Wipro Limited (WIT) Q3 2025 Earnings Report, Transcript and Summary

Ladies and gentlemen, good day, and welcome to Wipro Limited Q3 FY '25 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. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Dipak Bohra, Senior Vice President, Corporate Treasurer and Investor Relations. Thank you and over to you, sir.

Thank you, Yashashri. Warm welcome to our quarter three financial year '25 earnings call. We will begin the call with business highlights and overview by Srinivas Pallia, our Chief Executive Officer and Managing Director; followed by updates on financial overview by our CFO, Aparna Iyer. We also have our CHRO, Saurabh Govil, on this call. Afterwards, the operator will open the bridge for Q&A with our management team. Before Srini 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 Securities Litigation Reform Act 1995. These statements are based on management's current expectations and are associated with uncertainties and risks, which may cause the actual results to differ materially from those expected. The uncertainties and risk factors are explained in our detailed filings with SEC. Wipro 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 hand over the call to Srini.

Thank you, Dipak. Hello, everyone. Thank you for joining us today. Our best wishes for the New Year. 2024 was marked by macroeconomic challenges. 2025 looks more hopeful and resilient. Our clients are cautiously optimistic and discretionary spending is slowly coming back. While cost optimization remains key, we expect significant growth in AI spending. We are committed to driving innovation for our clients by leveraging the transformative power of AI. Let me now turn to the financial highlights of the quarter. All the growth numbers I share will be in constant currency. Our IT Services revenue for quarter 3 was $2.63 billion, reflecting a sequential growth of 0.1% and degrowth of 0.7% on a year-on-year basis. This takes us slightly above the upper end of our guidance. We ended the quarter with a TCV of $3.5 billion in bookings. Our operating margins came in at 17.5%, an expansion of 0.7% quarter-on-quarter and 1.5% year-on-year. This is a 12-quarter high, and I want to take this opportunity to thank our delivery teams for driving execution rigor. Our Capco business continued to see improved demand. Order book grew by 9% year-on-year and revenue grew 11% year-on-year. In our strategic market unit performance, we saw steady growth in demand across Americas, while Europe and APMEA remained soft for us. Americas 1 grew 3.9% sequentially and 3.7% on a year-on-year basis. Growth was primarily led by health and technology and communication sectors. Americas 2 degrew 0.6% sequentially and grew 1.2% on a year-on-year basis led by BFSI sector. Europe degrew 2.7% sequentially and 4.6% on a year-on-year basis. APMEA degrew 2.1% sequentially and 8% on a year-on-year basis. Moving on, 3 of our 5 industry sectors recorded year-on-year growth, reflecting the progress across key areas. Health maintained its momentum, growing 6.7% sequentially and 4.5% year-on-year. While BFSI degrew by 1.9% quarter-on-quarter, the sector grew 3.4% year-on-year. Consumer degrew by 0.9% quarter-on-quarter and grew 0.4% year-on-year. Energy, manufacturing and resources grew 0.4% quarter-on-quarter and declined 8.7% year-on-year. Technology and Communications degrew 0.6% quarter-on-quarter and 5.3% year-on-year. I would now like to share some updates on our strategic priorities that we had called out. In quarter 3, we closed 17 large deals with a total value of $1 billion across markets and sectors. I would like to give you 2 examples in this context. We won a vendor consolidation deal with a leading American retail and distribution company. As a strategic partner, we will transform their merchandising, sales and supply chain functions. In fact, our AI-led approach across engineering, digital, infrastructure and application services was crucial in helping us win this deal. My second example is the leading airline in the Middle East that has partnered with us for end-to-end technology modernization. As part of a long-term contract, we will design and implement a customized, cloud-based solution to improve operational agility and resource utilization. Again, using AI-powered industry solutions we will enhance employee productivity and customer experience for them. We continue to focus on our large accounts, in our core markets and priority sectors. In quarter three, we achieved a sequential growth of 7.3% in our top account. Top 5 and top 10 accounts grew 3.7% and 1.8%, respectively. We remain committed to investing and scaling our large accounts, demonstrating client centricity by driving greater value, increasing wallet share and expanding into new business -- new lines of business. I would like to give an example of this. A global technology company that selected us to create and scale a cutting-edge silicon platform for its mixed reality products. We will work with the client to develop a silicon chip to deliver high performance at low power consumption. We will integrate advanced features like AI, sensor fusion and stunning graphics to enhance end-user experience. This is one of Wipro's largest core silicon engineering wins. We have made good progress in our consulting-led AI-powered industry and cross-industry solutions. This quarter, we had several successes across our industry solutions, including Payer-in-a-box wealth AI and software-defined vehicle. And additionally, we also secured multiple cross-industry wins with our next-gen managed services and cyber shield offering. At Wipro, we continue to invest in EI education. 50,000 of our employees now hold advanced AI certification. Beyond skilling, we are also investing in AI tools and platforms across the software development cycle and our own internal processes. At Wipro, we are early adopters of AI, which is -- which will be delivering impactful results for our clients. This technology goes beyond traditional productivity assistance. While many of these applications are still experimental, we see use cases emerging in areas like customer service and supply chain management. Building talented skill is a key strategic priority for us. We remain focused in building a globally diverse team with a high-performance culture. While we are promoting strong internal talent, we're also bringing in top external talent. We are investing significantly in leadership development. In FY '25, Wipro Leadership Institute would have trained over 600 leaders through a combination of in-house leadership sessions and programs curated with leading global institutes. Finally, I want to recognize the dedication of our employees during the holiday season in delivering business-critical programs successfully for our clients. Now a note on guidance, before I wrap up. For the next quarter, we are guiding for a sequential growth of minus 1% to plus 1% in constant currency terms. With that, let me turn it over to Aparna for a detailed overview of our financials. Thank you. Aparna, over to you.

