Thank you sir. We will now open the call for Q&A session. We will wait for a few minutes until the queue assembles. We request participants to restrict to 2 questions and then return to queue for more questions. Please raise your hand from the ‘Participant ’ tab on the screen and ask the question. The first question is from Mehta Bhavik.

Hey, thank you and congrats for a good set of numbers. So, a couple of questions. Firstly, on the BFSI vertical, good to see growth coming back after a couple of quarters. I just want to understand was this broad based growth and should we expect that BFSI is bottomed out and we should see growth acce leration from here on? Any comments over there will be helpful. Secondly, on the top client, you know, we have seen a decline for the past two quarters very sharply. So, just want to understand is there further headwinds ahead or is this the last of the ramp down we have seen? And what is the trajectory going forward for that client? And if a third question I may squeeze in on the margins. You know, we saw very strong growth this year but still the margins didn't expand. And, I think, for next year also we are aiming to maintain margins, so what kind of growth is required for us to see margin expansion come through? Thank you.

Sure. So, Bhavik, multiple questions there, so I'll try and address specifically. So, as far as the largest customer is concerned, look, some of the ramp downs are planned ramp downs. So, when we do larger deals, there are productivity things built year -on-year and so these are not any surprises. So, if there was any surprises that would have been told very clearly. So, all of this is planned ramp downs. So, we have a good trajectory, we know where we are headed. So, I don't think there is anything to worry about in the top customer or for that matter it is not a pattern. Second part, when you talk about the margins growth, so look it is not lost on us that the market is tough outside. So, if you look at our peer res ults, growth is difficult to get in these environments. So, our first job is to make sure that we grow and grow at the industry leading growth rates. For that we have to do investments in sales and marketing, which are at a heightened level, coupled with the Gen AI kind of initiatives where we are all learning, we are all deploying our manpower to build capabilities on top of the AI capabilities that we have. We have also opened Customer Experience Centers, as we announced in the last quarter across the U.S., London and in Pune and so on. So, there's a lot of investment that is going in from a capability build perspective and winning against the bigger tiers and the mid tiers in difficult times. So, from that perspective rest assured as the headwinds kind of from an industry perspective subside, we have built enough muscle and the growth should take care of the margin expansion. But having said that , first focus is to make sure growth at reasonable margins is where it is. Now coming to the BFSI side, so, again, one bigger theme that if you look at Persistent overall, BFSI , Healthcare and Life Sciences put together and even in tech companies, we are gaining ground as a challenger to the bigger firms. More and more, we are seeing a pattern where bigger customers are not very happy with the large incumbent providers that they have. We are being invited in. We are winning against these in the larger landscape and some of the ramp ups that you're seeing in different industry verticals are based on that. So, same thing is happening in BFSI as well. We have opened some fairly large accounts and they are on the ramp up. So, that is the overall kind of commentary on the questions you had.

Thank you and all the best.

Thank you.

Thank you. Next question is from Manik Taneja.

Hi. Thank you for the opportunity and once again congratulations for the steady execution, Sandeep. Just wanted to get your thoughts around a couple of aspects. Number one, on the Healthcare side we've seen very steady, very strong growth through the cour se of the last few quarters. How should we be thinking about near term growth in the Healthcare side, given this is largely being led by one large deal ramp up? That's question number one. The second question was for Sunil. In terms of our revenue metrics break up, we see that the software license essentially has gone up in Q4 compared to Q3, which is unlike the usual seasonality. If you could help us understand what's driving that and how should we be thinking about this aspect? Thank you.

