Infosys Limited (INFY) Earnings Call Transcript & Summary

Hearty good afternoon, ladies and gentlemen. On behalf of Infosys, I'd like to extend a very warm welcome to all of you to the 2022 analyst meet. I am Kavya Chavali, and I must admit that it's just wonderful to see all the smiles that are not behind the masks anymore or for that matter faces that are not behind the screens anymore. And it's just wonderful to see all of us back here in a physical format after a gap of 3 years. So first up, huge amount of thanks to all of you for taking your time off and being here in person present with us to be a part of the event. At the same time, I'd also like to extend a warm welcome to all those who probably are not here in person joining us right now, but they are definitely watching this event and accessing the event via the live audio webcast from our Investor Relations website. I'd like to also inform you all that this event is being recorded, and the audio file for this event, along with various presentations and the transcript will be put up on the Investor Relations website. Now before we get started, I just thought I'll share a couple of announcements for the benefit of the audience. First up, as you can all notice on the seats -- on the table rather, there's the agenda that's placed that contains the entire schedule for the event. So please do take a look at that, and do ensure that we can all adhere to the timings to be in time and on time. That being said, the room is also Wi-Fi enabled. In fact, at the back of your attendee card, you'll also have all the details in order to connect to the Wi-Fi. Towards the sides of the hall, that is towards the edges, in fact on the tables, we also have power points. So in case you do wish to charge your devices, your mobile phones, you may please choose your seats accordingly. But that being said, we also have our volunteers here who are spread across the hall, and they're the ones who are wearing the Infosys i-cards, and they'll be more than happy to help you in case you need anything at all. Well, ladies and gentlemen, as we've taken a good look at the agenda, what we do know for sure is that we have 5 crisp sessions in store for all of you. Considering that the sessions are short, we may not be able to take the questions during the session, but we do have a dedicated Q&A round or Q&A session scheduled for all of you. So please keep your questions ready for then. That being said, can we also have an energetic round of a applause considering we're all catching up together in a physical of thought, in person. Can we have a round of cheer for all of you and for all of us, everyone gathered here this evening. And let's give this a vibrant start, a buoyant start and to give a head start to the program, ladies and gentlemen, please help me welcome on stage none other than the infosys CEO and Managing Director, Mr. Salil Parekh.

So good afternoon, everyone. Great to see all of you here and great to have you here with us. Thank you for coming for this session. We have, as you will see in the agenda, quite a packed lineup today. We want to talk to you a little bit about our overall strategy, give you a sense of what's going on with our digital and cloud work, talk a little bit about our go-to-market and really what's happening in financial services, then give you a sense of how we are engaging more and more with all of our employees and then have a sense of what we are driving in terms of our numbers and our sustainability work. And then leave it open for Q&A. So a fairly packed agenda. I'm going to start it off with the overview on strategy. Some of this, I think you've seen before in the strategic discussion, but I want to share with you what happened in the time since we started. Of course, every session will have the safe harbor slide as well. So as you know, we put in place a strategy a few years ago which was focused essentially on what we are driving in digital, what we want to do with energizing the core, what we want to do in terms of reskilling all of our people and then how we want to drive, what we then call localization and underpinning all of that was much more focused on client relevance and really a relentless focus on execution. Now 4 years later, we've had some good success with that. As you've seen, we are really considered a digital leader in the market today. Today, we have 52 different categories where we are considered one of the leaders when we started a few years ago. This was more in the range of 24. Beyond that, we've seen our digital revenue has gone from about 25% close to 60%, if you look at our Q4 numbers of last year. The growth, which was 5.8% the year before we launched this strategy is up to 19.7% last year and looking very strong. A lot of market share gain in that growth that we saw, accounts over $100 million. We were at about 20 then, today at about 38. And that we see as a very good sign of the trust that the clients have in what we are driving. Employees from about 200,000 to 300,000, so a big change in the scale and the size of the company itself. A significant market share gain, as I mentioned earlier. And if you look at our total shareholder return, it's the leading one amongst our peers in that time frame. So we put together a strategy. We executed it well and we had some very good outcomes. But that was, as they say, all in the past, what are we doing in the future. What we see today is digital and cloud is still very dominant in its growth. If you look at the overall tech services market, people estimate this is from third-party analysts in the range of 5% to 6% growth over the next 5 years. If you then take the digital and cloud part of it, that's around 400 billion, plus or minus which people estimate will go to about 800 billion plus or minus, growing in that sort of 14%, 16% type of a range over the next several years. So this is where we focus in the past. And we are going to continue to focus. We will fine-tune some of that focus which I'll share with you. We have a huge opportunity to continue to gain market share in this, in part because we made some very good capability building in these areas and in part because we are in this cycle, also going to build out some more new capabilities. We, of course, understand that the macro environment, there are lots of changes that are going on. Interest rates are going up, inflation worries and the supply chain has their concerns in many parts of the world. But what we see today is not very strong demand outlook and we continue to see the overall trend, which is driven by digital and cloud to be sustainable over this course of this time and even through all of these macro economic points, we see companies are focused on large digital transformation programs, and that will continue. Now what are the elements as we look ahead? We've tried to keep it along these 5 lines for the next few years. First, really go big with cloud, and cloud is the big opportunity. I'll come back a little bit on where we are differentiated in the cloud. Second, continue with all the intensity that we've had in digital. We have some tremendous capability even outside of cloud and continue with that. Third, we are taking this time to start to see some things which are in the next generation which may not have a result this next quarter on the next financial year, but will have some impact in the 3- to 5-year horizon. Then we've always been very strong in automation and we want to continue to be the leaders in automation and modernization. And especially as we see the macro developing, we will be even more relevant in what automation can give us in that market. And finally, more critically, redouble what we're doing with people care, with engagement with all of our employees and how we want to make that the cornerstone of everything we do in the future. All this continues to be underpinned with a continued focus on client relevance and continued focus on execution, which has always been the critical differentiator even as we put the strategic elements for the last 4 years. Now on the cloud business, 1 of the things that we've seen and noticed in the past couple of years is the launch we've had of Infosys Cobalt. Many of you have seen that launch. We've really built it out on some market-leading capabilities. For example, we have infra-as-a-service relationships and partnerships with all the major public cloud players. We have our own private cloud capability when we look at infra-as-a-service. We have strong partnerships in software-as-a-service, you look at any of the big SaaS players, we are the #1, #2 or #3 partner worldwide. We are also now building out very strong partnerships and our own toolkit on platform-as-a-service. Everything new that's being built today is cloud native, is cloud first, and the platform-as-a-service becomes even more critical for that. Big moves on data and cyber security on the cloud, these are becoming absolutely critical as we go ahead. And of course, there's a lot of work on advisory, on design and migration, but that's not the only elements of the cloud. All of the other elements are more and more relevant. And then we've now started much more industry solutions within the cloud and which are all available within COBOL. And this is what's helping us fuel our growth. You might have seen last quarter, we had 40% growth in digital. We had -- in cloud growth that was even faster than that, and we can see us gaining tremendous market share in the cloud space. On digital, we will continue with the intensity. There was a pentagon that we had built. It has worked really well for us. We are continuing with what that tells us in terms of building capability for clients whether it's on data and analytics, on engineering, digital engineering services, on IoT, on cybersecurity, even on enterprise technology, for example, new work going on, on SAP S/4 HANA and hybrids and so on. And then on experience, which is where we build all of our digital studios, we have now a global network of these studios across the world that is helping us as we work with our clients in all the new things that they're doing. Then the next generation seeding, here, we've taken a few ideas and started to build them out with great depth within the business. For example, there's a set of companies which are called Digital Natives or technology native companies. These are growing very fast. We have a very good business with them today, and we are expanding the footprint to work with them, to benefit from the growth that these companies are seeing. We've also been very strong in Europe, but we want to now look even more deeply in what is going on in expanding in Europe, good traction in the Nordics, good traction in Germany, even more scaling up in the U.K., good traction in Switzerland. So there's lots of opportunities in Europe which we will go faster into. The new technology areas you may have seen a few weeks ago, we announced a metaverse foundry launch. We have other launches like this and internal capabilities whether it's on Web 3.0. Of course, in blockchain, we've been in there for a number of years now, and on technologies, which relate more and more to what's going on in the quantum area. And then finally, in the new seeding domain, we have -- the company has focused on sustainability over the years where we ourselves driven to carbon net 0 in 2020. We have taken all of those tools and of course, more of what's going on in the market and build a practice for sustainability, which we are seeing good traction with clients. It's still early days, but these are some of the new areas that we are starting to be focused on. Here, on advanced automation, this is where we have all of our core services. We have very good strength in BPM, which we are building upon advanced ADM, where we're putting in much more of the automation and no code, low code building of new tools, the modernization area. And then AI and machine learning, both our own tools and tools that we have from the market, which we combine to drive automation. We've seen over the past several years automation, allowing our clients to benefit 10%, 15%, 20% each year to improve their efficiency, and we've seen that internally into our own capabilities as well. And so we know this is something that is of huge interest for our clients as we drive growth with digital. There's always the play on automation, which is helping them reduce their footprint and improve their efficiencies. And then on people care and development, we'll have, of course, a full session, which you'll hear about. A lot of the work which we're doing is very much focused on how do we enhance engagement with our employees, how do we attract and retain and develop our people, much more faster predictable career progression making sure that our employees see that it's predictable for them and that it's happening at a faster pace. An extensive reskilling for all of our people. We very much have the view that we want to make sure we reskill our employees as we go into the future and bring them with us in the new domains that we are going to see. One of the areas that I'm always very keen to share is that as we look at all of these growth dimensions we also have, and again, we'll have a more detailed update with you later on in the afternoon, we have several levers that can help us drive to a much higher margin. There are levers which relate to how do we manage the role ratios and the pyramid within the organization. There are levers that relate to how do we manage the mix between on-site and offshore. We've also got a very high level of subcontractor usage in the past few quarters and couple of years. And we know that that's a huge lever as we unwind that subcontractor usage percentage to give us more margin benefit. We know that automation itself will give us internally some benefit and we will capture some of the value from it. We realize the scale has changed as we've gone from 200,000 to 300,000 employees. We know there's some operating leverage within the business which we will bring into the margin benefit as well. And then, of course, we have a method of looking at how do we communicate more and more the value of what we are driving with clients both from a digital perspective, from a wage increase perspective and what do we do to make sure we capture some of that value back into our business and help us on the margin. So we have a set of margin levers, which we are working on actively to make sure that as we drive the growth, we continue to drive a higher-margin business. So with that, to conclude from my perspective, first, we've had in the last 4 years, demonstrated that we've had a good strategy, but even more important, a very disciplined execution of that strategy, which has brought us to where we are today. Going ahead, we still see enormous opportunities, especially in digital and cloud, but in many areas across our business portfolio. And we've built the portfolio which can hopefully benefit more and more from these opportunities. Our people engagement is already very robust, and we are now putting in more work into it to make it stronger still to make sure that connect with the employees is very high. We have several levers which can drive us to a high margin as we go through the next few years, and those are good things to have as we embark on this cycle. And we remain well poised to continue to gain market share, drive growth and continue to create value for all of our stakeholders, but especially for all of our shareholders who are represented here. So with that, thank you, and I pass it back for the next session. We have a couple of sessions now, which will relate to what we're doing in digital and cloud and more on the market. Thank you.

Thank you very much, Mr. Parekh for sharing a strategic overview and also for sharing the levers towards the growth drivers. That being said, ladies and gentlemen, it's also time to gather insights around what's next in digital. And in fact, our next speaker, we have with us Mr. Ravi Kumar S., President, Infosys, who's actually joining us digitally or if I may say virtually as he's joining us all the way from New York. So we'll have this session taking place in a virtual of thought, but we'll be having Mr. Ravi Kumar S. joining in to share his insights on what's happening next in digital.

