Wipro Limited (WIT) Q1 2027 Earnings Report, Transcript and Summary

Ladies and gentlemen, good day, and welcome to Wipro Limited Q1 FY 27 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. Please note that this conference is being recorded. And the duration for today's call will be for 45 minutes. I now hand the conference over to Mr. Abhishek Jain, Vice President Corporate Treasurer and Head of Investor Relations.

Thank you, Anne. Over to you. Thank you, Yashashri.

Good evening, and warm welcome to our Q1 FY 2027 Earnings Call. We will begin the call with the business highlights and overview by Srinivas Pallia, our Chief Executive Officer and Managing Director followed by updates on financial overview by our CFO, Aparna C. Iyer We also have our CHRO, Saurabh Govil, and our Chief Strategist and technology officer, Hari Shetty, 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 of 2000. 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. Uncertainties and risk factors are explained in our detailed filings with the SEC. Wipro does not undertake any obligation to update the forward looking statements to reflect events and circumstances after the date of filing. Conference call will be archived, a transcript will be available on our website. With that, I would like to turn over the call to Srinivas.

Thank you, Abhishek. Good evening, everyone. Thank you for joining us today. Let me start with a quick view of the broader market. The macro environment remains resilient but uncertainty continues to shape decision making. Technology investment has not slowed. They have become more focused. Clients continue to invest in AI data, cloud, modernization, cybersecurity, and productivity led transformation. Spending today is measured with more rigor, and longer decision cycles. The AI disruption is expanding the market not shrinking it. At the same time, conversations around AI are becoming more intense. As the tokenization landscape evolves, clients are focused on net productivity and require a tighter linkage between investment and outcomes. Despite selective client spending, our pipeline remains healthy. We continue to see strong engagement across our markets and industries. We are executing a consulting led AI powered strategy to help our clients reimagine and redesign their enterprise around intelligence. With the I will now share our financial performance. All numbers are in constant currency. Our IT services revenue for Q1 was $2.61 billion up 0.9% year on year. And down 1.2% sequentially. Our IT services margin was 16% a 1.2% decline year on year. In our markets, Americas remained soft declining both sequentially and on a year on year basis. We continue to see momentum in technology and communications, sector, and some good wins in the consumer sector. As we move into Q2, we are also seeing momentum build up. APMEA's revenue grew sequentially in BFSI. and on a year on year basis. We are encouraged by the momentum we continue to see in this market. Particularly in the BFSI and consumer sectors. Our Europe SMU grew year on year with strong traction in BFSI, technology, and communication. However, energy manufacturing and resources remain soft. We see a healthy pipeline across various regions in Europe, such as UK and Nordics. During the quarter, order booking total $3.4 billion and large deal bookings total $1.6 billion Our order booking includes 13 large deals this quarter. Let me highlight 2 of these deal wins. A leading global animal health care provider selected us to modernize and manage digital operations across their global network of hospitals and clinics. Using Wipro intelligence, we will help transform service operations improve productivity, and enable predictive issue prevention. We are helping the client create a more autonomous technology environment. The goal is to improve experiences for clinical teams employees and customers while increasing operational rig rigor. Second deal win. A leading European specialty chemicals company chose us to run and transform the complex application landscape. Leveraging AI led capabilities through WINGS part of our Wipro intelligence. Excuse me. We will automate operations improve delivery efficiency, and provide greater visibility through an AI powered digital command center. The outcome here will be elevated service quality, higher productivity, and lower operating costs. Across markets and industries, we are helping clients reimagine operations, by embedding AI at the core of their business spanning both physical and digital worlds. In this context, let me share some examples of the work we are already doing with clients. 1. For a global industrial manufacturer we are reimagining finance and procurement through our Winx platform Combining Agentic intelligent orchestration, real time analytics, and AI forward knowledge management. To create a highly automated operating model. In my second example, with 1 of our health care clients, we are deploying multi agent AI systems reducing provider enrollment processing times up to 70%. While automating their manual effort up to 90%. 3. For a leading global technology company, We are improving the quality reasoning, and safety of their next generation AI models through expert led data creation, and AI evaluation. This is delivering significant gains in model accuracy reasoning capability. With a life sciences client, our WINGS platform is transforming pharma coexistence from a document centric labor intensive process into an AI native safety operation. This is powered by autonomous agents and regulatory grid workflows. For a global energy leader, we are defining their enterprise robotic strategy and road map for physical AI. Enabled autonomous operations. Collectively, these engagements demonstrate the breadth of Wipro's AI capabilities strategy and advisory to domain specific solutions. And the wins that I talked about also reflect a broader shift in enterprise priorities. In fact, interestingly today, clients are looking beyond technology modernization alone. The focus is moving towards AI enabled operating models that improve service quality, reduce operational complexity, strengthen resilience, and unlock sustainable productivity gains. And this is where we are well positioned. Let me now share a few additional updates. During the quarter, we closed the acquisition of Mindprint and quickly transitioned from integration planning to execution. While we continue to deepen our relationship with Olam Group, we have also started to see good opportunities in the food and agriculture sector. You may recall last quarter, we launched AI native business and platform suite. Since then, we have moved decisively from strategy to execution. We are building multiple AI powered industry platforms developing new AI native business models, and forging strong partnerships across the AI ecosystem. We have laid the foundation strengthen the team, with specialized AI native leadership talent. And define our road map to establish clear priorities for the next phase of growth. As you would have been aware, we recently launched Applied AI Center of Excellence for cloud models powered by Anthropic. This strengthens our ability to help clients rapidly adopt frontier AI capabilities. While maintaining enterprise grade controls and governance. Capco our BFSI consulting arm, won the AI governance and risk excellence award. At the OpenAI Partner Summit. And our UK AI lab won the OpenAI Codec Hackathon for an AI powered banking solution. With that, let me shift focus to the next quarter. In quarter 2, we are guiding for a sequential growth of -1.5% to +0.5% in constant currency terms. As we continue to navigate macro uncertainty, and geopolitical instability, our priorities are to remain disciplined in execution. Helping clients navigate complexity and creating sustainable value for all our stakeholders. With that, let me hand it over to Aparna to share financial performance in more detail.

