Ladies and gentlemen, good day and welcome to the Infosys Earnings Conference Call. As a reminder, all participants’ lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Sandeep Mahindroo. Thank you. And over to you, sir.

Thanks Serena. Hello, everyone and welcome to Infosys earnings call to discuss Q1 FY17 earnings release. I am Sandeep from the Investor Relations team. Joining us today on this call is CEO and MD, Dr. Vishal Sikka; COO, Mr. Pravin Rao; CFO, Mr. M. D. Ranganath along with other members of the senior management team. We’ll start the call with some remarks on the performance of the Company by Dr. Sikka and Mr. Ranganath. Subsequently, we’ll open up the call for questions. Please note that anything that we say which refers to our outlook for the future is a forward-looking statement which must be read in conjunction with the risk the Company faces. A full statement and explanation of these risks is available in our filings with the SEC which can be found on www.sec.gov. I’d now like to pass it on to Dr. Vishal Sikka.

Thank you, Sandeep. Good afternoon, good evening and good morning everyone. And thanks for joining us today, as we report the results of Q1 fiscal ‘17. To characterize the quarter, we had some unexpected headwinds that resulted in lower than expected revenue growth in Q1. And at the same time, we continued to make strong strides in the execution of our strategy. We started this year on the moment from the fourth quarter of fiscal ‘16, which was one of the best fourth quarters that we had in recent years. We ended the first quarter of fiscal ‘17 with revenue of $2.501 billion or Indian rupees 16,782 crores. This represents a growth of 2.2% in U.S. dollar reported terms, 1.4% in INR reported terms and 1.7% in quarter-on-quarter constant currency. Volumes grew by 2.2%. Operating margin from the quarter was 24.1%, largely impacted due to typical employee and visa related costs of the first quarter, but also supported by improvement in utilization and reduced spending in subcontractor services among other measures that we took. The softness in top-line growth was primarily on account of unanticipated headwinds in discretionary spending in consulting services and impacted implementations as well as slower project ramp-ups in some large deals that we had won in the earlier quarters. This resulted in lower revenue from some client engagements, especially in our life sciences, energy and utilities portfolios. The revenue for our India and Finacle units declined slightly as well. All of it impacted our revenue for the quarter. On the positive side, telecom reported 11.4% sequential growth, manufacturing at 4.4%, retail and CPG reported 5.5% growth, and transportation and logistics reported 9.3% sequential growth, all well-above the Company’s average for the quarter. As a result of our focused efforts on expanding strategic client relationships, our top…

Thank you, Vishal. Hello everyone. This is Ranga here. Let me first start with Q1 revenue performance. Our revenues in Q1 were $2,501 million, which is a growth of 2.2% in reported basis and 1.7% in constant currency basis. On a year-on-year basis, when compared to Q1 of ‘16, revenues have grown 10.9% in dollar terms and 12.1% in constant currency terms. Volumes grew 2.2% during the quarter as compared to 2.4% in Q4 of ‘16. On quarter-to-quarter basis, onsite volume grew 3.3% and offshore volume grew 1.8%. Realization for the quarter declined by 0.3% on reported basis and 0.7% in constant currency basis as compared to previous quarter. However, on a year-on-year basis, realization declined 0.2% in constant currency basis and 1.3% in reported basis. As Vishal mentioned earlier, we continue to focus on optimizing our operating efficiency levers. These levers are utilization, subcontractors, cost as a synergy of revenue, onsite mix percent and onsite employee cost as a percentage of revenue. Some of these indicators have improved during this quarter. Let me talk about their trajectory during this quarter. Let me first talk about utilization. Our utilization excluding trainees, increased by 40 basis points to 80.5%; similarly, utilization including trainees also went up to 76.5%. For the last five quarters, utilization excluding trainees has been consistently above 80%; and we will continue to focus further improvement. And we do believe that there is scope for improvement. On subcontracting expenses, as a percentage of revenues, it improved further. You will recall that it was at the higher level of 6.3% of revenue in Q3 of last year; it reduced to 5.6% in Q4; and during this quarter, it has further reduced to 5.4%. While some of the subcontractor cost is inevitable to address the business needs, we are further…

Thanks very much, sir. Ladies and gentlemen, we will now begin the question-and-answer Session. [Operator Instructions] We have first question from the line of Edward Caso from Wells Fargo. Please go ahead.