Thank you so much. I'm guessing you can hear me now. I'm so sorry that I couldn't make it. I was so looking forward to joining you in Mumbai. I end up contracting COVID on my way back from Davos, and I was just about to board a flight to Mumbai. So I hope the technology and my voice holds up for the next 25 minutes. So in the next 25 minutes or so, I'm going to present a view about NextGen digital, what's coming up in digital, cloud and AI automation. I think Salil kind of summarized it pretty nicely. So I'm going to a little bit double click on it. I think I can give you enough to excite you, but not give away a lot so that we kind of lose our competitive advantage by pushing this information into the public domain. If you can jump into Slide 2, which is the safe harbor and then Slide 3, which talks about the market dynamics, which are reshaping the future. Salil spoke about it. Everyone is talking about the potential slowdown, the Ukraine war, the supply chain disruptions, high inflation in developed nations. But the digital opportunity is a real one. It's a very different one this time. It really contributes to the must-have transformation rather than the historic path where it contributed to the nice to have transformation of enterprises. In fact, digital technologies today can be the deflationary force for inflation, it can actually kind of reduce supply chain disruptions, it can even diffuse the heated labor market. Salil spoke about analyst predictions. I think the analyst predictions continue to remain intact, almost $1.3 trillion of IT services spend by 2023, and a significant chunk of it between 500 all the way to 800 where Salil was speaking about on digital services. The 4 shifts I kind of put up on the slide are the market dynamics reshaping the future. It's a golden era for technology. We're going to see accelerated digitization, needless to say, just to give you an example in retail, we took a decade to go from 10% to 15.5% in e-commerce until 2020, and then it kind of hit 20% in literally 12 months at the onset of COVID. Every industry is going through this significant digital embrace. Digitization plus dispersion, as I call it, I read a very nice article in the Forbes 3 or 4 days ago, dispersion of work, heavy investments in digital infrastructure for employees, dispersion of health care, dispersion of education, dispersion of telecom utilities in hybrid models as some of it is actually permeating into our homes. That is going to lead to more digitization as we go forward. Software is the new alchemy of businesses. We have gone from using digital technologies for extended reach, disintermediated reach to consumers to deeply embedding software in automating businesses to deeply embedding software into products and services. In fact, if you split the industries into bits and atoms, the bits industries are a bit related industries, primarily services industries are becoming more bits and atoms are getting emerged into bits. Who would have imagined as an example, the car industry going from internal combustion to being a software business? Who would have imagined the car industry to not have any dealers? Tesla actually hands over cars on your driveway and you just open the car on your app and take the keys out. What a disruption we are all going through in industries where the core product is changing. Industry transitions, that's a force shift. Amazon did it very smartly for many, many years. Every time they wanted to transition the industry, they did it seamlessly. Now there is the smarter G2K companies, a large number of them are clients. Having a renewed confidence on the digital platforms because of COVID. Of course, they had a strong physical network, which is kind of important in the times we are in, and a trusted consumer brand and the consumer base they are keen to straddle between industries, transition between industries. Big box retailers in the U.S. are getting into health care, oil companies want to be in automated retail because they can change the gas stations and do EV charging stations and then as more time is spent on EV charging stations, you can do autonomous. A lot of our clients are doing conversations with us on the industry transitions using digital technologies and this is which I think make the digital opportunity now very different from the past. And therefore, even if there is an impending slowdown I don't see a big change in the outlook. Slide 4, we have been speaking about pentagon of services onto digital services. More than 59% of our business is digital now and it's growing at 40-plus percent, as Salil mentioned about it. A portion of that business, a chunky portion of the business is cloud related, and it is significantly growing faster than digital, which, of course, is significantly growing faster than our core services. Our investments in Cobalt, the first cloud services brand, much ahead of our peers has helped us to enable growth. We have 60-plus digital services. 25 of them have a run rate of more than $100 million, annual run rate of more than $100 million. So our endeavor is to create that similar runway for all the 60 digital services. What has helped us get there a focused go-to-market, a strong partner ecosystem, a lot of awards and recognition. Services plus platform approach, co-creation with a network of living labs, design studios, early investments on reskilling infrastructure and distributed talent pools as we localize them across the world, which is really kind of needed for digital capabilities, has helped us to stay ahead of the curve. The next slide is about really the next in digital. In some ways, it's a summary slide, which I will double-click here on. Digital technologies, as I said, was always focused on the growth agendas of enterprises, speakers, you created extended reach to consumers and create a more efficient way to reach consumers. Digital services have now evolved across the efficiency stack, the growth agenda, and, of course, creating smart connected products and services. As I had mentioned earlier, the atoms related industries that are getting emerged into bits. All digital has underpinnings of the cloud, more nuanced offerings on the cloud emerge, hybrid, multi-cloud offerings. The resource and the infrastructure layer is getting repurposed. SaaS is almost $200 billion of market size, both horizontal and modular industry apps, a reimagination of data on the cloud. we're going to double click on it. Product engineering, embedding software into products, leveraging the 5G revolution. Human experience is no longer about consumers. It's also about employees, better intuitive UI/UX design for employees as well as more businesses go hybrid. Cybersecurity I think the biggest opportunity for us is to industrialize cybersecurity-as-a-service. Emerging technologies, which can future-proof us and, of course, a new era of consulting and advisory at the intersection of technology and strategy, especially in industries where there is a paranoia to leverage technology at the core, like the car industry we spoke about. Slide 6. Cobalt is a key differentiator, and why is it so? We all had this notion that the cloud is a lift and shift of on-prem infrastructure to virtualized infrastructure. The reality is it's not a lift and shift only. Lift and shift is a vehicle to do significant transformation of those workloads. And to create that transformation, I'm on Slide 6, we need an orchestration layer. Just to give you, illustrate this a little further, between the 3 hyperscalers, the top 3 hyperscalers, almost $100 billion is spent on capital expenditure over the next 2 years. And why do they do so? They do so to build infrastructure as a service and lend it to enterprises across the world. But that's not the real value is. That's not where the real value is. The reason why they do so is you land that enterprise workload and then you straddle them over the value layers. And these are the 3 value layers as I've kind of illustrated on my slide. So you could potentially take that workload, which you land on, move it to IT and business operations and move into business services. In fact, between the 3 hyperscalers, they have economies of scale to -- because they have internal consumption, like Google has 20-plus percent of the consumer Internet traffic in the United States going through Alphabet assets, 40% of e-commerce of the U.S. is through Amazon, 145-odd million users go through Microsoft because of teams. All of this allows them to create the insights and the algorithms and the business services and the ability to create IT and automated business operations, which you can flip around and give utilities to your clients. So that orchestration layer, somebody has to trade them, straddle the clients through that value. And we early on adopted this mechanism to make Infosys the orchestration layer for our clients who are going through this transformation, not just a lift and shift. So the ability to straddle those layers will help us to generate the value and transformation needed and the spend on the cloud then becomes worthwhile. Between the top 3 hyperscalers, almost $150 billion of revenue per year is generated. So for every first cloud [indiscernible] so you could potentially create 2 to -- for every dollar spent there, you could create $2 to $3 of cloud services. $600 billion is actually spent on public cloud or rather it will be spent on public cloud by 2023. So this is an exciting opportunity on the -- on Cobalt through a ground sub exercise, we -- we created 35,000 assets, 35,000 cloud assets, 300-plus industry templates. We've created a rhythm around building those assets, contributing into a repository and deploying them for projects, deploying them for programs. Equally, the cloud is going to become multi -- enterprise landscapes are going to become a high cloud. So we created a poly cloud layer. Again, a part of our orchestration. It creates interoperability, portability of data apps and services. You could straddle between the clouds. And this is very uniquely ahead of the curve because we did that way ahead of others. And that gives us the opportunity to stay differentiated in the market. Lots of exciting partnerships at the bottom of the slide, and all of them, we are in the top 1, 2 or 3, as Salil had mentioned. I'm switching over to Slide 7. This is a big shift in the way we see our business historically, system integrators saw business as the tech spend of enterprises as the universe. With the advent of the cloud, you could really pivot to business operations. automated business operations orchestrated on the cloud, and you could take large in-flight transformations and accelerate it as a service. For years, system integrators spoke about as-a-service consumption-based models, outcome-based models. We have now reached an inflection point because of the cloud because you could literally give as-a-service model to your clients. I think one of the differentiating value propositions of Infosys is our ability to create a viable economics, taking an existing estate of applications, data centers, people, taking the current mode of operations, as I call it. We can get service in the current mode, underwriting the advances and then taking future mode of operations and transitioning all that to the cloud. And doing this in a big bang way is seamless, I think is what our differentiation is. And that's why we are able to cut large deals with our clients from current mode of operations to future mode of operations. I'm going to -- the next slide and the next section is going to be a video from Australia Grid, the largest electricity distributor on the Australian East Coast, which owns, maintains and operates electric networks. We have seen 120 curated services, leverages our poly cloud platform with a digital command center, AI operations, advanced observability for business operations, which are automated through those 120-plus cloud services. Can I have the video for Australia Grid, please? [Presentation]

Thank you. The next slide is about transforming digital experience. Again, I'm kind of drawing from the summary slide I put up earlier. We had this very unique value proposition. Salil earlier on kind of created a strategy of the string of pearls for digital experience. So we bought a bunch of companies to create the beachhead capacity. We didn't go the traditional way of buying creative talent, but we went on specialized services, and we built the beachhead capacity. And then we went to schools in the United States and actually got non-stem talent, a design talent, and then we built platform which is uniquely different to the agency talent, everybody else built experience on. And then as the onset of COVID happened, we realized that, that experience will be double down on digital assets with our employees. So we bought a bunch of assets all the way from WONGDOODY, Blue Acorn, Brilliant Basics. We did an acquihire called Carter. And then recently, we bought Oddity, which actually has an exposure in Germany, but more importantly, it also has AR/VR capabilities to create immersive experience, which is needed especially in some of the industries where you have a physical and digital interface. And over the last few years, we created a network of 16 digital studios. And we orchestrated all of this underneath the leadership of WONGDOODY. WONGDOODY ran the whole process because they knew this business and they actually ran it for us, and then they were very tightly integrated with the Infosys engine. Our belief is that programmatic digital services or creative services, as we call it, will be in-sourced over a period of time because of privacy, data considerations, iterative nature now because when you're doing digital campaigns and digital branding, new edge creative is much more iterative with digital feedback loops, you will need a service where you would give dedicated studios to your clients. We've already done 3 of them. In fact, we call it StudioNEXT. And we are now helping the clients to build their own studios. In some ways using Infosys to in-source their own creative. It's a very, very unique value proposition, and it's a blockbuster offering of Infosys. I'm going to now show you a video from Rite Aid, an American drugstore chain, having 2,400 retail pharmacy locations in 18 plus states. It delivers health care services, retail products, and every day, 1.6 million Americans buy from Rite Aid. How do we evolve pharmacy systems from dispensing prescriptions to focusing on personalized holistic wellness? That was the the problem statement and WONGDOODY Infosys came together for building something which can give holistic wellness to the customers of Rite Aid. Can I have the video of Rite Aid, please? [Presentation]

Thank you again. I'm on Slide 11, next-generation Data & Analytics Services. I know we've been running out of time. So I'm going to kind of rush up the rest of the session. This is -- data services has been talked for a while, and so I don't want to go into details. Our approach has been very simple. We want to unlock data from legacy estates, create a flexible mesh of foundational services, build a data supply chain, create digital feedback loops, use data for the AI models. But the opportunity we tapped into way ahead of everybody else is the data on the cloud and data exchanges. We built some very strategic partnerships with Snowflake data bricks on data exchanges and data on the cloud. Let me give you one example of why this is such a powerful opportunity. I call it the network effect of data, and I call it the network effect of data on the cloud. big-box retailers, as an example, get higher revenues these times because they're struggling between physical and digital channels. In fact, they gained digitally much more during COVID because they had a physical network to support the digital channels. But they have lower margins. The reason why they have lower margins is because higher digital channels spend means lower trade promotion. Consumer goods companies know that consumers are just buying online. So they give you much lower trade promotion spend. And of course, higher shipping costs, higher returns. Digital channels uniquely however, have the opportunity to monetize the data. So while you have lower margins because of lower trade promotion and higher shipping and all, you have a digital estate either you could say it doesn't exist because there is no real physical estate or you could actually say it's unlimited. So the smarter ones are taking the data, putting it on the cloud on a data exchange, and then bringing the data elements across the value chain, consumers, retailers, supply chain, and the supply chain coming together. And those insights are monetized using either the data exchanges of the hyperscalers themselves or specialized ones like Snowflake and Databricks. We have strategic early strategic partnership with these companies, and we are seeing significant traction with the clients who actually want to not just monetize, but generate significant value by bringing all these data elements on the cloud across the value chain. I'm on Slide 12, which is about security. Security is like the first cousin of technology. If you spend more on technology, you have to spend more on security. If every company across the world is going to be a tech company, and the core of the products and services that will be embedded with technology, you're going to have more dispersed businesses, you're going to see geopolitical risk attached to cybersecurity, you're going to see more orchestrated hacking communities, you will need an orchestrated approach to security. We have a secure by design pervasive overarching approach, which has given us an opportunity to build everything with a secure design mindset. And we also have a zero trust architecture. In the past, most security was built on a castle and moat where the castle was the corporate network and you created a security around it. The users have left the corporate network on to the Internet. The apps have left the corporate network, the data had left the corporate network, so you need a 0 trust architecture. So we are significantly investing on SASE based or secure access, secure edge-based security where we assume that you need 0 trust architecture for building the future of security. We've invested in 7 cyber defense centers. In fact, I think security will move from a fragmented software-led insourced model to an integrated automated software plus services platform model, and it will be a managed service in the future. So the 7 data cyber defense centers together, we can create 24/7 security operations and the secure enterprise landscapes in a hybrid world where it is more important than ever before. It's a $100 billion-plus market opportunity as Mackenzie says by 2025. And there's an acute shortage of talent. We were very early on to sign up partnerships. In fact, we signed up with Purdue to get 1,000 professionals on cybersecurity. It's a university in the U.S., and we now have solution for the supply constraints as well as we've created industrialized scale security offering for our clients to embrace upon. The next slide is about applied AI. We launched an offering in 2021 in the last 5 years or so. There was a huge embrace of AI and the consumer value chains. We now see enterprises embracing it. There's an inflection point. Now I would say what enterprise software did in the late '90s to the reengineered enterprises. We are now going to see AI software evolving to, I would say, the next wave of reengineering of an enterprise. We did a formal launch in 2021 called Infosys Applied AI our unique approach to discover new use cases, democratize it and take it to production grade. We have something called the Infosys AI cloud and we can curate that whole scaling process and the life cycle of AI, but we can also make it responsible enough by putting the guardrails required significant traction. Again, we have an AI store with 35-plus AI services you can draw from 1,000-plus use cases. Slide 14 is I think Salil kind of alluded to it. We are accelerating automation for efficiency and productivity for ourselves. We have 24,000 bots. We have something called a bot factory. And the idea is to constantly rebaseline of productivity so that we stay ahead of the curve in winning large deals, staying competitive. Mohit will speak about how we have made that process so robust. But the idea is to keep the productivity cutting edge so that we win these deals. And we not only win these deals with the productivity commitments we make and therefore, stay competitive, but also get additional value, transition additional value on top of it so that we could release people from our projects and save more for us. We have done that very effectively over the last 3 years, and we continue to stay ahead of that runway. The next slide is about IoT, Slide 15. IoT had a slow start, I would say, as it took off as a concept. It had a lot of promise. IoT is now starting to gain a new life, a new life because it is no longer about Internet of Things. It is Internet of Everything. Internet of data process things, people, everything else. Equally, it comes at the intersection of decentralized 5G, edge and devices, smarter devices. When the cloud centralized compute and storage and network, that's what the cloud did, just centralized it. With the advent of 5G and with smart devices, you could decentralize compute and storage. And as you decentralize compute and storage, you can build a mesh of the Internet of Things and create a significant number of use cases. And we distinctively see 3 categories: industrial IoT, product IoT and, of course, smart spaces and sustainability services, which kind of are the new wave in smart spaces, which are evolving in this space. A lot of excellent partnerships. We also have some significant industry solutions. The next one is embedding software into core products. We spoke about it before. Historically, Infosys had a lot of capability on turbo engineering, mechanical and electrical product development. Now we are embedding digital CAD-based modeling, embedding software into end-to-end product life cycles, digital twins and then we're embedding software into media services. We recently bought a company called Kaleidoscope Innovation. The idea is to expand our capabilities on product design, development and prototyping. They have prototyping infrastructure so that you could embed software into medical devices, consumer electronics, industrial products. as these things come to your living spaces from, say, medical devices, more medical devices come to your living spaces, you need to embed software in it and interact with that ecosystem virtually. So this is an interesting company we bought, which helps us to prototype and generate more value. I'm coming to the end of my deck. The next one is about emerging technology. Well, we see significant value in the future. And therefore, there is a lot of curiosity and traction now, and we know that we can future proof our business as we invest into these spaces. Again, I'm going to just touch upon it. The Metaverse foundry, which we launched, one of the first few system integrators in the world, which actually created a foundry for the metaverse. I do believe that a 3-dimensional Internet is going to evolve, a virtual world in parallel. Why do people want to go to the new 3-dimensional Internet, because either they find inequalities and disparities in the physical world, and therefore, they want to spend time in the virtual world, they want to spend -- experiment in the virtual world and bring it to the physical world or they want to bring the virtual world to amplify the physical world. For whatever will be the reason I think we're going to see a metaverse. The metaverses also have underpinnings of the reset of Web 3.0 because the current Internet is having an imbalance between creators and participants. So the ability to use crypto blockchain, all of that will come into picture. We invested heavily on AR/VR. The recent acquisition of Oddity will help us as well. And the Metaverse Foundry is for enterprises to experiment and find out what their presence on the meters should be. A lot of traction we are having. Gaming is a great opportunity, 3-plus billion people in the world are in gaming. I'm astonished to know that number is so high because I'm not one of those gamers. $200 billion-plus of revenue from gaming industries. I think there is a $40 billion to $50 billion of IT services also on core product development. A lot of it is done in Eastern Europe today. And hyperscalers have a very big play, and we think we can have the footprint out there. Low code no code. In fact, we have globally only 25 million developers, while the world has 3 billion plus corporate users. The need of low-code software is very critical because if everybody wants to -- everybody -- if software is going to be the alchemy for every business, you need power users and citizen developers who can code as well, but it has to be low-code. We see a $100 billion opportunity. We have some early partnerships, as you can see on this slide, with Hancock and Appian out systems, Pega; a lot of these companies have low code software, and we believe this is going to be a $100 billion opportunity. The last 1 is co-creating innovation cycles. In fact, historically, we -- our system integrators had a follow-through innovation cycle. We had a think we have now got to the point where we need to co-create. So we have a bunch of things all through, and we want to be the bridge between startups and large enterprises. Start-ups accessing large enterprises who are our clients and our clients accessing startup ecosystems. We have 120 start-ups in an Infosys innovation network. And we've created this bridge so that innovation capital can flow on both sides. We're also leveraging the innovation fund of Infosys. We have living labs in all our innovation hubs in the U.S., Europe and Australia, of course, now in India as well. And we also have something for listening post as a service. The idea is if clients want to access startup ecosystems, we create a listening post as-a-service, which is creating a listening post for our clients and allowing them to access those startup ecosystems. So this is, again, an exciting opportunity to future-proof our business, and the lines between the startups and the large enterprises are blurring. So we become the bridge for it. So thank you again for listening to me. I know I went a little overboard on my time, but I'm very glad that my Internet connection and my voice held up for the last 30 minutes. Thank you again.