Sure. So, I'll take the first question and hand over the Sunil for the second answer. So, as far as the Healthcare is concerned, so let me clarify. Yeah, we have had a fairly large win in a fairly large customer but that's not the only win that we have had . So, if you look at our Healthcare Life Sciences business, our team has been built over the last couple of years and we have put the muscle. I'm pretty happy with the way the team has shaped up and we have had multiple wins. So, one large w in, multiple other wins in the middle kind of deal sizes is what is ramping up from our perspective . And I'm sure a lot of you would be curious, the pecking order for us for this financial year would be basically Healthcare Life Sciences followed by BFSI and Tech companies. BFSI and Tech companies will kind of, depending on the different quarters, be neck to neck or a little ahead of each other. So, that's where it is. Sunil, over to you for the software license.

Yeah. So, Manik, what is happening from our revenue mix perspective is the deals that we have had in the recent couple of quarters have a trend where we are taking on man aged services deals. We are setting up Infrastructure Lab which require us to buy licenses on behalf of the clients. That is one. Second is, it 's maybe a little too early and that has not reflected in the numbers but there is a trend in the market that the customers on their own, the enterprise customers are trying to convert CapEx into OpEx and when that happens that also becomes a software license cost which is coming in the purchase of software licences. So, not a heavy this one but, yes, this quarter did have all these transactions because of which you see higher cost.

Thank you. All the best for the future.

Thank you. Next question is from Karan Uppal.

Yeah. Thanks for the opportunity. So, two questions from my side. Firstly, on M&A. The company is sitting on a decent cash balance, so any plans for M&A in FY25? And in what verticals and service lines are you looking out? That's one. And second is on Europe. So, Europe has been soft for last you know 3 -4 quarters, so what are the reasons for the same? And from strategic perspective also when management is targeting 2 billion revenue, how are you thinking about Europe's contribution in that?

Sure. So, from an M&A perspective, look, we have our focus on M&A. We definitely are looking at different assets at different points in time and, you know, depending on finding the right asset…And let me define our M&A strategy as well so that you can und erstand where we are going. So, we are looking at the cusp of Healthcare Life Sciences or BFSI and Data/AI. That's one part of it. Within Healthcare Life Sciences, we are predominantly looking at things like the payer -provider ecosystem or t he payvider, if we may call it. That is one part where we are focused on. Similarly, within BFSI there are certain macro segments that we are focused on. In terms of geography, interestingly, we are looking at a combination of Western Europe from a business perspective, Eastern Europe from a delivery perspective. And in the last couple of years, given the conflict in that region, we had slowed down our M&A activity in that region but we will pick it up as we go along. And even at this point in time, as I said, at any point in time we are evaluating multiple different tuck -in acquisitions. We are not going to do acquisitions for revenue aggregation. These are capabilities, whether Gen AI, AI, Micro verticals and so on and so forth or our delivery presence in Eastern Europe. So, if we have something to announce over the next few months and quarters, we'll definitely come back but that's definitely an area of focus and that should also address some part of the void tha t we have in the European growth side.

The second part was on Europe which has been soft for last 3 -4 quarters. So, any comments on that?

Yeah. So, from a Europe perspective, look, there is definitely focus that we are bringing onto it. So, if you look at our senior hires, we had brought in Barath to lead Europe along with our BFSI vertical. So, that's one part. And, second, organically also we have been reinforcing the team and there will be some amount of M&A focus there as well. So, over the next several quarters we do hope to turn the corner on Europe in terms of growth.

Thanks and all the best.

Thank you.

Thank you. The next question is from Abhishek Bhandari.

Hi. Good morning to everyone. Sandeep, I have two questions. The first is on your growth distribution. If you look at the last two quarters, bulk of the growth is led by only Healthcare vertical. While, you know, we have seen some incremental improvement in BFSI, it is not really very material. So, if you could share some light about how you see the growth pattern across verticals in FY25.

Sure. So, you want to have the next question as well or…?

Yeah. The next question is on the margin profile. While we understand that your medium term aspiration of 200 basis point remains unchanged but now that has got, you know, seem to have shifted by one year given that we're talking about margin remaining at current levels in FY25. Having said that, your onsite effort on this large projects may have peaked out. Do you think that may give you some near term lever to continue to invest into sales and yet give back something to the investors in terms of improvement in margin?

