The first question is from the line of Aditi Patil from ICICI Securities.

My first question is , the organic business, was the growth soft than what you were expecting at the start of the quarter? If yes, what has led to the softness?

Yes. So, Aditi, on the organic business, I would say, definitely, the growth number of 0.3% that you see is a little softer. But the other point that I did forget to mention, by the way, in dollar terms, the underlying business grew by about 2.8%, whereas in rupee terms, and that's the numbers that you guys have access to right now, the underlying business grew by only about 1.6% . So there is a currency impact in this particular quarter where the rupee appreciated against the dollar. So , the growth in the core business is definitely higher than the 0.3% that we see. Having said that, I did speak about a few projects that we did, and these were, I would say, discretionary one-time projects that we executed in Q4 in some of our large accounts. We were hoping the follow-on work on the back of the work that we had executed to sort of get stitched up in this quarter. I would say there has been a timing delay in terms of signing on the additional work. Also, while there was a healthy pipeline for the core business, which is tech, we have seen a small delay in converting some of those pipeline opportunities, which has resulted again in the slightly muted growth that you see in the core business. But there is nothing that is out of the ordinary or I would say there is no loss of customers or things like that. In the next quarter, in fact, we already see enough order book in the form of confirmed order book to deliver a healthy growth. And this is for the core business.

Okay. So do we see any downside risks to our 18% to 19% USD revenue growth guidance for the full year?

Not at all. In fact, as Raj mentioned, some of the things that we were expecting to come through, they are now starting to come through, and we have seen some of those conversions happen even already in the second quarter. So the second quarter numbers will not only be on track for the 18%, 19% that we have guided. In fact, it will also catch up with the slight dip that you have seen in the first quarter. So, at this point in time, we are very confident of going past the 18%, 19% number. In fact, I was just having a debate with Raj before this call whether we should put up 20% at this time. We will hold our horses at this time, but there is a great deal of confidence that we will go past those numbers.

Okay. This is very reassuring. I have a third question on what led to the strong recovery in Decision Point? And should we see Decision Point growing at the same pace as organic business in FY '26?

I would expect that the growth will, in fact, outstrip the organic business because they are coming off a small base, if you remember, and they also had a dip in quarter 4. As I alluded to earlier, we are seeing positive signs and momentum. I talked about how clients are starting to look at a more integrated perspective, right, across R&D, supply chain and RGM. We are also starting to gain more traction with the decision-makers in the CIO, CTO audience. This quarter, we had a few wins as well in the consumer goods space. In general, I feel that the tide is turning. Of course, we want to wait and see how fast it turns. But definitely, the performance for Decision Point in Q1 and then going forward into Q2, Q3, we expect to be fairly strong.

Okay. And on the GenAI work, you mentioned a good order book and a good pipeline. So what kind of work are we doing for the clients in GenAI space? Is it based on like enhancing revenue for the client?

Yes, it is full spectrum actually. I mean, there is work that is being done in the area of customer experience and marketing. So for example, one of the accounts that we have won in the consumer goods space, we are using generative AI to help generate the audio video content as well as the text content that goes on their direct-to-consumer website. This is an apparel company, but they specialize in innerwear. And that's a very different kind of segment, in comparison to other companies that we are familiar with in the apparel space. And they had reached out to us , this is a client where we conducted the GenAI workshop along with Databricks. And we have been able to showcase a very, very strong, powerful way by which they can leverage GenAI and the agentic architecture around that to automate the content generation, that gets on to their D2C website. I mean this is an example of the consumer goods space. Similarly, in the Financial Services space, there is a lot of traction in terms of helping generate reports that are covering a fairly broad spectrum of areas, around asset management, around investment banking, for example, and again, these are instances where you can use the power of GenAI, LLMs, reasoning model, some semantic layer combined with an agentic architecture to generate the first draft of reports that can be put out. Of course, right now, most of this still involve a human in the loop in some form or the other. But we are progressing to increasing order of sophistication in terms of what the GenAI, agentic AI solution itself can do so that the human in the loop is able to bring in a higher order of thinking and application, right, before the solution gets absorbed within the decision-making process. So fairly broad spectrum impacting operating parameters, revenue as well as cost.

The next question comes from the line of Vimal Jamnadas Gohil from Alchemy Capital Management.

Very reassuring comments on the growth going forward. I just wanted to check on the wage hikes and the consequent numbers that we're seeing on attrition. Typically, we've seen about 120 to 150 basis points of wage hike impact depending on the environment on our margins every year. This year, it has been double of that. And if I were to sort of join the dots with the attrition that we are seeing at 23%, I think it's on the higher side vis -a-vis the industry. So how should we marry these 2 data points in front of us? And what are we doing to correct that?

