Infosys Limited

We do not break up guidance between acquisition and non-acquisition. However, the annual revenue of in-tech was around €170 million, which can give you a basis for calculation.

We see good growth across all geographies, especially in Europe. The pricing environment has remained stable, with improvements from value-based selling.

The discretionary spend remains low, but we see some improvement in financial services. We will continue to focus on internal fulfillment while also hiring as demand increases.

India's growth is small but doing well. There was a one-off in this quarter, but generally, it is in good shape. We plan to hire 15,000 to 20,000 freshers this year, with a mix from campuses and off-campus.

The 3.6% sequential growth is strong, but we have specific reasons for the full-year guidance. We have a clear approach on large deals and Generative AI, which is driving our growth. The slowdown is not due to macroeconomic factors but rather company-specific issues.

We have a program that enables our employees to get trained on different elements of AI and Generative AI, including awareness, development, and deep immersion. All service lines are being changed by deploying AI, and we aim to become an AI-first company. We do not specify how many people are recruited for specific categories, but overall, we expect between 15,000 and 20,000 new hires from college this financial year.

We are pleased with our performance, driven by our Generative AI ecosystem, large deals, and client engagement across industries. The growth is supported by volumes, particularly in financial services in the U.S., and our outlook reflects this confidence.

In Financial Services in the U.S., we have seen a shift, but discretionary work remains in a difficult situation. There is a lot of discussion around Generative AI, but actual projects are not large revenue projects. Most large deals are focused on cost takeout, efficiency, consolidation, and automation, with transformation funded through cost takeout.

Many of the tracks under Project Maximus are showing results, but we anticipate a comp review and the transition of large deals could be headwinds. However, we are confident in our margin guidance.

We are seeing recovery in U.S. Financial Services, particularly in mortgages, capital markets, and card payments, with some volume growth and early signs of recovery.

The acquisition is relatively small and won't have a material margin impact. Forex has remained range-bound, so we do not see an immediate impact, but it can change unpredictably.

The one-off revenue from a customer in India impacted margins by 40 bps, translating to a 0.5% impact on revenue.

There are signs of discretionary work returning in Financial Services, but it's too early to determine if there's a decoupling or a sequence of events leading to increased demand for services.

We are seeing early signs of recovery, with volume growth after several quarters. However, we need more data points to assess sustainability.

We do not break down guidance into organic and acquisition-related figures. The acquisition's revenue is smaller relative to the company size, and we remain cautious about discretionary spending.

The Retail sector is facing challenges linked to discretionary spending, which is tied to the macro environment. We are winning deals, but recovery in discretionary spending is necessary.

We still believe the first half will be better than the second half, and the strong performance in Q1 supports that outlook.

This quarter, we saw strong volumes and a positive change in U.S. Financial Services, which contributed to our revenue. Our client work on value and pricing also helped. Large deals this quarter provided visibility into the year, leading to a stronger outcome.

We have considered our typical second half performance, which is usually lower than the first half, in our outlook. We did not factor in any other triggers beyond what I shared.

We have multiple levers for margin improvement, including value-based selling, improved realization, hiring freshers, nearshoring, and lean automation. These will help offset headwinds, including compensation decisions and deal ramp-ups.

We are integrating Generative AI across our service lines, seeing benefits in software development and process optimization. Discussions with clients focus on the roadmap for AI implementation, data infrastructure, and cloud capabilities, which influence contracting.

That was a new item and not expected in prior guidance.

We have built our outlook assuming the current growth in U.S. Financial Services will continue, but we have not assumed it will change significantly or expand to other geographies.

In Europe, we see varied trends. The Nordic countries have shown good traction, and we are expanding large deal programs. In Germany, we are benefiting from local competitors facing constraints.

The in-tech acquisition was not part of the previous guidance as it was pending regulatory approval.

Not necessarily. We do not break out guidance between in-tech and non-in-tech. Other factors include Q1 performance, volume growth, and Financial Services growth, offset by discretionary softness.

The third-party hardware/software cost is integral to large deals and will depend on the ramp-up or ramp-down of those deals.

The India business is smaller, so any changes appear larger. The jump was a one-time impact from one client and should be viewed as such.

We have not decided on the wage revision cycle yet. We are evaluating various factors, including inflation and peer practices.

We are focusing on Project Maximus and various structural levers to offset headwinds and improve profitability in the medium term.

Margins are affected by compensation decisions and seasonal furloughs in Q3 and Q4. Our margins will also depend on the acceleration of Project Maximus and revenue growth.

It is very difficult to call out which vertical performance will end up at the low end and high end of our range. We have done various models internally to get to the margin band. Some of them get us to the lower end of the band, and some assumptions will get us to the higher end. I do not think there is any secular segment that is going to drive either way.

If you look at the first quarter, our YoY growth has been 2.5%. And 50 bps of that is one-off. We have always maintained that our H1 is going to be better than H2, and that the guidance bakes in on that. And then there is in-tech. So all of that put together makes up for a guidance of 3% to 4%.

It is difficult for us to say for the other companies. We can see some benefits in Financial Services, in cards, and in payments. We see benefits from some of our clients. We do feel we have a very strong set of capabilities from digital, cloud, Generative AI, cost, and efficiency. So, we do see much more connection with clients, but it is difficult to say for the others.

We do not know if that is a trigger or not. We are typically seeing large digital programs. Even now with Generative AI, clients are still not ready to launch them. It is difficult for us to take a view on that.

We are delighted with the strong first quarter growth, margin, cash, large deals, and volume. The change in guidance gives a sense of what we see in the outlook, 3% to 4% growth. We hold the margin at 20% to 22%. We feel extremely strong in what we are building in Generative AI, and we can see traction in the projects and programs we are doing. We believe we are well positioned in digital, cloud, technology transformation, and cost efficiency.