Good day, ladies and gentlemen. And welcome to the Q4 2012 Genpact Limited Earnings Conference Call. My name is Andrea, and I will be your operator for today. At this time, all participants are in a listen-only mode and we will conduct a question-and-answer session towards the end of this conference. We will expect the call to conclude in an hour. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Mr. Bharani Bobba, Head of Investor Relations at Genpact. Please proceed, sir.

Thank you. Welcome to Genpact’s earning call to discuss our results for the fourth quarter and full year ended December 31, 2012. We hope you’ve all had a chance to review our earnings release. But if you’ve not, you will find it in the Investor Relations section of our website, genpact.com. With me on the call are Tiger Tyagarajan, our President and Chief Executive Officer; and Mohit Bhatia, our Chief Financial Officer. Our agenda for today is as follows. Tiger will begin with an overview of our results in the context of our long-term strategy, with a perspective on the current environment followed by Mohit, who will discuss our financial performance in greater detail, and then Tiger will have some closing comments. Finally, Tiger and Mohit will be available to take your questions. We expect the call to last about an hour. Please note that some of the matters we will discuss in today’s call are forward looking. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. Such risks and uncertainties include, but are not limited to, general economic conditions and those factors set forth in our press release and discussed under the Risk Factors section of our annual report on Form 10-K and other SEC filings. Genpact assumes no obligation to update the information presented on this conference call. In our call today, we will refer to certain non-GAAP financial measures, which we believe provide additional information for investors and better reflect the way management views the operating performance of the business. You can find a reconciliation of those measures to GAAP, as well as related information in our earnings release, as mentioned, in the Investor Relations section of our website, genpact.com. Please also refer to the Investor Fact Sheet on the front page of the IR section of our website for further details on our results, where we have additional information we hope you will find useful. With that, let me turn over the call over to Tiger.

Thank you, Bharani. Good morning, good afternoon, good evening, everyone, and thank you for joining us on our earnings call today. Genpact delivered solid financial results in quarter four and for the full year 2012, with strong growth in revenues, adjusted operating income and cash flow from operations. 2012 marked another year of consistent growth for Genpact as we continue to deliver clear measurable business outcomes for clients, differentiate our approach through building capabilities and expertise, invest in our growth strategies and build on Genpact strong position in our large and underpenetrated target markets. Throughout 2012, we strengthen our relationships with existing clients, as well as added many new clients. In addition, we expanded and strengthened our capabilities across our enterprise services offerings, industry vertical markets and geographies with both investment initiatives and acquisitions. All of these accomplishments build upon our solid foundation and position us to take advantage of the large market opportunity available to us and long runway to drive sustained growth and revenues, and cash flow. Our full year financial highlights are as follows. Overall revenues of $1.9 billion increased 19% from 2011. Revenues from our Global Clients businesses increased 26% lead by insurance, consumer goods, retail and life sciences verticals. Within Global Clients, Business Process Management revenues increased 21%, including growth of 31% for Smart Decision Services. Global Client ITO revenues increased 42% for the full year, 36% excluding the positive contribution to revenues of the capital markets business we acquired in 2011. Growth was broad-based with most of our service offering growing at double-digit rates in 2012. GE revenues increased 3%, adjusted operating income increased 18%, cash flow from operations increased 17% and our adjusted income -- operating income margin totaled 16.5%. Turning to the fourth quarter highlights, revenue passed the $500 million mark for…