Yes. So Vimal, to your point on the wage hikes being slightly higher than the usual, you are right. The intent this year was for us to look at compensation as a total sort of rewards policy and not just look at the fixed component hike that we do. But in line with revisiting the comp philosophy, what we've also consciously done is look at a pay-for-performance sort of a structure where all people who are at, say, manager levels and above have a very attractive incentive component, but there is strong linkage to company performance as well as the BU to which they belong . There is some linkage to that as well. And therefore, while you do see that the percentage impact on the margins has been higher, a lot of it is actually linked to the performance and as well as of the BU that they sit in as well as the company level performance. Now of course, while the impact is a lot more prominent in this particular quarter, as the business scales, right, I mean, of course, periodically, our endeavor would always be to operate at a fairly healthy margin levels. When I say margins, these are at gross margin or project margin levels. And therefore, we will look at all other levers. This could be pyramid restructuring , it could be looking at the on -site/offshore mix as well as looking at utilization, all of these are levers that we typically look at to sort of bring back the margins to normative levels or historical levels . So that's the commentary on wage hikes. And I would say that over the next couple of quarters, we should be able to salvage whatever we've lost in the form of margin loss that have come from the wage hikes. Your second point was around attrition. See, while it's higher than the IT services standard, Vimal, in general, what we've seen as a company, attrition, which is less than, say, 25% for us is at manageable levels. And what we've also seen is Q1, which is typically after we pay out the bonuses and the variable pay as well as the increments, there is a slight uptick in the attrition. In fact, we are pleasantly happy to note that this year, that number is, I would say, while it's at 23%, it's not gone up significantly in comparison to immediately preceding quarter. This is again seasonally a quarter where post the wage hikes and post th e variable payout, you will see an uptick in attrition. So, I don't think as a business, we are very worried about that particular metric at this time.

Understood. And one more question would be on margins itself. If I were to look at another 2 metrics, which is the offshore ratio, which is at 83%, utilization at 82%, we've maxed out these 2 levers. Given the fact that the growth could be slightly higher than what we've seen in the near past, how about some operating leverage kicking in? Do you see that coming in and helping you get to margin level s that you've seen historically?

Yes. Yes. I think the operating leverage will come in, but the growth that we are anticipating, right, we are also in the process of building out buffers, specifically for the GenAI, Agentic AI type of opportunities also for the Databricks Center of Excellence, right, both on-site and offshore. So, I think that utilization, we will watch it carefully, but we also want to make sure that we are not shortchanging on the supply front, right, and the availability of skilled people. So yes, I me an, to answer your question, I mean, operating leverage will kick in, but we will also watch out on how the utilization balance needs to be right in relation to demand and supply.

The next question comes from the line of Rushabh Shah from BugleRock PMS.

So one question for LatentView, hiring is the most important part. So what quality do we investigate in the candidate? And what are your basis of criteria to judge a hired candidate?

See, the capabilities and the qualities we will look for, there will be a spectrum depending on whether they are hiring somebody at a junior entry -level analyst consultant level or whether we are hiring somebody who's more of an expert and a seasoned pro. I n general, we look for people who are motivated and self-starters. We look for people who have an intense amount of curiosity because this is a very dynamic and evolving space. And unless people bring that kind of curiosity, it is very e asy to kind of stay close to just what you already know, right, from the past and then lose out on what might be happening, right, in terms of the changes in the environment and the evolution. So, there is a lot of emphasis we lay on learning and development as we go along. In fact, one of the things that we have been very proud of from a very early stage is exposing all of the people in the organization to the upcoming opportunities so that they t hemselves can take a call on what kind of technologies they want to spend their time, right, learning and building skills and capabilities. And we make a fairly broad spectrum of training options available to them. At a more senior level, we will obviously expect that people also bring a certain amount of expertise, right, whether it is a technical expertise or whether it is algorithmic or whether it is domain expertise. And then again, domain expertise can be either in the functional area like parts of the value chain as in marketing and finance and supply chain and so on or else it can be an industry domain understanding or a subsector understanding. So that combination of technical algorithmic and domain understanding, coupled with that curiosity is what helps us deliver what the clients are looking for. See, at the end of the day, we are more akin to management consulting kind of an organization because a lot of the work that comes to us is fuzzy and ill -defined. So therefore, these are the qualities that people need in order to be able to diagnose the problem and then suggest the right kind of approaches, right, and then bring the mathematical and technical rigor, right, to be able to solve the problem. So, it's a very consultative kind of a model, ability to, of course, professional skills like building relationships and then questioning and problem solving, right, these become very important as well. So that's really what we look for. Once people come in, one of the most important metrics that we look at is what is the impact we are creating on the client engagements that they are working on. This is something that we take extremely seriously. We have an internal service delivery excellence team that tracks every project in terms of what does the original business value that was prom ised versus what got delivered at the end of it. And this is not just something that we evaluate on our own and pat ourselves on the back. This is actually administered in the form of a voice of customer survey that goes out every 6 months and our immediate sponsors and stakeholders in the client organization as well as the ultimate sponsors going all the way to the C-suite, they get this survey. In fact, the survey for the last year is currently on, and we are starting to get responses. Every engagement that we do, the clients come back and tell us whether the impact was conceptualized, analyzed and it was delivered, whether they were able to implement it and realize the benefit. And then we also look at whether we got kudos and appreciat ion from the senior most level within the client organization. And these all form a very important part of the performance management process that we have. So somebody within our organization will be able to get their top ratings only if they have received this kind of acknowledgment from the client in terms of the impact that they have delivered. So that's a very, very important thing that we look at. Of cou rse, there are many other things, right, that one includes in the performance management process. But this is one thing that we are extremely proud.

