constant currency, $2.61 billion, up 0.9% year-on-year, and down 1.2%. Margin was 16%, a 1.2% decline year-on-year. In our markets, America has remained soft, declining both sequentially and on a year-on-year basis. We continue to see momentum in technology and communication sector and some good wins in the consumer sector. As we move into quarter 2 in BFSI, APNIA's revenue grew sequentially and momentum we continue to see in this market, particularly in the BFSI and consumer sector, technology and communication. Energy, manufacturing and resources remain. We see a healthy pipeline across various regions in Europe, such as UK and Nordics. 3.4 billion dollars and large deal bookings total 1.6 billion dollars the booking includes 13 large deals this quarter let me highlight two of these deal wins leading global animal healthcare to modernize and manage using glyphro intelligence we will help transform improve productivity

and enable increasing operational rigor european special application landscape

Leveraging AI-led capabilities, part of our Wipro intelligence, we will automate operations, improve, deliver and provide greater visibility through an AI-powered reimagine operation by embedding AI at the core of the business. In this context, let me share finance and proof, intelligent orchestration to create a highly automated operation with one of our healthcare multi-agent AI up to 70% while automating their manual effort up to 90% and AI evaluation.

This is delivering significant gains in model accuracy and reasoning capability.

Transforming pharma coincidence, labor intensive process into an AI native.

This is powered by regulatory grid workflows. By defining their enterprise robotic strategy and roadmap for physical AI enabled autonomous operations. These engage and the wins that impact, interestingly today, technology modernization alone. The focus is moving towards AI-enabled operating models to service quality and unlock sustainable production planning to continue to deepen our relationship with Olam Group. Since then, new business models and fortune struck across the AI, strengthened the team. The applied AI center of excellence for cloud models won the OpenAI Codex Hackathon for an AI-powered banking. In quarter to minus 1.5% to plus 0.5% in constant currency terms. As we continue to navigate macro uncertainty and geopolitical instability to remain disciplined in execution, helping clients navigate complexity and creating sustainable value for all our stakeholders in more detail. Thank you.

Thank you, Shreeni. Good evening, everybody, and thank you for joining us. Let me share a quick update on the financial performance and then we can open up the queue for questions. Our IT services revenues grew 0.9% year-on-year in constant currency, while declining 1.2% sequentially. This is well within our guided range. Our operating margins for the quarter were 16%. We declined 1.2% year-on-year. The reasons are because of the incremental impact of salary increase, ramp-up of large deals, one earlier, and our ongoing investments in AI. This was partially offset by the rupee depreciation benefits and the other operational efficiencies. We remain focused on returning back to our previously stated narrow band. Net income for the quarter was 33.6 billion. Our EPS for the quarter was 3.2 rupees. Both grew 0.6% year on year. Moving on to our SMU and sector performance. All the growth numbers that I will share will be on constant currency. A1 was slattish year on year. while declining 2.3% sequentially. America's too declined 7.3% year-on-year and 2.5% declined sequentially. Europe grew 6% on a year-on-year basis, while declining 0.9% sequentially. APMIA grew 13.5% on a year-on-year basis and grew 4.4% sequentially. Moving on to sector performance, BFSI grew 2.6% on a year-on-year basis, while declining 1.2% sequentially. Consumer grew 1.9% year-on-year and 0.7% growth sequentially. Technology and communication grew 10.8% on a year-on-year basis and grew 0.2% sequentially. Health declined 2.6% sequentially and 3.0% year-on-year. EFR also declined 3.6% sequentially and 8.9% year-on-year. Our operating cash flow stood at 98% of net income for quarter one. Our gross cash, including investments, was at $4.3 billion. Accounting yield for the average investment held in India was stable at 7.2%. Our ETR was at 22.6% for quarter one versus 21.6% in the same time last year. In terms of the guidance to re-trade what was stated by Srini, Our IT services business segment is expected to be in the range of $2.574 billion to $2.627 billion. This translates to a sequential guidance of minus 1.5% to a plus 0.5% in constant currency terms. Lastly, in the recently concluded board meeting, our board of directors have declared an interim dividend of 2 rupees. Including this dividend, our payout since the last one year, we would be returning in excess of $3 billion in terms of the cash back to shareholders. With this, we can open up for Q&A.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question from the line of Ravi Menon from Access Capital. Please go ahead.

