Latent View Analytics Limited ($LATENTVIEW)

Ladies and gentlemen, good day, and welcome to the Latent View Analytics Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Asha Gupta from E&Y LLP, Investor Relations team. Thank you, and over to you, ma'am.

Good evening everyone, and welcome to Q4 FY '26 Earnings Call of Latent View Analytics Limited. The results and presentation have already been made to you, and you can view them on the website, www.crai.com. In case anyone does not have a copy of press release and presentation or you're not marked in the mail, please do write to us, and we will be happy to send you the same. To take us through the results today and to answer your questions, we have the CEO of the company, [indiscernible], to whom we will be referring as Rajan. And we have the CFO of the company, [indiscernible] to whom we will be referring as Raj. This is just to avoid confusion while doing the transcript. We will start the call with a brief update on the business and financials, which will be then followed by the Q&A session. As usual, I would like to remind you that anything that is mentioned on the call, that reflects any outlook for the future or which can be construed as forward-looking statements must be viewed in conjunction with the risks and uncertainties that we take. Business and uncertainties are included, but not limited to what we have mentioned in the prospectus filed with the [ SEBI ] and subsidiary annual report that you can find on our website. Having said that, I will now hand over the floor to management. Over to you, sir.

Thanks, Asha, and thank you all for joining the call. take some time to cover 4 topics on which I thought I'll provide some additional color. In addition to the information that's been already made available to you as part of the press release and the investor presentation. And then I'll hand over to Raj for further commentary on the financials. The first topic I want to talk about is the whole AI trust for the organization as well as what you all have probably been hearing about in the external media and within the IT services world. We are seeing fairly strong traction for all the work that we have been doing. Internally, we have been looking at AI work as work that we do use in traditional AI, generative as well the new agent solutions that are being implemented. And we did an internal check on the work that's been done last year in relation to all these 3 traditional generative and agentic. And we are happy to share that about 28% of our revenues for last year involves 1 of these 3, where the AI aspect is clear and visible to the client, which means that they can experience the generator AI interactions are the agent solutions directly in the implementation that we have done for them, which we feel is a fairly strong traction for the work that we've been able to do on the front. So we call this primary AI, where the AI solution is directly visible in the hands of the end customers that we are working with. In addition to that, there is a fairly good chunk of work where the AI is kind of under the hood, but it is still powering either the decision-making or the modeling of the workflow or the process assets the [indiscernible]. And that is to the tune of another 21% in the work that we did last year. So overall, almost half the work that we have been doing has been involved -- has involved AI in some shape and form a good chunk of it being directly visible right in the hands of the end customers. There is a fairly broad spectrum of which we are doing within the agent space itself, and I'll touch upon that in a few minutes. But in terms of the tooling and the technology that's used it's covering all the major names that you're familiar with, whether it's codex from open AI or [indiscernible] from [indiscernible], right? All of these are being put to good use in the work that we are doing. We are also doubling down significantly on the AI partnerships and the work that we're doing, and I'll come back to that in a minute. But before that, just giving a bit more color on the nature of the work that is being done using generative and agentic in particular, this work that we are seeing, the payments invoice reconciliation space where agentics are being implemented. There is quite a bit of work that we are doing on market intelligence gathering and orchestration and making it available in the hands of decision-makers running campaigns in an automated fashion using agentic frameworks have been implemented. A significant amount of work being done for marketplaces and platforms around fraud analysis, counter feed detection and quite a bit of work also, again, in the manufacturing space in relation to warranty claims handling. So these are some examples where fully agent workflows and orchestration have been implemented, and that is actually starting to yield business impact that is directly visible to the client. From our perspective, we are really doubling down on further strengthening our AI capabilities, both on the GTM front, go-to-market front as well as on the internal capability building. So there is a clock certification program that's currently underway, where over 200 people have signed up and almost 40 people are [indiscernible] launch. So there's a great deal of enthusiasm for all actions related to that. I was in the U.S. the last 3 weeks, and I had the opportunity to meet a lot of clients and also our partners. And one of them that we are starting to work with is an topic and operate person who leads the Anthropic partnership, and there is a good amount of traction on that conversation asset. From a capability standpoint, we are -- when we're building further strength in terms of the agent focus, especially senior architects that will be hiring. An entire model, you are probably also hearing that it's kind of like shifting to what is being are termed within the industry as forward-deployed engineers where people with full spectrum skills -- in some sense, it's a bit of full stack engineers from the past, but additional AI capabilities and domain understanding and customer interaction gets all that rolled into one, is what is being done as forward depot engineers. We are again looking at building capabilities around forward deploy