Thank you. Thank you, Srinivas. Good evening, everybody, and thank you for joining us. Let me share a quick update on the financial performance, and then we can open for the Q&A. Our IT services revenues grew 0.9% year on year in constant currency. While declining 1.2% sequentially. This is well within our guided range. Our operating margins for the quarter was 16%. We declined 1.2% year on year. The reasons are because of the incremental impact of salary increase, ramp up of large deals won earlier, and our ongoing investments in AI. This was partially offset by the rupee depreciation benefits and the other operational efficiencies. We remain focused on returning back to our previously stated narrowband. Income for the quarter was $33.6 billion Our EPS for the quarter was INR 3.2, Both grew 0.6% year on year. Moving on to our SMU and sector performance. All the growth numbers that I will share will be on constant currency. A1 was flattish year on year while declining 2.3% sequentially. Americas too declined 7.3% year on year, and 2.5% declined sequentially. Europe grew 6% on a year on year basis while declining 0.9% sequentially. APMEA grew 13.5% on a year on year basis and grew 4.4% sequentially. Moving on to sector performance, BFSI grew 2.6% on a year on year basis, while declining 1.2% sequentially. Consumer grew 1.9% year on year, and point 7% growth sequentially. Technology and communication grew 10.8% on a year on year basis. And grew point 2% sequentially. Health, declined 2.6% sequentially and 0.0% year on year. EMR, also declined 3.6% sequentially and 8.9% year on year. Our operating cash flow stood at 98% of net income for Q1. Our gross cash, including investments, was at $4.3 billion Accounting yield for the average investment held in India was stable at 7.2%. Our ETR was at 22.6% for Q1. Versus 21.6% in the same time last year. In terms of the guidance, to reiterate what was stated by Srinivas, our IT services business segment with expected to be in the range of $2.574 billion to $2.627 billion This translates to a sequential guidance of minus 1.5% to a plus 0.5% in constant currency terms. Lastly, in the recently concluded board meeting, our board of directors have declared interim dividend of INR 2 Including this dividend, our payouts in the last 1 year we would be returning in excess of $3 billion in terms of the cash back to shareholders. With this, we can open up for Q&A.

Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Take our first question. From the line of Ravi Menon from Axis Capital. Please go ahead.

Hi, thank you for the opportunity. Aparna, did not surprise that you have added headcount despite the guidance that implies a sequential decline. Attrition sales seems to be well under control. Utilization has also come off a slightly quarter on quarter. So why add headcount now when you are still looking at a decline in revenue next quarter?

Our headcount also includes the people who joined us from the Mindprint team, Ravi. If you exclude that, our headcount has actually gone down quarter on quarter. And guidance, of course, includes the revenues from stream completely in Q2.

Just to add, outside of the headquarter has actually gone down by 2.5 thousand 2 thousand 5 hundred people.

that is correct. Rishi.

Thank you. And, Srini, in BFSI, most of the peers seem to be doing well. And you also spoke of how things seem to be looking up there. But this quarter, then, we had a decline. Who are clients with big issue? And, you know, is this something that you expect to maybe hold us back a little bit in Q2 as well? Or you think BFSI comes back to growth? So, Ravi, Hi, Ravi.

it is Srinivas here. So as far as the BFS sector is concerned, specifically for us, Ravi, if you have seen we did see a year on year growth of 2.6% in constant terms. The sector declined 1.2% sequentially. Now, if I were to give a little bit of a color in terms of, how the sectors perform, Europe and APMEA, Ravi, actually year on year, have seen a growth. In fact, Europe, the FSI growth was led by a ramp up of the large deal we had announced earlier. And if I were to look at APMEA, we continue to see very good traction. With both in terms of ramp ups and also existing deals and the new deal wins that we have seen. I also want to call out that we see good momentum in the BFSI in Americas as well. So net, yes, you know, I agree with your comment. And having said that, we are also seeing good traction for us as well, Ravi.

Thanks, Ravi. We appreciate that. So we can look at this as maybe you know, 1 off client incident, something like that. Is there is there any cutback or did you lose out of any vendor consolidation? Could you comment on what caused the decline this got?

There are 2 aspects, Ravi. 1 is, you know, clearly, some of the largest that we have won had taken a lot more time for us to scale, ramp up. I think now the clients are moving. that is the reason why I said, with The Americas because we have 1 couple of deals out-- the large deals out there. Of them are, are coming back. 1 is the nature of the demand. Discretionary spend has been slower, and some of the decision making has been, slower. But we think, will come back. 1 thing that we are seeing while, you know, from a customer perspective, in the BFSI sector, there are 2, you know, a couple of opportunities that we see, Ravi. 1 is on the cost and vendor consolidation. Remains the key drivers for our clients. Rishi? And, you know, this is very similar to the commentary that we gave in the last few quarters. However, Ravi, what we are now seeing is that deep savings are getting reinvested by some of our clients into AI capabilities. And that is where I think, you know, the they will know the new transformation projects and discretionary spend, will come back. that is how we see it, Ravi. Thank you, Ravi.

1 last question, if I may. You know, on AI, your couple of peers have found very different strategies on setting up a very big, large data centers, someone else looking at a small capacity data center, which they think, they will, but they will own the entire hardware stack. Anything that you are thinking among those lines, So, Ravi, I think, at a macro level, the way we see is that AI is a structural opportunity for us and for the industry in general.

Having said that, the specialist in AI, you know, to be honest, is not just driven by models. Rishi? For us, having the client context, understanding the domain and industry aspect of it, understanding the process, Rishi? And the you know, driving the data for an AI implementation becomes very critical. And also, you know, clients are looking at security and change management, organization change management. In this context. So that is where I would say that, you know, the direction that, AI is moving on. And for us, Ravi, you know, very clearly, we are pivoted to AI. And in you know, we are doing an AI first approach. And our consulting led you know, you know, AI power strategy is all about that. When you are doing a run aspect of it, which is application management infrastructure, or in a process. We are doing with the AI first approach, and, we are clearly built a strong platform around things, which we are gaining very, a good traction, which is our delivery platform. And the second thing, you know, I mean, obviously, you are busy. Now listening to a lot of commentary around that, the software development life cycle, there is a dramatic improvement in productivity. Now the I do not know. We have to have the context of if it is a pure play green project, which is like a tool, like a, let's say, Python, the productivity is significantly higher. But on the other end of the spectrum, it is a complex code. And, you know, if you do not have the right, you know, target environment which is dot 4 legacy, deployment and production also becomes difficult. There, the productivity, you know, comes down, significantly. And so that is how we see it. But for us, the biggest opportunity is all the new AI services that we are seeing in the market. Now we call that as reimagine AI. Now, I think it is very important also, you know, what we are trying to do. Maybe I will double click later, but we have clearly created the AI native unit which I talked about. We are building the industry and cross industry platforms. In fact, some of the, you know, margin dilution that you talk you know, the question that was asked, investing in this. I think it is very important for us to invest for the future. So that is number 1, AI native unit. Second, no. We have the half a billion dollar Wipro Ventures, and now we are specifically focused on targeting AI and data and, you know, security startups. This will also enhance our overall Wipro intelligence platform. 3. We invested in our Wipro innovation network. We actually launched the innovation networks for our clients, and that is actually picking up. The clients are co innovating with us in those innovation network. And finally, you know, ecosystem partnering with the frontier AI companies. So that is how we are driving AI. Across our industries, and each industry is different in terms of adoption. But everyone wants to be you know, in the AI journey, Ravi. Yeah. We said but I have 1 more thing. When you said that the much productivity benefit in the you know, the old complex code. So then can we say that there is all the investor concern about significant, you know, erosion on the existing book of business Can we say that this is really unfounded? So the way I see it, Ravi, is that, you know, I am looking at for the industry and for Wipro. What are the like I said, structural-- what are the structural opportunities? Today, if you look at the traction that we have, the reimagined AI services, that is how I call them, you know, new AI services. 1, AI advisory and change management. that is something that, you know, for example, Capco is leading it to kinda OpenAI gave us an award around that. So is data priming for AI. Rishi? You know, if you do not have the right and the enterprises are struggling with data. We have to be honest about that. Enterprises have told us we have got too much of data. We do not know whether it is we do we need all this data to get the AI right. 3. Is, you know, agent implementation and managing agents. Organization is building number of agents. How do you deploy them? How do you orchestrate, deploy, and manage them? And, Ravi, you know, the token tokenization, token economics, whatever you call it, it is going, you know, it is actually skyrocketing right now. So then they especially the CFOs are saying, you know, hey, you know, what is my ROI? So do I use a high end LLM for a particular process of the workflow? Do I use an open source model? So that is the conversation that is going on. We are having the deep tech, we are able to actually have that conversation with the client. So there are multiple, new opportunities, whether it is model ops, You know, EID is something that is picking up within enterprises. You would have heard of Sovereign AI. So that is another 1. And finally, every client wants us to make AI secure and, you know, responsible. So to me, NetNET is a positive, you know, in terms of new services that are coming in. Short term, SDLC life cycle will continue to bring in higher productivity and shorter development life cycle. But I just want to call out even there, human it is going to be human plus AI always. Because in a software development life cycle, the business requirement, the user stories, you need humans. At the same time, when you are deploying and taking into production, need human intervention. Of course, you know, AI can prove millions of lines of code, but we need to make sure that code is optimized. So that is how I see it, Ravi.

Thanks so much for the detail, Srini. Beautiful. Thank you.

Thank you. Next question is from the line of Nitin Padmanabhan from Investec.