Thank you, Srini. Good evening, everybody, and wish you all a terrific new year. Let me cover the financial highlights for the quarter in a few key points. One, as a result of the strong in-quarter execution, we delivered about the top end of our revenue guidance range, growing 0.1% quarter-on-quarter in constant currency terms. Two. Our operating margins are at a 12-quarter high or 17.5%. This marks an expansion of 0.7% quarter-on-quarter and 1.5% year-on-year. Let me also add that this was achieved after absorbing 2 months of incremental wage revision. With this, the wage division impact that we did as of September '24 is fully behind us. As we move into Q4, we are confident of staying in a narrowband. Three. Our EPS and net income grew 24% year-on-year and 5% sequentially. This was led on the back of the margin expansion and therefore, the EBIT growth, better treasury returns and a stable ETR of 24%. Four. I'm pleased to share with you that the Board of Directors have approved increasing the payout percentage to 70% or above of the net income, cumulatively on a block of 3-year period, this is effective FY '26. Along with this, the Board has also declared an interim dividend of INR6 per share. You'll note that this is substantially higher in terms of the quantum of dividend payout compared to what we have done in the previous year. Finally, in terms of guidance, I want to reiterate the guidance stated by Srini. Our guidance for Q4 is minus 1% to plus 1%, and therefore, in dollar terms it will be $2.602 billion to $2.655 billion. This is in constant currency terms. With that, we can open it up for Q&A.

[Operator Instructions] We'll take our first question from the line of Vibhor Singhal from Nuvama Equities.

Congrats on a solid performance, especially on the margin front. Srini, my question was on the deal wins. The deal wins were definitely up on a Y-on-Y basis, close to $1 billion in terms of the large deal wins, and TCV has consistently stayed above the $3.5 billion mark. How do you see this trajectory helping us achieve higher Y-on-Y growth rate or execution in the past few quarters has been super solid? But I mean, at the end of the day, I mean, when do you think -- or what is the number that you believe is what can take us to -- closer to a mid-single-digit kind of a Y-on-Y growth rate or maybe higher than that? And do you see the pipeline for us to be able to achieve that in coming quarters? And how soon or how early can we reach there?

Thank you, Vibhor. Let me reflect on your question. Our current large deal pipeline is robust and we are seeing good traction across geographies. Now if you have to put an industry lens to this, our strongest traction in large deals remain in BFSI and EMR segment. BFSI is strong in Americas, Europe and India, whereas if you look at EMR, manufacturing is strong in Europe compared to U.S. And our E&U is robust -- I mean, Americas, including U.S. and Canada, followed by our ANZ and Europe. In terms of health care, consumer and tech and comps, we are seeing more traction in the medium to large size around $50 million to $100 million. Now if you look at our quarter 3, our large deal TCV has been at $1 billion, which is still up 6% year-on-year by value and up by 3 deals by top. So I wouldn't read too much into it. Large deals, as you know, are lumpy, and there's also a seasonal element to them. If you recollect, we had a record quarter 2 '25, and we now have a good foreclosure. So we don't see it as a cause for concern.