Thank you, Tiger and good morning everyone. Today, I will review our fourth quarter performance and full-year results, followed by a summary of key highlights in the balance sheet and statement of cash flow. In the fourth quarter of 2012, our revenues were $507.7 million, up 14.7% year-over-year and 3.4% sequentially. Business process management revenues grew 16% while our overall IT revenues grew 10% within which Global Client IT revenues grew 14%. Adjusted income from operations totaled $83.9 million in the fourth quarter of 2012, an increase of $6.8 million from the prior-year quarter. This represents a margin of 16.5% compared to 17.4% in the fourth quarter of 2011. Excluding the impact of a one-time impairment charge related to certain capital work in progress items, our fourth quarter margin would have been 17.3%. Our gross profit for the fourth quarter totaled $197.9 million, representing a margin of 39% compared to 39.4% in the prior-year quarter. SG&A expenses totaled $118.8 million in the fourth quarter, representing 23.4% of revenue, an improvement of 100 basis points from 24.4% in the fourth quarter of last year. This improvement was driven through better utilization of resources and tighter controls and discretionary spends that have helped offset the impact of investments in domain experts and front-end sales and business development teams. Our forth quarter GAAP net income totaled $53.4 or $0.23 per diluted share, compared to $61.1 million or $0.27 per diluted share in the fourth quarter of 2011. The year-over-year contribution from higher operating income was more than offset by lesser benefit from foreign exchange remeasurement recorded below the income from operations line and higher taxes. I will now turn to our full-year financial results. On a full-year basis, our revenues were $1.902 billion, up 18.8% year-over-year. Business process management revenues increased 16%. In…

Thank you, Mohit. In closing, our fourth quarter and full year 2012 results extend the great momentum we’ve established for eighth consecutive quarters. Our continued maniacal focus on operational excellence drive high client satisfaction levels as reflected in our highest ever net promoter scores and we are well-positioned to partner with our clients on their transformational journeys. We will invest to provide clients with the insight and solutions that will enable them to run a more intelligent enterprise, one that is more globally effective, connected, innovative and adaptive. Although in the near-term, global GDP maybe sluggish, we are excited about the opportunity in our large underpenetrated target markets. Our focus is to provide world-class services to our clients, which we believe will position us to take advantage of the long runway in our target markets and drive sustained growth and revenues, and cash flow. We plan to discuss our market opportunity and growth strategy in greater detail during our February 20th Investor Day. Now let me turn to our 2013 guidance. Genpact helps clients navigate economic and secular change. Our clients continued to face volatility and uncertainty that is forcing them to demand better returns and investment, develop more competitive insights, drive growth and even rethink their business models. We remain cautious as we are -- as our many of our clients about the global economy in the near-term even as we see signs of improvement and we are bullish on the long-term. For the full year 2013, we expect revenues to be in a range of $2.15 billion to $2.2 billion and adjusted operating income margin in a range of 15.8% to 16.3%. This guidance reflects the revenue contribution and slight margin dilution for the year resulting from the recently announced acquisition of JAWOOD. Without the anticipated impact of JAWOOD, we would have expected 2013 adjusted operating income margin to be in a range of 16% to 16.5%. I will now hand the call back to Bharani.

Thank you, Tiger. I’d like to open the call up for Q&A. Operator, please give the instructions.

Thank you. (Operator Instructions) Please standby for your first question, which comes from the line of Tien-Tsin Huang from JPMorgan. Please go ahead.

Great. Thanks. Good results here. Tiger, I guess, I’ll ask about the outlook and just visibility in general this year versus this time last year, and maybe and hopefully you can give us, what the organic growth assumption is in your outlook assuming that JAWOOD is contributing something to it?

Yeah. Tien-Tsin, thanks. Our outlook and the way we built it up is actually very similar to the way we did the exercise for 2012.

Okay.

And our visibility I would --I would characterize the visibility as being very similar. Obviously, there are different parts of the business that have different levels of visibility given discretionary spends versus non-discretionary spends. There are different verticals as we’ve said that have different pressures, some that are short-term pressures, some that are under long-term secular change, all of those obviously change visibility by different segment, but overall visibility is very similar to 2012. Specific to your question on JAWOOD and its contribution, JAWOOD will approximately contribute 2% to our 2013 revenues and therefore that $2.15 billion to $2.2 billion includes 2% contribution from JAWOOD, and that’s pretty much what we’ve assumed in our outlook.

Okay. That’s good to know. And then just thinking about the quality of the pipeline, et cetera, you’d mentioned Tiger longer term for transformational engagements. I’m sure -- I’m just curios, how close are those to potential decisions and how large potentially could those be, it always great to hear the update on the clients with greater than $25 million, but I’m trying to get a rough size again some of these larger deals that you might be pursuing?

So, Tien-Tsin, actually, again, as we’ve been saying actually now for probably three or four years.