Hi, thank you for the opportunity. I don't know, you know, it's a little surprised that you have added headcount despite, you know, the guidance that implies frequency decline. Attrition still seems to be well under control. Utilization has also come off slightly from copper. So why add headcount now when you're still looking at a decline in revenue in the next quarter?

Our headcount also includes the people who joined us from the Mindsprint team, Ravi. If you exclude that, our headcount has actually gone down quarter on quarter.

And our guidance, of course, includes the revenues from Mindsprint completely in quarter two. just to add outside of my headcount thank you in BFSI most of the peers seem to be doing well also spoke of how things seem looking up but this quarter then we had a is this something that you expect to maybe hold us back a little bit in Q2 or do you think BFSI comes back we did

year-on-year growth of 2.6% in constant terms. However, the sector declined 1.2%. Now, if I were to give a little bit of how the sector has performed, Europe and AFMEA, Ravi, you know, actually, in fact, Europe BFSI growth was led by ramp-up of the large deal we had announced earlier. And if I were to look at AFMEA, we continue to see very good traction with both in terms of rampers and also existing deals and the new deals that we have seen. I also want to call out that we see good momentum in the BFSI in America as well. So net net, yes, I agree with your comment. And having said that, we are also seeing good traction for us.

Thanks, very appreciate that. So we can look at this as maybe, you know, one-off client incident, something like that. Is there any cutback or did you lose out of any vendor consolidation? Could you comment on what cost of the time this quarter?

There are two aspects. One is clearly some of the large deals that we have won has taken a lot more time for us to scale, ramp up. I think now the clients are moving. That's the reason why I said we're FSI Americas because we have won a couple of deals out there, large deals out there. Some of them are coming back. The second one is the nature of the demand. discretionary spend and some of the decision-making has been slower, but we think it will come back. One thing that we are seeing while, you know, from a customer perspective in the BFSI sector, there are two, you know, a couple of opportunities that we see, Ravid. One is on the cost optimization and vendor consolidation. That remains the key drivers for our clients. Right? And, you know, this is very similar to the commentary that we gave in the last few quarters. However, Ravi, what we are now seeing is that these savings are getting reinvested by some of our clients into AI capabilities. And that's where I think, you know, the new transformation projects and discretionary spend will come back. That's how we see it, Ravi.

One last question, Ravi. On AI, your couple of peers have around very different strategies on setting up a very big knowledge data center. Someone else is looking at the small capacity data center, which they think, you know, but they will own the entire hardware stack. Anything that you're thinking along those lines?

So, Ravi, you know, one is, I think, to be honest, is not just for us having the client context, understanding the domain and the industry aspect of it, understanding the process, right? And, you know, priming the data for an AI implementation becomes very critical to change management in this context. So, that is where I would say that, you know, the direction that AI is moving on, pivoted to AI, and, you know, we are doing an AI-first approach, and our consulting-led, you know, AI-powered strategy is all about that. So when you are doing a run aspect of it, which is application management, infrastructure, or process, we are doing with AI-first approach, and we are clearly building a strong platform around Wings, which we are gaining very good traction, which is our delivery platform. And the second thing, you know, obviously you're listening to a lot of commentary around that, the software, we have to have the context of, if it's a pure play green field project, which is part of the other end of the spectrum, it is a complex code. And, you know, if you don't have the right, you know, target environment, which is a lot more legacy, deployment and production also becomes difficult. There's a productivity, you know, comes down significantly. And so that's how we see all that. Now, I think it's very important also, which I talked about, where we are building the industry and cross-industry platforms. In fact, some of the margin dilution that you talked about, the question that was asked, we are investing in this. I think it's very important for us to invest for the future. So that's number one, AI native unit. Second, we have the half a billion dollar Wipro Ventures. And now we're very specifically, focusedly targeting those AI and data and security startups, which will also enhance our overall WIPRO intelligence platform. Three, we invested in our WIPRO innovation network. We actually launched 10 innovation networks for our clients. And that's actually picking up the clients who are co-innovating with us in those innovation networks. And finally, ecosystem partnering with the Frontier AI companies. So this is how we are driving AI across our industries. And each industry is different in terms of adoption, but everyone wants to be in the AI journey.