Got it. Got it. In terms of discretionary spend outside of Capco also, are we seeing tailwinds in terms of clients willing to put the spend back on the anvil or do you believe there is still some time to be able to reach that stage?

So if you look at the -- from a discretionary lens perspective alone, we did talk about Capco, where both the bookings and revenue, we had a good year-on-year growth in quarter 3. Having said that, the discretionary spend in Americas, definitely, we see positive signs in BFSI segment, which is a good news for us. We also see some level of coming up in certain sectors, but it's not secular at this point in time. Also, this is a month where many of our customers are in the process of budgeting, and we are working with them to understand where the spend is going to be. But if you -- if I were to actually extend your question to the overall demand environment, we see Americas very strong and the demand continues to pick up. While if you look at our bookings into $1 million to $5 million and $5 million to $10 million range has been very strong. However, in Europe, while the economies are challenged, whether we -- we all know what's happening in Germany, U.K. or France. Actually, this has put some pressure on some of our clients and some of the companies out there to trim their costs and become more efficient. And we see this as an opportunity going forward. And just to conclude, overall pipeline is healthy and has remained at the same level over the last year.

Got it. Got it. Just 1 question for Aparna. So Aparna, I think margins in this quarter were rock solid. We were able to expand margins despite 2 month wage hike. So could you basically press upon or reflect upon some of the levers which we managed to use this? Because our gross margins have also expanded in this quarter on a quarter-on-quarter basis despite the wage hike. And related question, what would now be our, let's say, target band of margins given that we're already in the 17.5% range? In the near to medium term, where do we expect these margins to be, let's say, in the next 3 to 4 quarters?

So Vibhor, yes, the margin expansion has come. If you look at what were the factors in Q3, we started the quarter with 2 incremental months of salary wage hike to absorb. We also had a seasonally weak quarter in terms of the furlough, right? A lot of the improvements have been in action consistently over the last 3 to 4 quarters. Some of that played out. A lot of the improvement that we did to offset the increase and also expand the margins came from on the back of improved execution rigor, both in our core and in the consulting business, right? If you look at rising Capco and the core business, all of that has done very well. Now we had a set of levers, which are traditional in terms of the utilization, offshoring and the fixed price productivity that played out. We also did a very conscious reduction in terms of our overheads, including G&A, right? So despite the wage hike and everything, you will see those numbers coming down. And these are conscious reductions that we drove, and they have also yielded into the margin improvement. Where do I look at? Is there a revised operational band? Nothing that we would like to share at the moment. We've got to 17.5% that we had shared and it's a 12-quarter high. So in some sense, we are very conscious that we should sustain it. And therefore, for Q4, we are saying that we will -- we are confident of holding it in a narrow band, and we'll take it from there.

So 17.5% plus/minus could be the aspiration band now?

Yes, yes, at least for now.

We'll take our next question from the line of Abhishek Kumar from JM Financial.

Congratulations on a very good performance. So my first question is on growth and related to that is on guidance. Last 2 quarters, we have now been coming closer to the top end of our guidance, which is not happening in quarters prior to that. I just wanted to understand what has changed? Are the mid-quarter negative surprises kind of abating and that is helping us hit the top end or the demand environment has been improving? So that is on the performance. And related to that, on guidance, next quarter, despite the fact that furloughs will be absent, et cetera, at the midpoint, we are still looking at flattish growth similar to 3Q. So some of the puts and takes for our 4Q guidance.

Yes. Sure. So Abhishek, if you look at it, our guidance when we guide there's no change to the philosophy of guidance. We guide based on the visibility we have closer to the midpoint, and then we guide in a range. The fact that in the last 2 quarters, we are able to come about the midpoint is because of both a stronger execution in quarter; two, also the demand environment is improving, right? It does show that the stability, right, that we are able to draw at the start of the quarter to when we finish is better. So it is a reflection of that. It's reflected in the fact that some of our consulting businesses are doing well. Capco, like we'd highlighted, has grown 11% year-on-year. Bookings are up 9% year-on-year. So that's a good sign, and it's also a reflection of that. But otherwise, there's no change. As we look at Q4, it is a better guidance if you have to compare it to the guidance we gave for quarter 3, and that's what we have the present visibility for, Abhishek.

Sure. Okay. Maybe one question on margin, Aparna. There was a sharp decline in depreciation in this quarter. So is that now a more normalized level as far as depreciation is concerned or was there any one-off there that we should be aware of?