Well, I guess we truly managed to harness the part of technology and Internet got especially to ensure that this conversation continues. And we managed to also extract insights around the market dynamics that are literally reshaping the future. That being said, let's quickly move on to understanding the market approach and financial services debt, and for which I'd like to invite on stage Mr. Mohit Joshi, President, Infosys. So please put your hands together, ladies and gentlemen, to also welcome Mr. Mohit Joshi on the stage.

Thank you so much, and it's great to be back here. I was just thinking this almost 4 years ago since we were here and we were talking at that time about the sales transformation within the broader transformation that we wanted to drive within Infosys. And 4 years later, the results are in, and you will see that we've actually done very well. At that time, about 4 years ago, we had outlined our strategy, and there were 2 key components that we were very focused on. The first was large deals, and the second was our focus on account mining, our focus on account expansion. Now the large deal space that you've seen has been central to our focus over 4 years. And in terms of the numbers, we've won over $40 billion in TCV over this period. We have tripled the size of deals that we have over the 3 years, both in terms of the number of deals and in terms of the total TCV that we've done. Our pipeline has increased very significantly. Our pipeline today is 2.5x the size it used to be back in 2018. And as Salil alluded in his presentation, this increase in deal wins, this increase in TCV, has come up as a result of the competitive market share that we have been gaining. So again, it has been a central pillar of our strategy and one that has been immensely successful. And obviously, this is talking about the past. But even in the future, our large deal focus will stay very central to our vision of sales transformation. The other pillar, apart from the large deal space has been our focus on account expansion. As you will see also, when I talk about our financial services practice, we've always been blessed with really a marquee set of clients, and we have focused on digging deeper within these clients on looking at the unaddressed segments of the market within the client that we can address. And we've also had great success with our account expansion and account mining program that internally we have called the Titan initiative. And if you look at it, I think one of the most visible signs of the success that we've had in the account expansion program has been the increase in the number of 100 million plus account. And we have doubled this over a 4-year period. So if you think of it, right, it took us roughly 35 odd years of the company to get 20 $100 million accounts but only a 4-year period in which to double them. And again, like the large deals program, the Titan program, will be very central to our sales transformation initiatives. Apart from the large deals and the Titan program. We've also done a number of other areas, right? There have been a number of other areas in terms of transformation of the sales force itself. We have significantly expanded the size of our sales team. We have invested heavily in the training of the sales teams, the composition of the sales teams to include a lot more Gen Z and a lot more millennials has again allowed us to deliver on these 2 key initiatives. The new account opening program, again, has been very successful. The revenue that we get from new accounts has also doubled over this 4-year period. And as a result of this, we are today among the fastest-growing IT brands in the world. And very importantly, from my perspective, the connectivity that we have with key decision-makers within our clients, right? Whether you use LinkedIn as a proxy for this or you have other analysts to the study. Consistently, Infosys comes across as the company with the best connectivity within our client organizations. And I feel that this is something that will really serve us very well for the future. So that in a nutshell is something that we have done over the past 4 years. And if you look at it slightly more in detail, Salil spoke about the work that we have done with clients, the world over to drive digital transformation, right? And these are some case studies over here, you will see 6 case studies of digital transformation done through large deals, right? And digital transformation is a difficult thing to describe. The best definition that I have for it, working with my colleagues, is digital transformation is if as a company, you can provide an Apple-like experience. If you can provide Google-like data and targeting capacity, if you can fulfill like an Amazon and potentially train like an Infosys. So this is what our digital transformation initiative looks like. And these are 6 great examples of it. If I take the first one, this is the work that we've done with a large bank. We have done it with their European operations. And so essentially, driving optimization and transformation within their portfolio for Europe, so 20-plus countries across the retail bank and the commercial and the corporate bank across the various stacks of technology, right. So a transformation from an apps perspective and infra consolidation move to the public cloud and a transformation from an end-user perspective. So a comprehensive transformation of the client's estate, resulting in a significant improvement in productivity, in a consolidation in the number of applications that they have, and a significant investment in employees as well. So there's a talent transformation piece to this as well. So this is one example from the banking industry of a large deal and a transformation that we have driven over the past year. The second example is from the telecoms business, and this is about the digital supply chain that we're helping this client build on their industry. Again, it has 2 parts to it, right? The first part is allowing the client's teams themselves, right? And this goes to the no code or the low code piece of it. Allowing the client teams themselves to configure the complex applications without relying on the ITT. That's a huge value add for the client team. And the second is really building out a significant data lake that allows them to track from a device perspective in terms of fulfillment, in terms of client satisfaction across various segments. So providing that detailed targeting capacity to the client is the transformation that we've driven for this telecom major. There's an example from the health care space. In the health care space, we worked with this client using an Infosys platform called Infosys Helix that I'll talk a little bit about later. This is to completely transform the onboarding, the billing, the provider management for 3.6 million clients using Infosys system integration capability, Infosys BPM capability, but also an Infosys platform. So across these 3 offerings from Infosys, we are transforming the entire experience for 3.6 million members. We are driving significant productivity, so a 60% increase in productivity, a 95% reduction in the dropout rate. And again, giving this client this platform has been to the client is so much more competitive that they are now entering new markets in the U.S. Again, a holistic example of transformation using platform and people capabilities. And finally, I'll talk a little bit about the retail example that you have over here. This is with a large consumer goods retailer, soft goods retailer. Across 100 million clients that they have. We have entered into an initiative to build a significant data capacity for them for their direct-to-consumer business. And I'll just leave 1 metric with you, right, about the impact that we've had. Before this data lake and this significant targeting capacity was built, the client had about 8% repeat sales to customers. With this new platform, we are now driving a 37% repeat sales capacity. So again, a sea change in the direct-to-consumer business for this very large retailer with 100 million-plus clients. So hopefully, this gives you a sense when we talk about digital transformation, what do we truly mean -- why is these deals so large? Why does this significant to our clients? And hopefully, this gives you a flavor of the kind of work that we have been doing over the past couple of years. This work also has been powered by many of the platforms that we have built. I'll be talking about Finacle specifically, which is the oldest platform that we have. Ravi spoke and Salil spoke about Cobalt and the COBOL capabilities that we have created both from a horizontal perspective, but also the vertical industry capabilities that we're creating in Cobalt. I spoke about Helix briefly, which is a health care platform that we're building. We are building out the peer capabilities of that platform. I think this is very significant. This is a cloud-native API first platform. You really don't have cloud native platforms in this space. And so the work that we have done, we think will give a significant boost not just to us but also to the industry. We built Equinox, which is a digital marketing and e-commerce fulfillment platform. Just within the 2 years that we've launched this platform, we've had close to $50 billion of gross merchandise value flow through the platform. We had a very significant win recently with Nu Skin that we had announced, and you had a quote from the CEO of Nu Skin, talking about how this was transformational to their business, the whole beauty industry. We've spoken previously about Wingspan, which is our digital learning platform that has over 1 million learners now on the platform, again, a very significant capability that we have built, not just for our own enterprise but also for our clients and for the world at large. In the U.K., for instance, it is also being used by the brand council. So it is being used as a social enabler and a social growth platform as well. So again, just to give you a sense of the multiple platforms that we've created and how these are not isolated now, right? These are central to the deals that we've been doing. We are seeing a paradigm shift in the marketplace, right? And this is something that we talk about quite often. When I think of Infosys, I think of Infosys as being like a really capable jet with 2 engines, right? So you have the one engine, which is focused on productivity, on automation, on cost. And when things are tough, this is the engine that clients rely on. But you have a second engine, which is actually larger now which is 60% of our revenue, which is all around growth. It's around experience, it's around data, it's around cybersecurity, it's around the cloud. And typically, you have one of these 2 engines going on at full steam. And this has been a remarkable period over the past 2 years when you find both the engines being equally in demand and being in great sort of use across our client base because clients are not looking only for transformation and growth. They're also looking for efficiency. They're also -- not just looking for a technology impact. They're looking for a holistic business impact. And so we feel that at this time, we are uniquely positioned. We are uniquely positioned to deal with this duality. My clients are looking for significant global capacities that we have, but they're also looking for significant local approach. And if you look at it across the U.S. and Europe, 70% of our delivery capacity in these markets is now local. If you look at the talent infrastructure that we have built, it is among the best in the world, we have added more headcount in the past 12 months that we have than we have ever in the history of the company. But equally, we are also a great magnet for talent that our clients' organizations have, right? So we've also done more rebadging of client talent than we've ever done in our history. So again, it is this duality, which is making Infosys especially interesting to our clients because we bring this combination of agility and scale of global presence but also significant localization of historically a technology focus, but also a holistic business understanding. We're looking to address this duality from our sales perspective as well. If I look at it from a large deals perspective, first of all, from a large deals perspective, we are very focused on the turnkey deals that we can do, where we are bringing tech capacity. We're bringing ecosystem partnerships through the cloud, we're bringing automation, but we're also bringing a deep knowledge of the industry. So for instance, we can promise clients that we will be able to process their mortgage book for a certain basis points of the book, right? So for 7 basis points, we will service your mortgage book, instead of that 20 that you pay to us now. We're focusing, again, like both Salil and Ravi mentioned on the cloud. That's a significant opportunity for us, and on digital. We're also focused on the tech natives. This is a significant opportunity for us because digital natives historically used to -- they used to make their own cooking, right? They would only work with their own tech teams. But again, because of the need to expand quickly and because of the focus from a productivity perspective, they're increasingly looking at partners like us to provide that scale capacity. So with digital native companies across the world, we are seeing significant large deal opportunities. Europe is a significant focus area for us. I do believe, based on the discussions we've had with several analysts, and several of you actually, that over the next 4 to 5 years, the incremental spend, not the overall spend, but the incremental spend on technology in Europe will probably be the same as the U.S., which is quite remarkable because there's a lot of catch-up to do. So we feel that this is a huge opportunity for us. We've been working with private equity partners. Private equity is a very significant component of our sales playbook now. We've been working with them as they try and build this -- as they try and realize value from their portfolio companies, either for a single company or for the entire range of companies. It's a team that we have created that now works with private equity companies, and we have started to win our first set of deals in this market. And finally, ESG, right? ESG has been a great driver for us, and it is now almost the third leg of every deal that we do. Historically, when we used to do deals, we used to talk to clients about, a, the productivity that we can drive. So for this portfolio, we will simplify it by reducing the total number of your applications by 20%, by automating 30% of the processes, by reducing FT count by, let's say, x percentage. But we also talk about the work that we do from a digital perspective, right? We will improve your NPS by 5% year-on-year. We will improve your total addressable market and your market share by maybe 7% year-on-year. But now we're also able to come into specific ESG goals, which are so important for all Fortune 500 and Fortune 2000 companies across the world. So we're able to tell clients that you have a stated ambition to be carbon neutral by, let's say, by 2035. Based on our analysis of our portfolio, we feel you can be carbon neutral by 2033 if you work with Infosys. So it's a very important lever as part of our overall strategy in working with clients across the world. Our account expansion program has been incredibly successful. As you've seen, we've gone from $2,000 million clients to 40. We are now focused also on building the next set of Titan accounts, right? So how do we get the accounts between $10 million and $50 million? How do we increase that base of accounts that we have so that we have a healthy pipeline for the future as well? And at the same time, we are very focused on making sure that we're able to upscale, to hire, to retrain and to better -- and to build better social connectivity for our sales team. So there's an immense amount of work going on to make sure that we can educate the sales teams, right? If you think of it, we are launching dozens of service lines every year. We're launching dozens of propositions for our client every year. We have to make sure that our sales teams are able to understand and articulate this and take this to the market. So a set of platforms has been created that allows our sales teams to very quickly understand the offerings, understand the applicability to the industry. and then take it to the market. So this is the focus from a sales perspective. And again, everything is focused on the work that we do for our clients, right, which is how do we build vertical solutions that are based on cloud infrastructure that incorporate the latest thinking of the latest opportunities that technology offers, whether it's the metaverse or whether it's blockchain or whether it's quantum. But all of these are built on very real business use cases, right, we have very strong horizontal capabilities, but our go-to-market is built on very strong industry use cases about the change that we can drive for our customers. One final slide from a Europe perspective, again, just to highlight the importance of this market to us. It already is a very significant market for us. We already have a very large footprint there from a market capacity but also from a delivery capacity. But we are very focused on growing in that market. And therefore, the seeding that we have done in terms of digital studio capability, in terms of digital innovation centers, in terms of cyber defense capability, it has been obviously buttressed with the new acquisitions that we have done, whether it's Fluido or it's Kaleidoscope or it's Brilliant Basics or it's more recently Oddity. I feel very confident about our presence in this market. We will be doubling down. And we will be making sure that we can grow incrementally in a market which I think is poised for an increase from a spend perspective. So that's the overall sales vision. We have been incredibly successful with the strategies that we put in place 4 years ago. We're very focused on doubling down on these. And I believe that we have the momentum. We have the momentum in the marketplace, and Infosys is uniquely positioned because of our heritage as a very efficient, very productive, highly automated player to which we have added the capabilities of design, of data, of cybersecurity. So we feel very optimistic about the opportunities from a market perspective and the customer demand is not slowing down. The customer demand remains very strong across sectors, and across geographies. Now talking specifically about financial services, and again, this is an industry that will need very little introduction for all of you. So all of you know it much better than I do. But you know that this is an industry that has been transformed dramatically, right, over the past few years and really across the various sectors, whether it's banking and some of the metrics in this industry are mind-blowing, right? If you look at banking, for instance, just about 10 years ago, 50% of transactions globally will happen in the branch. Now it's 5%. 95% of transactions now happen digitally. But banks still sell mostly their own services. So 80% of all financial services sold are products that are owned by the bank. This will change. No more than 30% of the products being sold will be sold will be the bank's own products, right? So again, a transformational time in the banking business, again, a new customer demographic as well, a very significant change in the insurance industry. The insurance industry is tech-driven like it never was before. The focus has moved squarely from an actuarial focus to a technology focus, whether it's parametric insurance or embedded insurance or IoT-driven insurance or whether it's the transmission that we're seeing of claims, for instance, or the focus of aggregation in this business. It is an industry being dramatically reshaped by technology. The capital markets business is being reshaped by this intergenerational wealth transfer which will be the largest fee opportunity the industry has seen in over 50 years, right? There is the whole digital asset classes that have been created, whether it's currencies or it's NFTs, and the need to settle and to be the custodian for this is a huge opportunity. And payments. Possibly no sector, the industry has seen a more dramatic change in the payments business from an automation perspective, from a tokenization perspective, again, a significant amount of spend and focus on this. So the industry is changing very dramatically. And we are growing. I think we've had industry-leading growth in this segment for many years now. And if you look at the -- at our revenue, both our overall revenue and our digital revenue, you will note the trajectory, but you will also see that at a time when the market was at its weakest, right, in FY '21, when most of our competitors were shrinking, we delivered a very impressive 8% plus growth. And that's because I believe that we have a unique combination of people, of our playbook and our platforms for this business. And we also have a client set, a unique client set. A client set across geographies. So whether it's in the U.S., where we work with 8 of the top 10 banks, or Europe where you work with 4 of the top 6 banks, or Australia, where we work with 3 of the top 4 banks. The work that we've done from a cards perspective, all the networks, all the merchant acquisition providers, all the issuers, a significant amount of presence in the insurance space as well. A deepening presence with the fintech community. So a combination of our solution offerings plus the client base that we have has given us this growth. But we are not resting on our laurels. We have created, like I was saying, a very significant playbook, a very significant digital transformation playbook for this industry. And if you look at some of the components of this playbook, right, if you look at, for instance, the first point, be our digital attacker we are helping our clients who are, let's say, like citizens, regional banks or super regionals expand nationally. So how do you build out a national footprint for what has essentially been a regional or a super regional bank, or if you're an investment bank that is looking to create a wealth management offering or a mass affluent offering, we have a playbook for this. We have specific solutions for this. If you look at customer journeys, customer journeys are being transformed like never before, right, with a combination of EKYC. You have dramatic improvements from an RPA perspective. You have e-signatures, you have new standards in terms of customer experience and user experience. We have a playbook for dramatically transforming customer journeys. We have built a significant number of algorithms that work as an AI flywheel for you, right? So whether it is from a customer acquisition perspective, a customer profitability analysis perspective, credit decisioning, monitoring and collections, forecasting, smart serving, you have algorithms that really serve the entire value chain of the Financial Services business. and it comes to the convenient playbook for you, for a bank or for an insurer to take the components of it that you want to really transform your business. Data-driven lending, the use of not just traditional data sources, but also alternate data sources for customer profiling, for customer segmentation, for credit decisioning and for collections and monitoring. These are dramatic tools that we have created for a business, for a lending business that is growing very quickly. From a self-service perspective, we are working with our clients as they move their contact centers to the cloud, as they move from to more digital call deflection. It's been a very successful offering for us. So again, a remarkable set of playbooks and a significant amount of work with our clients, right? I spoke with citizens previously, but citizens is transforming itself into a fintech. They are transforming themselves from a collection of hundreds of applications like a traditional bank to now a set of digital platforms, to a set of digital cloud native platforms that we have worked with them to create the vision, and then we work with them to create the actual platforms as well. We also work with them to make the organization agile to bring in engineering focus within the organization. The work that we have done with Frost, for instance, as they reenter the mortgage space to completely reimagine the mortgage experience, a digital and a human experience for mortgages. The work that we have done with select portfolio servicing in driving very significant productivity by the use of AI in the mortgages business, which has historically been a very paper-intensive business to drive almost 95% productivity in the bulk books that they buy and the work that we have done in insurance, again, using our McCamish platform. We just completed the migration of 1 million policies for a very large U.S. life insurer. This is one of the largest migration that has happened. So again, a combination of our capabilities through the playbook and the platforms and the people is what has helped us differentiate. Just a minute on Finacle now. Finacle, as you know, has been a banking software platform that we've had for many years. and Finacle over the past couple of years have seen incredible success. Incredible success. We have rebuilt Finacle to be a cloud-native API-first platform. And it truly is a combination of digital product engines that go to -- from everything from savings and checkings to treasury capabilities, to lending capabilities, to market capabilities. Combined with these digital product engines, you have a significant digital engagement suite from a front-end perspective and from a middleware perspective. And Finacle has had incredible success. You see the logos over there. These are traditional banks that are looking to transform into digital attackers. You have digital-only banks. You have fintechs that are providing some banking capability. And then you have nonbank institutions that are providing, again, some banking capability. We've had success across all of these and across the markets in which you work, right? So you will see a mixture of Asian names, but also names from the Middle East, names from Europe and from the U.S. It truly is a global platform with a presence in over 100 markets and over a 1.7 billion accounts and over 1 billion customers on the platform. What is driving the success for Finacle, right? What is driving this traction that we're having in the marketplace? I think it's a couple of things. One is, like I said, customer journeys are transforming. Banking as a Service essentially means that you now have to provide significant API capability for banks to be able to transact in embedded finance. There's still a significant focus on cost. We did an analysis and Finacle customers on average have a 3.9% lower cost-to-income ratio than non-Finacle customers. It is because of the significant amount of automation that has been built into the Finacle platform. We're also seeing, again, just a transformation in software, in banks and a real openness, a real openness to look at the digital product engines and the front-end experience that we provide in Finacle. And again, a very close time with the services organization so that we're going together and we're able to expand beyond the core as well. We're also building out, Salil and Ravi spoke about Cobalt, right? And we're building out very specific financial services capability in Cobalt. So you're not just buying cloud capability. You're buying a financial services cloud capability, right? And what this means is that when you buy this fs.live.cloud from Infosys, you have all the Cobalt capabilities, but you have security built in. You have specific tooling around data encryption and data deduplication built in. You have specific tools, for instance, for reconciliation or you have specific tools for interest calculation already available on this core platform. So it's a significant upgrade over buying a plain vanilla cloud capability. And we've had success in the market. You see it with market access, for instance, we were able to provide them a recon capability on the cloud, almost from the get-go, save them a significant amount of CapEx and it's world-beating capability available on the Infosys cloud from a financial services perspective. And finally, the world is changing, right? The world is changing. We are seeing new technologies on the horizon, and we're already starting to work in these areas. The metaverse, for instance, a combination of physical and digital. And we've already done our first pilots in this space. So we work with a very large payments company, for instance, to build their virtual launch in the metaverse. In the virtual lounge, you can maintain a wallet, a wallet that has multicurrency and flat currency options that has NFT options that has crypto options. You're able to with the ecosystem, buy and sell NFTs and cryptos and store them on the wallet. But you also have a lounge capability, right, where you can interact with other customers. You have a financial literacy component to this metaverse lounge. And I'm so this is the first of many metaverse capabilities that we will be building for our clients. From a blockchain and crypto perspective, we have built this for ourselves. As part of the work that we have done for the blockchain India company, again, using Finacle to build a trade platform, a domestic trade platform for India that will be transacting billions of dollars worth of domestic trade assets and receivables, but also the work that we're doing with leading blockchain and distributed ledger companies like digital asset holdings, for instance, where there's a significant amount of interest in tokenization. And tokenizations are doing projects for exchanges for custodians. There's a huge amount of work that custodians need to do, for instance to be able to store digital assets, and this requires a lot of work from a tokenization perspective. This is already a significant area of focus for us. Banking as a Service I spoke about; and finally, Quantum, 5G and AI, right? Quantum is still relatively new. It's still more conceptual. But banks are thinking about what will quantum mean from a cryptography perspective for me. What does it mean from a portfolio optimization perspective, from a planning perspective for me? From a 5G perspective, again, the low latency and the high data capacity that 5G offers means that for insurers and for banks, this is a very interesting space now, and we're building out the lab capability and the research capability to work with our clients as they start to explore these more cutting-edge technology platforms. So that in a nutshell, is it a little bit about the sales transformation, the success we've had, but more importantly, the focus that we have for the future. And from a financial services perspective, again, some of the mesh that we're working on from a platform perspective, from a playbook perspective, and from a people perspective to ensure that we're as successful, if not more successful in the future as we have been in the recent past. So with that, thank you.