engineers who are able to bring the data engineering BI, data science as well as AI skills together in designing and implementing the solutions that tenant in the client organization. Once point on the AI, the announcements by OpenAI and Anthropic they are going to be forming joint ventures to create [indiscernible] extend their capabilities, not beyond just the models that they are building to directly getting into enterprises while there have been concerned around that in terms of what it means for services companies, I think it's also a validation that a very strong services layer is required and just the models by themselves cannot deliver value until the services layer is available to take care of a lot of the orchestration, not just the business process and the decision-making and they're embedding within the workflow. But more importantly, topics around transparency, governance evaluations, validation, provenance ability to prove something, right? All of these things are important questions. And this is what a strong services layer can help accomplish so that AI solutions are not just some model that's sitting in an ivory tower, but it's actually seeing practical application with very defined business benefits. So I just want to give you that perspective from traction standpoint. The second topic is our partnership with Databricks. Again, a lot of traction on this trip to the U.S. I had opportunity to meet multiple people on the partnership ecosystem our partnership in the consumer goods manufacturing and technology space continues to evolve and strengthen. I also had a chance to meet with the person who heads of the provisional services partnership. We have a small foothold there. And this conversation helped push that further in the right direction. We are also evaluating potential inorganic acquisition opportunities where these firms come with a much stronger professional services partnership with data breaks. And that is something that, again, validated with the data of its leadership team on whether that will actually help propel us right into the next orbit. So this is something that we will double down on in the coming months and quarter. The Databricks summer was coming up in June, and we will have a very strong representation there with many of our leaders being in attendance. We also organized several exclusive dinner events with several of our clients and prospects and I'm expecting more traction on the back of that. Finally, we are continuing to make investments both on the [indiscernible] market front as well as on the back end capability experts, architecture and so on. And this action will continue in the coming quarters. So this year, 2 strong pillars of growth will continue to be the interaction and the partnership with Databricks. And we are expecting that diesel yield but it's right not only in this year but in the coming year as well. The third topic I wanted to briefly touch upon is the investment that we made in [indiscernible] You would have seen the press release that came out earlier in the last quarter. So a small investment, but we are the first investor into [indiscernible], when we started looking at them and evaluating them, they came with an exceptionally strong business problem under use case, but more importantly, a very, very well thought out technical architecture and an agent framework that can solve the revenue cycle management problem within the healthcare space using largely, right, 18%, 90% of it being done using an [indiscernible] architect. Of course, there is a human in the loop aspect of that as well but the solution that they had built and conceptually -- that the concepts and design was something that resonated with that. They are currently in the process of building out the agentic suite under technical solution. They have also signed up 2 charter clients with whom we are working to build out these agents. As a access to the full suite of agents that they will be building, which we can then leverage and use in other conversations, both from a showcase perspective as is using them as competence in the solutions that we deliver. plus the revenue cycle management solutions that they are building will be available in a composite fashion if we intend to take it into other health care. So I'm expecting that there'll be more traction in the coming months and quarters, and we'll keep you posted about it as we move forward. Finally, the last topic I wanted to cover was the technology industry and some of the headwinds that we have talked about in the previous quarter. We did start out start this new fiscal with a bit of a gap down because of the headwinds that we witnessed in the last quarter. But I'm happy to report that there are several strong opportunities that we are pursuing, especially on the back of the AI push that we are in these accounts. In fact, in our largest account, as part of the trip I was able to participate in 3 fairly large deal conversations. And 1 of them is almost at the point of will be a $3 million plus be rate in total, but the other 2 are also 1 million, 1.5 million in size. So while they have not completely cover the gap down that we had, they do bring us back to a reasonable level of confidence. And we are expecting that the momentum continues through the course of the year, we'll be able to claw back much of what is lost because of the headwinds in the last year. One other thing is that also engaging with the vendor organization, we are providing analytics support to them, bringing us closer the procurement organization and getting us more visibility what is happening, right, within the rest of the orange. So these are the 4 broad topics I want to cover. Otherwise, as an organization, we continue to double down on our client partners and hiring the right go-to-market people. making some internal prices also that we are fostering greater collaboration and cross-pollination across our entities. But these are things that will pan out over the next few quarters and we keep you posted right in terms of any specific mentions that very happy about how we closed out last year I'm seeing a reasonable amount of optimism as we step into the unit. So with that, I'll hand it over to Raj for further commentary on the financials.