So just a second question on the client engagement. So, we do projects for some clients like for some small projects, and we don't have follow -up work with them, in the sense we don't get a long -term contract. So how has LatentView had follow-up with them? And has client s engaged with us after a small project being done for them?

In general, we are able to convert initial engagements, whether they are in a staff augment model or whether they are in a fixed fee, fixed scope model into longer -term managed services contracts in about 70% of the time. But in the other 30% of the cases, it might still continue either in a staff aug model, or it might fall off after the first fixed fee, fixed scope engagement that we do. In some instances, we also see that while there may not be anything that happens immediately after the first project, we are able to re -engage with them a year, 2 years down the line, 3 years down the line. In fact, this quarter, one of the engagements whe re I talked about fairly fast -track growth, this was a client with whom we used to work when they were in a different organization 6 years back. And then they came back to us because, I mean, that organization decided to take all data analytics work in-house, and then they actually terminated relationships with multiple data analytics vendors. But when this person moved into a different organization and they needed help and support, we were the first port of call for them. So , there are several instances where ex -clients and alumni clients and even alumni employees come back to engage with us right after a period of time. We now have a formal process that we have launched as well, where we look at all clients that we have engaged with in the past and what is the current status of our relationship with them and whether we are in a position to go and help them in some form or the other, in their current role that they are performing. We are also extending this exercise to over 3,500 alumni that we have, who have passed through the portals of LatentView and who are currently working, right, in other organizations. And if they happen to work in our current client or prospect organizations, we want to tap into them as well. So these are all avenues that we will continue to look at in the future.

The next question comes from the line of Karan Uppal from PhillipCapital India.

So Rajan, just a question on BFSI. So very consistent sort of performance in BFSI. So would love to hear your comments on which subsegments are driving this performance? And how is the competition in this space, which are the competitors which we are competing with? Yes, that's my first question.

Sure. The growth that we are seeing is more on the fintech and payments and that type of area, because that is where we have been stronger even in the past, though we worked with a fewer set of accounts. We are just extending our understanding and expertise in that area to grow those relationships. Banking/insurance, we have had starts, but I would want to see a bit more traction with some of the larger banks that we are engaging. I mean I talked about the European bank, for example, right? I think that is the place that grows strong. There is an engagement that we have started with one of the largest consumer banks in the U.S. as well. It is still taking shape. I'm expecting that some of these relationships with the larger banking clientele could potentially start giving us even bigger kickers in the next couple of years. But at this point in time, it is largely around asset management, around fintech payments that is driving the traction.

And which are the competitors which we are competing with in this space?

I think the competitors will be fairly broad spectrum. I mean you can have anybody even the IT services players, right, if they have strong analytics solutions that they bring to the table. There are other pure-play data analytics companies as well, which do work in the Financial Services space. So you won't have likes of a Palantir and all, for example, in the space in terms of product companies, but this is traditionally the largest sector, right, for IT services as well as even data analytics. So it is a well- entrenched space. We are happy that some of the more interesting innovative ideas and GenAI solutions that we are taking into the market is what is finding traction. And that is something that we will continue to look at capitalizing on.

Okay. Second question is on retail and CPG as a vertical. So , core vertical, [ex] of Decision Point appears to have declined sharply for second quarter in a row. So could you help us understand is this performance the bottom because the commentary suggests that you are seeing some turnaround in this space. So yes, I would love to hear your comments on that.