Yeah.

There are some engagements that start big on day one, but even those if you think about our business takes time to ramp up to that big engagement that you signed up for. A lot of our engagements actually start with either a geography or a division or a set of processes that then get added further through other geographies businesses and processes, so we grow through a lifecycle typically of the first two or three years and then the next round of lifecycle. If I were to look at the pipeline today the distribution of small versus large, transformational versus let’s just get this done for immediate benefit, I would say that distribution is pretty similar to what it’s been over the last two or three years. A couple of colors I would add and said -- talked about this in the call. The Americas pipeline has accelerated, which is great because it for sometime it had not accelerated. Our European pipeline, which has been accelerating in the past, is now stable. So we feel good now that both of them are in a good position in terms of a pipeline. From a service line perspective, finance and accounting, insurance operations, back office operations for financial services all looking good in terms of what is sitting in that pipeline.

Okay. Great.

So, these are -- as you know in our business these are engagements that take time for decision making and then take time for execution.

Totally understand. Totally understand. Last one then I’ll give up. Just the Smart Decision Services has been very, very solid. How large is that as a percent of revenue now, I’m sorry if I missed it, just curious what that look like and as you existed the year?

Tien, this is Mohit. Smart Decision Services as a percentage of revenue is just over 15% at this point in time. So it’s holding on to about the same rate we mentioned last time.

All right. Great. Thanks for that.

Thanks, Tien.

Thank you for your question. The next question comes from Edward Caso from Wells Fargo.

Hi. Good morning or good evening. Thank you for taking my question. We noticed that the headcount went down quarter-on-quarter. Is that something we should read in or is that just the fine tuning of utilization?

Well, there is nothing more to read in there except fine tuning of utilization, so that’s one. Obviously, it’s prudent to run the business, particularly on the discretionary side when you adjust for utilization and it’s an adjustment of bench. But I think it also reflects some of the growth we’ve got above company average on Smart Decision Services. As you can imagine, Smart Decision Services would have a slower headcount growth overall as compared to revenue because it just is higher valued-added services. So, I think it’s a combination of both.

Can you talk a little about the JAWOOD, that acquisition sort of surprised how much a margin impact it had since we -- I guess the math is about $50 million or so in revenue and I believe there is a software angle to it as well. Could you sort of give us a little bit more color on the dynamics -- financial dynamics of the acquisition?

So, I’ll talk a little bit of the distribution of the work except around the type of work and then I’m going to hand it over to Mohit for the margin discussion. It’s a business that’s been in business for a long time. It focuses on the healthcare payer space. While, a substantial portion of the business is onshore work, it does have an offshore component that is material and therefore the total business is in offshore and in onshore component. It obviously is focused on areas that add to capabilities that we have in the healthcare payer space and the combination is what we believe is going to drive incremental growth in our healthcare vertical. So it’s technology services, it’s understanding the domain around claims. It’ understanding the domain around conversion from ICD9 to ICD10, the exchanges and so on and that combined with our process knowledge around the same domains is what we feel excited about. Margin, Mohit?

Sure, Tiger. The margin we’ve assumed right now is the range of about 10% to 12% as compared to our company margin of 16 odd percent. But I do want to caveat the fact that this is a brand new acquisition, we just about guided in. We’ve yet to do a detailed analysis. We’ve got to get into an apples-to-apples comparison of their cost lines and ours and the way we define steps. So we got to do that. Also in the beginning, there is going to be integration expenses and other stuff that we will be incurring. But broadly, it is will be in the range of 10% to 12% is what we’ve assumed.

Thank you.

And the final point on that, Ed, would be it’s no different than typical capability acquisitions that we’ve done of this size in the past. They tend to start at that level, but driven by growth which is the whole objective of these acquisitions because they are bringing in capabilities. They tend to come back to steady state margins of the company. So we feel very comfortable with the way this acquisition looks and feels as compared to things that we’ve done in the past.

Thank you and congrats on another strong quarter.

Thanks, Ed.

Thank you for your question. The next question comes from Paul Thomas of Goldman Sachs. Please go ahead.