Hi, good evening. Could you talk a little bit about the insurance vertical? We’ve been hearing some sort of more cautious commentary across the industry in recent quarters, presumably now that they are more challenged with extended period of low interest rates, any thoughts there?

Hi, this is Manish. I run the insurance sector. The spend in the sector is challenged overall. I think what was happening is that with the negative bond yields et cetera, the treasury there -- treasury is not producing enough returns, and there is overall cut that we see. With that said, we have had a couple of very good wins in the last quarter, in the insurance space. And we remain bullish about the sector, at least for us.

My other question is I just wanted to press a little bit on clarity on the margin guidance on what medium or intermediate term means. So, help us out here, on your press call earlier today, you suggested in the short-run, the margins more in the 24% to 25% range. Now, is short-term this year or shorter than that? And given the seasonality of your business with your margins, just trying to -- help us clarify that. Thank you.

Sure, thanks for asking the question. We continue to retreat that FY ‘17 operated margin will be in the range of 24% to 26%; there is absolutely no change in that range.

Thank you. We have next question from the line of Keith Bachman from Bank of Montreal. Please go ahead.

Hi, I’d like to start with following up from Ed’s question. As you think about the trajectory of margins over the course of the year, you called out a few things, for instance visa costs; I understand wage hike’s impact this quarter. But, how do you anticipate visa costs continuing to be a headwind and more specifically or more broadly I should say, why the margins go back up; what are the forces that are going to get relived that causes margins to go back up?

Sure. Every -- the margins dropping in Q1 of every financial year is seasonal. As you know, we announce our compensation hikes every year in Q1. Typically, the margin impact on account of compensation hike is around 1.5%, and this quarter we had 1.4%. As you know, Q1 is also the time when we file for our H1 visas in the U.S. And every Q1 of every year we have this cost and this year we had 0.8%, in fact on account of that. So, over Q4, decline of margin by 150 basis points to Q1 of the year is very normal. It happens in every year. That is nothing unusual about it. And having said that, during the quarter, if you look at last year for example, we were at 24%; and this year we are at 24.1% on Q1-on-Q1. And so, typically the margin dips in first quarter because of these two reasons; and afterwards, it gets normalized during the course of the quarter. And, so, that is one trajectory while we reiterate that 24 to 26. The second part is coming to the levers. As you know, as I mentioned three quarters earlier, there were couple of cost efficiency levers which we thought we had not fully optimized. First, we identified the subcontractor expenses as a percentage of revenue. It used to be 6.3% in Q3 of last year. We said, we will bring it down. And it came down to 5.6% of revenue in Q4; and further, it came to 5.3%. While some of the subcontractor expenses is required to meet some of the business needs in short term, at the same time we do believe that some of that is also because of lack of better talent planning and some inefficiencies in that area. So, that’s what we are focusing on; we want to eradicate those inefficiencies. Coming to likewise in utilization, utilization for example for the last couple of quarters has been consistently above 80%. And we do believe that there is scope for couple of points improvement because in some of the quarters, we have now in the range of 82, 83. So, that’s second trajectory. Likewise onsite employee costs. So, these are the levers that we believe we have at our disposal and we want to optimize them.

My follow-up question then would -- I wanted to talk more broadly about financial services. You talked a little bit about the insurance side, and there’s some pressure there. But I wanted to hear some comments that you’d be willing to share with us surrounding the broader financial services, in particular the investment banking broker-dealer areas. And I know in your previous comments, you had said that it’s a little early to think about the UK situation. How are you thinking about -- you think about scenario, the UK situation, what that might do to the investment banking or broker-dealer world in particular and how that may either help or hurt in terms of the broader financial sector spending in IT over the next couple quarters?