Thank you, Rajan. Good evening, everyone. And welcome to the last investor call for the fiscal year FY '25, '26. One of the, I would say, big positives for this year as we close the year for a [indiscernible] going back to INR 1,000 crores mark, which is a fairly significant milestone for us, even in dollar terms compared to the year roughly grown about 2.2% in about the 3-year time frame, right? So I would say from the sort of growth that we've delivered and consistently with profitability, we're fairly happy with the numbers that were achieved for the last cycle. And this was also in line with the guidance that we had given earlier in the year where we've indicated that on a full year basis, will deliver between 90% to 20% growth. return EBITDA for about 23% to 24%, right? So pretty happy with the way the year has turned out to be. In terms of specifically what's happened in this quarter? Of course, Rajan already touched upon the fact that we did start the year with some level of shrinkage in one of our large accounts, technology accounts, right, where there was a fair bit of consolidation that happened within this one large account as well as the prioritization of some of the work that you were doing, right? So we are really happy to note that despite the shrinkage that happened in this large account, we were still able to grow in dollar terms by about 0.5% on a sequential basis. compared to the previous quarter. This was, of course, driven largely by the strength that we witnessed in the BFSI the CPG retail practice, right? And we'll talk a little more about what growth in these accounts. But BFL continues to sort of deliver highly strong numbers. Even as we head into the next year, we expect this practice to continue to deliver strong growth. For the last year, we're very happy to report that [indiscernible] grew in excess of about 80% compared to the year before, it right. In terms of the Y-o-Y growth, of course, for this particular quarter, in dollar terms, the revenue came in at about 17% higher than the previous year. And in rupee terms, of course, because of the INR depreciation, the year-on-year growth came in at about 24.3% compared to the same quarter in the previous year. I'll talk a little bit about what sector specifically. So you will see that the technology vertical for us historically, if you see used to contribute in excess of almost 70%. I mean if we go back almost 8 quarters, right, if you go back to Q1 of FY '25, the tech vertical used to contribute almost 70% of our revenues at that point in time, right? From there to now, you will see that the share of technology from the 70% has come down to about 55%. While technology has continued to grow what is happy to note is some of the other verticals, which is primarily [indiscernible] retail, their share of revenue has grown substantially. One, obviously, based on the organic growth that we witnessed in [indiscernible], but to also the [indiscernible] acquisition, which has led to the increase in the overall CPG and retail business, right? We're also happy to note that share of revenues from the rest of the world, right? I mean at one point in time, I mean, maybe 8 quarters back, you used to contribute 94% of our overall revenues, right? There is the rest of the world, including Europe. We're happy to note for the most recent quarter. Our share of revenues from the rest of the world has increased about 15% compared to the 7% or 6%, 8 quarters back, right? So both from a geographical concentration standpoint as well as from a vertical concentration standpoint, we are seeing some of the other vertical as geographies expand, and that is, again, hardening to note. Okay. I talked a little bit about the profitability for this particular quarter. You will have noted that our EBITDA for this quarter came in on [indiscernible] I'm talking about adjusted EBITDA. The adjusted EBITDA came in at about 24.1%, right? There was, of course, a benefit of ForEx, which was to the tune of about 1.1% on the overall EBITDA for this quarter. But this particular quarter, we also had some benefits in terms of certain costs that were there in the previous quarter, which were not recur in the current quarter, right? So you will all recollect that the last quarter, we had made corrections to our wages to comply with the labor code. And also there was severance pay that was paid for some level of headcount rationalization that we had done in the last quarter. Those 2 items contributed almost 1.5% of costs in the previous quarter, which did not recur in the current quarter, right? So we did get some of those benefits. However, the positive impact of ForEx and the labor code related restructuring was offset by higher spends on travel as well as SG&A, other items like pizza, even though our visa cost on a competitive basis compared to the previous year has come down, but then we did have a fair amount of visa costs for H1B filings that we had to do, and those costs were incurred in the end of Q4. Both of those remain that are -- the consolidated impact of the higher travel because via cost was about 1.1% on our overall EBITDA. And of course, we continue to sort of spend on certain other aspects around we still want to increase some of the leadership hiring, specifically as far as the AI COE is concerned, hiring client partners for some of our key accounts as well as continuing to build our data back practice, right? So we had some of higher [indiscernible] in relation to some of the hires that we had to make. Net-net from the 23%, the items that I spoke about mean that for this particular quarter, we came in at about 24%. But on a full year basis, in line with what we had guided before, our for the full year came in at 20%, in line with what we have guided. This is also the last quarter in which the transaction-related retending cost expense that we were adjusting for the bus of reporting EBITDA, that would be incurred. Going forward, you will not see that line, right, because you will not have these costs going forward. So happy to report that as well. Coming to the PAT and the EPS, you will -- this quarter also had a small benefit coming through on account of deferred tax asset that was created in relation to unexercised ops that were there in the U.S. Please want that this is only for the U.S. And this was an accounting charge in some sense, and there was no charge. This is an accounting product asset that we had to create it resulted in the ETR dropping from the typical 25% about 22% levels for this particular quarter. Going forward, we will not see any such impact and this -- I'm talking about the current so that have been issued to the employee rate. On the EPS line, again, EPS for this quarter, while you did see a small degrowth compared to the previous quarter. That is the degrowth is largely on account of lower, I would say, other income that you would have seen. And compared to the same quarter in the previous year. You will see that for Q4 of FY '25, EPS came in at about 2.5% against that [indiscernible] but please bear in mind for the last year, it was almost INR 4 crores, INR 4.5 crores ForEx gain that we had recognized in relation to some intercompany loans and advances that were given out. stripping that out, if you were to strip that out, the EPS or even on a comparative basis has grown by about 8% compared to the previous year. So with that, what I would like to also close my opening remarks is that we are happy to note that FY '26 concluded on a fairly strong note. While there has been some level of headwinds in the technology vertical, we are particularly impressed by the strength in the BPI and the CBD practice. Our data bricks practice, again, continues to generate significant action in terms of the pipeline and inbound sort of reference. We're also fairly excited about the transformation in the window chain that we are seeing on the A side close to about 28% of our -- the projects that we have delivered in the last year had a significant AI component. And we believe that this number is only bound to increase even in the current year as we continue to to execute through this year, right? With that, I will hand it back to Asha, and we can open up for Q&A.