Good morning, guys and thanks for taking my question. I guess following up on the margin question on JAWOOD. So, if it is kind of a typical process, I mean how long do you think it would take to get those margins back up to the corporate average?

So, again, 12 to 24 months, sounds like I really thought this through. But, hey, we just about acquired this company. We’ve got to figure things out. We are going to do what’s best for the company. We are going to realign portfolios. We are going to look at the way they are structured, the sales teams, the operating teams. So, a little bit premature for me to give you an accurate assessment. But there is no question, we are very confident of improving the margin profile with the synergies that we can see openly out there. So, 12, maybe 12 to 24 months, we should see their margin profile improving.

Okay. Thanks for that. And then in the prepared comments you guys were talking about some decisions that were still showing pockets of delay. Could you give us a little more color on that on any particular segments, or geographies to kind of highlight where decisions, processes may have slowed down recently?

Paul, no. I don’t think there is been any change recently. It is a continuation of the way I think the world has been -- and we’ve talked about this actually now for, boringly a couple of years where there are geographies that tend to slow down for some time and reaccelerate back. It’s also a function of the company itself. When a company -- specific company is undergoing a change either because it’s undergoing an acquisition or it’s splitting into two companies or it’s redefining its business model. All those tend to delay a decision that is imminent and then three, six months later they take the same decision. So there is nothing different about this. Our long-term trajectory continues to remain the same. A lot of companies want the kind of services -- want a partnership that helps them traverse the journey that we just talked about. So it’s in the context of that. All I was saying is not everyone is on the same decision-making track, and that’s the nature I think of the world we are in.

Understood. Excellent, guys.

Thanks, Paul.

Thank you for your question. The next question comes from the Bhavin Suri from William Blair & Company. Please go ahead. Rahul Bhangare - William Blair & Company: Hi. This is actually, Rahul Bhangare in for Bhavin. Good quarter, guys. I was wondering if could give us a little bit more detail on the traction you are having with the new sales hires from the last couple of years.

Yeah. Let me take that. As we have maintained, as we bring in these sales people with deep domain expertise in the markets, the verticals, the geographies that we serve, our objective is really to integrate them into the company in terms of understanding the value that we provide, the differentiation that we have, the Lean Six Sigma and SEP, Smart Enterprise Process capabilities we have and start taking that to clients. And then when we overlay that with the sales cycle, which in our business is long sales cycle and then further length around transitions before revenue gets recognized. We clearly see this as two to three year journey at a minimum. The sales people we’ve got into the team, we feel really good about the way they’ve been integrated. We feel very good about the way they are getting traction in the conversations they are having with clients. We feel very good about the generation of early wins. Some of that is a reflection in Smart Decision Services because those are shorter cycles and get decisions faster and revenue also comes through faster. So, overall, we feel very good. I must tell you that we had planned to take that investment to 5% by the end of 2012. As you’ve heard, Mohit say, it’s at 4.9% and therefore it’s very important that we measure this investment and do it in a measured way so that we can integrate them well. We will continue this trajectory as we go into 2013 and beyond, because we feel good about the investments we’ve made. Rahul Bhangare - William Blair & Company: Okay. Great. And then GE growth was a bit above our expectations, should we expect to see this type of growth in 2013?

Hope so but we always think about G given our penetration in the businesses and given the fact that it’s a range of businesses across a range of geographies and very diversified. We always plan for flat-to very low single-digit growth. And then as the year pans out, we’ll see how it works. We feel very good about 2012, 3% growth very good. But as far as 2013 is concerned, I think we should assume flat low single digits, very low single digits. Rahul Bhangare - William Blair & Company: All right. Thanks.

Thank you. The next question comes from Joseph Foresi from Janney Montgomery Scott. Please go ahead.

Hi. My first question here is just maybe we could just put this in context as we headed to 2013. How do you feel about the pipeline heading into this year versus last year and any qualitative information you could give us regarding that will be helpful as well?