No, I don't think there are any one-off. It's likely to sustain. You can model it at the same level.

We'll take our next question from the line of Abhishek Bhandari from Nomura.

I had a question on growth and the guidance, again. So Srini, if I look at your growth for this quarter, it was broadly led by health care, partly by manufacturing. But in banking, we had a negative number. Is it both because of the furlough? And if you could talk about your outlook specifically for banking and health care businesses, given that some of your peers are talking about increased caution amongst health care client given uncertainty around policy givers and optimism in banking event that there could be derated and other stuff happening, which would increase the business?

Let me give you some color to this. If you look at with BFSI, it was impacted by furloughs in quarter 3. However, the sector has grown 3.4% year-on-year. This is clearly a combination of discretionary spend led by capital which pan just talked about it, which is a consulting work and also nondiscretionary fees in some of the large and midsized deals, which are more around the themes of vendor consolidation, cost takeout. If you look at BFSI budgets going forward, we see -- we feel there will be an uptick on the budget, whereas health care budgets will continue to grow, albeit maybe slower than what it was in the past. So that's my take on both health care and BFSI.

Got it. And Srini, second and last question is again on the guidance part. Given that we had a great execution this quarter, we exited more than the top end. We are talking about some return of discretionary demand, furlough would be absent, as Abhishek also asked, and there will be some tailwinds coming from the execution of the projects in the near past. So I'm still curious why you have a negative number from guidance perspective, when most of the things are actually positive for you?

So like Aparna said, we've given the quarter 4 guidance based on the visibility, current visibility we have. Having said that, we are seeing a gradual recovery happening. And the sectors that I talked to you about just now, BFSI and Health care clearly are doing well. And some of the sectors for us both in EMR, which is energy manufacturing resources and consumer and still need to recover. However, if you look at on the geo side, we see momentum building up in Americas while Europe and APMEA remains soft for us.

Got it. And last question, Aparna to you, now that we have return of capital to shareholders to around 70%, how should we think the mode of return? And you have mentioned blocks of 3 years, so would it again be lumpy if you decide to use the buyback route or do you want to make it more like an annual --.

In terms of more of returns, we continue to prefer both dividends on buybacks and/or even special dividend as appropriate, we will -- the Board will make a decision. We want this to be more consistent, but we've continue given that we -- one cannot rule out a buyback. We have said that you should continue to measure this over a block of 3 years. We will assess. And if at some point in time, we want to make this annual, we will. But for now, we will continue to measure this as a block of 3 years and we prefer both buybacks and dividends.

All the best for calendar '25.

Thanks. Thanks, Abhishek.

Next question is from the line of Rishi Jhunjhunwala from IIFL Institutional Equities.

Just 1 question around mining the non-top 10 clients better or basically even looking for hunting opportunities. If you look at, we have done reasonably well when it comes to growth in top 10 clients. It's up 15% year-on-year, whereas ex of that, our revenues are still declining at a 5% rate. So just wanted to understand, outside of the top 10 clients mining, given that if the overall environment were to become better how are we preparing ourselves to ensure that when some of those opportunities come, we are able to hunt better as the decline in non-top 10 seems to be a lot higher than what we generally see in industry peers?

Rishi, there's no change to the philosophy. We would like to continue to hunt and mine, right? We do look at mining our top 10 clients or top 25 or top 50 as a show of strength and that's something that we're focused on. The reduction that you're seeing in our active client portfolio, we report that number on a trailing 12-months. So if there is a weaker revenue environment that also shows up in the number of active clients is also the furloughs and the cross currency impact that's also playing out a little bit this quarter. But there is certainly, in terms of the strategic priorities that Srini about, hunting remains a very, very key lever for us, and we are very, very focused on winning the must-have accounts. So there's absolutely no deprioritization on that count, Rishi.

Next question is from the line of Ravi Menon from Macquarie.

This quarter even without any aid the margins have been credible. So actually a bit surprised that you talked about --

Sorry to interrupt, Mr. Menon, can you use your handset mode, please? Your audio is not very clear.

Yes. The margins have been pretty good. So surprised that you're talking about keeping it in narrow range. Are there any headwinds in the coming quarter that you're thinking about? Because it looks like at least the rupee seems to be depreciating. So how should we think about margins for what the headwinds and tailwinds next quarter?