Thank you, thank you very much, indeed, Mr. Joshi. And with that, ladies and gentlemen, what we're now going to do is head for a quick break. It looks like we've managed to gather some very important data points from this side of the hall. But we're going to take a 20-minute break. So I'm going to request you all to please cordially join in for the high tea that's taking place outside. But let's also have you all back exactly at 5:25 p.m., I repeat, 5:25 p.m., for our next set of conversations. Please do take care of your belongings most importantly, but see you all exactly at 5:25 p.m. again, and please do join us for the high tea that's being served outside. Thank you. [Break]

Ladies and gentlemen, we kindly request everyone in the pre-function area to please proceed inside the hall and take your seats as we're about to get started with our next set of sessions. We kindly request everyone in the pre-function area to please proceed inside the conference call. Thank you. Welcome back, everyone. I'm going to request you all to very quickly. Please take your seats. And also a humble request, to please keep your mobile phones on the silent mode. As I can see, it's a house full evening here, so I just thought I'll also quickly make a safety announcement for the benefit of the audience. In case of any fire hazard, ladies and gentlemen, please note that we have 3 exit doors to your left and 1 right behind. So please, to be sure that any kind of emergency, rush to the nearest exit and then he can tweet or talk about it later. But most importantly, safety first. That being said, it's time to also spearhead another interesting session. Joining us this evening, I'd now like to invite on stage Mr. Krishnamurthy Shankar, group Head, Human Resources and Infosys Leadership Institute. So please put your hands together. We managed to have a good dose of caffeine with tea and coffee. Can we have an energetic round of applause? Please help me welcome Mr. Krishnamurthy Shankar.