Joseph, I think I answered this earlier. The visibility of the pipeline for 2013, I would characterize as being quantitatively very similar to the visibility of the pipeline in 2012. Clearly, the difference would be the constitution of that pipeline by vertical, by geography, by service line and I characterize that when I said that the America’s pipeline seems to have accelerated, which is very good news. Finance and accounting and back office services for financial services looks very good. Talking about the capital markets, transformational discussions which have been going on for actually two or three quarters, those will take time to fructify because those are big changes for large corporations that they haven’t undertaken before. We talked about the both growth in verticals such as pharmaceuticals, life sciences and consumer products. And we also talk about the fact that the pipeline there is strong. So I mean, that’s the way I would add color to the way we think about the pipeline.

Okay. And then just going back to the sales force question, how would you measure their productivity at this point. I think we had talked about in the past there being Genpact having a pretty high win rate. How would you measure your ability to maybe get some more add backs for lack of a better term out in the market. And how have you seen the change in them?

So our productivity metrics around sales force is a range of metrics. Win rate is less about sales force productivity, it’s more about, is our value proposition resonation in the market and are people selling it right et cetera. So we measure it in terms of how many conversations they are having, are they having enough conversations at different stages of the pipeline, given the length of the sales cycle. Is there enough range of clients they’re talking to? Are those moving through the pipeline? And then subsequently, ultimately, do they win the right number? Obviously, when we hire a sales person, the initial period is all about, is there enough activity. And then the subsequent period would be all about, is there enough conversion of that activity into revenue. And that’s the journey. In a BPM business, that journey could be as long as 2.5 to 3 years.

Have you seen any change in any of those metrics?

Have you seen any change in the year metrics?

Yeah.

When new people join the year metrics of the group as an average for obvious reasons would drop, because the mix includes new people. And new people start at a lower level in that metric. As time passes by and as those people get integrated, rare individual metric grows. As the mix ages, the metric improves. So I would characterize those metrics as metric that for the company should improve in a long-term next two to three year trajectory because that sales force that we’ve added in the last 18 months and the sales force that we will add in the next 18 months would take that time to “mature.”

Perfect. And one last quick one for me, just a housekeeping one, how should we think about the other income line heading through next year, maybe, Mohit, if you could just jump in on that?

Sure, Joe. So basically, in the other income line, you’ll see interest costs going up because of our new debt facilities that we’ve taken on. I mentioned in the script that we expect interest cost every quarter to be in the range of $9 million to $9.5 million, approximately $9.3 million. Add to this other miscellanous stuff, we should see about $38 million to $40 million expense line on the interest side, just a gross expense. As far as interest income is concerned, we should see it at similar levels of 2012. So does that help.

It does help. Thank you guys.

Thanks, Joe.

Thank you for your questions. The next one comes from Ashwin Shirvaikar from Citibank. Please go ahead.

I think that’s me. Hi Tiger and Mohit. So, Tiger, one of the issues you had laid out, I guess, when we met last year was the Genpact didn’t actually see every opportunity that was out there. I think put out a metric that said maybe you only see 50% to 60% of all the opportunities. As you add sales force and as you change some of these processes, do you have a sense for how much of the opportunity, you actually see and can go after. And they are asking less about productivity, more about the top of final issuer?

No, Ashwin, it’s a great question and it’s a question that we think about a lot. I don’t think we have all the answers. And that’s a good news because I think it’s an opportunity. We don’t see everything that is out there. We don’t see every opportunity and the more we see those, I think the more our differentiation does play out and then we win our fair share and sometimes we win more than our fair share, particularly in specific industry verticals and specific service lines that we think we are best-in-class. I think our approach as we go into 2013 and beyond is to constantly think about how do we get known more, how do we continue to deliver great operating excellence with great net promoter scores. And the fundamental premise of net promoter scores is when you have customers, who are highly satisfied, who got great value addition, they will promote us. And we’ve seen that play out over the years. So don’t know exactly, how much we see. I think there are some metric that tell us that we probably see one in two to one in three.

Okay.

And as we get prepared and ready and talk through the Feb 20th, Investor Day, we will talk about this in terms of the context of the total market, the way we think about penetration in that market and the way we think about what we think we see versus what we don’t see enough are thinking on how we will go about capturing that.

Okay. Understood. Couple of clarifications, the organic contribution that you gave, sorry, the inorganic contribution you gave away was that just JAWOOD or was that the total inorganic contribution because there were, I think, there are other acquisitions that affect this year?