Karan, I don't think it's right to say that the core verticals declined, in fact, the last quarter, when you see Decision Point had actually witnessed a fairly sharp decline. In fact, there was a lot of headwinds, specifically in the CPG vertical, which I think we had guided when we came on the call as well, we did say that, of course, right now, there's a lot of macroeconomic headwinds for the CPG space. Tech had done fairly well last quarter. I would say this quarter, for us, because of the large base that the technology vertical is on, the fact that this has been a flattish quarter is probably that's the reason why you're saying that the rest of the busi ness has actually not performed. But again, a couple of reasons, right? I did speak about the fact that the last quarter, there were, I would say, 2 to 3 fairly large onetime projects that we had closed. This is for the top 2 accounts where we did some one-time projects and we were hoping that we will be able to close the follow-on work, which will come as a result of that execution of the one -time projects in Q1 and start booking revenue as well. There had been some shift in terms of the time to sign those deals, right? So that has definitely impacted the revenue that the technology vertical has reported in this quarter. Other than that, there has been, I would say, a marginal decline in the industrial vertical as well, again, partly attributable to some level of one-time projects that were executed in the last quarter. These were initial POCs that we had done on the GenAI side again, for a fairly large industrial house. We're happy to report that again , there is a meaningful pipeline that we are currently working on, which if we're able to close now, the industrial vertical again will be back on the growth trajectory. For technology, we are very confident that for the next quarter, we will sort of be back on the growth trajectory. And this quarter, while it was a flattish quarter, was largely because of delayed signing, follow-on work on the back of one -off projects that we had executed in the last quarter. I hope that answers your question.

Yes, yes. Just a follow -up there. My question was pertaining to the CPG and retail vertical [ex] of Decision Point. So there, it appears to have declined for the second quarter in a row. So just wanted some clarification on that.

So there, yes, you're right. I think your assessment is right. But again, we've had a couple of good quality logo wins, right? Rajan spoke about the innerwear apparel company where I would say while we are starting off with the initial sort of POC, which has to be executed by August, we are very, very positive about the engagement on this particular opportunity, and we believe that this can be a substantially large opportunity if Phase 1 is delivered. So, I would say definitely, there, again, we are seeing some green shoots. We did see some contraction in a couple of accounts where we were working, and these are slightly longer-term relationships that we've had, where I would say there were some changes, some rationalization in terms of the number of vendors that the client organization was working with, which resulted in some shrinking the existing logos. But I would say on a full year basis, our CPG business [ex] of Decision Point, again, will be back on a growth trajectory. This is based on the order book and the pipeline that we are currently carrying.

Okay. So if I have to summarize from the commentary on all the verticals as well as the guidance, so no client-specific issue as such and no pain in the CPG vertical going ahead. Is this a fair assessment?

Absolutely. Absolutely. I mean whatever pain was there in terms of 1 or 2 specific names there where there was, I would say, some level of budget rationalization as well as vendor rationalization that was happening, that has already been factored in the results for the current quarter.

Okay. And just last question on GenAI. If you could help us understand in terms of the deal sizes and the tenure in the GenAI work? And is it largely project-based work? Or is there any annuity component also which you are seeing.

It's a combination. Obviously, GenAI, agentic AI being the new kid on the block, right, in terms of the buzz and the excitement. There will be a bunch of POCs, pilots and experimentation type of projects that are happening. But we are seeing instances where it's already moving into production with a longer-term kind of involvement in terms of executing the work using the new architecture and the framework that is emerging. We are assembling the team largely as an expert team. So because there are already people within the organization who have been doing GenAI, AI type of work. So , it's not as if we don't have a critical mass of people within industry entities, organizations that we have. The purpose of the horizontal CoE, the Center of Excellence, is to bring a higher order of expertise and capabilities, right, in relation to the R&D experimentation that I talked about. So, we will be largely staffing with people who bring that kind of perspective and expertise into that team.

The next question comes from the line of Pooja Jain from Trinetra Capital.

So my question is, how are the macroeconomic headwinds like interest rate hikes, client IT spend reductions and involving AI regulations impacting your project pipelines or pricing flexibility?

I think macroeconomic headwinds have been prevailing for almost an 18 -month kind of a period, right? And I'm sure that you are hearing commentary from other service providers as well, right, in relation to how it continues to be a bit sluggish when it come s to large initiatives, new decisions on that side. Over the last 18 months, we have also experienced that. I mean the good news has been that with many of our existing stakeholders, incremental opportunities have been easy to come by. And that is what has helped us, right, deliver the 18%, 19% organic growth rate that you have seen in the last several quarters. We are still also looking at when the inflection point will happen in terms of kicking off new initiatives, which are substantially larger. But while this has been happening, there is also a shift in terms of decision-making around at least the data platform. Most organizations have come to realize that they do need to have more robust integrated data platforms in place. And therefore, data engineering and the work there is expected to be a fairly significant boost in the coming quarters. At least when some of the uncertainty in the macroeconomic scenario is lifted, right, around inflation, around tariffs, war, all of that stuff. One of the first things that we would all expect organizations to do is to put in money into cleaning up and improving their data platform. And that is the reason we are also gearing up, right, with the Databricks partnership and the capabilities that we have on data engineering. I think initiatives which are more sophisticated, right, in the AI, data science, GenAI kind of space, that will also gather momentum. At least many initiatives that saw the light of the day in terms of pilots and POCs, clients will be more willing to commit real dollars to production type of engagements. At this point in time, I would say that while that interest and excitement is fairly significant, they are still being a little cautious in terms of signing up for the larger production scale engagements. And that is what should change once the move gets better in terms of the uncertainty in the macroeconomic environment.