I have one more thing. You said that there is not much productivity benefit in the old complex world. So then can we say that all of the investors are concerned about significant erosion in the existing book of business? Can we say that this is really unfounded?

So, the way I'm looking at, for the industry and for Wipro, if you look at the traction that we have on the reimagined AI services, that's how I call them, new AI services. One, AI advisory and change management. That's something that, for example, Capco is leading it. OpenAI gave us an award around that. Second is data priming for AI. If you don't have the right, and enterprises are struggling with data. We have to be honest about that. Some enterprises have told us we've got too much of data. We don't know whether it is. Do we need all this data to get the AI right? Third is, you know, agent implementation and managing agents. Every organization is building a tremendous number of agents. How do you deploy them? How do you orchestrate, deploy, and manage them? And Ravi, you know, the tokenization, token economics, whatever you call it, it's actually skyrocketing right now. So then, especially the CFOs are saying, you know, hey, you know, what's my ROI? So, do I use high-end LLM for a particular process or a workflow? Do I use an open source model? So, that's a conversation that's going on. We having the deep tech, we are able to actually have that conversation with the client. So, there are multiple new opportunities, whether it's model ops, AI DC is something that's picking up with enterprises. You would have heard of sovereign AI. So, that's another one picking up. And finally, every client wants us to make their AI secure and responsible. So, to me, NetNet is a positive in terms of new services that are coming in. Yes, short-term, a DLT lifecycle will continue to bring in higher productivity and shorter development lifecycle. But I just want to call out, even there, it is going to be human plus AI always. Because in a software development lifecycle, the business requirement, user stories, you need humans. At the same time, when you are deploying and productivity, you know, and taking it to production, you need human intervention. Of course, you know, AI can prove millions of lines of code, but we need to make sure that code is optimized.

So that's how I see it, Thanks so much for the introduction. Thank you.

Thank you. Next question is from the line of Nitin Parmanabhan from Investec. Please go ahead.

Good evening. Thank you for the opportunity. First, I wanted your thoughts on how should we see margins recovering to the band that we stated? Do you think it will be gradual through the year? Or do you think there's any element that can help a faster sort of recovery, considering we don't have wage increases and that's done and behind? The second is, from an overall business perspective, When do you think the headwinds sort of recede where we can start showing some level of growth as a business? And do you think these headwinds are largely over in Q2 or do you see any specific things that could linger? Yeah, thank you.

Srinivasan Srinivasan here.

On the margins aspect, Nitin, you know, You know, Aparna talked about it as well in our commentary. 120 basis points is number one. You know, the impact of MSI we had, it's coming into this quarter. Second, the investments that we are making, you know, in AI and in deals, that's the second part. Third is some of the acquisitions that we made.

I don't know they're actually coming to, you know, into execution mode right now.

So, that's the impact we had on the margin. Having said that, Nitin, our mission is clearly to go back to the narrow band that we've been talking about, 17 to 17.5. Now, the question that you're asking is, what is the time frame? Right now, in the context of the volatility that we see, in the context of the revenue situation that we see, right, I do not want to predict exactly when we will get there, but the point is that we want to get there. If you have noticed in the last two years also written, despite the challenges with the revenue, we continue to stay focused on margin improvements. You can be especially sure we will continue that path. However, I want to clearly articulate that we want to invest in our new AI native business. We want to, because when you are doing an AI native business, you also need to have the right talent, you need to have the right infrastructure to build the new products, new platforms and solutions as well. So, it's a combination of all this, Nitin.

Yeah, qualitatively, do you think it's fair to assume that it's gradual rather than quicker? Just a qualitative thought process is fine.