Okay. Good afternoon, everybody, and welcome to this event. I think you've heard some very interesting sessions pre tea. And now let's look at this post tea, where we're going into this whole session on people, yes, people management. I think what I'm going to do is the first few slides I'm going to talk about some of the key highlights, and then I'll go into how we're looking at into the future because over the last 2 years, we've seen big changes happening in the whole people area, and we're really going to talk about what are some of the things that we are doing looking forward to this. I think the first thing is our headcount, yes? And you can see that this has been growing consistently. Last year, we had almost a 21% growth of our headcount. But this has been something which we have been growing very consistently over the last 3 years, significantly last year. I mean this is like a huge amount of -- a huge growth in headcount last year. Now that's been supported by a huge amount of hiring, yes. We've had about -- the hiring that we have done is something that we've never done before. It's a huge amount of hiring, 142,000 people, almost 2.2x what we did in FY '20, which was pre-COVID, in a normal year, like we did 65,000. This is almost 2.2x that, so huge amount of hiring. And that's really what this industry and what Infosys -- we've seen in the last year. As I look into hiring, I just want to give you some color about the kind of thing that's been happening in hiring. I think the hiring has again been what is the objective really, to strengthen our talent and also ensure that we manage our pyramid pretty well, yes. So that's been the whole objective, and that's what we've been doing. A large amount of freshers we've hired, almost 85,000 freshers, both here as well as on-site and lateral hiring. And I think if you're looking at this never-ever-done-before kind of hiring that's been done due to many things, lots of use of tech because if you look at all the hiring has been completely remote, completely virtual, and managing all of that has really meant a lot of new technology that we've gotten. Looking at all our processes, looking at newer sources of candidates -- actually, doing things like for a freshers, we have something called HackwithInfy, which is like a coding competition. Where we've got lots of people almost joining in, and that's been a great source of hiring for us. We've also gone off campus last year. Normally, we go to about 300 engineering colleges, but we also went off-campus to really get into a wider pool of people. We also have something called the InfyTQ. Now InfyTQ is kind of based on what Mohit spoke about Wingspan, which is our internal Lex platform, where engineering graduates, finally our students can really go through and upskill their -- upskill themselves to be industry-ready, and they also do a test. And once they pass the test, then they can really get fast tracked into our own -- into our training and offer. So I think that's been another great source of hiring for us. So overall, I think a lot of work which has gone on into hiring, and that's really expanded how we have really hired. This is the other one, which is very interesting, I think attrition, given the high demand that we've seen, we've also seen that attrition was a little high. But if you look at it, our attrition in Q4 was about 27.7%, but that had actually come down by about 5 percentage points from Q3. So you can already see that attrition has come down. I mean from a high of Q3, we've seen a 5 percentage points drop, but also because there are a lot of things that we did. We've been looking at compensation corrections. I'll talk about that in terms of a little more detail in the next chart in terms of what are the kind of things that we have done. Faster career growth, because as the industry is growing, we've got greater opportunities. We've been able to grow our people much more faster. Skilling has been a big focus area. And we've -- and I'll talk about some of the things that we're doing. But in this industry, our focus has been to really make up people really ready for the future. So that's been a key focus, and we've really done a lot of work around the whole reskilling area and of course, engagement. And we've seen -- again, I'll talk a little more, but we have seen that our engagement has probably been very high and sometimes maybe a figure that we've not seen before. So all these have come together. And if you look at what we have done in compensation, I think from January last year and now in April, we've rolled out 3 compensation increases. So we did one in January, we did one in July last year, and now in April, we've rolled out the compensation increases. So 3 general increases in compensation. But in addition, we have done various other things. We've done a skill-based compensation increase because we found that, that was one area we had to really take care of, and that was something that we did towards middle of last year. A lot of retention and budgets across various geos, Australia, U.S., Europe, so I think those are areas we've really looked at. And there is other things, retention bonuses where needed. I spoke about promotions and ensuring that even we increase the stock grants over last year. So I think all these have really been investment in people, given the high demand for talent and the kind of people that we've been hiring. So a lot of work that's really gone on and how we've invested in our people over the last year. I think now what I'll do is, so this is just a quick idea of a huge amount of our workforce growing, hiring growing and all the work that you've done really in managing attrition and in the whole compensation area. But if you just look into what has happened over the last 2 years, there's been a huge change, this working from home or working remotely was a big thing in this industry, and that's changing many things around. So what we have done is we sat together and reimagined everything. What -- how is work going to be done? What is the change in the workplace that is needed because there are some elements of workplace that needs to change. And also our workforce because given this change, given the high growth, what are the kind of things that we want to really work with our people? So these are the 3 key things, and I'll just talk a little bit about each of those. If you look at work, I think, clearly, in the industry, we are now looking at what we call as the hybrid work, yes. So what are the key considerations? I think one is what the client wants. Clients sometimes want people -- it depends. I think we got to put the client needs first. Then there is the employee need. Employee needs more flexibility. There are some people with different needs. We've got to keep that in mind. But there's also a need for the team to come together, the whole social capital, the team and the organization connect. That really is a fuel to get teams working and engaging them better. So that's also another need that we see. And lastly, there is this regulatory, where there may be a need from either a [indiscernible] or something for people to be present on and off. So I think we keep all of this together. And based on that, we really say what is our -- what is going to be our hybrid work kind of model. And I think in the end, we're going to end up with a group of people who are going to be permanently working from the office. There could be a group of people who may be permanently remotely, maybe come once a quarter or so. And there'll be a significant group, which will probably come flexibly within the week. So that's how we're going to be. This is evolving as we go forward. And I think what is going to be the key is for people to toggle seamlessly between home and work, yes. And that's where the whole work model as well as technology will have to enable that. I think when we look -- given this flexibility, we're also getting a staggered return to work, I think we've seen increasingly people coming back to work, and we'll see how it evolves over the next couple of quarters. The other thing is, we have a lot of people because of the pandemic who have gone, and we have hired people from across the country. We've got people staying in different parts of India. So what we're doing is to actually reach out and we are now setting up 4 new centers, development centers in Coimbatore, Vizag, Kolkata and Noida. And these will be areas where we -- because there's a huge captive people, our employees are there, and that will help them really make it easier for them. Plus, we have our other centers. We have one in Indore, we have Nagpur, we have Mohali, but these have all been centers where we've -- that people have moved to, and therefore, they've all grown in numbers now. So I think all these centers, given the widespread we have, will enable us to really get more people connect with each other time. Of course, in the U.S., similarly, we have 6 hubs. And these hubs have really been a great source for getting talent, training talent and also deploying them. And the last part, as we look into this hybrid, when we're really looking at a return to work, it also needs a lot of technology. And I think our team has really worked on it. Various things, right from -- I spoke about recruitment, but even everything to onboarding to engagement, how can we do it in a better way in a virtual way is something that we've really worked on and we've invested. I mean learning is another big area. So I think all this together is what we're going to really look at as this new hybrid model evolves. If I also look at a more macro level, what we've also seen is a couple of things. There is this growth of our nearshore centers. We've had huge growth in Canada and Mexico over the last year. But also Europe, Eastern Europe is another area we've seen our headcount growing because of talent as well as Philippines. So these are areas you can see Bulgaria, Romania, Poland, Slovakia, Croatia, Lithuania, Mexico, Canada and Philippines are areas where our nearshoring has increased. In India, I've spoken about the new locations that we're going to go, 4 new locations where we are going to be setting up centers. And increasingly, with our clients, we -- human capital is becoming an increase -- a great part of our engagement, either reskilling or rebadging or helping them build a capital on a BOT basis. So various things are coming up, and I think that's an area we see greater engagement with our clients. Now let me move on to our workplace. The work we have discussed, hybrid work model and how it will be. Now let's move on to the workplace. I think the workplace also has to change. I think this is because in a hybrid way, how are the things that we're going to get people engaged and how do we work with each other. I think what we did together is recraft our purpose. We always had a very strong purpose as the heart of Infosys, but we kind of articulated it much more clearly, and you can see that here. I think the whole idea of this is for us as Infosys is to amplify human potential to create the next opportunity for our employees, clients and everybody. And we are now using this purpose. We -- our C-LIFE values are there at the heart of what Infosys -- every Infoscion does, and that's something we've been there and the part of our culture, which we've been kind of building over the years. So I think these are important, what I call building blocks of really looking at the workplace of the future. And this workplace -- this will be the foundation of that. And we've got to have newer focus. I think there's got to be a greater focus on flexibility that I've spoken about, greater focus on well-being because the people working remotely, how do we get better connection and our focus on wellbeing, and I'll talk a little bit about that and getting a more diverse and inclusive organization, yes. So those are some of the things that we will build as we go forward in this new kind of hybrid way. I think wellness is very important. I think during COVID, this really came into the forefront. We, as Infosys have been actually doing a lot of things leading the way on it, for example, vaccination. We've got almost 96% of our employees vaccinated as well as 5 of their dependents at company's costs, and we've set up vaccination camps within our centers as well as in many towns across the country in partnership with hospitals, various hospital tie-ups, dedicated COVID care centers where people could stay and various is other things. We've been really supporting that. But that has just moved on. And now I think there's a lot more focus on how do you create this mental well-being, how do you create emotional well-being, the strongest social connect with people. And therefore, you can see a lot of things that we've been working on. We have something called Samaritans where employees are trained to really be kind of first hand, first aid kind of counselors to people. So we've really grown that. We have wellness coaches that can -- people can reach out to, at a call, and various online tools, for example, people can do a test about how they've -- any anxiety levels or their stress. And once they get a feeling there's something, they can really reach out to us and we'll help them with that. And of course, various training programs that have been done. At the same time, what we are trying to do is get people to connect. What we've started is events where people can come to the campus. We've been encouraging small team huddles to happen, virtual communities have been built. We've also had times where we are saying no call hour so that people can have time to really kind of do things, they don't feel overworked and stressed. So I think all these are there. But all this, we've left it a lot more with each team and their manager to say, what is best for them, yes. That's how we've really built around it. So this has been an area of focus. And I think as we move into the hybrid, this is really important for us really to work on. The other part is diversity. You can see the growth that we've had in diversity. And this is thanks to a huge amount of hiring. We've been -- and the extra efforts that we've gone to really retain women and hire women. We had a program called return to work after maternity about 3 years back, only 60% of women came back. Now we've reached in that stage of almost 90% of people who are coming back after maternity. So that's a big thing, and that's one big focus with us. We have another program called restart with Infosys. These are people who have taken a break who've gone on for a break of more than 2, 3 years, so we're getting them back. They could have been in any company then getting them back and retraining them, giving them a couple of months of training so that they can then be deployed. So that's something that we've had. We've got a program called Orbit Next, which is ensuring that we develop our engineers to become managers. So therefore, we've now got about 350 enrolled, next year, that's going to go up to almost 1,000. Hiring diverse leaders at the leadership level, that's been another great focus. We've got a very strong LGBTQ network across India globally as well. Various employee resource groups. There's one on enfeebility, which is about people with disabilities. There is this pride group, which is on LGBTQ network. So we've got all these groups that have been really very vibrant and we've really helped them actually have a voice and engage with each other much more. And of course, as a company, we've got 156 nationalities working for us. So I think in line with our ESG vision, diversity is a priority for us, yes. And I think you can see that our focus has continuously helped us grow it, and this is something that we'll continue to keep. So in this workplace of the future, while it's all a flexi thing, I think a culture, the focus on well-being and diversity and inclusion are going to be important as we go forward. I'll then move on to the workforce because now we've got to really talk about what can we do for our people and how do we keep them ready for the future. I think the first thing is our focus on training. I think Infosys has always been well known for the training, right? 6 months, any fresher who comes from any engineering call it goes through a very rigorous. I think that continues. We now have Lex, and Lex is our internal platform, which is really quite world-class, and you can see the number of people that have really come on to Lex. Almost 295,000 people are on Lex. We've got almost every day about 22,000 people coming on and learning there. They spend more than 34 minutes learning -- average learning time of day. So you can see the kind of focus that Lex has had. And this -- and we have created various programs. People can learn a skill. And once they kind of there are various things and not only learning something they can work on the cloud, so they can really do hands-on work on the cloud, which will help them build that skill. In addition to Lex, which is -- I think we've also had a great program for our managers, where we have tied up with Cornell, we call it the Great Manager Program because managers are critical to our growth because they hold the team, they kind of manage the group, and that's another one that we've really worked on. So our focus really is get our people trained for the future, invest in them a lot more so that they can be ready for the whole transformation that is happening. The other part is what we call as create more agile careers within the organization. And what does this mean? This means that we want people to really grow faster because there are greater opportunities for them, we want to ensure that there are faster growth opportunities, but also more predictable. I think that's something that we've really worked on. We want to ensure that people see faster and more predictable growth for the -- for our people there, up to the middle management level. The other thing we've introduced is what we call as a Bridge program to really ensure there are greater opportunities for people to move around. So this Bridge program takes people who are like doing -- the software engineers in the project management stream to do this program, get selected and move on as a consultant, yes. So therefore, they can move to the consulting stream or they can move to what we call as our digital specialist stream or our power programmer stream. These help them really multiscale and expand and grow. So I think the Bridge program has really been very successful, and we want to ensure that is at the heart of it to give greater career opportunities for our people. You can see the number of promotions that we've had, almost 3.5x over what we did last year, and greater internal movements. And our focus is open up, create an internal marketplace so there are greater internal jobs for people. They get trained, they get -- they can also move around and ensure that they see a greater career within the company. The other thing is our focus is on skills, and we spoke about it. I spoke about training, et cetera, but we've got a clear framework of how do we look at skills. We have something called a skill tag, and a skill tag really comes, if suppose I want to be a cloud architect, I do various courses on Lex, I do something, some hands-on work on the thing and I passed the test, then I got to work on the job. And if I work for 6 months on a job, then I get a skill tag. I can call myself a cloud architecture. Therefore, that's how we create a unique way of identifying people with skills. It's quite a rigorous process. And we've then created a kind of a framework of how we look at skills. We have these skill tags, depending on the skills of premium skill or a normal skill. But then we've created what we call as digital specialists. These are really premium kind of digital transformation people who we select after a very rigorous training and tests. And then the power programmers or the experts, yes. So I think this is the -- this transformation specialists command higher billing rates, and we select them based on very tough tests and a rigorous internal process also, yes. And to really drive this whole growth, we've created something called a digital quotient, which really measures the skill level of individuals. Each one can have a DQ and we say listen, your DQ is now 40, you take it up to 60. That really helps people go up and our focus is on getting them interested in improving their DQ. So I think our focus on skills, along with Lex, has really made this a powerful engine of helping our employees upskill themselves. While we're speaking about skilling, there's also a big focus on leadership. One of the key things we've seen in Infosys is a stable leadership. In the last 5 years, we've got a very stable leadership with Salil leading it. Now we had Pravin, our COO, after the transition, I think we've really -- last 6 months, things have seamlessly moved on, and we've really managed that transition. How has that been done? I think our focus on leadership development. There is a strong focus on succession where we identify key roles. We identify who are the people there based on assessments, career conversations and also coaching. So we have -- where needed, we provide some coaching, and this has really helped us retain our leaders in a significant way. For all our leaders, we have programs both at Stanford and with Harvard. And these are really top of the world programs, which really help them. And in the pre-COVID era, they used to go to Stanford twice a year for a week and then 1 week in Bangalore. That's now become virtual, and we are trying to get back to the thing. So those kind of programs have really helped upskill our people, and we've invested in them. What we've also done is do a lot of these -- a lot of what we call as organization moonshot projects. people have worked on it. Like for example, how do we grow cloud and our leaders, our emerging leaders have worked on it, and that really helps them develop themselves, but also contribute to the company. All this has also helped us get an award for excellence in leadership. While we are looking at diversity, we also have a big program for improving our diversity of our leaders. We have a program called I am the Future, where more than 350 of our women have been enrolled. They've gone through a program with Stanford in addition to mentors that senior leaders have become mentors and helping them. I think this has really helped ensure that we invest in our women and also grow them into bigger positions within the company. I think at the heart of all of this is really our value proposition to our employees. So what is it? I think there are 3 key things that we're really looking at. The first one we say is we want to inspire you to make an impact. It's meaningful, purposeful job where you can feel that you're making an impact, yes. You can make an impact with your client and whatever you're doing and create what's next. So that's the first thing that we've been working on. The second one is to ensure that we are continuously learning and we call it your career will never stand still. So they're keeping on learning and they can move around and grow within the company. That's the second part of our value proposition. And the third part is our culture, where we say, listen, together, you navigate further, which is about the employ experience that they have, the culture, the teams that they work with and all that I spoke about, inclusion, wellness, everything. So I think these are 3 at the heart of our employee value proposition that really -- that's something that we've been working on. I'll just sum it up. Some of the awards that we've won. We become -- we are a global top employer. I think among the 11 top employers, which are globally certified, Great Place to Work in various countries, among the LinkedIn top companies and various other awards for things on leadership, on our onboarding and hiring. We've got an award -- SHRM Award on analytics, of course, best employer for diversity and best company for women, which is of that. So I think significant recognition there. To summarize, I think there are -- these 4 or 5 key things that are there. Number one, you can see that our headcount has been increasing. And last year, more than 21% increase. So great growth in our headcount. I think our recruitment has been at an all-time high. And that engine is really working in a smooth gear really, and kind of that's helping us grow all across. A great focus on training. And you can see great infrastructure and how we've been training and reskilling people and the whole framework of training and skilling that we've got. I think that's been very strong. Diversity at the heart of what we've been doing, and that's something that we are really passionate about and growing. And to sum it all that, it's huge growth in our employee engagement. I think engagement early in the past, it used to be in the 70s now it's about 79%, which is pretty good. And I think we've seen a phenomenal engagement through various things that we've done. So I think that's all I had to say. I can summarize that I think there's been a lot of action, a lot of change, but at the same time, we've really ensured that we are clear on what we want to do, focus on growth, focus on recruitment and reskilling and ensure that our culture is there, which really takes the company forward. Thank you.

Thank you very much Mr. Krishnamurthy. In fact, there was so much of passion and enthusiasm in all that you shared. And that was definitely one of the functions that was massively disrupted, yet one of the most pivoted. Thank you so much for sharing those insights. With that, ladies and gentlemen, I do hope you also pop the questions because post our next session, we will be scheduling the open house, the Q&A session. So please do be sure, you've kept the questions ready. After the next session, we will schedule the open house. That being said, it's now time to gather more insights on fueling growth and delivering margins, for which if I may please invite the Chief Financial Officer, Mr. Nilanjan Roy. Please put your hands together, ladies and gentlemen, please help me welcome Mr. Nilanjan Roy.