[Operator Instructions] Your first question comes from the line of Aditi Patel from ICICI Securities.

So. My first question is on the technology vertical. The sequential drop in technology vertical appears to be higher than what we had called out in Q3. So correct me if I am wrong, we had called out around 5 million, 6 million annual drop we are expecting in our one of the top tech clients. So if you consider that then the sequential drop in Q4 seems to be slightly higher. Is my understanding correct? And is there any other client-specific issue in the technology vertical.

Yes, I can take that. Yes. Got it. Aditi, specifically in this particular account, while the initial estimate was the drop will be closer to about 5.5 million, 6 million. That was the estimate at the not in the last quarter. In reality, some of the rationalization that happened subsequently as well [indiscernible] happen mean that the total value of opportunities is close about $6.5 million to $7 million. That is the total value of shrinkage that happened in this particular account. But with this -- the one thing that we want to confirm is all the renewals, all the rationalization are all done, right? So it was not to care about $7 million, right? But this -- to Rajan's point, I think we are in active discussions even with the particular account on several other threads at this point in time, which definitely gives us confidence that we will be able to recoup more than 50% to 60% of the revenue lost in this account in the next 1 to 2 quarters, right, in terms of the overall book of what -- so there are already some very advanced discussions that we are in is particularly trying to recoup the revenue loss?

Okay. Okay. Got it. And apart from this client, what is the traction we are seeing in other clients and, therefore, like what kind of growth should we expect in technology vertical in FY '27.

I can cover the [indiscernible] and Raj, you can comment on the percentage for the number. The other 2 large accounts that we have in the tech space, in general, with one of them, it's been fairly even key, right, at this time. But they have also gone through some leadership change right at the end at the very top. And the third one, they are going through -- I mean, they've been going through some consolidation and related exercises over the last years. But at this point in time, again, the interactions that we have to offer indicate we will [indiscernible] in the next year. Other than these 3 top accounts, in general, the sentiment in the tech space, given the amount of activity that is happening in relation to AA seems to be more positive rather than negative at this time. Of course, clients want to do -- they want to do a lot more on their own. But there is also the general feel that whatever initiatives were kept on the backbone or whatever was shelved earlier can all be picked up and there could be a movement on many of them because the economics of getting initiatives done has improved significantly. I mean you can do many of these things that much higher velocity with lower effort. And that is creating a revival of interest in exploring and doing a lot more things in comparison to budget constrained approaches that were there in earlier quarters. So in general, I feel more optimistic. I mean the percentages and stuff, we will obviously see as a overnet 2 quarters. But at this point in time, [indiscernible]

Okay. That's helpful. And my next question is on the BFSI vertical. So we had a very strong growth in this vertical for last few quarters, but in Q4, if we see the sequential growth, it was flattish. So was there any like onetime revenue in Q3, which was not there in Q4? Or what can explain this?

So Aditi, even in relation to what we delivered for the last quarter, the share of [indiscernible] revenue from 14% has gone to almost 16%, okay, in this particular quarter. right, on a sequential basis, so there is a definite increase in this particular quarter in relation to the previous quarter. I'm happy to answer this a thing. But at least for this quarter, there will strong momentum even [indiscernible] of course, as we see as GFC continues to scale, right, and become -- the last year, they ended the year with close to about $18 million in revenue. You will -- as the business continues to stay, you will see the incremental rate of growth dropping right? Because obviously, they're on a higher base as well now. So that is something that we will start to witness. But in absolute times, the [indiscernible] will continue to grow.

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

So Rajan, you mentioned about the impact on the business. You said that almost half of the growth has some bit of CIA is involved. So if you can give some examples in terms of the nature of services, which we are delivering as well as the deal sizes and if you can also comment how steel prices are different from the traditional deals are kind of around 0.5 million to 1 million or maybe 1 to 2 years? And how much of it is, let's say, the token cost, which could be a pass-through revenue and how much is retained by [indiscernible]

The last question is [indiscernible] answer whatever revenue that we are reporting this on our revenue. It's got nothing to do with token cost because the model that we use with pretty much all the clients that we are engaging with is that they take care of the infrastructure tokens, what are the atlas and all that. So everything that we are talking about is our revenue. I did give some examples when I did my opening remarks around the agentic workflows and processes like that we are impacting around payments, invoice reconciliations, market intelligence orchestration, campaign analytics, fraud, counter [indiscernible], warranty claims and so on. It's fairly broad-based in the sense that any area where the process is known the parameters are understood and guardrails can be established. There is a good month. And that rails in the sense that you want to make sure that there isn't hallucination, there is transparency, traceability right out of that stuff in terms of what is the [indiscernible] that is being made? And why is the decision made? And then you can clearly connect the dots especially in a multi-agent orchestration framework when agents hand off from one to other, it's important to have that kind of recognition. So in those types of situations, where there is a good understanding of the traceability parameters, there is enough traction. Of course, simpler ones, like when I say traditional, and I gave those numbers, it included the combination of all 3, traditional generative and agent. A lot of the work that we are doing is having some component in some shape and form. So going back to your question on deal sizes, it is the full spectrum. I mean, we are seeing examples where a particular use case or something simple is being done with [indiscernible] spend. But we are also seeing examples where the initiatives are fairly large. In fact, they initiated the [indiscernible] few of the 3 initiatives that I referred to with our largest comp, all of them involve AI in some shape and form. Because, I mean, with technology claims are pretty much a given. I mean, you cannot do any work without either under the hood or directly being implemented. -- in the form of either a generator interface or an agent arbitration of the workflow. So the spectrum of work from a deal size also ranges all the way from $0.25 million to $2 million, $3 million.