The endeavor is to reach where we want to reach. And if you look at how you can take the cost out of the FPP, both in terms of automation, AI, and productivity. We have other levels, including G&A, and so on and so forth. Bench utilization, how do you restructure the pyramid in the context of the projects and programs? you can run it through agents, and how many of our current existing programs we can agentify. So these are all the levers that we are looking at within, and we'll stay focused on that. But the point, the message I wanted to give you is that despite all this, we will also want to continue to invest in our future, which is very, very critical because the world is pivoting to AI, and we have already pivoted to AI. And we will continue our journey around consulting-led and AI-powered, and we'll stay focused on that. the pro-intelligence platform, both delivery platforms and the industry cross-industry platforms, we are seeing good traction with it. And in the future, the consumption will be platform plus service. And from a growth perspective, when do you think that you are seeing sort of So if you look at it from a growth perspective, demand environment remains soft and that has reflected. Having said that, Nitin, I just want to call out the point that I made, that we are seeing good traction building up in America in the PFS segment. The question that Ravi had asked. EMR, which is Energy Manufacturing Resources sector, which was very soft in Europe and AFMEA. We have won couple of deals in Europe in this segment. We will see that coming into delivery. To me, also, the way the customer takes the cost out, then they start shifting their, you know, budget to AI, you know, we are ready for that. That's how I see it. So, I can't give a commentary in terms of how our quarters will go because I want to stay within our quarter to bed in.

Sure, fair enough. Thank you, Shini, and all the very best.

Thank you. Next question is from the line of Vibor Singhal from Nuwama Institutional Equities. Please go ahead.

Yeah, hi. Thanks for taking my question. So, should be a couple of questions from my side. I think two verticals kind of grant the growth in this quarter of energy and healthcare. You mentioned about energy that the softness in the European market and we've got a couple of these. good to hear that we'll probably be covering that soon. What's your take on the healthcare segment as this segment has been one of the key segments in which we were one of the early pioneers at this point.

Weber, Weber, Weber, sorry to interrupt you. We could not hear you.

Yeah, I hope I'm audible now.

Yeah, sorry for that, actually. Yeah, so my question was basically on the, that there were two verticals which dragged the growth this time. One was the ENU, which you mentioned that it was because, and good to hear that there are deals that we have one will ramp up in the coming quarters. On the healthcare vertical, what is the view that we are looking at? Is, I mean, this, we used to be, I mean, we were one of the pioneers of this industry. And from the peers, we hear a lot of comments, a lot of companies are kind of incubating their healthcare vertical because of a strong demand that they are seeing, especially from the peers' side and some, of course, in the provider side as well. So what is the outlook on that vertical in terms of these that we might have won when using that vertical kind of comes back to growth? I'll have a couple of follow-ups, if you can answer this, please.

Your observation is very valid. For us, we've grown by 2.6% sequentially, and if you look at from a year on, see, what has happened is, especially when I say healthcare, we have multiple segments. We have got payers, we've got providers, we've got licenses, and we have got medical devices companies. These are the four industry segments within the healthcare sector. We have a huge presence in payers and providers in the U.S. The impact that we had is because of the U.S. healthcare ecosystem, right, which is facing sustained pressure both from structural and demographic forces due to the situation which is very much, you know, within the U.S. context, right? So, in some of these companies are, you know, because from the whole government and so on and so forth, right, their budgets have been slattish for us and some places we have seen the negative growth. Then also automation aggressively and offset the cost pressures, I think, you know, that would help us going forward. So, we are staying focused on the regulatory mandates like I talked about, like, you know, both Medicare, Medicaid and ACA. If you recollect, we have a huge platform that supports these aspects. So, the member onboarding in terms of member services that we need to do, you know, how that has evolved for us in the last one to two quarters also had an impact on the numbers that you see. Having said that, you know, if I look at the opportunities that we see, right, you know, especially reimagining some of their processes with AI. So, Vipar, you know, claims is one important thing. Clients are looking at taking the cost out on contact centers, right? Also, you know, now more and more with the HIPAA compliance and the regulatory compliance coming into picture, they are able to deploy AI more confidently into clinical operations, including regulatory processes. So I see these as our new opportunities that are coming in. We are staying focused on that, Vibhar.