I assume you’re talking about our 2013 guidance.

Yeah. Guidance.

Okay. So listen, the 2150 to 2200 is the total growth which includes everything. The only material inorganic part of that would be JAWOOD because we’ll have almost 10.5-month impact of revenue that we’ll get from them, which will be approximately 2% on 2012. Honestly, the rest of it we’ve -- rest of them we’ve almost had for most of the year and we really going to integrate them and mix them up with our different industry verticals as we speak. It’s going to be very hard for us to measure them in their original form. In fact, I really encourage everybody that to focus on our overall performance. Whenever you do an acquisition, we are going to highlight it. Where required, we’ll tweak our guidance. But, having said that, our whole endeavor is to get the acquisition, mix the teams, exchange product portfolios, do what’s right for the larger Genpact and therefore, measuring performance at the original entity level, especially for the small platform capability that we are acquiring, which are so organic in nature, stuff we could have really done ourselves but faster to get the capability from the outside. And therefore, honestly when we talk about 2013, we looking at it overall as 2150 to 2200, JAWOOD would being brand new, approximately 2%.

Got it. Last point more of a clarification, understanding, type of think. You had I think a couple of contracts that got renewed, on renewals do you typically see a material price down that we should worry about?

Ashwin, let me take that one, broadly no, we don’t. The whole thinking around renewal from a client perspective is, we are now going to continue our journey that we’ve been on. Here is the way we’d like to think about the next five, seven, 10 years depending on the contract. And here is what and this is the interesting part about most of our relationships and characterizes the underpenetration that is there and the opportunity that is there. It’s always a conversation about, now when we think about the next journey, what else can we think about, what else can we add to the pie and what else can we replicate, how else can we go upstream adjacent. So, in fact, the contract actually under goes its next evolution. So first of all, it’s a very rarely an apple-to-apple comparison, broadly the way I would characterize it is that we would think about the contract in terms its margin profile continuing on into the future. So I would less talk about pricing and more about its margin profile, because there are many other changes that happen in those discussions. It’s an opportunity to sit down and relook at the full opportunity.

Thank you. Next question comes from Bryan Keane from Deutsche Bank. Please go ahead.

Okay. Thank you. Hi. Just wanted to ask about capital markets, obviously that was still area of softness, interested to know, what the outlook looks like in that business since we had -- as we developed in 2013? And also if you can remind us, what percentage of revenue capital markets is for total Genpact gross?

So let me answer the first part, Bryan. The -- our outlook for the capital markets business in terms of the industry vertical and is not a surprise, I mean, everyone in that space is thinking about, the secular change that that industry is going through. And what it means for them? What it means for the product they have, the technology platforms they have, and how they are going to provide those services? What it means for them from a regulatory perspective and complying with those regulations? And which products are going to continue on in their portfolio. So as they undertake those changes. They are restructuring, I mean, we -- you and I both read enough newspaper articles about those types of restructuring decisions. They are also taking a very hard look at their overall spends and as you can imagine, capital markets as a vertical has significant technology spends. And they are looking at significant components of that which are discretionary and saying which of those do I continuing and which of those do I don’t need right now? And we see those, probably continuing to play out in 2013 that’s a way we thought about 2013. At the same time, for the very reasons I talked about, they also saying its time for us to think about running this business differently, about thinking about the combination of process and technology, about thinking about some of the enterprise G&A functions. And obviously in those areas the core Genpact process capability, the core Genpact Smart Decision Services capability, redesign capability, bringing SEP and Lean Six Sigma, and Analytics plays out really, really well. And we are therefore and have been in significant conversations with the number of these relationships and these relationships are deep, strong and get great service from our capital markets business. So as I -- so in conclusion, all of that ease in the mix in 2013. We continue to think that the business vertical is going to go through continue relook at discretionary spends and that’s why remodeled, but transformational agendas are real. And the proportion of the business, Mohit?

It’s about 8% to 10% of our revenues.