Okay. Second is on this open AI and profit launching their services it's very recent phenomena. So any anecdotal evidence of, let's say, enterprises maybe giving more work to the services arms of opening in open maybe rationalizing third-party vendor, not making you, but anyone else you see in the industry, some observations there, that would be it's too early to comment on that. I mean, obviously, they just have announced these launches. I think OpennAI acquired a company, if I remember, I think, called tomorrow or some that was the name [indiscernible] and the others are in the process of setting up their JVs and hiring people. Anthropic plus OpenAI probably had put out recruit 500-odd people, okay, forward-deployed engineers, right, that I mentioned earlier. So they will be building of these teams. But obviously, they will focus more on the areas where they see friction with respect to the model usage. There is a fairly large amount of work that needs to be done and see by any stretch of imagination. And hopefully, our Anthropic will be able to do everything because the model is just one aspect of it. everything that I talked about that needs to sit on top of that, right? That all needs to be done by some services company or the other. Of course, this can range all the way from all boating funds to the OpenAI and Anthropic service are doing in terms of. But I'm sure that they are also announcing multiple partnerships. Anthropic [indiscernible] received applications saw some 40,000 people by partners. And they are working through the mechanics of areas. These 2 firms are also taking very specific approaches. I mean Anthropic as the more enterprise focused. OpenAI has been more consumer focused, but I'm sure that there will be some amount of meeting [indiscernible] will happen over the next few quarters. generally, my feel is that display will be a significant play in the scheme of things. I mean that is the point I wanted to make. That is not going away. Of course, the nature of the work will change in terms of the oral deployed engineering model coming into play. But there's a tremendous amount of work that needs to be done on all the points that I mentioned, right, whether it's eval, observability, traceability, like all of us. Okay. Got it. Got it. Next is on FY 26, all terms, it is 9% growth, but you can clarify what is the organic part in it? And for FY '27 how should we think about the overall product for the company.

What was your question? Sorry, can you just repeat that again?

I was asking it for FY '26, if you can clarify the organic growth in dollar terms. That was one. And for '27, how should we think about the cost overall in the footprint.

Yes, the organic growth for the business would be 18%. I think 18.2% or 18.3% because you please recollect that only there is one quarter of [indiscernible] revenue, which is not consolidated last year. We started consolidating recent mine revenues from first of July last year. okay? So we had 3 quarters of revenue. So it is only 1 quarter that was missing. So the rest of the business, of course, delivered 18% growth. right? In terms of your growth guidance for the next year, and maybe, Rajan, do you want to take that or do you want me to take that question? Yes, you can take it and add in the color Go ahead

So [indiscernible], right now, what we definitely can see and beginning of the year, of course, been looking at planning for the next year, we actually want to split that enter into a couple of sort of data points, right? So right now, the way we are looking at our current order book as well as pipeline, right? We have a reasonable level of confidence in terms of high visibility pipeline and order book for it to deliver about 12% to 13% of growth, right? And that is, of course, at the beginning of the year, right? As we see in any year, typically, whatever you have visibility for, you will end up adding more to the order book and pipeline through the rest of the year. right? And that is where we obviously are making investments in the go-to-market side as well as capability building side. All those investments are obviously targeted to deliver a growth rate, which is very similar to what we delivered this year, okay? This is all organic that I'm talking about. I'm not talking about including inorganic [indiscernible] but right now, the level of visibility that we have is to deliver a 12% to 13% growth. But with the investments that are being currently made to deliver a similar growth to what we delivered, Yes. I mean data point. I'll add is that in the previous years, compared to when we start the year to when we end the year, this high visibility number that takeout has typically gone up in the range of 8% to 10%. So a book. I mean, we are targeting a 20% kind of a growth. And if things pan out well, then we should be able to get that.

[Operator Instructions] Your next question comes from [indiscernible] from [indiscernible] Capital Management

My first question is on the overall outlook that you provided partly you answered my question, but I just wanted to get a sense what are we building in, in terms of tech and non-tech verticals? Are we building the headwinds to continue for the tech vertical because you mentioned that despite a strong conversations around with our top clients, we will still see the revenues won't be as [indiscernible] the decline that we've seen. So that essentially means that the non-tech verticals will do the heavy lifting. Correct me if I'm wrong. And I just want to understand the nature of the decline in the tech vertical. Is it because of absolute cancellation of projects? Or has there been a severe deflation in the amount of work to done. So basically, what I mean is the volume of work that we've done is possibly increase, but the deflation around that has been higher than our volume growth. Has that been the case?

I'll take the second part of the question. And Raj, you can comment on the percentage question. The nature of the decline is twofold. One is consolidation where they have decided to work with one of several partners. This has led to some amount of the decline. The second part of this at taking the work in hubs. Specifically, in this account, there was a new leader who came in to head up a big chunk of the work that we are doing. And their preferred model is to work with internal full-time employees as opposed to work with the vendors. That's what they are familiar with and comfortable with from their previous organizations, right? And therefore, the moment they came on board they very clearly made their intent known to us, right? This is the dataset we've taken a move. There is no impact on account of what's staying the same, but revenue falling or anything like that. I mean the way the whole industry anyway is moving, is that budgets are either staying the same or going up in general. They're just getting more work done because of the the increased productivity that is now possible through the use of AI, [indiscernible] all shape and form. So if you take a baseline 2 years back and compare it to today, across the board, right, in all industries, all sectors and more so in the technology sector, you will feel that for the same amount of budget, 30%, 40% work, more work is being done there has not been any shrinkage of budgets itself that we have seen, okay? They either been a reallocation to internal tans are consolidation with other partners. We have seen instances where clients have said that do the same work for us, but we want to pay you less. In general, set, we are paying the same amount, but more what can be done, okay, with the money goes well. But maybe you can give a color on the percentages.