Sure. So, I think, the second question you have partly answered yourself. So, if we look at it, yes, there are larger deals that we have won which start with certain amount of vendor consolidation at times onsite, which basically if you look at our financials and put a thread through the pattern there are some deals which are ramping up, contractor spend is going up and this is also a margin lever for us as we go ahead. Look at the headcount that we have added. We've added significant headcount over the last two quarters, both on site and offshore. The offshore headcount is in the hope and expectation that as we do the offshore transitions, they will get deployed and so on. So, there's a pattern if you put a thread t hrough all this. Yes, there is a possibility of margin improvement. But, look, as I said before the market is tough, we don't expect it to be kind in terms of demand environments anytime soon and as we are also growing and as we are also competing with the large st peers that we have and doing vendor consolidations, etcetera we want to keep that decision to us in terms of improving margin in this year versus doing the right thing by growth. Improving margin is an easier task versus getting higher growth. So, for this year we’ll focus on growth and at any point in time if we can improve the margins, rest assured we'll do our best to improve the margins. Now, in terms of the growth, while you said that H CLS is the only vertical with growth, yeah, predominantly yes. But BFSI also if you look at it, in an environment where most of our peer group, whoever you have seen the results from and what we see in the market, BFSI is a tough segment at this point in time. Squeezing out growth on a quarter on quarter basis means that there are more newer deals that are coming in. While we might be optimizing in the existing business as well, so rest assured, the focus is on different verticals, different service lines. Internally the way we are structured, there are different teams going after BFSI, different P/L leaders for Lifesciences, so and so. So focus is on growth across, will let the year pan out but high level , Healthcare will lead the growth even for this year because of the pipeline that we have, because of the provisions that we have done, followed by BFSI, followed by Tech.

Thanks Sandeep. Sandeep, maybe one last question. You know historically, our portfolio has been very discretionary in nature. Maybe in the last 3 - 4yrs., we have made it more annuity-driven, long term contract driven. As things stand, in your assessment, you know how much left in discretionary amount is critical for you to hit a 14-15pc kind of growth. Do you think the pipeline is enough and the exit rate is enough for you to go to a double digit growth? Don’t give me a number but you maintain that you will have an industrial rating growth in FY25. Some of your large peers are talking about a better FY25 than FY24.

So we have delivered, if you look at the financial year 24, we have delivered 14.5pc. If you look at the overall industry and take an average for our peers in the industry, whether you look at the Indian space or otherwise, it will not be more than 3 -4pc at an average of all the service providers that we track. Now if you look at the last 3yrs. as well, even before this, so the relative outperformance for Persistent has been fairly decent. And that has been in the same environment where we have been asked this question about discretionary, non -discretionary. So rest assured, discretionary or non-discretionary, we are not waiting for the demand to come back, where we can deliver relative outperformance, we will and we are confident that this year should also pan out relatively well.

Thanks Sandeep and all the best for fiscal 25.

Thank you.

Thank you. The next question is from Ravi Menon.

Thank you. Sandeep, congratulations at the end of a good quarter. What I want to ask you about the top client. You said that this is a plan ned ramp down and that this is the last deal that you had signed in FY23. Is there any re-negotiation as well in this or this was just productivity improvement and other things that were baked in right from the time you signed the contract? Contract will say yes b ut the client actually changed any part of the contract or restructured it?

So Ravi, there is no re-negotiation. There is no contract opening. This is as per the contract we signed, as per the planned revenue profile for the years. So there is no concern on any of those kinds of issues that you talked about. So this is fairly straight forward, what was planned is what is being done.

Ya. Our clients have definitely asked us for the licensing order for this but our attempt here is not to use this as a product, but use this as an accelerator, as an IT that we will use so that we can retain the value and capture more value in services as we go around rather than just using it as another part of our Accelerite business or payments.