The next question comes from the line of Srinath V. from Bellwether Capital.

Just wanted to understand data engineering, the kind of Q -o-Q growth is shown and kind of looking at your commentary, would it be fair to assume large part of Databricks and other hyperscaler work is in the order book and yet to see execution? How do you see this particular business growing over the next, say, 12 to 18 months?

Yes. I mean Databricks in particular, we are expecting a lot of acceleration. In fact, only on Friday, I was reviewing the pipeline, right, that we have visibility into in terms of what Databricks is chasing and there is a whole host of migration opportuni ties that are in there. And this is the migration that needs to be done to clean up the data ecosystem, right, that I alluded to in my response to the earlier question. I also talked about the competency around SAP and the alliance that Databricks themselves have announced, right, with SAP. So, there is a fairly large quantum of work that needs to be done in terms of cleaning up and getting the data platforms ready to be able to capitalize on the new tooling and the new approaches that everybody is building into the platform. So whether it is a Databricks or Snowflake or even the Azure AI Studio or even the GCP plus Gemini platform, all of them can deliver value only if there is a significant amount of effort put into the underlying data. And that is the reason we see that there will be a big uptick in terms of opportunities. So there are already opportunities in the pipeline, right, that we are having conversations with. Clients just need a little bit more of a push on that front . I mean, with respect to the macroeconomic. And otherwise, they are still waiting and with a large data cleanup exercise of this sort, the essential question is always like, do I just do it in a bit -by-bit piecemeal manner, use case by use case or do I go ahead and make those big investments right ahead of the curve. And that is where we are also having conversations with clients. And in many instances, we are recommending what will make sense given the culture, maturity, and the approach that the organization takes. And in many of the instances, we do see organizations willing to make that commitment, which is why the conversation is also shifting to the CIO, CTO audience, as opposed to just the business stakeholder's audience. So we are expecting that there will be good momentum in the coming quarters.

Yes. About 18%, 19%, 20% growth on this INR 360 crores base would start to work over 5% kind of quarter-on-quarter growth. So would it be fair to assume that our order book is there, thereabouts in the execution pipeline to see that kind of ramp-up in growth over the, say, the next 2, 3 quarters?

Perfect. One suggestion from my side, Raj, it would be nice if you could start disclosing constant currency growth so that confusions on currency going forward would be easier. And that way we can model it out easier.

Point taken. We will consider it, for sure.

Next time, so yes, we'll do that.

The next question comes from the line of Pratap Maliwal from Mount Intra Finance.

I just had one question regarding a recent management interview that you had given, where you had said that service providers like us would have to pivot to become AI integrators like the system integrators. So I just wanted to understand what would be the change from this in our current business model? Does it kind of, in particular, change the kind of contracting that we do. As you said that we convert work to managed services after initial projects? Does it change anything on that front? Just some idea around that.

Yes. I'll first talk about what I meant by the AI integrator role, and then I'll comment on the contracting model. What I mean by being an AI integrator is playing the role of a service provider, consultant that can help organizations navigate the increasi ng optionality and complexity that i s emerging in the AI ecosystem. I mean we all see the explosion that even happened in the high capital -intensive LLM space, right, once DeepSeek came in and revealed their modeling approach. We are seeing the same thing happening, right, whether it comes to reasoning models or whether it is small language models, whether it is semantic layers, whether it is RAG models, right, retrieval-augmented generative models. So, in all of these areas, and not to mention the agentic infrastructure itself, right? I mean Databricks, for example, recently announced Agent Bricks as their agentic architecture. And you have already seen what OpenAI has announced last week. So that optionality and the complexity, and the ability to navigate that is really what I meant when I said that one needs to play the role of the AI integrator. All evidence that we have till date in terms of enterprises attempting to go it alone indicates that it is a fairly challenging and complex space. So, while they might initially be euphoria in terms of we have implemented, say, Databricks or Snowflake and then therefore, now our own business users and data scientists can go ahead and do what needs to be done. When it eventually comes down to implementing enterprise use cases, you still need to choose the right kind of technical architecture that solves for your context both on the technical environment that you have as well as the business case and the use case environment that you have. So that is the role that one could play. What this will mean, however, is not that every line of code, every piece and component needs to be built by us. It might mean that we are able to leverage a lot of the tooling, technology, functionality components that are already available as part of the evolving complex landscape. And therefore, that is what will enhance significantly the efficiency and the productivity of the team. But there is a role for service providers like us. The ones who do this faster and disrupt and go with the best kind of technical architecture innovations and solutions will be the ones that emerge victorious in this. Now what is the implication that it has on the contracting infrastructure? I think managed services models will continue to be in vogue. I don't think they're going to get replaced by one -off fixed fee, fixed scope projects only. But there will, of course, be maybe a higher percentage of fixed fee, fixed scope projects that start happening, especially when the analytics maturity and the internal environment of the client organization is very strong, they might need initial and periodic refreshes of architecture and decisions related to that as opposed to ongoing continual support, right, for everything that needs to be done. So we got to see how that impacts the contracting model. I'm expecting that there will be more instances where we are able to go in and help them on specific technical architecture engagement as well. However, if you do that well and you establish your capability, then whenever there are opportunities, whenever there are requirements to get a whole lot of work done, then the organization that helps with the architecture could be the one that is called upon as well to execute on the use cases. So that's how I see this evolving.