Yes, the rupee has been depreciating. We'll have to keep a watch on it. It has remained volatile in the last few weeks. We will -- a lot has to play in. There's also a certain hedge books, there's also a certain amount of hedges that we carry. So it will be a function of that. I don't think there are any particular headwinds as we start Q4, in a lot like the salary increase and anything is behind us. It is going to be a lot of business as usual. And so there are not particularly headwinds that I'd like to call out.

And Srini, health care, seasonally, this is actually normally a good quarter for health plan services. So is that what helped you or are there any other segments within health care that you're seeing good traction there?

If you look at health care for us, it's a combination of payers, providers, pharma and medical devices companies, so the growth that we see has been across these 4 sub-industries Ravi.

Right. So extremely broad-based, I can say.

Yes.

We'll take our next question from the line of Gaurav Rateria from Morgan Stanley.

Congrats on great execution on margins. My first question is on the large deals. Have you seen any change in the average tenor of these deals and hence, the conversion of these deals into revenues?

In some sense, Gaurav, our large deal bookings are down sequentially, but our TCV bookings are not down, right? So the quantum of small- and medium-sized deals have picked up this quarter, which also means our ACV growth was particularly good after several quarters. But it's still 1 quarter. We'll wait and watch to see if this is a deterministic trend that plays out. But as far as the overall texture of deals when we see in the pipeline, I think there are quite a few large deals as well, both in terms of cost takeout, when the consolidation efficiency led. So in some sense, the large deal pipeline continues to remain robust. So if I look at the pipeline, it seems to be very similar to what it has been in the last few quarters. But our bookings in Q3 are definitively the deal tenure has come down.

Got it. Second question is, what are the portfolio interventions you have done in some of the areas where growth has not been so great, like EMR vertical, APMEA geography? And where are we in terms of these interventions, are we likely to see any changes in the outcomes?

Sure, Gaurav. Let me just talk about both of them, APMEA and Europe, where we have been very soft. As far as APMEA is concerned, we have the new CEO there, and he's building a next level of leadership, and we continue to invest in this market across the broad geography that APMEA covers. We're also relooked at our go-to-market approach with a very defined both account teams as well as teams that can go after new logos. In fact, specifically in APMEA, specific to the reach of the countries, we have identified a set of accounts, and we are also differentiating ourselves with AI, which is definitely a different value prop to this market. Pipeline is being rebuilt, and we see the pipeline growing. And I think if we continue to execute we should see momentum coming back in APMEA. In the Europe, again, very similar. We have created a new leadership at SMU level. We are also making sure we continue to focus on certain sectors and double-down on them. We -- while Europe has shown de-growth in quarter 3, I can definitely tell you, pipeline is strong. All we need to do is focus on deal conversion. And I think with the consulting teams and the local delivery capabilities that we have, I feel we all have -- we have all the ingredients in place, now it's all about execution, Gaurav.

We have our next question from the line of Sudheer Guntupalli from Kotak Mahindra AMC.

Congrats on a good quarter. So a couple of questions. Firstly, your top account continues to see very good traction. So any specific reason behind this? I think for the last several quarters -- last few quarters, we had seen that this is steadily increasing in terms of its revenue share.

I'll just give you 1 fact and then maybe Srini can speak about it. In terms of just the top 10 growth, right, the top, top 5, top 10, they've been doing well. Even if you have to take in top 25, the growth is pretty good. What's driving this growth? 7 out of our 10 accounts are growing on a year-on-year in constant currency terms. So that's something that's quite broad-based. Certainly sectors that are doing well are adding to it in terms of BFSI, health. So they are adding those clients and the top 10 are doing really well. And yes, if you would like to add in --

Sure. So Sudheer, the context of the deals that I talked about when Gaurav asked that question. Similarly, both in Europe and APMEA, like I said, we have reinforced our teams, both on account management as well as delivery, and that should actually help us mine these accounts more especially in this patch of the markets that we are in. And as far as the top 10 accounts that have grown that Aparna has talked about can be the role models for the rest of the account teams as well in terms of possible. In fact, it's the top 25 accounts, I would say. Also, some of these accounts are a little bit sector-specific to for us. If you look at like we talked about demand environment, strengthening in BFSI and health, whereas in certain sectors, especially energy and manufacturing for us have been weak. But I see at least based on the quarter 3, we have seen an uptick in manufacturing that will actually result into the accounts that we are focusing on.