Thank you. Lastly on margins, can we think about margin improvement being possible when the demand environment improves? You were saying that you have over invested a bit, deliberately in sales. So can we see that normalize when demand comes back?

Yes absolutely and if you look at it, we have been saying this for some time and even if you were to follow our organization, if you look at the leaders that we have brought in, right from Ayon as the Chief Strategy and Growth Officer, Barath for Europe Financial Services, DB as the Chief Operating Officer and many others, so we are putting a muscle. Whether it is a bad economy or a good economy, we are preparing ourselves to go to $2 bn and much beyond. And so from our perspective, if the market conditions have become more amenable and the growth becomes easier because the demand comes back, you should definitely see the leverage of all these investments come.

Thank you. The next question is from Sandeep Shah.

Ya, thanks for the opportunity and congrats on the good set of numbers. Sandeep, the 1st question is, entering FY25 versus entering FY24, based on client discussion, do you foresee some change in terms of the client pattern, in terms of discretionary spend because some of your peers on the hyper scalers are saying, “Cost optimization effort o n the workload migration has been bottoming out.” Some of your other global MNC peers who are into software products engineering. They are saying that some of the projects which were once stalled in terms of discretionary pattern have been coming back. Are you witnessing and if that turns out to be true, do you believe that FY25 could be better for us despite we are doing much better than the industry?

So we are not seeing any of that. We are seeing the same kind of demand environment that was there 2 quarters or 3 quarters back and we will be happy to see a change in the demand environment. And so should the demand environment change as I said earlier to Ravi as well, we will let it pan out but we are preparing ourselves for a status quo in terms of the demand environment and performing relatively well within that.

And Sandeep, coming to the margins, I think in search of changing the growth profile, from just being project based and a discretionary based, we even a managed services player. That will lead to many contracts where we may have to schedule a plan ned ramp down, we have to do slightly higher onsite efforts, slightly higher sub -contracting cost, so why we call out this like a one-off cost and this may postpone your margin achievement target of 200 -300bps. When do you expect that movement to start happening? Will it be FY26 or beyond that?

Look, there are multiple things that are happening. It is just not the large deal wins. If you look at it, we have been talking about how we are investing in Generative AI, how we have put labs together, how we have put customer experience centres together, how we have brought in overall management bandwidth and so on. So there are multiple things there and we are today preparing for an environment where we will increasingly fight for bigger deals against the bigger players. And this will become par for the course. Whatever the transaction costs are and so on and so forth. And as I said earlier, look, all these investments are to make sure we maintain our growth trajectory while maintaining the margins at where they are and as the demand environment makes it self amenable to more growth, I am pretty sure, with that and with time, all of these will have a better leverage and margins should improve. We remain committed to the next 2 -3yrs., 200-300 basis points and we have a line of sight to that.

Thank you. The next question is from Mohit Jain.

Hi! First is on the TCV. It appears to me that TCV Y-o Y is little on the slower side. If I look at ACV, TCV on both sides, so is there a spillover or something that you guys are expecting from 1Q? Or is this just a reflection of the current environment we are in and this is the new normal for TCV?

So if you look at the TC V, you are comparing it with the earlier years and so on and so forth. The demand environment should be kept in mind. I don’t think we are concerned about any slippage that happened in the last quarter which will come in this quarter and so on and so forth. We are relatively ok with the TC V that we delivered. It can always be better and we will try to do better. But we are comfortable with where we landed with that and we have a decent pipeline.

And 2nd was on margins. You had 300 basis point margin benefit because of the earn-out reversal. But in the opening remark, I think there was this 200 basis points mentioned. So what is our recurring margin or true margin for this quarter?

Sunil, you want to take this?

Ya, so the question over here is, how much of the earn-out reversal liability we have line of sight to recoup. So on multiple levers, both on the sub - contractor cost reduction because of onsite to offshore movement and purely the utilization improvement and some of the cost that we talked about were one time like the transition cost that we talked about and the travel cost that also happened in the last quarter. I think we have a good line of sight to have EBIT margins in the normal operations at the level of 14.5pc.