Yes. Yes. So [indiscernible], in terms of percentage, your assessment is right that it will be a non-tech vertical, which you have to do the heavy lifting this year, right? But having said that, I think the right now, the visibility or I would say, the sort of confidence that we have, is that tech will deliver anywhere between and I'm giving you a range over here because right now, we are working on certain pipeline opportunities, depending on 1 the size of these pipeline opportunities eventually and also the timing of when we close them, the revenue that we'll be able to book for the year may sort of change, right? So tech vertical for this year should probably deliver between mines and our sense that it would be between 5% to 8% right on a year-on-year basis, okay? This is adjusting for, of course, the loss. They will still be able to recoup some of the lots. Of course, also, there are some new conversations that are going on with some new logos as well in technology verticals are listing for the losses that we've already witnessed, we should be able to deliver a Y-o-Y growth of about between 5% to 8%, that's the confidence that we have consumer -- so our senses right now should grow anywhere between 18% to 22%, okay? So that's the sort of range that we're looking at. And these [indiscernible] Obviously, the growth rates for this year -- for the next year will come down compared to the previous year. For our senses, they could at least grow at about 40% for the next year right.

Understood that. [indiscernible], just on margins, we've had benefits around, of course, the USD. We've also had some employee adjustments that we've done plus we have had our utilization levels around 90%. I understand, I mean, the utilization going up because of employee adjustments. But to some extent, I feel we've sort of stretched our levers in terms of margins. In case there is any normalization as far as these levers are concerned, how should we think about margins going ahead? I mean I don't see any levers that we can sort of leverage at this point in time.

So I would say that we still continue to -- so your point on utilization for this particular quarter going up from the 85% to almost 89% levels is very valid man. The only point that I would want to reiterate is One of the reasons why the utilization levels have significantly gone up in this quarter is owing to some one-off when I say one-off, the certain large one initial projects that we have won with consumer in consumer claims, okay? And we are actually cutting across 2 different quarters. So some of these projects were won in February and March, okay? And they continue to be delivered through May and June as well, right? So in order to deliver these projects, [indiscernible], we had to deploy all the people that we had on the bank. And therefore, that's the reason why you have seen utilization levels going up. Having said that, I think one of the things that we continue to work through is this large client consolidation that we spoke about, a lot of the work historically used to happen on site, okay? One of the things that we are actively pursuing with the client is as we open new trades with the client, we want to do a lot more work either offshore or nearshore, right? So that is one lever where definitely, from a margin standpoint, we will be able to make better margins. on some of these projects. Two, I think on a while on a full year basis, you may not have seen the impact. We definitely the favorable dollar to INR ratio right now as we see it should continue to positively impact us? I mean, if they continue to stay at these levels, for sure, I think there will be a positive impact on margin for next year. So I think there is enough sufficient cushion both in terms of the movement to doing more nearshore and offshore work for tech clients plus the higher favorable INR [indiscernible].

The CPG vertical should see normalization next quarter [indiscernible] because there was a one-off this quarter?

We. Will not see a big -- yes, there will be some level of, I would say, a normalization for the next quarter because some of these large projects that we executed, they will start sort of tapering off in the next quarter. Of course, there are conversations in the pipeline for follow-on work, but you will see a little bit of tapering off or at least the next quarter it.

The next question comes from the line of Pritesh Thakkar from [indiscernible] Capital.

I mean, you were negating 3% of revenue that we were anticipating is mega coming on to existing accounts or quantified that we have. Is that right understanding?

Sorry, I couldn't hear you clean. Can you repeat the question, please?

[indiscernible] Is it fine now? Yes. I was I was referring to the earlier question was current. You were taking [indiscernible] of revenue that we are. So that is rarely on the existing accounts or the qualified deal pattern that we have that that's what we are very great for my understanding.

It's not just existing accounts. When we say we have visibility of 12% to 13%. It will be a combination of growth we are expecting from existing accounts as well as the high probability opportunities that we see in the pipeline. -- with the new stakeholder groups in excusing accounts as well as completely new logos as well. What Raj referred to is the ones where there is high probability and high degree of confidence. The full pipeline will how many other opportunities that are at a lower level of profitability, which you will want to progress. In addition to that, we still have more than 10 months available, right? And we will keep adding new opportunity. The point I made was that in general, in the past, compared to the high visibility number that we talked about at the beginning of the year to where we will likely end up, we have seen an 8% to 10% kind of an addition, okay? So that's what we are expecting for this year.

Okay. Next on the -- I mean looking at the client additions that we had on $5 million [indiscernible] if you can provide some color on the industry profile and the scope of engagement targeted account Raj, can you take that? -- is asking about the split of the accounts in different buckets.

Sorry, you're asking for -- sorry, [indiscernible], what is the question split of which accounts and what bucket, sorry?

Sequentially, we've added on a $5 million [indiscernible]. We added 1 accounting there. If you can add some color on the industry profile and the scope of engine that particular account? So just 1 second. I'm just -- so this particular account, -- is the [indiscernible]

Yes, yes. So this actually is the financial services account that we value.

Okay. Understood. Understood. Okay. And lastly, on the bookkeeping side, 2 years back, if I look at our DSO was around and was 73% a year back and now it is [indiscernible]. So if you can provide some color on why it is [indiscernible], what should be the steady state going forward?