So, I think in the financial services, we had a good quarter. If you strip out the results of Finacle, we grew at about 2.5%. And, you’re right, in the broker-dealer segment, we did see some headwinds. So, that was lower than we expected. But, I think it’s a -- I think it might -- we’re hopeful that it’ll comeback in the second half of the year. Overall, the story that we have, right, the software plus services story, I think that’s really resonating well with our clients. And the whole industry is in the middle of a transformation. So, there’s a huge amount of interest in technology, what it can do from the perspective of industrialization and reducing cost to income ratios and from the perspective of what digital transformation can do for the industry. We also see that the pressure on regulatory mandates and the compliance pressure still continues especially in Europe with PSD2 [ph] and MiFID II. So, we think that the spend in the industry should stay stable. And from our perspective, we see a strong pipeline for Q2. Even in Q1, if you read through our commentary, of the 10 large deal wins that we had that is deals over $50 million, three of these deals were in the financial services business, and this included consolidation deals but it also included deals where we led or where we are leading a payment transformation initiative for a bank in Australia. So, overall, I think we had a good quarter with stable to strong volume growth. On the Brexit question, I think this is something where like the rest of the industry and like actually the financial services business, we are in a wait and watch mode. There has been a lot of concern and there has been a lot of volatility. But, with the exception of one example, we have not really seen slowdowns or change in client behaviors. I think it could be a positive for us as clients look to restructure their businesses or as they look to move workforces to Continental Europe. They will also be -- spend on account of new regulatory and compliance mandates, which would mean system changes. But on the other hand, it would also mean a slowdown in decision making and a cut in spending. So, we are waiting to see the impact of that. Finally, just to echo what Manish said, more than Brexit, we are concerned about the interest rate scenarios, so the fact that interest rate hikes are unlikely or are going to be slower in the second half of the year. So, we are waiting to see what impact that has on spend.

Thank you. Next question is from the line of Rod Bourgeois from DeepDive Equity Research. Please go ahead.

Yes. So, a question about your European business. If Brexit only really affected decision making at one client, which is what I think was said on the earlier conference call. I would like to understand what explains relative growth weakness in your European geography. I’d specifically like to know, if Europe’s growth would have been weak in the quarter even in absence of Brexit?

So, Rod, this was unrelated to Brexit. The one example, I think Mohit gave earlier, in the earlier call was pertaining to slight slowdown that we saw, which was not actually significant related to Brexit. However, the slowdown in Europe that we saw is related to the two things that we talked about earlier, the slowdown in the discretionary spending relating to consulting services and package system implementations, as well as one of the large deals that we had won couple of quarters ago that we had expected to ramp up at a faster rate than it did over the course of the quarter. Both examples were in Europe. So that is the reason that we saw the slowdown in Europe. It was not related to Brexit.

Understood. So on that note, let’s talk for a second about the consulting and package implementation business. Quarter-to-quarter, swings in a given segment can definitely be misleading I know, because of lumpiness of deals. But in that consulting market, you generally aren’t seeing a lot of lumpiness; you’ve got a lot of project based yields there. It was interesting yesterday to hear TCS essentially report much improved consulting growth. But, I think you’re today citing consulting as a key reason for your revenue weakness and you had a sequential decline in that business. So, in that context, can you characterize the latest demand trend in the overall consulting in system integration market? I’d like to know to what extent the recent weakness in your business there was due to the market, or was it more due to specific challenges on Infosys specific deals, or maybe you encountered some execution setbacks in that business? In other words, can you dimension the market impact in the consulting business versus the Infosys specific impact in your consulting segment in its latest growth rate?

So, I think that it is almost entirely us; it is our situation with clients and our execution. I would say, almost all of it or vast majority of it has nothing to do with the opportunities or consulting in the broader market, it is all us and this is something that we’re going to take a very strong -- or put a very strong focus on. Rajesh is now running our consulting business. And I do believe that, there is actually a need in the tier above our traditional services to offer the next generation, strategic services and program management and high-end capabilities around complex program, whether these are around package systems or not. And I think that that is something that we continue to be very excited about. On the very top end around strategy and design oriented engagements, as I mentioned in my commentary earlier, we actually have seen significant amount of success. But, roughly 3,000-person consulting organization that we have that we have integrated over the course of the last year or between the old Lodestone Company and the Infosys management consulting team, that just ran into some challenges that were unanticipated over the course of the previous quarter. And those are all largely due to our own execution. And this is something that we are going to put a very strong focus on, and fix.

And how long does it realistically take to improve your position in that consulting business? I’m assuming that’s a multi-quarter effort; it’s not something that turns overnight. Right?

Yes, I don’t think, it will turn overnight. But, I mean, now that we have a strong focus on it, I expect that -- I am confident that it’s going to do better. But, you are right, assuming a dramatic turnaround here is going to take couple or three quarters, but this is something that -- I mean there is no shortage of opportunity there. So, I see no reason why we can’t get it straight.

And September is your seasonally strongest quarter. Do you see some improvement in that consulting business occurring in your September quarter?

Generally, September quarter is a good one in consulting. In our case, because of European holiday schedule and so forth, it has some impacts. But, we have factored all of that into the numbers that we have guided on.