Okay. Good afternoon, everyone. Wonderful to see so many familiar faces after so long and look forward to our engagement post this event as well. There's a saying attributed to Lenin, I think it is Lenin, and it says that there are decades when nothing happens, and then there are weeks and months when decades happen. And I think all of us will agree this is one of those times, right? There's so much change around us. So in that background, I think our performance in financial year '22 was truly remarkable in many respects. Industry-leading growth, largely organic, if not entirely organic, of 20% year-on-year. And I think it's important to understand that this was on the back of a growth of 5% in FY '21. So there was not really a bounce back effect because in FY '21, we are probably the only ones of our scale and size, which actually grew and didn't decline during the peak of COVID. Operating margins in this challenging macro environment continues to hold up at 23%. Digital growth, which really is differentiating us and helping us gain market share, now at 57% of our share of revenue. 94 large deals at an impressive $9.5 billion, right? And I think the number, I think a lot of people are comparing with FY '21, et cetera, and we know some of the impact of that. But in FY '21, we had 76 new large deals and large deals of $50 million-plus TCV. This year, we've done 94 of these, right? And this gives us an opportunity to further expand or mine these accounts and the point which Mohit had made, to make these into the $50 million to $100 million annual bracket and then take them up. And that's -- I think our metric which sometimes is underappreciated in terms of the number of large deals we've done last year as well. Very strong FCF conversion focused on cash, CapEx and finally, in DSO and ROE at a record 29.1%. The holy grail of all of you, TSR, and we continue to be very, very focused. This is, of course, linked to employee compensation in our 2019 plan and continue to be at the top quartile of that. So what I'm going to talk about is as we look ahead, usually, this would be a margin slide. And I think this is about both fueling and driving growth, creating the headroom for the organization, right, that we can actually support this growth initiative, but at the same time, being relentless and ruthless in taking out inefficiencies and costs from the system, right? And that's the whole purpose of this. So it starts off with making sure that we are able to fulfill the supply side opportunity, which we see at times, and we'll talk about that. How are we taking out costs from our margin drivers. Pricing, I think the industry has largely been very squeamish about this, but really, this is something we will have to address as a company and how do we bake and sell pricing to our clients. Building strategic capabilities and the investments we have to do about it and some of that -- Salil and some of the speakers have talked about. A really programmatic M&A and a disciplined M&A approach for us and finally rounding that off with our sustainability and ESG credentials. Starting with the supply side, really, this is a demand, frankly, we have to fulfill at any cost, and that's what we are seeing around there. We do not want to leave demand on the table, right? There's always a time we know we can optimize on the cost, right? And therefore, in a way, when this demand comes, are we able to fulfill it as an industry and the reality is that both in terms of sheer numbers of headcount and the skills which you need, there is a gap, right? You cannot train people fast enough. You may not have enough freshers coming in who have to get skilled and then on to a new technology, rotate people inside. And sometimes this is a short-term timing issue as well. But until then, I know we are very clear that either we have to get subcons in, right, and you have seen our subcon numbers and some of you have asked questions around that. Some of these are on tap, on demand, which we are -- not the most preferred way, but like I said, we have to find ways to fulfill this demand, which is in front of us. Increased compensation investments. Krish talked about that, the various wage hikes we've done during the year. The one which we are planning now from 1st of April, the cost of promotion, progressions. And finally, the fresher intake, right? And the 85,000 freshers coming in, we will train them, we will skill them. But of course, they will have their own time to get utilized, right? You cannot put them into production, into projects from day 1. And of course, that will have an impact on the overall cost structure. But having said that, we know that if we leave a 5-year deal on the table, right? It's better for us to get this demand and then look at costs later rather than saying, we just can't fulfill this demand. And therefore, these investments are truly required. From a margin drivers' perspective, I think the levers, many of you are familiar with, the ability to create a pyramid on site, again, very unique for us with our 6 hubs in the -- for instance, in the U.S., we now hire about 6,000 -- 3,000 freshers in the U.S. alone, right, each year. And the ability to build a full pyramid, which earlier used to be largely an offshore sort of a mechanism, now you can actually build an on-site pyramid as well and actually take out costs. Internal rotation and promotion and, of course, higher fresher intake we've talked about, 85,000 freshers last year. And this year, we already said we will start off the block with 50,000 freshers at -- putting that into our overall pyramid. Subcon costs, we used to be about 6.5% before the pandemic started. Today, we had about 11.1%. Of course, these come at a premium, but we know this is a lever, which we can deploy both in terms of volume and the number of subcons we have, which is a program we run call subcon to hire, which is when we can hire a subcon, as an employee or we can replace a subcon with an existing employee. And also in terms from a rate perspective, because subcons come in a remarkable and a higher premium, so whether we can buy much more efficiently, consolidate the vendors we are buying from, looking at more buying programmatically with a rate card approach rather than a margin approach as well. So more innovative ways of looking at subcon hiring. Automation, that's the bedrock of our cost optimization. It is embedded into everything we do on a daily basis. And in fact, that's a whole program. Over the last 3, 4 years, when this program started, it was run more like a project, cost optimization project. Today it is seeped into whatever we do, in all the functions, in all delivery, so it's not sitting there as an afterthought to say, okay, what do we've to do more about cost optimization. So this is now very ingrained into the way we work every day. So automation, we've talked about the 24,000 bots, make it industrialized so that we can repeat many of these use cases across industries rather than creating a new solution each time you want to automate certain work in a certain client. On-site, offshore, nearshore, I think the biggest underappreciated impact of COVID is the ability that work in the future can get delivered anywhere in the world. I think this is, in a way, a very tectonic shift, that has as a very positive impact on our industry. In the last 2 years, whether it's clients, whether it is shared services, whether us, you don't know where your employees are, they're all over the country, they're all over the world, right? And therefore, if organizations earlier used to question that this work is so mission-critical. It has to be done in front of me. In my office, in Rochester, that's no more the truth, right? In the last 2 years, you don't even know where those employees are. And I think that, in the long run, opens up a lot of opportunities for us and our global delivery model to deliver work, whether it's on premise, whether it's in our hubs, whether it's in nearshore locations and, of course, in offshore locations. And I think that has -- in a way, if you've seen that from 30%, 4 years back in terms of our on-site offshore, it fell to about 27%. And the last 4, 5 quarters, this has come from 27% to 23%, 23.5%, right? So you have already seen a lot of that shift of global delivery helping in our offshoring. And finally, operating leverage, right, in terms of our SG&A costs and our higher growth gives us that benefit, and at the same time, allowing us to plow some of those margins back into our investments. Pricing, again, something industry has always shied about from talking. I think they've never been really an ask. And I think the reality is, today, the kind of wage inflation, which we are seeing across, it is something which we have to put on the table. We have to have a conversation with our clients. And we are seeing this in 2 aspects. One is, of course, the pure inflation linked, right? And how are we addressing that. Now since for new deals automatically, these will get built into your deal pricing system, right? And of course, they will unwind as the deal goes on, you will start seeing the benefits. But you have clauses around cost-of-living adjustment with some clients, right? So how are you able to enforce those clauses? How are you able to build such clauses into new agreements which you are doing with clients? Can you speak to existing clients and opening up existing contracts and say, how do you can have a gain share in terms of investing back into your own talent with the money which you give them? Because the end of the day, all this -- we are servicing our clients, right? And our employees in a sense are part of the extended team. So what can we do from a wage hike perspective, which we can plow back into our teams. Discounts, right, has always been the vein, so when there comes up a renewal, clients ask for productivity. What's your positioning there when clients come back for the next year's renewal? How do you push back? And how conversations do you have? So that's the whole discussion around inflation side. The other side is more about how do we sell fundamentally on value, right? And it's easier said than done, as I guess said, because you have to have these conversations in clients and move away fundamentally from a cost and a rate card into how do we influence outcomes? How do we influence your Net Promoter Scores? How do we influence your time to market? How do we influence your promotion, your innovation cycles? Can we link outcomes based on pod pricing? So these are the things which we have started discussing with clients. I think first, you'll have this conversation with your own sales force. So for many of them, this is new, right, who've never sold like this. And I think then is the conversations which you have to have with the client. So this is something very central for us what we're doing. We're running a lot of training with our salespeople as well, monitoring this account by account. And the reality is that the way wage inflation is, we will have to continue to push the pricing pedal, which historically has not been something which the industry has really done. Non-CIO buying centers. I think that's a very important part because usually, we've seen that these are not fundamentally budget-constrained buying centers, right? And they are more business transformation projects. So attacking many of these buying centers, you can see a larger value delivery sort of a concept to give rather than a rate card sort of approach we would have had with more of a CIO buying center. Investments behind strategic capabilities. And I think if you go back, rewind in 2018, when we started the new navigating our next strategy, we had talked about some of those investments we would require for the future in a way, we have seen over the last 4 years, the results which have come out. And I think there are 2 or 3 areas we are clear, we will fund from our internal margins as well. We've talked about the whole digital and cloud opportunity, investing behind that, both from a delivery capability and from a GTM capability as well, the full stack approach. We are hiring much, much more in numbers now, not just pure college freshers, but as a top layer, the power programmers and of course, digital specialists. And these are career streams for full stack programmers. They're coming from a much higher level of colleges, more creamier colleges, and of course, you are supposed to pay a much more higher compensation as well. I think we've talked about the whole opportunity on tech natives. In a way, the whole COVID opened up the way these tech natives are competing more with the Fortune 500 companies as well. And in a way, we are building out our services and our GTM for this new age of born in the cloud sort of companies. We still have an opportunity, we understand whether it could be from a cost perspective, whether it could be from tech ops, but we are building out a whole suite on how to address this opportunity. And finally, as Krish talked about, our investments behind our employees around their careers, a more predictable career plan, higher internal talent rotation, of course, coming with that skill-based compensation and differentiation so that we can retain top talent, highly skilled talent as well. M&A for us, I think, is one of the cornerstones of our strategy as well. It has been -- like I said, it has to be very programmatic and disciplined. We did, frankly, nothing in FY '22, right? We must have seen hundreds of assets. We just wouldn't pay $1 more than what we think it was worth, right? So we are very clear. It has to fit into our digital pentagon. It has to speak to what we require from a digital capability perspective, but we will pay the right price for it. And therefore, if you see from the right side what we've done, it has largely been around the experience layer, right, which has traditionally not been the strength for many of the Indian IT services companies and therefore, most of digital transformations actually which start with experience, we've invested very heavily on that, recently with oddity. And going all around the Pentagon, of course, accelerate is one of the largest and the core of digital transformation and including innovate. So as we look ahead, a lot of the -- where we will look for our M&A would be fundamentally speaking to this digital pentagon looking at the cloud verticalization and horizontal capabilities as a second one. Geographic footprint, including Europe, would be another thing which we would be interested in. And more importantly, I think for us, the business case is about the synergies, which we are able to give forward synergies to the acquisition targets and vice versa the synergies they give us, right, in terms of where the higher billing rates, et cetera. So the synergy case has to be very strong both ways in terms of these acquisitions, which we do. So finally, ESG, I think this is something very core to what Infosys stands for. This is from the days of the founders. This is very core to our company that sustainability is interlinked with business, right? We don't see it differently. And stakeholder value and shareholder value for us is very inextricably linked, right? And that's in whatever we do. So we laid out our ESG 2030 Vision 2 years back, a very comprehensive document. I would urge you all to see our latest ESG book, which we've released last week. We are very clear. It's milestone-driven. All of it is measurable with annual targets given out. It's part of -- the ESG Committee of the Board, I think one of the few companies in India, which has the ESG committee at the Board level. Senior executive compensation is clearly linked to ESG targets and meeting ESG targets as well. So this is something which we have actually again internalized around the organization. And again, like this is something which is if you see what we're doing, whether it's on climate, whether it's doing on sustainability or digital talent scale, it's all what we do on an everyday basis. This is not sitting outside there. We have no ESG budget in the company, right? Everything has to be part of business and the way we do business on an everyday basis. If I look at one of the aspirations which we have, which is about engaging with clients on climate, right? Again, the credentials which we've had, and Mohit talked about it, right, whether what we've been doing inside, we have said, why don't we offer it as a service outside. So we now have -- the sustainability business unit has been created. We have 6 large offerings there: energy transition and transmission, ESG finance, the circular plan, smart spaces. So for instance, we've talked about how green data centers is a big part of the cloud transformation as well. So in fact, a large data center, we moved from a big client in Europe. We moved it to actually an old abandoned mine in Norway, right? And it gets cooled by natural running water in the mine, right, because of the temperatures there. So these are just some examples of leading-edge green data centers and many others on the decarbonization footprint, which we have. So sustainability practice, for instance, is now embedded into our ESG goals. If I look at enabling digital talent at scale, right, we have taken a target of having 10 million digitally trained people, starting from school kids, whether -- employees and their clients' employees through our Wingspan and Lex initiatives. And part of that is our CSR initiative around Infosys Springboard, right? So what we said is, let's democratize learning across the world. So we have actually opened up all our learning courses, free to students both in India, in the U.S. and Europe and Australia under the Springboard initiative. A number of partnerships with content providers who're very happy to give us free content, looking at the work which we are doing around this as well. We are partnering with the government now and getting accredition from many state governments in India. This is aimed at both digital skill and life skills. We already have, in about a year, about 2 million people who have registered on this platform. And I think in terms of the growth rate, we are very, very pleased that this is going to enable a much more wider democratization of learning across the environment. So just one of the ways, opening up our Wingspan library and making it much more available externally as well. So just point I'm making is ESG is just getting embedded into what we do on a daily basis as well. So looking at the value creation finally for shareholders, a very strong FCF conversion, 100% plus in FY '22 to 113% in the previous year. Return on equity continues to be around our focus, so from 25.8% in '20, we are already at 29.1%. A lot of focus on CapEx, a lot of focus on cash collections and our ability to deploy that is in the capital returns. You all are aware of our FY '20 to '25, 85% commitment to return FCF. In the first 3 years, we've already done that. With the combination, you can see of the dividend, a steady progressive dividend from INR 8,200 crores to INR 11,500 and INR 13,000 crores and topped up by the buyback of INR 11,100. And of course, we remain committed to our articulated and very transparent capital return policy. Finally, over the last 4 years, our TSR continues to be industry-leading at 141% against our measured peers, which we've announced in the 2019 plan and continuing to drive that as well. So in summary, I think we will continue to do what's required to support the demand environment supporting our client needs, right, relentless focus on costs. We have a number of margin drivers, which we have, which we can deploy. Scaling up our strategic capabilities behind digital natives, behind investing around talent, driving pricing improvements. This is a key initiative, which we kicked off. Of course, this will take time. We know that. This is not a conversation which can immediately turn into margins. But I think this is a journey which we started and over a period of time, we should see the benefits of that. And finally, leveraging our sustainability credentials, which we've gained over the years and how do we take that to market for our clients. Okay. Thank you.

Thank you very much, Mr. Nilanjan. Thank you once again for sharing those valuable insights. And with that, ladies and gentlemen, it's literally time to switch the gears because we're now about to get up with the open house session. While we're setting the stage, let me also quickly share some important pointers. In order to ensure that we can get maximum participation, we're going to request for one question per person. We're also going to request you please raise your hand so that the mics can be passed on to you. And as you all know that the event is being recorded, we're going to request you to please share your name and the name of your organization before you share your question. So please do so. Again, just a quick request, one question per person in order to ensure maximum participation. That being said, it looks like we are already seeing the hands raised. But first up, let me invite on stage, once again, Mr. Salil Parekh and Mr. Nilanjan Roy to please come on the stage. It's time for the open house session, and it's time for your questions to come on board.

Ankur has got his hand up already.

Ankur, you asking? Or are you answering?

Actually, the first table should answer. From [ Kawal ] onwards all of them are.

Go ahead.

This is Yogesh from HSBC. So just one question. First of all, thanks, guys, for the presentations. My question was, like we've discussed since morning, lots of COVID habits are reversing. People are traveling and shopping online. Lots of U.S. results are showing e-comm results that people are back to the physical world. And if you see companies also saved a lot of money last few -- couple of years, and those savings are reversing as well now. So why would the tech spend not reverse back to the historic growth rate of 3%? I mean for a few sectors like autos, it may not, but for banks and retailers, why would it stay elevated and not go back to the 3% run rate?

So thanks for the question. What we're seeing today, as we look out over the next few years is the demand environment has changed in a couple of ways. One, digital that we've talked a lot about, which is really every company is attempting to make sure they reach out to their customer, work with their employees, work with their partners in the supply chain in a digital electronic online format, and that needs a lot of work that has to be done on the tech spend. The second and also which we talked a little bit about is automation where -- anything that is going on in the clients' technology landscape, which can be improved with efficiency, we have an ability to do that. And we see, from our perspective, at Infosys, much greater ability, both on automation and digital to drive that overall growth. And the third, Nilanjan alluded to a little bit also in his session, which is, everyone is now understood from a client perspective that work from anywhere can be applied to almost any role that was going on within their organization. And so that is not something that will happen overnight this quarter or next, but it expands the available target opportunity that we are going after in terms of the type of market. So from our perspective, given all of those parameters, we see the demand environment looking to be quite strong and looking quite secular at this stage, where there is early stages of cloud and digital, early stage of efficiency and very early stage of this addressable work from anywhere.

This is Ankur from JPMorgan. So obviously, the most interesting stat for me so far is the 85,000 graduates Infosys hired last year. And I know Infosys has a great history and a legacy of training. But how relevant is it in the digital world? I mean my question, bottom of it is, how do you, a, train and deploy 85,000 people, partly digitally, partly in the physical world right now? And secondly, how do you imbibe culture in them, especially if they can't come to your campus? I mean I'm sure you -- this bothers as you think about scaling the firm.