The next question comes from the line of Jalaj from Svan.

Congrats on a decent set of numbers in this tough environment. So , as I had two sets of questions basically. First, I wanted to understand with regards to Decision point, the role of payment, at least for that 70% has been made or there is something else which you need to be take? Any amounts?

So, the 70% acquisition, all the payments in relation to that has been completed. In fact, in the current quarter, we have made the acquisition of another 10% in Decision Point. So , with this, in terms of payout, what will be payable, and this will happen around June of next year , is the payment for the balance 20%.

And there is no specifically performance-linked portion also on this or there is a part to that also?

It is. The consideration is linked to underlying performance, which is revenue as well as floor EBITDA that they need to maintain for the overall business.

Okay. And the second question was more to do with our aspiration. So would it be fair to assume that the top line aspiration of $200 million is by F Y'28. Just a direction, maybe not to sticking to the number, but the way we are growing, I guess, that is very much achievable. And secondly, just to add to it is the revenue growth for the balance of the year for our aspiration looks like a very accelerated growth. So, there is no assumption of macro improving, I'm assuming built into it.

Yes. The 3-year $200 million target calls for approximately a 26% CAGR. And as we just alluded to, I think at this point in time, there is a good deal of confidence that we should be able to go past the 20% kind of a number, even before the end of this qua rter. And if things improve a bit from there, then the 25%, 26% that is required should be achievable. Now of course, we don't want to jump the gun here and say that everything is hunky-dory. Obviously, that's an aspirational number, right, that we have put out, keeping in mind that the expectations that we have also around how the macroeconomic uncertainty will resolve, at least in certain areas, right, not everywhere. And we'll watch out for that, right? We will anyway double down on the areas where we are seeing traction, right, in terms of what is happening. If you look at Databricks, for example, since we talk about the Databricks partnership, they have put out a CAGR of 60%, right, that they are targeting in the next few years. So therefore, we are also encouraged by what we see the larger players talking about here. I mean, in fact, this afternoon, in response to a query from one of our Board members, I was doing a bit of look up on what is the consensus estimate on GenAI, agentic AI growth over the next 5 years. And everybody is talking about anywhere from 35% to 45%. So that is an area that we will focus on double down on, right, so that we are able to realize that aspiration. Of course, there's a lot of work to be done, but I mean, irrespective of macroeconomic uncertainties that might be providing now, there are other factors also that could play out, right, in how it unfolds.

The next question comes from the line of Shubham Sehgal from SiMPL.

Could you just share how many new clients were added during the quarter? And additionally, if you could break down the revenue growth of how much came from the existing clients versus the new ones?

See, the overall number of new clients that were added during the current quarter, I would say, was about 7 in total. In terms of the split of the growth, in terms of what came from existing clients versus new clients. So like I mentioned, right, in dollar terms for this quarter, we grew by about 2.8%. Of that 2.8%, I would say about 0.6% came from new clients that we added in the current quarter and the remaining came from existing logos.

The next question comes from the line of Surbhi from Bellwether Capital. Please go ahead.

Hi Rajan, you spoke about some integrated deals in the CPG vertical where you would go from R&D to supply chain and then integrating it with RGM. Could you throw some light on such deals and explain how the scale up for the same will happen? Would it be more gradual in nature? Or would it be more like an upfront pitch for an integrated project on the go? And in such cases, what could be your average deal sizes and the length of relationship with your clients and so on and so forth?

