Stockrabit · Analysts
Questions across 2 calls

Nitin Rakesh

Firm not listed in source transcripts

MphasiS Limited

MphasiS Limited CC-Jun25.pdf · 2025-07-25
Sudheer, I think the way I would address that is that the direction of travel is absolutely in the right direction. I think we've recovered the business. We've had some headwinds to deal with in the last couple of years. Most of them, at least as we stand today, seem to be behind us. So, there's no reason to believe that this trajectory will not continue. The only reason why we are at this point guiding to what we are guiding to is that the environment hasn't really changed. There is still a bunch of uncertainties. There are still things that require a significant push. But at a micro level, I think we're very pleased with where we are. And as I mentioned in the last quarter call leading indicator of pipeline turned into a great quarter close for TCV. And if that execution continues, then I think we will potentially be in a better place this time next quarter. But we want to take that time to make sure that we have the same rigor and the same outcome to drive that confidence as we go forward th rough the remainder of the year. Still too early in the year for us to have a definitive view on what the next three quarters will bring, but the direction of travel is absolutely what you just mentioned.
As we stand today, the answer is no, we don't see any of those weak spots. And I think our approach to dealing with any headwinds has been just sell our way out of that by actually creating deals using the propositions and differentiation and using that momentum to work around these issues. But as we stand, nothing is imminent .
MphasiS Limited CC-Mar24.pdf · 2024-04-26
Sure, Nitin. I can take the -- both the questions, actually are pretty linked to each other. Firstly, I think we had a very bunched up early part of the year with some very large deals getting bunched together in late Q1, early Q2. And we guided that we'll have to continue to move deals through the pipeline through the remainder of the year. And that's the reason why the pipeline is up 5% sequentially just Q4 over Q3. A large part of the growth came obviously from the rebuilding of the pipeline in BFS as we've seen opportunities open up. There are two nuances to think about the TCV number. One, I think the -- on a full year basis, we've still grown the TCV wins by about 5% in a challenging year. Second, a lot of these deals are, as we guided, especially in the early part of the year were multiyear deals, have not yet fully ramped up and we continue to monetize the opportunity provided by those deals to ramp up. So that's one thing to keep in mind because the linkage between order book and revenue growth is much clearer for us given that we only report net new deals. Secondly, especially in Q4, we've seen a number of short burst deals. These are typically -- while we are reporting TCV, they're typically even shorter.. the duration is even shorter than 1 year in many of these deals. I think the $0 million to $10 million category deals for us the contribution, even on a dollar basis, is actually very high this quarter. And that gives us the ability to ramp up these deals very, very shortly -- quickly. And hence, you've seen some of that already show up in Q4 numbers, and we expect that to also show up in the following couple of quarters. So I think that's one thing to keep in mind when it comes to the shape and nature of the TCV. Your second question around how we're using capability and how we're driving that competitive advantage. I think the ability to orchestrate the tech ecosystem, ability to provide a solution that leans on application of tech versus pure capacity or T&M basi s, I think, is really where the market is headed. We have -- we broke out the overall TCV, and we basically said about 28% of that was AI -led. Combination of examples I gave you in the presentation are all pointing towards those AI-led deals. I think it's a little bit too early to start creating a metric that we can report every quarter given that we are heading to a point where almost every archetype, every solution will have some element of tech orchestration. But I think we'll continue to work towards figuring out what's the best way to represent growth in that business. I mean it's not just us, even the hyperscalers are having the same challenge with the 2 earnings calls that I heard -- listened to today between Google and Microsoft. I think it's not very easy to differentiate how much is AI-led and how much is cloud-led. So we'll continue to find ways to give you a representation. But for now, I think the takeaway message is that lead indicators are pipeline. Pipeline in AI -led deals is directly linked to the 4 archetypes I talked about, which is Agile IT Ops, Next Ops, Data engineering and modernization. Those are the four very, very large pockets of opportunity, and those are the four biggest buckets of our pipeline at this point as we speak. We do expect the TCV conversion rate to show a much healthier number as we start FY '25 as well.
Yes. But I think, again, as I said, right, Yes, as I said, right, large deals by definition will be lumpy. I think when you consume such a big number and there is a windfall quarter, you will see rebuilding of the pipeline through the phases, and that's wh at we are focused on. I think on a steady-state basis, the LTM average is something we are very confident that we'll reach back as we get through FY '25.