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

Hi, Nitin. Srinivas here. On the margin aspect, Nitin, Aparna talked about it as well in our commentary The reason why we had a drop of 120 basis points is number 1, I know the impact of MSI we had, it is coming into this quarter. 2. The investments that we are making, in AI and in deals. that is the second part. 3. Is, you know, the acquisition some of the acquisitions that we made, and they are actually coming to execution mode right now. So the impact of the, you know, impact we had on the margin. Having said that, Nitin, our mission is clearly to go back to the narrow band that we have been talking about, 17% to 17.5%. Now the question that you are asking is what is the time frame? Rishi? Now, in the context of the volatility that we see, in the context of the revenue situation that we see, right, I do not want to predict exactly based you know, when we will get there. But the point is that we want to get there. If you noticed in the last 2 years also, Nitin, now, despite challenges with the revenue, we continue to stay focused on margin improvements. You can be rest assured, we will continue that part. However, I know I want to clearly articulate we want to invest in our new AI native business We want to because when you are doing an AI native business, you need and now you also need to have the right talent, and you need to have the right infrastructure to build the new products, new platforms, and solutions as well. So it is a combination of all this, Nitin.

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

Got it. The endeavor is to reach where we want to reach. And if you look at the within, there are multiple levers for us from a operational perspective. But that is you can take the cost out in FPP both in terms of automation AI and productivity. Now we have other levels including, you know, G and A and so on and so forth. You know? I do not think bench utilization has been higher. that is another lever that we have. How do you restructure the pyramid right, in the context of AI? How much of the projects and programs you can, you know, run it through agents and how many of our current existing programs we can identify all the levers that we are looking at, Nitin, and we will stay focused on that. But the point the message I wanted to give you is that despite all this, you will also want to continue to invest in our future is very, very critical because the world is pivoting to AI. We have already pivoted to AI. And we will continue our journey around consulting led India forward, and we will stay focused on that. The pro intelligence platform, delivery platforms and the industry cross industry plat platforms, we are seeing good traction in And in the future, the consumption will be platform plus service, not just pure play service.

Surendra. And from a growth perspective? When do you think the and then that you are seeing sort of the seat?

Yeah. So if you if you if you look at it from a growth perspective, the thing, typically, we give just 1 quarter view of our guidance. Rishi? Like I said, the demand environment remains soft. That is reflected in our quarter 2 guidance. Having said that, and, Nathan, I just want to call out the point that I made that we are seeing good traction building up in Americas in the BFSI segment. Rishi? Now, which was a question that in the Ravi had asked. Second, EMR, which is, you know, energy manufacturing resources sector, which was very soft in Europe and APMEA. We have won couple of deals in Europe in this segment. We will see that, you know, coming in delivery. Rishi? So to me, also, the way the customer takes the cost out, then they start shifting their, you know, budgets to AI. You know, we are ready for that. that is how I see it. So I cannot give a commentary terms of how our quarters will go because I want to stay within our the quarter to guidance.

Surendra. Fair enough. Thank you, Srinivas. All the very best.

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

Yes. Hi. Thanks for taking my question. So, Srini, a couple of questions from my side. I think 2 verticals have kind of dragged the growth this quarter. Top energy and health care. You mentioned about energy that the softness in the European markets and we have won a couple of deals. So good to hear that we will probably have recovering that soon. what is your take on the health care segment as this segment has been 1 of the 1 of our key segments in which we were 1 of the early And at this point Sir, if I, Vibhor, Vibhor, sorry to interrupt you.

You know, could not hear you properly. I am sorry. Could you just repeat the question?

Thank you. Yeah. Sure. Please go ahead, Vibhor. Yeah.

I hope I am audible now. Yes. Yeah. Sorry for that, Srini. Yeah. So my question was basically on the 2 verticals which dragged the growth this time. 1 was the ENU, which you mentioned that it was because and good to hear that, there are deals that we have bundled ramp up in the coming quarters. On the health care vertical, what is the view that we are looking at? Is I mean, This we used to be-- I mean, we were 1 of the pioneers of this industry. From the peers, we hear a lot of comment. A lot of companies are kind of incubating their health care vertical because of the strong demand that they are seeing. Especially from the payer side and some, of course, in the provider side as well. What is the out outlook on that vertical in terms of deals that we might have won and when using that vertical kind of comes back to growth. I will have a couple of follow ups if you can answer this Sure, Vibhor.