Okay. 8% to 10%. Okay. And then just want to ask a general question on the adjusted margins. Obviously, this year with the acquisitions in general margins were kind of flattish to down a little? Do we ever get to a future point of scale where we can get adjusted margins to increase with the revenue growth?

So just to, I’ll answer that Bryan, the one quick final answer, I want to add, one line I want to add to the capital markets business and I talked about in the prepared script is, we haven’t seen, so we’ve talked about all the discretionary spends and the pressure, et cetera in the past, that just continuing. We haven’t seen any further deterioration, it’s actually stable and the view of our 2013 is stability from that perspective as we go from ‘12 to ‘13 in the capital markets vertical. Margins, Bryan, this is a business where the runway for growth is long. This is a business where underpenetration is the only way to characterize, every industry vertical, every geography and every service line. In that context, it’s therefore an industry were, it’s therefore a business, where we would think about stable margins with focus on investing in the right areas either from a domain or from a capabilities, or from a client facing team, or from things like Lean Six Sigma, Smart Enterprise Processes, new products, all of which are the things that we tend to spend our investment dollars on. So, I don’t think we have clear definition. At this point we are going to increase our margins. Our view right now is stable margins.

Thank you. Next question comes from Kunal Tayal from Bank of America. Please go ahead.

Hi. Thanks. Tiger, firstly, I wanted to understand the 2013 revenue guidances in terms of trends that you expect for IT and BPM buckets?

Kunal, the trends for BPM are, obviously, typically the BPM business gives you more visibility. Particularly on the process side which is a significant part of what we do in BPM, very high visibility typically. And therefore, that’s what has been modeled into our 2013 plan. When we get to technology and IT Services, clearly, there is a shorter cycle element to that, and there is a discretionary element to that. I think the way I would characterize 2013, the planning is cautious optimism when it came -- gets to those types of areas. In the context of the volatile uncertain world that we keep referring to. And then there is Smart Decision Services where lot of the transformational agendas, we think are going to continue to grow at the pace that which we’ve seen. And within analytical business and analytical services, the discretionary end of it which is not very large for us but is there, those will continue to be under scrutiny to make sure that they are the spends that our clients want to do in that industry vertical at a particular point in time and all of those are part of a model for 2013.

So, I guess fair to assume to that BPM continues to grow, maybe shared faster than IT services for you all.

Absolutely. Absolutely. Probably, more than a shared faster for an IT services.

Right. And then -- I know you’ve just talked about capital markets but then, your BFSI growth rates have shown a nice uptick from 8% yoy to 14%, 15% this quarter versus the previous quarter. So, firstly, was it planned and then yoy business you have stocked off, but any improvement in spend sentiment that you’ve seen from BFSI clients, specifically over the past one or two quarters?

Kunal, as you know our business is not about spends. It’s about spends only in the technology side and on the discretionary end of technology and analytics. Our business is about providing services in a more efficient way and then adding an effectiveness way of bringing outcomes, helping clients deal with new risk and regulatory requirements, helping clients deal with new revenue growth opportunities, cross-sell, managing receivables an so on. So, it’s less about whether BFSI has started spending in our case. It’s about, has BFSI got to a point where they are now revisiting their transformational agendas? They know what to do and then they’ll start the partnership journey. And we’ve seen that journey actually pick up through 2012. Again, in our business it takes time to see that flow through to revenue. We’ve seen that flow through to revenue in quarter four. So, as we think about 2013, we have a good pipeline around the banking and financial services vertical as well as insurance. All of which gets categorized under that BFSI umbrella.

Thank you. The next question comes from Manish Hemrajani. He is from Oppenheimer. Please go ahead.

Yeah. Good morning, Tiger, Mohit. Good quarter, guys. Can you comment on the decision side to timelines? Industry rhetoric off late has been that pipelines are strong but cycles times are long. Are you seeing any improvement there or are you seeing anything different?

Actually, Manish, we are neither seeing an improvement nor seeing deterioration broadly, and I want to make sure it’s broadly because the world is not one statement for the world. The world has now got characterized into different geographies, different verticals, different industries and different services and they do tend to have their individual volatility. But broadly, I would say decision times, cycles times have remain stable. Broadly, it’s not accelerated neither has it deteriorated. It’s actually been stable for a consistent period of time. We saw pockets of acceleration in Europe. We are now seeing at least addition to the pipeline in the Americas from a geographic perspective, I mean that’s the way we would characterize it.