Thank you. The next question is from Vibhor Singhal.

Hi! Thanks for taking my question and congrats Sandeep and team for a very strong execution yet again. Just 2 questions from my side. One is, Sandeep, I just wanted to check on the hi -tech segment. You mentioned that ex of the top client , the Hi-tech segment did grow in this quarter as well. What is the overall outlook in this segment going forward in FY25 , again excluding the top client. Are the clients coming back on the spends and what is the kind of demand that we are expecting from that segment? My 2 nd question is a broader level question for Persistent as a company. Now that we are well over a billion dollars revenue in size, what are the challenges, company specific challenges that we see for ourselves? I mean we will keep aside the macro part which is of course same for everybody but as a company, I mean in terms of being able to win large managed services deal in t erms of let’s say, if there is more of past revenue which impacts our ability to expand margins, anything of those sorts which you believe are the things that you are probably taking at the top of your to-do list to tackle in the coming years?

As far as the hi -tech segment is concerned, you are right. Ex of the large customers, it definitely grew. Now Hi-tech segment is obviously facing the headwinds because of the enterprise customers. Enterprise customers face challenges in their business. Their downstream ability to buy from these enterprise software companies which is what comprises hi -tech for us pre-dominantly is under pressure. So we do expect that for the next few quarters, there will be pressure in this segment and we are trying to build our pipeline in a way that we can still deliver healthy growth and will let it pan out. Now coming to the company specific challenges which is fairly interesting. So I would say that it is not about challenges. It is about, as we scale, as we are invited more and more to the party in terms of being a challenge r, where there is a fatigue with the larger peers of ours, where people see a refreshing change in the technology capabilities that we have from bringing the product engineering tenets into the enterprise market or otherwise. Capabilities around generative AI, AI, other emerging technologies, where they really see the differentiation and they see a refreshing change in our agility in terms of our response. It’s not just about what we do, how we do to the customer experience that we provide. It is definitely opening more doors for us. Now for us, obv iously the challenge is to bring in the newer set of thinking, whether it is in terms of how do we mind our existing customers to become bigger and more relevant or we open newer accounts at scale where we are invited. So if you look at our management hires over the last 1yr., e ven in the last 2yrs., you will find that is where we have been incrementally building the muscle. I do think it’s a very healthy challenge in your newer terminology and it is a very very good opportunity for us and that’s where if you look at it, it is the 16 th straight quarter of revenue increase and if you look at it, if you do a relative output performance in the sector, as I said, last year, the sector grew by about 3-4pc, we grew by about 14.5pc. And in the last 2yrs. and before that, we grew at 35pc each year, so I do think there is a great market opportunity for us and for us to grab it, bring the right skills, muscle and that’s what we are focused on. It’s all about execution now. Hopefully it answers your question.

Thank you.

Hi Sandeep, hi Sunil, hi Saurabh, thanks for taking my questions. SO 2 questions from me. It is interesting that your Life Sciences vertical is the healthiest because when we speak to enterprises, it’s the Life Sciences vertical that use AI as mission critical. I think 9 out of 10 Top Life Sciences companies want to build LLMs by year end. So perhaps you can address the TAM, the competitive position, you know and how many more of these big deals can we win because it does seem like a vertical that’s quite right for, you know businesses like yours to come in and help, hand hold through that process. that’s the 1st question. The 2nd question would be, it is quite evident, if you speak to those who are close to the Cloud business that there has been an acceleration of consumption within the Cloud and the degree of acceleration can be debated but no doubt there is acceleration. So how do we reconcile an AWS that could potentially re-accelerate to 20- 25pc growth by year end. And the relative, I wouldn’t say, it is just very neutral, I would say commentary from us on the lack of visibility ahead because it doesn't quite reconcile. Essentially the re can’t be that much of a delta in the conversion rates from POCs to production, for Amazon versus you. So I would just be curious as to why this stark delta – is it just because a lot of their revenue is driven by clusters which you do not monetize as in GPU clusters which you do not monetize and it gets porous. Is the sequencing argument or you are missing something else? It will help to understand.