Got it, got it. Any timeline that you would be able to provide that you think our healthcare vertical should see some recovery?

So, like I said, you know, I don't want to focus beyond quarter two. So, quarter two is big team. Having said that, you know, AI, you know, like I said, you know, AI is a structural opportunity. I see this opportunity in every industry verticals within the healthcare system, members, including for providers, because they also want to, you know, improve their efficiency. Let's look at providers today. You know, they depend a lot on these products like Epic, who are also making it more AI. They are actually integrating their provider systems into paired systems, and, you know, so that, and, you know, employee, you know, the members and the patients, they can actually, you know, have an end-to-end view of how the Medicare medical systems work as well. So, these are the opportunities that are coming in. We are having the conversations around that as well, Vipar. But I am not giving you a specific timeline at this point in time.

Got it, got it. This is helpful, Shiri. Just my second question on the deal wins. The total deal wins and the large deal wins were down quite sharply on a Y-on-Y basis. I would assume it is just a timing kind of a thing because you mentioned the pipeline remains quite strong. So, maybe somebody has got pushed into Q2 or something like that. Is that correct, Shiri?

So, absolutely, Vipar. If you look at our quarter one, right, you know, we clearly had, like I said, $3.3 billion worth of booking, out of which $1.6 billion were 13 large deals that contributed to that. Having said that, your point is valid. Some of the decisions on some of these deals have actually slipped to quarter two. And, you know, I always tell my team, you know, when it slips, you've got to really hold on. Don't let it slip because, you know, and try and let's close it in M1, M2 rather than wait for the M3. So that's the work that we are doing right now. But your point is valid. The observation is valid. The pipeline is healthy. And also there are deals around cost optimization and vendor consolidation. But I also want to call out, Vipa, that I want to give a little bit of color in terms of the kind of pipeline we have, right? Right. So the pipeline, you know, let me give you one color, Weber. One is sectors. Let me also give you the type of deals outside of these large and mega deals. Right. So I called out BFSI, if you remember. Right. America and Europe, the pipeline is strong, Weber. But if you look at from a consumer, you know, we just won a couple of deals in America. But, you know, it is I wouldn't want to say that it is a big piece, but it's definitely modest. in America and Europe. In Acme, a consumer is weak. That's how I see it. Tech and the comms are very strong in America. I think that one place, you're seeing double-digit growth that I talked about, and I think we'll continue to see strong momentum there. EMR, which you also called out after I said it, right now it's strong in Europe because we come on a back of two wins. And also it's strong in America, us, including, you know, based on what's going on. Healthcare, you know, I did talk about it, right? I want to, overall, it's strong, but, you know, but I want to be careful in terms of what we call it. So, that's the color from a sector perspective, Weber. But if I look at it from an opportunities perspective, there are new opportunities also coming in, like I talked about, right? You know, there are clients who are talking to us on Sovereign AI, there are clients who want to build AI DCs, right? So, those opportunities are also coming in. The size and scale depends upon how much, you know, for example, if I look at AIDC, how much of design and architecture you do, how much of implementation and management that you do depends on which part of the project and program that we are involved. And the size and scale and complexity depends on that. But overall, your point, you know, our pipeline.

Got it, got it, got it. Thanks for taking my question, Shini. Just one follow-up for Aparna, if I may. Aparna just wanted to get some color on how to look at the margins in the wake of the AI-driven deals that we are seeing at this point of time. I mean, I know it's difficult to make a one statement analysis that, okay, the deals will be margin accretive or dilutive. But from an overall point of view, I mean, let's say we are also building SLMs for the client or let's say the application layers for them. Then there's the token cost involved. So, overall, where does the map sit for these large AI-driven deals that we are chasing and we are winning in terms of margin with our current portfolio?