Thank you. We have next question from the line of Moshe Katri from Williams Trading. [Ph] Please go ahead.

Thanks. Vishal, I think it will be helpful if you provide some more color on some of that spending power that you mentioned that you’ve seen in the consulting universe. And then, should we assume that -- just to clarify, should we assume that this actually continues for the second half of this calendar year, based on what you’re seeing out there?

Hey, Moshe. First of all, congratulations, man. Generally speaking, I don’t read too much into that. It’s just that -- I mean if you look at the guidance and the underlying situation, we have -- the basic pillars of our strategy are both working extremely well. The renewal of our core business and the main delivery engine has worked very well. We delivered -- what, 3.4%, Ranga, growth in the first quarter under Ravi’s leadership. And this was clearly something that where the combination of Zero Distance like initiatives on grassroots innovation, there is a bringing Design Thinking in a massive way and also the power of automation has all clicked in. And then even more encouragingly in parallel to that, the new areas around Mana, Skava and Edge did extremely well. Where we had the challenges were in these small pockets, in particular in consulting and package implementations as well as in India and Finacle. And Finacle was at $2.5 million decline. So, I don’t read much into that at all because we had a very good quarter before that. So that is basically what has dragged down the performance in the quarter. And being the first quarter of the year and being the sequential quarter-on-quarter nature of the business, we are having to revise the guidance downwards by a point. So, that is basically what has gone wrong. [Ph] And the reason for that in the consulting world as I mentioned is an answer to the previous question was it’s primarily our own execution in some projects that ended that we did not anticipate not being renewed and exits in some cases and so forth. So, that is something that we are determined to fix. And I am not reading too much into the spending pattern and so forth, as a broad thing in that context. As I mentioned with regard to Brexit and so forth, this is still too early to tell whether that has an impact in these areas or not but the impact that I have talked about so far is not related to any of them.

And then, just a follow-up; are you resetting your hiring plans for the fiscal year because of what you’ve seen so far?

No. We are hiring and hiring very -- yes, we are hiring in all ways. We are -- actually, as I have said, our longer-term, the 2020 ambitions are around $80,000 revenue per employee, which means that the rate at which we hire will tend to decrease. And nonetheless, it is still even at 20 billion and $80,000 revenue per employee that is 250,000 employees, which is a little bit more than 50,000 employees more than where we are at now. So, this won’t slow down dramatically, it will slow down to some degree because of the benefits of automation and productivity improvements kicking in. So, that is kind of what we are doing. Also on attrition, I mean, yes, the attrition number went up to 15.6 or something thereabouts. But, if you look at the high performance attrition, we’ve put in a very specific talent management approach on earlier this quarter. And as a result of that we were able to decrease the high performance attrition by 2 percentage points from 13.2 in the previous quarter to 11.2.

Thank you. Next question is from the line of Bryan Bergin from Cowen. Please go ahead.

Hi, thanks for taking my question. On BPO, I think I heard some slowness mentioned earlier. Can you talk about what verticals or service lines that maybe driving that?

Radha, do you want to answer that; industries and verticals and service lines?

Yes, sure. In BPO, we are adapting the Renew and New strategy, the renewal of the existing BPOs through automation and providing higher productivity, using people and software to create greater value for our customers. The new part of the BPO is what is very exciting. We are trying to reshape client experience or stakeholder experience of our clients. We are using Bala in ways very unique to try and create more value for our clients. And clearly, the operating model has to move from the headcount based fee models to percentage or value based outcome models. That is a journey which we are undertaking; it’s very exciting.

Okay, thanks. And then just on your M&A pipeline, can you just remind us again your core areas or I guess areas of focus?

For BPO or for the Infosys Group as a whole?

Broadly.

On the M&A, priority continues to about bringing, hiring and innovation, hiring -- about hiring. It’s -- at the end of the reporting, [ph] our long day guys. It is around buying next generation companies that help us accelerate our ambitions with new technologies, next generation -- if you look at Skava, it’s a great example of the kind of acquisition that wish to do, or Panaya, the companies that we’ve bought. So, we will be -- we are selectively looking for opportunities in new and emerging areas where differentiated technology solutions, AI based solutions, collaboration and design solutions can help us advance our mission. And that continues to be the case.

Thank you. And next question is from the line of Ankur Rudra from CLSA. Please go ahead.