So on the training, I think we are first very excited with that number, 85,000 college graduates. We have just recently restarted our in-person training, which is very well known in our Mysore location. But we've also put in place this online learning, which Krish referenced in his session, which relates to having all of our employees access an online learning platform. So our sense is over the next 12 and 24 months -- there's an initial training which everyone is going through. But over the next 12 and 24 months, more and more between in-person and online, the training will happen and people will become deployed and working on client engagements. I think the point on building the culture and the social connect is extremely critical. So what we are starting to see is more and more of our employees are coming back to campus. If you look at many of our employees at the senior levels, a vast majority of them are back in offices, working 3, 4 and 5 days a week, so more or less where we were pre-COVID, not quite at that level, but pretty close. For the other employees, again, you saw in one of our sessions a percentage of those are actually not in our main campus locations today. They're in their home-based locations. And slowly, we are seeing those also starting to come back either in the new hubs we formed. There are 4 that were mentioned, for example, Coimbatore and so on or back into our campus locations. So we feel that, that social connect is going to be important, is going to be important for building the culture and employees are also seeing that. But it's not going to happen overnight, and we see several quarters where it'll start to come into play. And if -- we have this sort of a situation where the COVID prevalence as low as it is today in India, we will have more and more of that connect happening here.

This is Kawaljeet from Kotak. With your permission, can I ask 2 questions instead of one?

It's very difficult to stop anything.

Thank you. Okay. So the first question is on large deals, while there has been plenty written on Infosys' success on the sales side of large deals, the focus has now shifted to execution of large deals. There are various interpretations one can draw on how well are the deals being executed. On the positive side, one can always take an assumption that revenue growth is good. But one the moment you look at the volatility in the segmental profitability, that makes you wonder whether the large deal execution is progressing on track. So just wanted some broad indicators either in terms of CSAT scores or otherwise, which can give comfort on the large deal execution of Infosys.

So they -- Kawal, the way we are seeing it is we have had -- you've seen all the stats in the 90-odd large deals last year, even year before that a significant number. Today, if I look at some of the largest deals we've done, for example, a deal in Europe or a deal in U.S., our delivery on the most complex cloud data center transformation is going very well. So we have extreme comfort in the way our delivery is going on those large deals. Of course, there are many large deals. And starting those programs, we always have to make sure that the start goes in a smooth way. But there is no concern from our side with respect to delivery. And that I feel is one of the things where Infosys has a very strong track record over the years in delivering very well to what we promised to. We have never had a situation where we've given some sort of a commitment, which we've not been able to deliver to. So to answer the point you make, our delivery on large deals today is going well.

The example that you gave was quite an interesting one as well, European client. Okay. The second question that I have is more hypothetical. Now this is based on constant questions that we get from investors. So I thought I'll lob it back to you. The question is that let's assume that we head into recession sometime next year, right? And a customer who wanted to spend, let's say, $100 on tech transformation as well as run operations. Besides that, okay, let's bring that down to $90. Now if you were to imagine yourselves in the client situation, how would a customer go about -- how would a client go about rationalizing the spend, which are the areas which we will cut back on? Would there be consolidation decisions taken? And how does the client ensure that they get the maximum bang for the buck even with reduced spends?

So there first, Kawal, I think it's difficult for us to have that sort of a view because there are so many factors, let's say, a few quarters from today. But maybe to address some of the elements of what you're posing, what we see client discussions, which want to launch transformation also want to make sure that they can gain some efficiency from their current operation. And there are multiple ways they are looking at it. One, we've discussed a few times is automation, one that you brought up, and we are saying that we have been the beneficiary of is consolidation. So there are several discussions going on even today with clients where we are potentially receiving benefit from their consolidation. And who are they consolidating? There are, which you know very well, several quite large companies, which have some issue, whether in delivery, whether in the way they're going to market or whether in the way there is some governance and we feel comfortable that we are consolidating from those companies quite regularly. So many of the clients at an individual level take a view that they need to drive their digital work. They can do it from their OpEx. They also are opening up their CapEx to do it. So it opens up a little bit more of the spend. And then they're using automation or consolidation to get some benefit from it. So given all of that, today, our discussions with clients remain good on demand. I think Mohit shared earlier, our pipeline today is looking very strong, and that's where we are coming from given the macro environment that's going on.

Apurva Prasad from HDFC Securities. Salil, question is on the cost structure -- delivery structure, rather, and the evolution of that, how do you see that over medium term? So is the fresher intake or the fresher hiring a lot more institutionalized and therefore, you think the bottom of the pyramid as a percentage of the overall can expand? And does that also imply that attrition can remain elevated for longer periods of time?

So on the college recruiting, in fact, Nilanjan and Krish have put in a program where we have the ability to do, let's say, a target X, and then we have the ability to flex it on a more monthly quarterly cycle. So that gives us a tremendous advantage. And that's part of the reason why we saw this large college recruitment program that happened in FY '22. We already have set a target for FY '23, and we are well on our way to execute that. The idea, I mean, as you know very well, our business model will be to make sure that essentially our cost per employee, the average remains within what the band we want to be across the whole company. It is not just at one level or the other. Attrition, you heard also from Krish. First, in Q4, it's come down by about 5 points from the previous quarter. We also see, generally speaking, what we see with the initiatives we put in place, faster progression, more predictability, the comp increases that we've put in place. We see, generally speaking, attrition coming more in control. Anecdotally, we are also seeing some of the startup ecosystem starting to face some issues in their funding. That was one source where we were seeing attrition going towards. So some points, small x points, will be reduced of attrition because that ecosystem seems more fragile, and there'll be less outtake into that as well. So we generally feel attrition will remain more in control and campus hiring, college hiring is looking good there.

Pankaj here from CLSA. I understand the macro risks are yet to show up in clients' decision-making, on their IT spend. But I was wondering how are you thinking about your own expense, your own investment plan for the year. Have there been any calibration or any thoughts of the investment that you were planning to do this year? Or do you think it is still too early, maybe look at some of the cost measures, some of your hiring plans example. Are you thinking about it? Or you think it's still too early to start preparing for any kind of a slowdown on the demand?

Let me start on that. And if Nilanjan has some points. I think on the cost, what Nilanjan mentioned, we have a very strong cost program that runs basically all the time but with new targets every year. So not that we have taken anything because of the macro. But in general, we have a high cost program approach. We've, of course, had 3 wage increase cycles. So that's been more of a driver than the external environment. On investments, again, what Nilanjan shared in his session, we've looked at what we -- where we want to build capability, and that's something we want to go ahead with. We also have looked at what we want to drive in terms of the employee connect and that we want to go ahead with. So those have continued. We've not made any changes to that.

This is Girish Pai from Nirmal Bang. I had 2 questions. One was with regard to your retail CPG business. We've had a few retail companies in the U.S. come out with fairly bad results and also commentary for the rest of the year. In that part of the business, are you seeing any kind of initial pressure from conversations on sales cycle or implementation of projects or discussions on value-based pricing? Is there any pushback coming from them? Second question was regarding your value-based pricing proposition itself. Is it a little too late in the cycle to talk about it because now we're kind of going into a bit of a slowdown situation.

On the retail, at this stage, we've not seen any change in the pipeline. What we do see is there are some of our clients who are well on their way to e-commerce transformation, omnichannel journey. They are accelerating what they want to drive through. But we've not seen anything which has come subsequent to the results that you mentioned. On the value-based pricing, anything you want to...

No, I think the problem still is there. I mean you can see the latest U.S. economic stats. There are 12 million jobs and there's 6 million people applying for them. I mean wage inflation is 5% to 6% in the U.S., right? And consumer inflation, in our headline last month, 8%. So this is not a typical recession. This is a stagflation-led recession, if it's going to ever come, right? And therefore, I mean, clients are seeing that same pressure internally within their teams as what we are saying is our attrition for many of our clients, actually, who have attrition figures are saying we are seeing the same kind of rate pressure. And therefore, I think both on the inflation side and going back to clients to talk about wage inflation, how we can plow back some of what they give to us into our own teams. On the other side, change overall on a longer-term basis, how we transform businesses, right? We have to move away as an industry because today, we have a core to business transformation. We have no more outsourced to India because it's the cheapest place in the world, you can do a BPM transformation. That is history. That was 10 years back. Now we are centerpiece in large deals, right? You are sitting centerpiece into the IT landscape of the company. Anything which touches you will touch the transformation you're doing there. So I think the narrative has to change the way we are selling to our clients, right? And like I said, it starts first with making sure our salespeople are educated on what value we are able to get and making that a wider conversation. So I don't think the opportunity has left us at all.

Sandeep from Equirus. This question is almost similar to what the previous participant asked. So I think you as well as some of your global P&C -- MNC vendors have also alluded that and the pricing hike may come with a lag. And if we look at from where we are today, when the pricing hike are due, the macro headwinds may further worsen. So in that scenario, do you believe this pricing uptick commitment can be reversed or tough to get in that scenario?

Yes. So I think, again, it's horses for courses. I mean you can't say all clients will go out and next they have a pricing conversation. In some places, you may be the fourth or fifth vendor, right? And you can't suddenly become a price leader, right? In some cases, you may be the #1 vendor, and you can start a pricing conversation. So it will actually depend in across industries, across the relationship with the client, the kind of work you have. Are you doing T&M, are you doing FP, what in-flight programs. So it is going to be very, very customized to each client. But the reality is that you will have to have these conversations across the board. I mean, we tell our sales guys, the worse the client and say, no, right? That's the worst that can happen, but must go out and have those conversations. Now because that's what we are seeing in our structure. And if we don't -- we aren't able to in a way, pass that benefit on to our employees in a way it will turn on attrition. So it's in the clients' interest as well to make sure that some of these which we can plow back into their teams into retention bonuses, et cetera. And they see this linkage in what the are doing with their own teams inside, right? If they're plowing back wage hikes to their own teams because they want to curtail attrition, we are part of the extended teams. So those are the kind of conversations we will have to have.

[ Mihir Desai from Carnelian Asset Management ]. I had a question on spends on Horizon-2 and Horizon-3. I mean, how should we spend -- see the spends on Horizon-2 and Horizon-3 versus Horizon-1. And when should that start kicking? Some quantification, some understanding on that will be helpful. And what kind of services will largely be catered by Horizon-2 and Horizon-3 kind of services?

So there, we showed a little bit about what we are doing with the seeding of the future growth. We are not -- we have not quantified that externally today. But typically speaking, these things are more in the 3-year and plus type of a range in terms of financial years. But the thing with these things is -- we've got a set of technologies, Ravi highlighted some of those, which we start to build out today. Sometimes they kick in, in 18 months, sometimes they may kick in, in 4 years. So it's not a very definitive view, but it's something certainly which is outside of the current financial year.

This is Atul Mehra from Motilal Oswal Asset Management. Just 1 question again on pricing. So in a fairly strong demand environment where, obviously, post the pandemic demand has been extremely strong. What has been the biggest constraint on pricing? Like is it every company's wish to grow top line at a much faster pace. So what is the -- what are the constraints, underlying constraint to pricing? Is it client constrained in terms of not -- like, obviously, they are facing inflation in their own entire cost structure. So what is the key in terms of constrain to underlying pricing going on?

Yes. No, I think -- I mean, like I said, every client is very unique, right? It is not that you can go tomorrow and ask your 1,800 clients that my wage inflation are being 2.5 wage hikes, now I think I need to give a 10% increase I need from you. I mean it just doesn't work like that, right? It is different for different contracts, like I mentioned, right? You have to go to some clients and say, position yourself in terms of how you're influencing outcomes, right, rather than saying it's a rate card because the easiest way that a client can knock you down is because there's somebody else whose at a cheaper rate card is how do you -- why do you want a hike? So these are conversations and the way you sell, which are very nuanced by client by client, right? And therefore, some of them will have to be places where you can say, okay, I'll have some skin in the game, right, the way I sell to you. It's an outcome-led pricing. Can I influence Net Promoter Score? Can I influence innovation cycles? Can I have a certain skin in the game in terms of your outcomes. Those are the things which we are doing for high scale digital talent, right, which we fundamentally know is in short supply. Based on experience, right? So if you want somebody with 7 years of experience who's worked on some digital programs, can you get a 20% premium on billing for that client. So these are conversations like I said, which will happen. Some of them can hear ourselves already picking up that conversation, but these are longer lead times. They don't just kick in overnight where clients will immediately say I agree to you. So I think this is a longer-term thing. But more importantly, it is something which we have started programmatically inside the company, right? Looking at digital program specifically at the time of striking new deals, what are you doing on T&M, what are you doing on smaller innovation projects. And I think that's the entire approach. It is not one size fits all, really, which is if an answer you're looking for.

Hello. This is Gaurav from Morgan Stanley. Two parts to my question. Firstly, you talked about very strong demand in Europe, whereas we see maximum disconnect with the macro. So trying to understand the demand drivers there. Secondly, you also talked about doubling down your investments in Europe. So if you could quantify in terms of how much of margin drag is coming through in fiscal '23? And what is the payback period when do you think that starts reflecting in incremental revenues or margins, and that comes to our numbers?

On Europe, I think the way we want to share is this is an outlook that we have for the next phase of our strategic journey. So think of the next, let's say, 4, 5 years as the Horizon for what was discussed when Mohit shared some of that, I shared some of it, Nilanjan pointed to it. The thinking for us is, we have a very strong business in Europe, but there are still more opportunities, and there are a few geographies within Europe where we think we can go faster. We have not, in that sense, taken -- we have some clear focus on what we will do to drive that. But we have not taken a specific -- externally specific investment and return parameters and share it externally. But it's part of the mix that we have that as one of the initiatives we want to drive is to make sure we further expand in Europe. And that, among the other things we discussed, will give us a growth rate, which is ahead of where the market is, and we'll continue to gain market share on an overall basis.

Yes. This is Vimal Gohil from Union AMC. So my question was on the large deals. The construct of the large deal seems to have changed over the past couple of years where we've seen a couple of very, very large deals, which have involved significantly higher pass-through costs. And that probably has led -- and correct me if I'm wrong, that has probably led to higher unbilled receivables, which has sort of -- our free cash flow would have been even better than what you've reported. Going forward, how should we look at this? Inherently, will pass-through costs remain elevated and probably have higher unbilled receivables? Could you help us explain how do we sort of account for the pass-through? Is it that you've front-loaded some of it while the revenue hasn't come and which relates to Kawal's question on the profitability of the segments. So manufacturing had weaker profitability this time around.

I think there are 2 different questions. I think unbilled and pass-through is actually quite different. I think one of the reasons of the unbilled question is largely, many of these large deals have a large transformation element to it, right? They are not just simple T&M month and bill every month, right? They are -- where you are involved in transformation milestones over a longer period of time, right? And therefore, their billing cycles do not necessarily follow a typical monthly billing cycle or quarterly cycle. So you have to -- that's why you're seeing this gap. It's nothing to do with whether you have a larger pass-through and you have a larger unbilled really into it. That's the biggest reason of the unbilled is. Basically, more transformation programs are being done.

One follow-up. Will these continue? I mean...

I mean I can't answer in future what...

So what I meant was when you actually go and bid for these larger deals, does it inherently have clause where the pass-through cost will be probably be higher than what you've been historically been comfortable with?

It doesn't -- I think today, like as Ravi mentioned, a lot of deals which are there are end-to-end as a service dealer, right? That's the end objective. The client really frankly doesn't want to see the nuts and bolts of what you're doing, right? So it is bundled with service, it's bundled with software. It's bundled with cloud and bundling with hardware, so the client is immune and that's the best position because then you can leverage that because the moment the client starts by buying hard chips and servers, et cetera, then there's a cost transparency. If you're giving an end output and say, it's per-transaction per-gigabyte process, which is what cloud is about, right, you don't care how many x86 Pentium servers you're putting, you're saying, how much VMware capacity I can process in a microsecond, right? And that's the best way for the industry because then you've created this opaque layer of cost to end delivery. And that's what as a service is about. So you will see bundled deals happening. And that, as Ravi's slide said, the infrastructure layer moving up and then finally, Business-as-a-service.