Sure, sir. And second question is in terms of headcount. So in the last 10 quarters, if I look at it, I think net addition is negative in 7 of them, including the current quarter. Now that we're talking about an improvement in demand and our guidance also sort of reflects some amount of growth in the coming quarter. Adjusted for furloughs, we are operating at 86% to 88% kind of utilizations. So when should we think that the hiring engine should start picking again?

Saurabh here. The hiring engine has actually kicked off. It's not that it's not there. We have called out that in the next fiscal, we will be going every quarter to campus and hiring about 10,000 to 12,000 people. Over and above that, we'll have lateral hiring happening. . And we also see attrition coming down in the coming quarters because our net new resignations have been coming down. So we will look at overall supply chain in terms of utilization, demand, attrition and look at hiring. But I see that we will be robust in hiring as we move forward.

Next in line is Mr. Sandeep Shah from Equirus Securities.

Congrats on a good execution. The first question, I think, Srini, you meant that the portfolio-specific issue in the energy manufacturing resources and consumer is not behind, so when do you expect that to get behind? Because we have also heard in the earlier calls, it may be more Wipro-specific rather than industry-specific. And why I'm asking this is, this contributes almost 36%, 38% of the top line, and that may provide a hurdle in terms of consistently growing quarter-after-quarter.

Thanks, Sandeep. Sandeep, if you look at the way we have the 4 strategic market units, clearly, Sandeep, Americas and Americas 2 we talked about our performance last few quarters. Having said that, we did call out that APMEA and Europe has been soft for us. Now if you embed the industries into those 4 markets, clearly, the industries that we have -- the sectors that we are -- we see growth and opportunities in the last 3 quarters I'm talking about has been banking, financial services and health care. Having said that, this quarter, we saw 3 of our sectors grow year-on-year and I think that's another positive area. In terms of specifically energy, manufacturing and resources, it has been soft for us. But within that, manufacturing is taking an uptick for us and you see the numbers that we have talked about. In terms of technology in consumer, it has been a good quarter, quarter 3, and I know we have a very strong and robust pipeline around that. I see that we have to just execute into those -- that segment. And finally, if you look at the broad-based the pipeline is very broad-based across these sectors and across these 4 SMUs, I think the focus will now be, Sandeep, bringing some of them home.

Okay. And Aparna, just if I'm not wrong, what you said on the capital allocation, we are more tilted on dividend versus buyback as a matter of choice or am I wrong in understanding this?

No. We prefer both dividends and buyback. That said, you've seen that the dividend that we have declared is substantially higher compared to what we have done in the previous year. The capital allocation that we have committed is 70% and above of the net income over a block of 3 years with effective FY '26. So you should look at the block starting FY '26 for us to meet that number. And we -- like I said, all modes, including dividend, buyback, special dividend, everything will be explored.

[Operator Instructions] Next question is from the line of Ashwin Mehta from AMBIT Capital.

Congrats on good results. Aparna, I wanted to get a sense in terms of that despite the wage hikes, our employee cost number in absolute terms does not seem to have changed materially over the last 2 quarters. So what have been the offsets for that? And the second question is in terms of depreciation. We've seen almost 120-odd bps benefit on depreciation from a Y-o-Y perspective. So what is driving this substantial reduction in terms of depreciation?

Actually, Ashwin, on depreciation, in Q3 of the last fiscal, we actually had a one-off. So that's not the right number to take. Even if you have to look at it over the last 2, 3 quarters of depreciation. So broadly there, there is some optimization, but that's a result of the natural face-off of intangible amortization that we do, right? So like I said, what you're seeing in Q3 is actually the word of and you can model that going forward. Now to the point on what's playing out in the employee cost? There are quite a few things. One, we've spoken about improved levels of utilization, the number you're seeing is a reduction, but that's how we just define it because of furloughs the utilization looks lower, but there is -- if you look at the core utilization even outside of this is very, very strong. Two. If you look at the FTP productivity that we've been driving, being consistently improving. And what you're seeing as a flow-through into Q3 is also a lot of the product initiatives that we had already initiated through Q2, right? Also, we've actually improved our quality of revenue. If you look at our third-party services cost, it's also something that we have reduced. So our improved quality of revenue is also playing out into the margin expansion. And then again, so those are some of the levers.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Mr. Dipak Bohra for closing comments. Over to you, sir.

Yes. Thank you for all joining the call. In case we could not take any questions due to time constraints, you can reach out Investor Relations directly. Have a nice day.

Thank you, members of the management team. On behalf of Wipro Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.