Got it. On the JAWOOD acquisition, was there a competitive bidding process and then how large do you think the opportunity is in the ICD9 to 10 conversion, if you can quantify that?

There is much more of discussions that we started off quite sometime back with our focus around the healthcare verticals, so I wouldn’t necessarily call it a classic competitive process. Around ICD9, ICD10, there are clearly segments that they operate in. There are specific capabilities around that. I think we’ll probably talk a little bit more in detail when we get to the Investor Day, when we talk about the healthcare vertical. That might be a good venue to talk about it.

Thank you. The next question comes from Tim -- from Baird. Please go ahead.

Hey, guys. Nice job. I just had a couple of housekeeping question.

Hi Tim.

Hey, Tiger. Just a couple of housekeeping question, I guess on the revenue trajectory to the year, typically, you guys see revenue down sequentially and I was just curious of the acquisition coming on. Should we expect that to still be down sequentially or can maybe it be flattish or up slightly?

The sequential mix of revenue next year will be pretty much in line with what you saw in 2012. So there is typically a dip in quarter one for reasons we’ve stated in the past. But it does then into sequentially for the rest of the year. So if you look at our trend in 2012, we expect it to be reasonably similar to that in 2013.

And then should we make the same assumption from margins, I think historically, they’ve been weaker in Q1 and the strongest in Q4 but last year, they’re pretty stable throughout the year. So should we expect that too in 2013?

Actually, it’s a good question. You should also expect the margin profile to be a lot more even this year just like it was last year.

Okay.

Although in the past, our margins have been lower in the first quarter and then improved sequentially. Given various puts and takes, including the phasing of some of our investments, we do expect the AOI margins to be more even very similar to 2012.

Okay. And then just on FX gains and losses, I think at the beginning of the year, the rupee was around 55 and now it’s around 53. So if you would end there this quarter, you would probably have a little bit of a loss in Q1, so are you factoring in any FX gains or losses into the guidance?

So the foreign exchange remeasurement gains or losses which appear below the income of operations line are actually not taught of our guidance. In fact, we don’t guide to EPS as you know. So they don’t impact the adjusted operated income line at all. So our guidance of 15.8% to 16.3% AOI is in fact not impacted at all by the remeasurement line. But indeed, gains and losses will impact net income in EPS. And I think your question was whether we plan for that, we don’t. It’s a quarter-to-quarter remeasurement and it’s hard to predict what that might be.

Okay. Thanks guys.

Thank you.

Thanks.

Thank you. We are only taking one question per analyst. Now, the last -- the final question will come from Arvind Ramnani from BNP. Please go ahead.

Hi. Just a couple of questions on your JAWOOD acquisition, I mean, I assume when you do these acquisitions, there are some efficiencies that you can leverage by using your HR systems, another sort of operational things Does your guidance assume any kind of efficiencies like operationally through the acquisition?

Arvind, actually we don’t think too much about benefits from HR systems et cetera. We execute it. The reason I’m saying that is because these are acquisitions for capabilities. These are acquisitions for adding growth in specific verticals and building capabilities in those verticals. That’s the focus of these acquisitions. These are not acquisitions where the objective is to quickly find a way to get that extra 1% incremental margin. There would be acquisitions like that. I’m sure but in the context of JAWOOD and actually quite a few of the acquisitions that we’ve done in the recent past, they’ve all been focused on capabilities, they’ve all been focused on bringing those capabilities to our clients, often and most often, existing clients and driving growth. So yeah, we will get some benefit and we will see that as we go over the next couple of years that Mohit has talked to and referred to as margin improvement of that business, that will happen but the thesis is built on growth.

Thank you. I would now like to turn the call back to Bharani Bobba for closing remarks.

Thanks everyone for joining our call today, and once again, I want to reiterate, we look forward to seeing everyone on February 20th during our Investor Day. Thanks very much.

Thank you.

Thank you for joining today’s conference. This concludes your presentation. You may now disconnect. Good day.