I think, you know, your observation is very valid. For us, health care sector has degrown by 2% sequentially. If you look at from a year on year basis, 3%. See, what has what has happened is especially when I say healthcare, We have got payers, we got providers, we got life sciences, and we have got medical device know, devices companies. These are the fourth industry segments the health care sector. Rishi. We have a huge presence, in, payers and providers in the U.S. The impact that we had is because of the U.S. healthcare ecosystem. Rishi, which is facing sustained pressure both from structural and demographic forces due to the situation, which is very much you know, within the U-- in the U.S. context. Rishi? So what we have seen in some of these companies are, you know, because of the pressures that they have, from the whole government and so on so forth. Rishi? Is they have been their budgets have been flattish for us. In some places, we have seen the negative growth. They are also there is a lot of pressure on in terms of taking the cost out. And also, most of the budgets right now have kind of, you know, being reallocated to some kind of discretionary spend, but towards AI, and big portion of it is on the compliance report. So, to me, the more they use AI and automation aggressively, and, you know, offset the cost pressures, I think, you know, that would help us going forward. So we are staying focused on the regulatory mandates like I talked about, like, you know, both Medicare Medicaid and ACA. If you recollect, we have a huge platform that supports, these aspects. Member onboarding in terms of member services that we need to do you know, how that, you know, how that has evolved for us in the last 1 to 2 quarters had an impact on the numbers that you see. Having said that, you know, if I look at the opportunities that we see, right, you know, especially reimagining their some of their processes with AI. So we have got, you know, the claims is 1 important thing. Clients are looking at taking the cost out on contact centers Also, you know, now more and more with the HIPAA compliant, and the regulatory compliance coming into picture, they are able to deploy AI more confidently into clinical operations, including the regulatory processes. So I see these as our new opportunities that are coming in. We are staying focused on that, Vibhor.

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

So Vibhor, like I said, you know, I do not want to forecast beyond quarter 2. You know? So quarter 2 is, you know, all this that I talked to you about is baked in. Having said that, you know, AI, you know like I said, you know, AI is a structural I see this opportunity in every industry verticals within the care system report. Including for providers. Because they also want to, you know, improve their efficiency. Let's look at providers today. You know, they depend a lot on these products like Epic, who are also making it more AI. Are actually integrating their provider systems into payer systems And then also that and then, you employee, you know, the members and then the patients They can actually, you know, have a end to end view of how the medical Medicare, medical systems work as well. So these are the opportunities that are coming in. We are having the conversations around that as well, Vibhor. But I am not giving you a specific timeline at this point in time.

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

So, absolutely, Vibhor. You know, if you look at our quarter 1, right, you know, we clearly had a like I said, $3.3 billion worth of booking. All of which $1.6 billion were 13 large deals that contributed to that. Having said that, your point is valid. Some of the decisions on some of these deals have actually slipped to quarter 2. And, you know, I always tell my team, you know, when it flips, you gotta really hold on let it slip because, you know, I am trying to close it in m 1, m 2 rather than wait for the m 3. So that is it. that is the work that we are doing right now. Your point is valid. The observation is valid. The pipeline is healthy. Also, there are lot of deals around cost optimization and vendor consolidation. So also want to call out, Vibhor, that want to give a little bit of color in terms of the kind of pipeline we have. Rishi? So the pipeline you know, 1. Let me give you 1 color. About 1 is sectors. Let me also give you the type of deal outside of these large and mega deals. Rishi? So I called out BFSI, if you remember. Rishi? Americas and Europe, the pipeline is strong, Vibhor. But if I look at from a consumer, you know, we just won couple of deals in America. But, you know, it is I would not want to say that it is you know, big piece, but it is definitely modest in Americas and Europe. In APM, your consumer is weak. that is how I see it, Vibhor. Tech and the comms are very strong. In Americas. I think, you know, that 1 place we are seeing the double-digit growth that I talked about, and I think will continue, you know, we see continue to see strong momentum there. EMR, which you also called out after I said it, right now it is strong in Europe because, we have come back to win. Also, it is strong in Americas, including our LATAM. But, you know, a little bit modest in APMEA, I think, you know, based on what is going on. Health care I did talk about it. Rishi? I want this overall, it is strong, but, you know, but I want to be careful in terms of what we call out. So that is the color from a sector perspective, Vibhor. But if I look at from a opportunity's perspective, there are new opportunities also coming in like I talked about. Rishi? You know, there are clients who are talking to us on sovereign AI. There are clients want to build AI business. Rishi? So those opportunities are also coming in. The size and scale depends upon how much, you know, for example, if I look at AIDC, how much of, you know, design on architecture you do, how much of implementation and delivery. And management that you do. Depends on which part of the project and program we are involved and the size and scale and complexity depends on that, Vibhor. But overall, your point, you know, you know, our pipeline is healthy.