So, I think, like you rightly said, one size doesn't fit all. It will depend deal to deal. Wherever the intention is to use AI for you to be able to drive higher productivity and take costs out for a large operation for a client where the cost taker is priority, you will see that, you know, there will be a lot of productivity, forward productivity that gets taken into these, right? The re-imagined AI that Srini spoke about, the paths which are newer, where you are going to be seeing newer spends on a kind of AI, there we are very confident we will drive a premium in rate realization. Similarly, service offerings around data, AI advisory, they'll all be very incrementally net positive to the rate realization, than margin. So, it will depend on what we are using the AI for and how we are structuring the deal. So, large deals will remain competitive. You will have some amount of forward productivity that gets baked in. When you're looking at AI over smaller programs, when you're looking at things like data modernization, when you're looking at smaller pockets, and you're looking at newer areas, they will be accurate and that's been our experience thus far and yes got it got it great thanks for the and thanks a my questions wish you thank you we'll take question from the line of Rajiv earlier from JM Financial please go yeah thank opportunity can you 2Q revenue guidance into organic and incremental contribution from inorganic? We're not doing that, Rajee. We're not breaking our guidance out. And if you look at it, last quarter we had said that Mindprint was coming in and we had in the guidance baked in 45 days. But in our actual Q1 results, we've had two months of it of the revenues being consolidated. You can do the math but like we typically do we only disclose in the first quarter and after that it's We don't make further disclosure.

And the second part of the question is, if you're seeing the last running calls, you mentioned about grinding sourcing impact in PHSI. Is that fully behind in this quarter or do we see some impact from a going forward perspective as well?

No, I think that is behind us, Rajiv.

Thank you. That's all from my side.

Thank you. We'll take our last question from the line of Abhishek Bhandari from Nomura. Please go ahead.

Thank you for your opportunity. Shri D, all through the call, you guys have mentioned that the large yield environment remains very competitive. I was curious to understand, has the degree of competition increased, decreased, or is And a related question is, you know, how are you future-forcing your margins in the wake of such competitive pressures? We already saw some glimpses of, you know, margin headwind into one, which of course you will recoup through the year. But if the market remains like this, how do you ensure that, you know, we don't trade of the margin for chasing growth?

You know, if I look at it, AI is reshaping most of the spend allocations. So what that means is from a client perspective, the traditional IT, the traditional BPO that we do and the support aspects of it, those budgets are getting compressed. So the clients want us to deploy more AI. The clients want us to kind of disrupt that aspect of the whole process to bring in agentic aspect of it. So that is, I would say, a level for our clients to improve their budgets for new spend pools around AI. So the clients are also driving that, which is not just competition, but also clients want to take the cost out on that. And we do have opportunities for us to go and talk to our clients in terms of, for example, how we can deploy wings and bring in end-to-end productivity benefits and make it more agentic and the experience aspect of it, velocity aspect of it, and so on and so forth. Now, coming to the – so if that is the place where there is compression, there is definitely competition, Abhishek. Now, the reason I'm saying is that sometimes, you know, we will have to look at client-to-client in terms of their ability and propensity to implement AI. We have seen certain clients, you know, who want to do it in a lot more faster way, and some of them are saying that, you know, we want to spread it out. So, in that context, you know, the pricing aspect also changes, and, you know, we have to relook at how the solutioning happens because when you deploy AI quickly, the token cost also, you know, increases for our clients. So they are looking at total cost of ownership. And that is something that, you know, we've been carefully working on, Abhishek, and this is something that I think as an industry, as Wipro, we will all continue to evolve. Now, coming to the margin pressure, I know it's actually related to that, right? So if you look at large traditional deals, cost optimization, vendor consolidation, there will be margin pressures because sometimes you won't invest into the deals for now to make it more long-term as well, Abhishek. So if it is a net new, re-imagined AI kind of projects and programs, the margins are much better. But if it's a traditional work where you have to bring in the productivity through AI at the same time, help the clients to shift the budgets, there are competitive pressures.

Got it. Thanks, Shini, and all the best for the year.

Thank you. I would now like to hand the conference back to Mr. Abhishek Jain for closing comments. Over to you, sir.

Thank you all for joining the call. In case you could not take any questions due to time constraints, please feel free to reach out to the Investor Relations team. Have a nice day. Thank you.

Thank you. On behalf of the ProLimited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.