Hi, thanks. Just on the performance for this quarter, Vishal, it’s probably been the second or the third quarter we’ve seen significant volatility on one side or the other, compared to where we were expecting. And, last time this happened, I think you’d indicated that you were taking in some steps in terms of getting internal early warning systems and improving execution. Maybe, if you can elaborate what steps you’ve been taking to prevent internal surprises, and especially in terms of planning?

The last several quarters, we’ve been consistent in how we have -- and consistently positive in how the changes have happened. This particular time, some of the surprises hit us relatively late, the combination of the consulting that I mentioned and the slower ramp ups on the projects and so forth. Ultimately, there are bunch of things around simplifying our processes and building internal systems to be much more responsive in real time. But to a certain degree, there is an inherent volatility in our business where ramp downs are immediate and ramp ups take a while. And so that asymmetry creates a challenge in being able to forecast more accurately. And now, we are adding these new dimensions of the software business which have their own dimension of volatility. So, a combination of all these things has got to this point. And the solution is very simple to do for us to ensure that we do for us what they do for clients already, which is to build much more fine-grained real time systems that can give us a more granular sense of where we are.

Would a wider guidance range help, given the greater volatility now?

No, Ranga is saying we have reduced the guidance and yes, that is true. I think that if we were to increase the guidance range that would help stay within the band but it would kind of miss the point as well at the same time. So, I don’t know; I think the better solution to this is to lower the volatility, to have smaller gaps and so forth. And that is more a -- and part of it is the fact that we are transforming a business in a quite a fundamental way. And so, no matter how sophisticated our systems are, there will continue to be surprises that we get hit by. But, your point is absolutely something that Pravin and I have been working on, which is to -- ultimately to simplify our processes. So, Ranga and his team already have put in place earlier this quarter, a brand new process that we call OTR which is similar to our order to cash process. And we will continue to make process improvements and bring ourselves and do real time, just as we do for our clients.

Fair enough. And just one more question on the revised guidance, I realize that you’ve baked in the impact you’ve seen in the quarter, but I am not entirely sure I understood whether you’ve baked in potential further caution beyond what you saw in this quarter. So, have you been overly cautious in terms of potential impact of weaker macro environment and Brexit beyond the loss of revenues this quarter?

No, no; this is a visibility that we have as of today. This is -- we have not baked in the impact of Brexit, because we don’t know what the impact of Brexit is and where this thing is going to go. Our philosophy in the two years that I have been here as well as in times before has always been to give our market a very accurate sense of what we see. It is not about the business of what is it called, under promise and over deliver and managing expectations and stuff like that. It is simply -- to give you, Ranga put it very nicely earlier that we want to always minimize the asymmetry of information between us and what management sees and what the market sees, and that is our always our endeavor and our commitment to you. And this guidance is basically what we see at the present time. And if this changes, we will of course let you know.

Fair enough. Just last question, maybe Ranga you can help me. You mentioned subcontracting cost is something you’ve worked on very closely in the past and maybe that will be a lever for the rest of the year as well. If you can help me understand, typically what’s the transformation of reduction in subcontracting cost? Because I am assuming when you reduce subcontracted labor, there is an adjustment in terms of rise in full time employee cost, maybe an impact on utilization as well. So, net of that typically, how much is let’s say 100 basis-point decline in subcontracting actually transmit into margins?

Yes, I think that’s a good question. One is looking at the subcontracted cost as a percentage of revenue. And that has to be seen along with whether the total employee cost as a percentage of revenue is also showing the similar trend line. For example, if it declined the subcontractor expenses by 1%, if the total employee cost goes up by 1% as a percentage of revenue, absolutely no impact on P&L. However, if you look at this quarter and if you look at the three quarters, both have moved in tandem. For example, in subcontractor expenses as a percentage of revenue, three quarters ago in Q3 was 6.3% and let’s said this quarter, it is 5.3%. Now, if you look at the onsite employee cost as a percentage of revenue compared to the last years, it is flat; it is 39.3% and it was 39.2%. Now, coming back to your second part of the question, which is, how does it play out? Yes, there are two types of subcontractor reductions that we are looking at. One, is that subcontractor required it all in that position; can we replace with another employee is one. In that case, differential savings would really be what we pay to the subcontractor and what we pay to the employee. Typically, subcontractors are hired of niche skill sets. And we have seen even up to 30% to 35% of cost differential between employee salary cost and that subcontractor expenses. That is one. The second category is we do look at certain opportunities. Hey, we do really lose subcontractors beyond a certain period and can they really reduce a total number of headcount in that project, if it is a fixed priced project for example. So, it’s a combination of these three factors. But, we took a decision that look, we need to really optimize. While we all agree that subcontractors are required for meeting certain business needs, we look at internal inefficiency if any in talent planning and timely availability of our own talent pool requirement, so we are able to reduce that.