[indiscernible] this, 1 of the reasons why, like I told you, right, I mean, there were a few -- so I would say 2 things. One, as the share of Vision points revenue to the overall company's revenue increases, you will see a small uptick. I think we are already maxed out in terms of what that impact is. But vision point because they do a lot of work with CPG companies. CPG companies, in general, tend to have credit terms ranging between 90 to 120 days, okay? And for this particular quarter, specifically because of the uptick in CPG revenue, which is largely driven by[indiscernible] , you did see that DSO days go up. Having said that, purely from a housekeeping or a bookkeeping standpoint. We are very well aware of the fact that the deal was higher gearing, but we've realized a lot of those collectibles. Subsequent to the year-end as well, right? So some of those were built out or were in unbilled revenue, which has been subsequently invoiced. So there has been a fair bit of progress price even though collectibles are concerned.

Understood. Lastly, on the margin side, given our appetite for investments, even if I look at last year, there was a lot of activation benefit that come into our bucket, but we made a lot of investments there. So even if I were to include quarter 3 one-offs that we had on an adjusted basis, if I look at [indiscernible] margins are, I would say, marginally lower than what we delivered can we expect a cost to replicate a similar trend [indiscernible] you've been using investments are largely on invested? I heard rather saying that we have some seniors onboarding process. And at the same time, we are hiring [indiscernible] So just wanted to understand the investment strategy in.

So yes, I would say consistent with what Rajan already alluded to, there will be some senior level hiring. -- that we will continue to make specifically in the AI space, right, including a potential hiring of a Chief Technology Officer. So some of these investments will be made to obviously future-proof the organization, we will continue to add people on the AI side across all industries as well because that is something that I think from how we leave conversations with clients, I think an AI first narrative is absolutely important. We need to hire people who deliver some of these projects at scale. Right, for large enterprises, and we will continue to make investments in bringing some of these senior level folks prepays. So that will -- I don't think -- from an investment standpoint, all the investments that we had to do, it's not like we've done all of them. Specifically, on the capability take, we will continue to invest. Maybe on the go-to-market side, we will not -- we don't need to do a lot more investments. I think there is a fair amount of I would say, investment that is already there. Here and there, depending on -- it could be geography specific investment could be in Europe, right, specifically, we may do 1 to 2 higher. But on the GTM side, we are largely done as far as the stones concerned. Databricks again, we will continue to invest in this partnership channel for growth. So I would say the 2 big areas of where we will continue to make investments would be data breaks as well as the AI [indiscernible].

And how much is revenue from database currently this year [indiscernible] '26 for you -- absolutely -- so on a full year basis, our revenue from the data [indiscernible]

Put together is closer to about 17.5 million. And by any growth, how much that we delivered in terms -- so the previous year, the similar number which was close to about 12 million.

The next question comes from the line of Srinath V with. [indiscernible]

Three questions. I'll just put all the questions together. Raj, first question would be the growth outlook shared in the call, would that be in USD terms or constant currency terms, if you would clarify that, that will be great. The next set of questions are on data bricks. I want to understand the outlook for data breaks for FY '27, what's the kind of growth you guys are working with? And would it be fair to assume that Databricks funded or cloud partner funded projects will start coming in this year? And would it largely show up in CPG and Industrials? And the last 1 would be the financial services business. Could you kind of cover it a little more in detail. The sequential growth, Y-o-Y growth momentum seems to continue. So again, kind of how is the outlook for FY '27, new logo additions, or is it all coming from the existing set of customers spending more? So these are the large key areas? If you could please [indiscernible]

, you can take a first question. I will add the second and third.

Srinath, to answer your question, the growth guidance that we put out at the beginning of the call is all in USD terms, right, not INR.

On Databricks, Srinath, the expectation is that the data bricks portfolio of work will continue to grow at about 60% plus -- last year, I think we went from 11 -- between 11 and 12 to about 17-plus okay this year. We are expecting in fact, you should get -- accelerate more on the back of the points that I made at the beginning of the call. There is good traction. There is a lot more engagement. We are talking to all the right people, the senior people. They are bringing us into their QBRs. When they do their QBR, they call all of their account educators and salespeople and we are able to showcase the solutions that we are building. So in general, there is good recognition. I talked about the professional services trust as well, right, where they could bring in partners. And even on that, I mean, professional services in Databricks context, in the past have focused more on migration type of work because that's a fairly big chunk of where Databricks gets its revenue, but they are now starting to say in the recent conversations that industry solutions and building on top of the migrated data will be an important component as well. And that's where they see somebody like us bringing in more differentiation than the typical migration normally partners that they have worked [indiscernible] in the past. So in general, I'm seeing -- I'm expecting that the trajectory of 60% kind of growth should continue. On the financial services, it's going to be a combination of growth with existing accounts. The large account that Raj just talked about. And then there is also a follow-up question, right, getting into the fine reflecting that there will be momentum with that account going into this year. But even as we have started this year, I think we have signed up 2 other accounts. And I have meetings with like 2 more in the wealth management, asset management space as part of the stroke. So I'm expecting that there will be traction in all those spaces, payments, asset wealth management and also the credit and [ credit card ] Ambassador Insurance is something that we are looking to get in. But the sectors where we are already present, I'm seeing good conversations in all of that.

The next question comes from the line of Rohan Nagpal with Helios Capital Management.

Just a couple of quick questions on my end. So the first one, I think you said that you'll be able to recover 50% to 60% of the both at [indiscernible] your top customer by the end that on -- is that on a run rate basis? Or do you expect to recoup 50%, 60% of that for revenue that you booked this year? And then the second question was I missed a bit on topic. Have you signed up with an topic as a partner or the special services front or the customer?

Raj, do you want to take the first one?

Yes. The first question is obviously then I mean, what I meant was we're looking to sign deals which will ensure the value of the deal itself, right, will be -- will ensure that we are back to think we'll recoup 50% to 60% of the total contract -- annual contract value with these clients, right? Now depending on the timing of when we sign some of these deals that they could sort of have an impact on the revenue for the full year. But right now, as we speak for this particular client, current projection is that we will be at least at 90 -- sorry, 95% of the revenue that we delivered with this claim for the last year, that is the just to confirm the point. That's right.

[indiscernible] [Audio Gap] We do see levers to improve gross margin by doing more near-shoring as well as offshoring work as a team. But when the planning that we've done and the guidance that I gave out is without factoring in any significant change in the current levels, right? So we're assuming the current sort of model to continue, right? So to the extent we're able to execute better, we should see some upside on margins on gross margins from these fronts.

We will take the last question from the line of Karan Uppal from PhillipCapital India.

Just wanted to understand from the pricing perspective, how much of our work is time and material, what is the fixed price? And how is the trend of these 2 line items? CLM decreasing in the last few years? And second part of this question is that how much discretion are we seeing in the PMM line item because of AI productivity base?

Raj, you can go ahead. I will add some color to [indiscernible]

Yes, yes. So in terms of our overall share of fixed bid to MDA, so within T&M again, we're including the way we internally review or classify contracts is pure staff out or T&M contracts, and there is a concept of managed services, which essentially, again, while surprising is headcount based or capacity based, and there is a fixed monthly sort of revenue that comes [indiscernible] you it is still, to some extent, based off a headcount number. And then, of course, you have the fixed bid or -- we don't do a lot of outcome-based pricing today, but fixed bid you have, right? So today, the range of fixed to T&M for us will be closer to about 80 to 20. So 20% from 6 big fixed [indiscernible] type of work and then T&M would be about 80%. But within that 80%, almost 65% to 68% of that could be in [indiscernible], where it's not -- like what I mean to say it's not based off time sheets that someone is entering or in the client systems, right? These are essentially people where we are contracting for a certain level of capacity in the time basis a monthly fixed amount for those [indiscernible]. So there is no linkage to one, the time that is clocked; or two, the sort of deliverables that we have to deliver as part of the projects. right? So that's how we internally view it. What was your second question, Karan?

Yes. I was just asking what is the deflation in the PLM projects because of AI productivity.

Clearly, [indiscernible] I will add color to the first question also before I take up the second one. So Karan, the plan, though, is to shift a bit more to both milestone and deliverable based as well as outcome based. So that 20% that Raj referred to, we want to bump it up, okay? I'll tell you the reason is that productivity gains that you can get by building an agent in foundry or a suite of the agents that can be deployed, right, in -- along with people who do the work. Or even productivity benefits by building a full-fledged solution by nonlinearity or even the pace at which we can do work, these can be accrued to us only if we contract differently. If you can't continue to [indiscernible] either in the managed services model or in the T&M model, then the benefit of having a suite of agents that are doing a better our own people being more productive, they will not only accrue to the client. So internally, we have launched an initiative where we're incentivizing our project teams, right, in areas that are well understood that the process is known, and we are able to build good bounded [indiscernible] solutions that we encourage the client to contract with us in alternate models, right, as opposed to just a managed services or a name down. We'll keep you posted on the results of how it is panning out. But internally, our teams have been incentivized to move a bit more rate to that model. The second part of the question, there is no deflation on the rates. So today, it works is that clients continue to engage our people. In fact, in many instances, they will be willing to pay a bit more. That's why Raj was referring earlier to an earlier question, you were saying that gross margins could be higher if you are doing agent or AI work. But the expectation, of course, is that though they are paying more for the people, they will expect a lot more work to be done by them, okay, within the time frame. So therefore, in terms of margin, there is no deflation, okay? There are no rate reductions or margin decrease in that is happening. It's just that people will be more productive. So more initiatives will get done in the same set of different capacity.

There are no further questions from the participants. I now hand the conference over to the management for closing comments.

Yes. Thank you. Not too much to add. I think we covered quite a bit of the stuff. I mean this will be an important year. It will be an inflection point here, right, in many ways whether we are talking about the whole AI agentic shift that is happening, partnerships with the likes of an anthropic and so on or whether we are talking about Databricks and the work that we are doing even with, say, [indiscernible] and Microsoft and so on, right? So there is a lot more action that we expect to see, right, on those fronts. Of course, everybody is trying to understand how the entire agentic shift will play out. My own read on the matter is that there is going to be a need for a lot more complex design engineering of the agent frameworks, which brings in all of the governance and transparency aspects that I have talked about. And we need good people who are able to marry the not just the technical understanding, right, of how to use a blood core or [indiscernible] or how to create agent or testation but people who can marry that with the business process, the underlying risk and the transparency and the governance requirements and then bring it all together. So in some sense, this will be a year where there's whole forward applied engineering concept, right, that brings together many of those things will start seeing a significant play. We are gearing up for that and always on the capability, expertise, certification hiring front as well as how we evangelize how we talk about this, okay, to our clients and show them what needs to be put in place so that they can get the benefits of it. So we're expecting traction on all of those trends. Obviously, we'll keep you all posted on a quarterly basis on how is unfolded. But thanks for your wishes. And hopefully, we'll continue to see [indiscernible] initiatives that we have [indiscernible].

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