Mukul from Motilal Oswal. And it's going to indulge me 2 questions from my side, including one follow-up. On the Europe side, Mohit mentioned that next 4 to 5 years, the spend will be in line with the spend which is happening in U.S. Is that more to do with the U.S. being more mature market and hence, growth is slowing down there vis-a-vis Europe? And again, the model which has followed in Europe over the last many years is a higher share of rebadging versus how things are in the U.S. So is that likely to continue? Or is the model changing there?

On Europe, I think what Mohit was sharing was we see now a greater openness for the large companies in Europe to look at both digital transformation and also global delivery. So we've seen -- you take an example, let's say, a country like Germany, where you take the Nordic countries, we see the discussions there that we are having with the CXOs and Mohit is very well positioned by being in that geography. At a very high level, the discussions are about how will those transformations happen. And so the sense we had was we think that, that will give us more opportunities. So it's nothing to do with U.S. being less in that sense. It's more that those discussions are giving us a -- the U.S., we still think will grow pretty well, but this has that newer set of clients, which seem to be more keen for these digital transformation and the global delivery programs.

And on the nature of rebadging, which has kind of prevailed in Europe in the past, will that continue?

So there, again, it's what our experience is. We've done work where we've taken employees over from clients in the U.S. We've done work where we've taken employees over from clients in different countries in Continental Europe and also in the U.K. We have a specific method of doing it, which is we are not taking employees just for the sake of taking employees. We have a view that will we be able to now look at placing those employees on other programs in the future. So that is one lens we have and then we have a lens on the skills that they're bringing in, which can be relevant. We are doing it from that perspective. And then the Europe, the clients, both in Europe and U.S. are seeming to be more open. We are also a very attractive employer. So typically, we have seen the rates at which the employees join us are fairly high. And that gives a feeling that as a employee brand, we are very strong with those employees.

Yes. The second question was more conceptual. Keeping aside all the macro concerns, which are out there, you presented a multitude of opportunities today during both yours and Mohit's sessions. There are many segments which by themselves are $1 billion business now and growing really fast. And then you also mentioned every $1 spend results in 2 to 3x spend on services in many of the cases then why it is the case that your addressable market is still growing in mid-teens and not faster? And the second way, which is also there, is there a likelihood of a winner/loser kind of a scenario coming up in IT services? Or is that a remote possibility? Because that's the only way for any company to meaningfully outgrow the peer set?

So what I understood is you think it should grow faster than the 13% high-teen growth.

The industry growth, the forecast were about 14% to 16%. The industry -- the end markets are growing much faster.

That -- so I don't have a sense of why that is -- your point is valid. There's a lot of opportunity that exists. The way we took that was from external data sources that 14% to 16% from what the industry analysts, people put together, and that was a consolidation, one of our external providers gave it to us. My own sense is 14 to 16 is a very strong growth rate for the scale that we are talking about because at the end, this is -- if you looked in that addressable market, that was about $400 billion. That's a very large chunk of the overall tech services market, which let's say, anywhere between $1 billion to $1.2 billion depending -- $1 trillion depending on how you count it. So it's a very large chunk of that, which is growing extremely well. And there are pieces within that, which may grow, as you said, at the rate that you were describing even faster. For example, we see even within that $400 billion, the cloud piece, however you cut it, let's say, just take the SaaS services piece. That's growing at a much faster rate. And that is why that Cobalt investment capability is very important for us because we built it all out. What Ravi was describing, the team has built it. It's ready. Now what Mohit shared, we are putting industry solution. So we are well ahead of where any peer is on that. And our objective is like we had last year, we get 4, 6, 8 points of growth faster than anyone else in the industry. That's a significant outperformance for us. So we are not thinking of 20 points. For us, 4 to 6 points would be very good. But any growth which is greater than the industry peers or industry leaders will give us some traction. And then as in Nilanjan described, we have the levers for margin. So that's how we created the business model and we get the growth and we make sure we drive the levers for the operating margin.

This is Ashwin Mehta from AMBIT. I have 1 question. So over the last 2 years, we've added almost 106,000 freshers. That's almost 1.5x, your net headcount, addition is almost 1/3 of your current head count. So the question is, is the demand becoming more complex or less complex for us to induct so many freshers? And secondly, the follow-up is that does this fresher lateral ratio continue going forward? Or as you get into the next year or the year after, the lateral backfill will possibly increase? And the third associated question is if the staffing is so fresher-led, will the clients be paying new extra?

So there -- what we've seen is the first point on what is the type of demand and can a larger number of college graduates help us sufficiently fulfill it. What we see is there are a set of methodologies and tools, Mohit referred to some of the platforms that Infosys has built, which is allowing us to make sure that many of our employees are getting skilled on that quickly enough and making sure that they become much more productive vis-a-vis what the clients are looking for. Now equally, what the clients are looking for is complex in the digital transformation arena, but we are making sure that with the tools that we build and the training that the individuals get plus the remaining people within the company which are not college graduates, we have sufficient depth in delivery to make all of this happen. Now as we look ahead, we don't have a specific view on the mix between, as you called it, lateral recruitment and college recruitment. But what we are very clear is there'll be more and more emphasis on fulfilling internally. It's not 100% but it's more and more emphasis on that. And that gives us a way to build out what was described as a pyramid from internal basis, which gives a lot of confidence to the people joining the company that they have a long and predictable career within the company.

Thanks for the second opportunity. This is Girish Pai from Nirmal Bang. Couple of questions. Ravi mentioned about business shifting from IT towards business operations. Would that mean you do more rebadging going forward? That's question number one. Second, there was also a discussion around experience studios being in-sourced by clients. So what is the logic behind that? I mean how would that lead to more business coming your way?

So on the IT and ops, I think what Ravi was sharing was there is more and more connected decision-making when we are working with clients to not just look at tech, but look at tech and ops as a combined piece and making sure that the ops is also leveraging some of the new automation capabilities we have. So I don't think it necessarily will translate to a discussion on client employees joining us or not. But it's much more that there's a the more of these things that are becoming integrated, what we spoke earlier, the more this 1 Infosys model becomes more relevant because that in itself is something which differentiates us. Not so many of our peers are able to bring all of this together with client discussions. Now on experience, I didn't follow what you meant.

Ravi mentioned that some of the experience students are being in-sourced by customers. I felt that, that was bringing in people. Now how does that help you because you would be losing business.

No. I think -- so what I thought Ravi was sharing there is much more emphasis on the experience capability today with clients. What he said with in-source and what we see is the WONGDOODY digital lab is placed within a client organization. While we are making sure that is being run with those methods of human experience. So it's not just that the clients are coming to our labs. It's like we are building a center within their organization in their headquarters. So that allows them a greater usage and then it brings to us more capability as they use it. So not that they are taking it from outside provider and taking it in, but putting the WONGDOODY lab inside the client.

This is Rahul from Dolat Capital. Just on the subcontracting initiative that you shared in the slide. What are the easy efficiencies that we can bring in FY '23 or maybe near term that you could do with some of the 3, 4 things that you shared. Is it like more getting fresher, helping out easing on that number or even from any other form?

Yes. So I think the whole recruitment model is very interconnected, right? It's interconnected with freshers. It's got lateral. It's got an attrition element. It's got a fresher element. And in a way, subcon is a "balancing figure", right? Because that's the final place where the pyramid doesn't fit, then you say, okay, let me give me a subcon. That's the way the whole operations model in this industry works, right? And therefore, all these 4 have an impact on number of subcons. So theoretically, if attrition comes down, you don't need so many subcons. Theoretically, freshers, you can put more, you need -- you'll have to have less subcons. So these are all interrelated. So some of the programs which we are consciously driving and not waiting for the outcome of attrition or not waiting for more freshers to come in, they'll get deployed is, for instance, the subcon do hire, right? So reaching out to many of the subcons and saying, okay, a permanent employee position doesn't demand this kind of a wage premium because the flexibility cost of subcons is that you want that wage premium because they don't have fixed jobs, right? So you hire them and then you don't have to pay that kind of a wage increase, which subcons demand, right. You replace them because now you already know there's a steady-state demand already available for this job. And therefore, in 3 to 5 months of redeployment, you actually replace them with an employee. So those are some things which are quick levers which we can deploy. And like I said, even on the rate side, looking at other ways of how we can bring down the rates of subcons through vendor consolidation, et cetera. So there are a number of levers which we can deploy, and we will only see some effects of that.

Thank you. Just 1 question on if there is a slowdown, for example, second half of this year or sometime next year, there has been a historical perception that Infosys has a higher proportion of discretionary services compared to many of your large peers. And if there is a slowdown, it might be more exposed. Now we don't have a service line split anymore because you've been sharing with us only the digital proportion of business. How should we think about it right now in terms of what proportion of your engagements are likely to be reviewed if there is a slowdown next year versus the rest? Is proportion of fixed-price contracts, one, relevant proxy, for example?

So for us, what has happened with the change, both through digital and also to the larger deals is in general, without giving percentages, there's more of a shift to the managed services approach. So I don't have a specific view on what the market considered discretionary in the past and what will it be in the future. But our mix is definitely much more managed services, much more medium-to-long term in the way we are working with clients. So we will see, of course, in the event that you described if that sort of thing happens, what it looks like. But that's how our mix has changed.

I have to add. I think this was a question when COVID struck, I think this was, I think, most investors asked, Infosys "seems to have the most discretionary." We were the only player which grew in the period of COVID when this cut down in your way happened, right? I think that should give you an answer of how widespread our services and embedded there.

A related question, maybe a follow-up is if we look at the nature of deals you've been winning, the proportion of large deals has been high. It's been a significant success story for you. However, the large deals that you share has been sort of plateauing for the last year or so. And I think one of the assumptions we've had, and I think you've shared this as well, is this a high proportion of medium-sized contracts, smaller sized contracts, where you're winning with clients, which is not visible in what you publish normally. Is that something which might be a source of risk for you and perhaps for the industry, if the proportion of small-sized deals and smaller contracts is increasing, they are easier to not renew or easier to shut down as opposed to large contracts, which you were winning, let's say, at a high proportion a year ago?

For the large deals, the way we are seeing it and at least what I think we've shared in the past is our large deals are deals over $50 million. So there are already significant sized deals. We only referred to, what we call, some mega deals. And those we said are more not predictable in the sense of we don't know which quarter they may come in and they may come across a year, 2 years. We still, as I look at our pipeline, have mega deals in our pipeline, but the large deal number, which is what Mohit shared and Nilanjan shared, the number of over 90, that number is increasing. So these are not small deals, meaning these are not deals which are $1 and $2 million deals. These are deals each over $50 million. So today, when we look at the pipeline, that pipeline is looking strong for us. And we feel comfortable with that sort of a pipeline, what we have closed, and that looks good for our guidance for this year.

This is Ayush from B&K Securities. I have 2 questions. So first question is. In today's world, clients are at a different stage of transformation. And so cutting their IT budgets today will make their existing investments as a sunk cost. So do you agree with this, then only we will see the less tech spending this time. And the second question is considering the current macro environment, do you think the current growth guidance is at risk?

I think on the first one, what I understood is the IT is very critical, so they may not cut the IT. Is that what you were saying?

Yes.

So what we see is there is a strong prevalence within large companies that we are working with to drive this digital transformation because it's helping them position themselves better. They're also using both OpEx, sometimes some CapEx. So that gives them a little bit more flexibility in how they're looking at their budgeting. And they're also taking because of automation, consolidation, some funding out of their existing landscape, which is allowing them to fund this. So given all of those parameters, we see the digital transformation continuing. On the second, our guidance at 13% to 15% remains where it is. We feel comfortable with our guidance given where we are in the environment.

It's [ Puranik ] from Enam. I have a question on the pyramid, the whole pyramid architecture. If you hop back to the early 2000, the first tech boom, the lot of hiring happened and a lot of promotions happen very quickly. And those who were promoted quickly, they become the target for pyramid correction later because there are capability issue of those guys who have been promoted earlier. So do you see any correlation to what happened at that time and today in the context of people working from home today? So would some of these guys would get into a situation where they may not be very relevant unless they are trained very well?

So there -- I think what happened in 2000, we -- I don't have a strong sort of a correlation with what we are seeing today from that perspective. What we do see is the duration of the skill relevance is shorter today. So what could have been 10, 15 years for, let's say, an SAP ABAP skill; today in the world of cloud, cyber is probably 5, 7 years where you have to replenish your skill. What I feel happened in the past, if people were willing to reskill themselves, even if it was longer duration, their longevity in the career was higher in terms of percentages. And it will be the same if people are willing to reskill. So let's say this 5, 7-year horizon, which is a shorter horizon. If at the end of that horizon, people say, look, I'm going to reskill and build a new whatever that skill, quantum, meta, whatever that skill is of that day, then that longevity will increase. And the thing with Infosys has always been -- which is a very strong company value is if people are willing to reskill, they will continue. We are not a company which is churning people just for the sake of it. We are much more a company which is reskilling. That's how I think it can play out if people choose to reskill.

Ladies and gentlemen, we have room for the last 2 questions.

Yes. Krati from Credit Suisse. So wanted to understand what -- so Infosys, the next year guidance is 14% to 16%. Last year, you grew 20%. What is stopping Infosys from growing 14% to 16% every year for the next 5 years, 6 years? Is it because of COVID, people have accelerated their digital spend, there is a huge market, which is not digitalized yet. So what is stopping Infosys from growing much higher? Is it just a lack of sales force on the ground? Or is it because there is a market that Infosys will never pitch in for?

So there, for us, the guidance for this financial year, April to March is 13% to 15% for growth. We don't give a guidance, which is a multiyear guidance, so we don't have any specific view for the year after. Of course, last year, we grew at 19.7%. So when we had a guidance which we changed a few times in the year upwards. The way we look at the guidance, as you know, is where we have the deals that have worked for the previous few quarters. What we see in the pipeline and how we are converting at that stage in the market. Of course, we would like to grow at a rate which is above the market. What will happen in the sort of the year after in the financial year, we don't have a view of. What we try to do today was more give you a sense that. If you look out over the next few years, the demand environment is fairly solid with this cloud and digital, and our capability is very strong. So we will play well in that demand environment and we will more than likely grow at a rate which is above so that we gain market share from our peers.

Sir, I wasn't looking for a guidance specifically, but wanted to understand in your mind, what are the constraints that cannot let this industry grow higher than this continuously every year.

So there, I don't have a specific view on the industry within -- for Infosys, particularly, I don't see any constraints. So we have a very strong engine. It's just that we don't have a view of what that number will be in that second and third year.

Any further questions? All right. So then on that note, ladies and gentlemen, we conclude the open house. Thank you very much, Salil. Thank you very much, Nilanjan, for sharing your thoughts as well. And on that note, we officially come to the end of the event as well. Ladies and gentlemen, first off, we'd like to thank you all for joining us this evening. And let me remind you that the audio file of the event, the presentations and the transcript will be provided on the Investor Relations website. That being said, it's now time to cordially invite you all to please join us for dinner. It looks like there might be some more questions looking at the curiosity in the eyes. So please bring forward your conversations over dinner and kindly join us for dinner that's being served just outside the conference hall. Thank you so much again for being part of the event. Thank you, and take care.