Thank you. And next question is from the line of Joseph Foresi from Cantor. Please go ahead.

Hi. I was wondering, just starting first with attrition, what part was voluntary versus non-voluntary; and do you expect that to directionally improve; and was any of that related to the project delays in the quarter?

There was almost -- the usual contribution of non-voluntary -- so, there was -- Krish, do you want to answer this?

So, the voluntary attrition is about 1%, and that’s been the average over the last couple of quarters. So, it’s not kind of spiked up.

Okay. And then, obviously directionally, you expect it to improve and none of the attrition was related to the projects themselves that were delayed, right?

Yes. Normally this quarter, because this is a time many of these people go out and do higher education and all. So attrition always goes up in this quarter, but we hope to see it coming down. We’ve already seen it come down in June. So, I think in the next quarter, we think it will come down.

Okay. And I’ll try this question; I’ve tried it before a little bit. But, you’ve done a very good job on the operational innovations. But, from a transformational standpoint, I am wondering, can you give us any color on the progress you are making on the digital front? I know a lot of players have given percentages of revenues and you’ve said a number of times that hey, all of what we do is digital. But, maybe you could either give us some examples or help us understand how you are competing in that particular arena?

First of all, that term has been quite deeply abused in the industry. And I know, I have joked about it in the past, but over the course of this last quarter, I looked into some of these digital projects in more detail. And in turns out that a lot of things that are traditional ADM and so forth are characterized as digital. Having said that, there are two very fundamental, very deeply two ways in which there is a digital revolution going on around us. And you have to go back to Nicholas Negroponte’s book on Being Digital to get inspiration from that. The first one is areas where end-customer touch points where businesses are digitizing the previously physical end-user touch point. And the second area, now, this applies to retail, but also to consumer facing aspects of any business. The second area is where the Internet of Things where the digital technology overlaying on to the physical world whether in machinery or in the buildings or institutions, machines and so forth creates new digital opportunities and experiences, as a counterpart to the physical world. So, if you look at digital as these two, our digital practice that Ravi has, as well as our Skava business that we have run, applies very much to the first part of it. And our engineering services work and our Mana platform applies to the second part of it. I don’t see any particular value in breaking up this revenue and putting it into some category and then compete with somebody who calls their Salesforce.com implementation as digital and so on. But, I can tell you about the things that we consider digital. And all the work that we do in bringing Skava as a new mobile or kiosk environment or virtual reality…

That’s very helpful, thanks. And then, just one last question from me on the pricing front; I know pricing has always been competitive. And, I am asking sort of a very hypothetical question here. But, if should we see a downtick or some sort of disruption due to Brexit, is that your chief concern that pricing could get hit fairly hard because the business and the majority of the business is more commoditized, at this point or should we be concerned more about discretionary spending? I am just trying to get a sense of sort of if you are prepared to go into this or if there was a downtick, which I know you are not seeing yet, where you would start to see it and how severe you think you might be able to get? I know that’s very hypothetical.

On the pricing front in the last few years on the business and IT operation side, it has always being under pressure. And it’s not from a rate card perspective but more from a deal perspective where clients -- whenever a deal comes for renewal, clients are clearly expecting 30% to 40% reduction in what they’ve spent, so that they can repurpose the spend on the discretionary side. So, whatever pressure we have on pricing, we are trying to counter through operational metrics as well through automation -- operational levers as well as through automation, and that is already factored in. But, on the Brexit, which is again hypothetical, but if it’s Brexit expense, then, I think the impact will be mostly on the discussion discretionary side. And there either I go the projects may, I mean because of the uncertainties, some of the projects in short-term may get pushed out or there may be pricing pressure on the discretionary side of things. But again, at this stage, it’s hypothetical. We have to see how it will evolve.

Ladies and gentlemen, this was the last question for today. I would now like to handover the floor back to Mr. Sandeep Mahindroo for his closing comments. Over to you, sir.

We’d like to thank everyone for joining us on this call. And we look forward to talking to you again over the course of the quarter. Thank you.

Thank you very much, sir. Ladies and gentlemen, on behalf of Infosys that concludes this conference call. Thank you for joining us. You may now disconnect your lines.