Yes. Our intention, Surbhi, is to make a bit more of an upfront transformational pitch. We are seeing some degree of receptivity from this from some of the clients that we are having conversations with. We are also seeing a greater deal of receptivity from Databricks as a partner because they are also looking to differentiate themselves in the evolving landscape. And these could involve pitches being made more to the C-suite, maybe even to the CIO, CDAO type of an audience as opposed to separately to the supply chain organization or the R&D innovation organization or to the team that is responsible for modeling, pricing and so on. So, we need to kick it up a few levels. We are looking forward to Databricks also supporting us, right, in those kind of conversations. The 3 events that I talked about, which are happening in the U.S., we are looking to pitch that kind of an idea, at least a ppeal, in terms of how that can help organizations that adopt a more integrated approach to realize more value, both on top line and bottom line, right, if they take that kind of an approach. We are seeing some early encouraging signs on those types of conversations. If that happens, then even initial engagements can easily be upwards of $1 million. Because of course, they won't do it for the entire company. But this kind of an integrated approach if you take a particular product market or a product category market, say, a particular beverage or a food item or a cosmetic and you're just looking at one geography and implementing it there. This kind of an integrated approach can still mean that it is a s ubstantial engagement. And that's the kind of thing that we'll be pushing for.

Got it. Very clear. And anything you want to call out specifically on Europe? We've seen some good traction on Q-o-Q basis. Anything that you would like to specifically call out here?

Yes. We are seeing traction both in the Financial Services space and in the consumer goods space. I mean if you remember, a few quarters, a couple of quarters back, we had already started talking about that we want to double down only on these 2 industries in Eu rope. And at this point in time, I think we have upwards of half a dozen clients that we are working with in these 2 sectors put together. We recently also relocated one of the decision point key people into the geography in London. We are in the process of adding another client partner, specifically for one of our accounts in the region. In the Financial Services space, I mean, when I alluded to the growth that we are seeing, the account where the person who used to work with us earlier came back and engaged us, that is again in Europe. So, we are seeing some traction in consumer goods as well as in BFSI in Europe, and that is what has led to the Q-o-Q. We are looking at certain other options as well, right, in terms of partnerships that we could potentially do with local European management consulting and boutique consulting organization. These are early -stage conversations at this time, but we will want to double down on these 2 verticals and then bring in other levers that can help accelerate our growth.

Got it. Just one follow-up here. Any internal milestones for this geography, say, 2, 3 years out?

Slightly early days. I mean, in the past, we had alluded to Europe contributing 10% plus, right, in terms of revenue for us, right, in a 3-year time frame. I mean, obviously, we haven't cracked the code on Europe yet as a geography. So , I would want to take some more time before I'm able to put out a number.

The next question comes from the line of Aagam Shah, an individual investor.

Sir, quick 2 questions. Most of my questions have been answered. Sir, other income for this quarter was around INR 23 crores. So it should be in this range for going ahead?

So, Aagam, like I mentioned, there was forex-related gain, and these were gains on account of loans that we have given to our subsidiaries in U.K., and that came in at about INR 6 crores, right? So, of the total other income reported for this quarter , of the INR 23 crores, INR 6 crores pertains to this forex. And I don't think we should model it for the future period, obviously, this level of gain or loss will sort of come down because as I alluded to in the earlier part of the call, our intention is to pare down or substantially trim the level of investments in Europe because of some of the transfer pricing changes that we have made. And therefore, we don't need that level of investment or debt to be sitting in the books of the subsidiaries. You will see this level of gain or loss that we've reported historically to come down. So, you should consider that as a one-time more than sort of factoring it as an ongoing gain.

Yes, the other income should be going forward, in the range of INR 17 crores to INR 18 crores. Give or take, of course, that number could go up or go down depending on the yield that the treasury generates, but it should largely be in the range of INR 17 crores to INR 18 crores.

Okay. And all the commentary given by you all and the excitement around the GenAI and Databricks and data engineering and all, and even after the revival of the consumer vertical Q-o-Q, maybe we are being a little conservative in growing by 18%, 20%, but there is a scope of overachieving this number? So how are we looking at it?

I mean there is always a scope for number. I can’t deny that. But we also want to see the deals coming through, signatures on the dotted line and work commencing. I mean, as you can sense from this call and our commentary, there is a greater deal of optimism, right, in comparison to where we were even 1 quarter back based on what we are seeing. But we will want to keep guiding, right, on the basis of some of these things fructifying and coming through as well. A lot more conversations seem to be progressing to the final stages. In general, the sales cycles have been long right through this last 18 months and longer. And I don't feel let up on the sales cycles themselves. But given that some of these conversations were kicked up 12 months back, 18 months back, we are starting to s ee some of them coming through at this time, right? And we are obviously adding new opportunities to the pipeline as well. So the thinking is that we will be able to move past that kind of a number.

The last question for today comes from the line of Aditi Patil from ICICI Securities.