Got it. Got it. Got it. For taking my question, Srini. Just 1 follow-up for Aparna, if I may.

Aparna, I just wanted to get some color on to look at the margins. In wake of the AI driven deals that we are seeing at this point of time. I mean, I know it is difficult to take a 1-- make a 1-statement analysis that will give the margins that is really margin accretive or dilutive. From an overall point of view, I mean, let's say we are also building SLMs for the client or let's say the application layers for them. There is the token cost involved. So overall, where does the math fit, for these large AI driven deals that we are chasing and we are winning in terms of margin vis a vis our current portfolio? So clearly, the board, I think we like you rightly said, 1 size does not fit all. It will depend deal-to-deal. Wherever the intention is to use AI for you to be able to drive higher productivity and take cost out, for a large operation for a client that the cost take out is priority, you will see that, you know, there will be a lot of productivity forward productivity that gets baked into these. Rishi? See, reimagine AI that, Srinivas spoke about, the parts which are newer, where you are going to be seeing newer spends on account of AI, there we are very confident we will drive a premium and great realization. Similarly, service offerings around data, AI advisory, they will all be very increment like, incrementally net positive to the rate realization and margins. So it will depend on what we are using the AI for and how we are, structuring the deal. So large deal, will remain competitive. You will have some amount of, forward productivity that gets they think. When you are looking at AI over smaller programs, where you are looking at things like data modernization and you are looking at smaller pockets, and you are looking at newer areas, they will be accretive. And that is been our experience thus far and yes. that is it. Got it. Got it.

Great. Thanks, Thanks, Aparna, for the clarification, and thanks a lot, guys, for taking my questions. wish you all the best. Thank you.

We will take our next question from the line of Ravi Kumar from JM Financial. Please go ahead.

Can you break the 2Q revenue guidance into organic and incremental contribution from inorganic?

We are not doing that, Ravi. We are not breaking our guidance out. And if you look at it, last quarter we had said you know, mind print was coming in, and we had the guidance, they did 45 days. But in our actual Q1 results, we have had 2 months of it of the revenues being consolidated. You can do the math. Like we typically do, we only disclose in the first quarter. And after that, it is we do not make further disclosure. And the second part of the question is, if using the last earnings calls, you mentioned about client insourcing impacting BFSI. Is that fully blind in this quarter? Or do we see some impact from a going forward perspective as well? No. I think that is behind us. Ravi. Yeah. You. that is all from my side.

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

Thank you for the opportunity. Srini, on this call, you guys have mentioned that the large deal environment remains very competitive. I was curious to understand as the degree of competition increased, decreased, or is it stable? And a related question is, you know, how are you future proofing your margins in the wake of such competitive pressures? We already saw some glimpse of, you know, margin headwind in Q1. Which, of course, will recoup through the year. But if the market remains like this, how do you ensure that, you know, we do not trade off the margin for chasing growth?

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

Thanks, Srini, and all the best for the year. Thanks, Abhishek.

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

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

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