So Karan, I will be respectful of time. We have 3 minutes before the call has to finish. So I will try and answer your 1 st question. 2nd, I think we can take it offline because it is a fairly long debate there. So if you look at the Life Sciences healthcare vertical overall, Healthcare vertical for us is broken into pharma /bio-pharma, scientific instruments , medical devices , payer and providers. If you look at the used cases in terms of AI, we are involved in each one of these segments, whether it is in the research side with the pharma set of companies, whether it is providers like radiology where we are working with some of the leading firms in that, where we are working on building AI /ML solutions for them to further enhance the quality of output that a radiologist for example can bring to the market and even reduce the cost of the entire value chain right from patient recruitment to their end resulting delivered and have them increase revenue on one hand, decrease the cost on the other. Similarly in payer provider, there are multiple used cases that we are working on using AI/ML and Gen AI as well and we have talked about a few of these in our earning call today and earlier. As well as the other things are concerned, look, all the more part of the hyper scalers. If their revenues increase, I am pretty sure our revenues will follow as well. So we will closely watch that and we will take it offline in terms of the bigger discussion on consumption GPUs versus others and so on. Since we have only 2 minutes, I want to make sure that we take one more question before we close the call.

Thank you and the next question is from Nitin Padmanabhan.

3 questions – so one is, couple of players I think in the earlier results have been talking about re-scoping of existing contracts that are coming up in between, so what's your thought on that within your portfolio? The 2nd thing is on BFSI. If you could just contrast BFSI in your portfolio, what it was maybe a year ago. How have the things changed in terms of dynamics? You mentioned that it continues to be a tough area but I think people have also been talking about bottoming out there, just your thoughts there with reference to your portfolio. And finally on managed services, how has managed services sort of be en on the portfolio, maybe let’s say 3yrs ago versus now as a percentage of revenue. Is it meaningful today than what it was? 3 questions – thank you.

Nitin, we are really out of time so I will quickly go over all this. As far as re- scoping of contracts is concerned, I don’t think we have seen any major re- scoping of contracts. There m ay be minor things which are part of the course. There is definitely you know at times, very large customers may come and, basically when your COLA is due, try to not give the COLA so on and so forth. We are seeing more of that rather than re-scoping. BFSI large customer dynamics, so we have been gainers of the phenomena where as I said before. Customers are not very happy with the larger inc umbents. They are looking for challengers to come in and bring in the right technology capabilities and the agility that they need. That’s where we have opened some fairly large logos and we are seeing some ramp-up there. That should only accelerate with time. Managed services, definitely if we were to look at it, simple things like what we are talking about, if you listen to our earnings call in the past as well, private equity for example, we have become a pri vate equity car veout specialist. So if private equity goes in, carves out at new co from a large company, new green field IT and then there is a managed services for the next 3-5yrs. That’s where we have won significant deals in the last 3yrs. And so there is a good proportion of managed services coming from things like that to our newer customers, existing customers and so on. So hopefully that gives you a colour. We are out of time. So I would want to, with this, take a pause here. So with this, I would like to close our call with the message that we are positive on our profits as we move into FY25. We would once again like to thank our 23,800+ team members, customers, partners, investors and all of you for support in our growth journey. Thank you for spending time with us on the call today. We look forward to connecting with you again in 3 months’ time to provide and update on our progress. Thank you. Operator, you may now close the call.

Thank you very much to the Persistent management. Ladies and gentlemen. On behalf of Persistent Systems Limited, that concludes today’s conference. Thank you for joining us and you may now disconnect your line and exit the webinar. Thank you. ***************************************************************************