So my question is on margins. For how many quarters should we see the transaction-related expenses? When do we expect them to phase out? And for the full year, since we have a higher impact of the annual compensation this year, should we see the full year margins to be lower versus FY '25?

So to answer your first question, the transaction-related costs, I think that will sort of play out for the next 3 quarters. And therefore, you will see this getting fully phased out by March of '26, right? And thereafter, you will not have this cost. Coming to your question on the impact of wage hikes and consequently, what will be the full year margins. See, like we mentioned, we want to keep the consolidated margins on a full year basis in that 23% to 24% sort of range . And then we are fairly confident that the impact of the wage hikes notwithstanding, we should be able to bring back the sort of margins to that level on a full year basis. The only thing though that I think Rajan also spoke about this briefly where there was a question by Vimal on the operating leverage playing out was that we are, at this point in time, planning for investments on the Databricks side as well as the AI, CoE side, right? I think while we have made some investments already, we are in the process of formulating one, setting up the team and also formulating the plan for the rest of the year. We do see substantial opportunities to set up these CoEs or practices well so that they're able to deliver disproportionate or exponential revenue. So, in that process, there could be some investment that could sort of, again have some impact in the short term. But I would say long term for us, the margin should be in the 23% to 24%. Any deviation from that, we'll definitely be mindful of that, and we'll call that out. If we see any impact on account of the investment that we are making, we will call that out. But right now, that doesn't seem to be the case. I think we should be back to 23% odd levels fairly soon.

Okay. And my last question, just last bit. You spoke at length on the data engineering space opportunity you see. So when you do a data engineering project, does it also count with the analytics work? Or is it purely the data engineering work?

Most engagements in data engineering will have some or the other business use cases, right, driving the need for getting the data engineering work done. In the past, almost all organizations were taking a piecemeal approach, meaning use case by use case, they will go back and figure out what is the data environment they need to get in order. What we are starting to see now is that quite a few organizations are thinking about investing in their data infrastructure and getting it sorted out as a cost of doing business, meaning that they are ready to do it ahead of the curve, right? And taking a philosophy that we build a good data infrastructure, the use cases will come, and everybody will benefit from it . In which case, the initial data engineering engagement could be just about getting the data house in order . But you know that, I mean, the organization is always executing a bunch of things, right, even around their data analytics requirements. So even if it is largely a data engineering engagement, there could also be a handful of use cases that they would like to see implemented and executed as part of that engagement itself so that they start seeing the impact and the benefit of what they are doing.

Okay. Okay. Got it. And in the data engineering service line, for the last 2 quarters, there has been a sequential drop. So is it like a one-off thing?

Maybe in percentage terms, there has been a marginal drop, Aditi. I don't think in absolute terms there has been a drop, Like I said, right, there will always be some short-term quarter-to-quarter, if you see, there could be some projects that we execute, which could sort of not have follow -on revenue that could have an impact on a Q-o-Q basis. But then I think on a full year basis, we definitely are on track to deliver the same impact, if not higher than the company level of growth, the same level of growth in data engineering practice as well. In fact, this is higher on the back of all the work that we did.

And that was the last question for the day, I would like to hand the conference over to the management for closing comments.

Yes. I think we had a fairly lengthy and detailed interaction. I think I at least covered all the points that were in my mind, right, in terms of what we would like to convey. In summary, I just wanted to say that there's a bit more optimism that we have b ased on how the environment is panning out and how it is unfolding. We are also energized by the traction and the progress that we are making on the 3 strategic priorities that we have. I think all of th ese are also very synergistic in nature. I mean I talked about how the generative AI CoE focus is helping us even with the Databricks partnership because Databricks has identified as one of the GenAI partners that they will work with, right, in terms of taking it into consumer goods companies, for example. So, I think these are all connected and related. And that's how we are looking at it and approaching it as well. And we are putting in more organizational constructs and mechanisms at our end as well to make sure that we are not losing out or missing out on any of the synergy, right, that exists between the different aspects of our strategy and our priorities. So that is what will be the focus of the management and the leadership team. We have discussions happening not only within the management team, but also with our Board. You will all recall that Dr. Anindya Ghose has joined us recently as one of our Independent Director. In fact, he is here with us today and tomorrow, and we are going to be having some discussions specifically focused on the topic around GenAI and agentic AI. So we are expecting that we will get more good counsel, right, on how to take this forward. And that's the advice that we will seek to action on, right, and drive things forward. So, with that, I think I'm kind of done with my closing arguments. Raj, if you want to add anything?

No, I think we've pretty much covered everything. I think we've had a fairly extensive call. So I think, obviously, the focus will be on executing the strategy that's been put out. And that's where I think over the next couple of quarters, we'll be putting our heads down and executing to the plan that's already been laid out.

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

This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings.