LTM Limited ($LTM)

Ladies and gentlemen, good day and welcome to the LTM Limited Q4 FY 2026 Earnings Call. [Operator Instructions] Please note that this call is being recorded. I now hand the conference over to Mr. Vikas Jadhav, Head, Investor Relations at LTM. Over to you.

Thanks, Imba. Good evening, everyone, and welcome to LTM Quarter 4 and Full Year FY '26 Earnings Call. Today on the call, we have with us Mr. Venu Lambu, Chief Executive Officer and Managing Director; and Mr. Vipul Chandra, Chief Financial Officer. We'll begin by providing a brief overview of the company's quarter 4 and full year FY '26 performance, after which, we'll open the floor for question and answers. During the call, we could make forward-looking statements. These statements consider the environment as we see to date and carry risks and uncertainties that could cause our actual results to differ materially from those expressed in today's call. We do not undertake to update any forward-looking statements made on this call. I now turn the call over to Venu for his opening remarks.

Thank you, Vikas. Hello, everyone. Thank you for joining us today. Before we start, I'm pleased to share that upon recommendation of the Nomination and Remuneration Committee and subject to the approval of the shareholders, the Board of Directors has approved the appointment of Vipul Chandra as the whole time Director and Chief Financial Officer. Congratulations, Vipul. We closed FY '26 with another quarter of steady growth and strong execution. It has been a defining year for us on various fronts as we continue to deliver broad-based growth and sustain value of our customers. During the year, we executed 3 strategic programs to strengthen efficiency, scale and competitiveness. These included Fit for Future to drive cost optimization, the establishment of a dedicated large deals organization and our pivot to become and AI-centric enterprise. Every decision, investment, partnership and client engagement in the year was aligned with these initiatives. Fit for Future has delivered on its stated objectives and helped us to improve our margins over the year. The launch of Blueverse, our agenetic AI ecosystem has begun to accelerate our clients' concept to value journey and serves as a foundation for our AI-centric capabilities. In parallel, we secured some of the largest deals in our history, expanded order intake consistently and entered FY '27 with a robust pipeline. We also took an important step in how we present ourselves to the world. Our new name and identity as LTM and our positioning as business creativity partner, clearly articulate who we are, the value we deliver and how we intend to lead in the agenetic enterprise era. Everything we executed this year is aligned to Lakshya, our 5-year strategy, and I'll take you through the key elements of this during the call. To begin with, let me share the financial performance for the year, followed by quarter 4. We closed FY '26 with a revenue of USD 4.76 billion, reflecting a growth of 6% in dollar terms and 5.3% in constant currency. Operating margins for the year stood at 15.4% and 90 bps improvement on a year-over-year basis. Adjusted PAT stood at INR 5,371 crores, up 17% year-over-year. The total order inflow stood at USD 6.6 billion, representing a 10.3% year-over-year increase with a 300% increase in large deal wins including 6 USD 100 million plus deals. In quarter 4, we reported revenues of USD 1.22 billion, delivering 1.2% sequential growth in both USD and constant currency terms. This translates to an 8.1% growth on a year-over-year basis. Operational EBIT margins came in at 15.1% reflecting the impact of a partial wage hike, Vipul will elaborate further on this in his comments. Order inflow remained stable, closing at USD 1.7 billion, this marks our sixth consecutive quarter with inflows exceeding USD 1.5 billion. This quarter, we continue to win significant dates. Let me highlight a few. We were selected by the Central Board of Direct Taxes to modernize India's national direct tax analytics platform, enabling improved compliance monitoring, risk detection and real-time insights. We were chosen by a leading European medtech company for a multiyear product development and support engagement, leveraging our [ Inex ] platform to support innovation, productivity and scalable delivery across its digital and physical product ecosystem. We won an enterprise-wide engagement with a U.S.-based global financial institution to drive AI-led reimagination and implementation of a business process as part of the broader operating model transformation. We were selected by a U.S.-based global enterprise software provider as a strategic service partner to drive the AI-led digital transformation and AI-driven platform enablement across its enterprise customer ecosystem. We were selected by a large U.S.-based commercial P&C insurer to reimagine its head chart and finance back-office workflows through agenetic AI and automation, enhancing the stability and efficiency of its HR and administration platform. These deals underscore our technology and demand expertise, scalable execution and the trust our clients place in us. Let me now share updates on our vertical and geography performance. I'm proud to share that 4 out of 5 business verticals achieved double-digit growth for the quarter compared to the same period last year. While 3 out of 5 business verticals recorded double-digit growth over the full year, this performance reflects the resilience of our portfolio in a dynamic microenvironment. All numbers referenced next are for FY '26 growth in U.S. dollar terms. BFSI reported a growth of 3.7%. Manufacturing and resources reported a growth of 12.7%. Tech, media and communication declined by 0.7%. Consumer business experienced a growth of 13.2%. Healthcare, life science and public services grew by 9.6%. From a geography perspective, the Americas grew by 4%, Europe by 12.4% and the rest of the world by 11.6%. At the end of FY '26, the total head count stood at 87,950, reflecting a net addition of 3,643 employees year-over-year. Total pressure additions for the year were 6,729. We continue to see consistent external validation of our capabilities by industry leaders and partners. This quarter, we received several recognitions. I'll call out a few prominent ones. We were named NVIDIA Partner Network Rising Star Consulting Partner of the Year at NVIDIA GTC 2026. We were named ServiceNow Transformation Partner of the year 2026 for an enterprise HR service delivery transformation at a multinational aerospace and defense electronics corporation. We have been recognized by HfS as an enterprise innovator in the HfS Horizon's Agent Services 2026. We were recognized as a leader of average group in the software product engineering services peak metrics assessment 2026. We received 4 honors at the Economic Times Human Capital Awards 2026 across various talent categories, including a gold for AI in talent management. We won the gold for sales operations team of the year at the 20th Annual TV awards for Sales and Customer Service 2026. Please refer to our fact sheet for a complete list of recognitions. This quarter, we made continuous progress in scaling our AI-centric ecosystem. Strengthening partnerships and deepening client impact. Here are some of the highlights. We launched [ Skillet ], a skills marketplace for our AI agents and digital employees. With over 700 skills ready to deploy from day 1 and portable across copilots. We expanded our Blueverse ecosystem with 3 multipurpose platforms, agent IQ, App IQ and Fusion IQ, designed to help enterprises modernize applications, orchestrate AI service software delivery and engineered quality and scale. We have partnered with Salesforce to co-create Blueverse Max, an agenetic marketing execution solution built on agent force and Salesforce Marketing Cloud, helping clients unlock higher marketing efficiency. We have partnered with Unifor to drive AI outcomes across global enterprise operations for P&A, contact centers, contract intelligence, outbound logistics and workforce transformation. We partnered with the Indian Institute of Creative Technologies, [indiscernible] and MIT to design deep dive training programs for our workforce to enhance skills in AI and related technologies. We were granted 4 new patents across AI-generated insights from visual analytics, intelligent configuration of data engines, AI-driven resilience testing for applications and predictive modeling for product [ intense ]. I also want to highlight some AI-led outcomes. We delivered for our clients in this quarter. We built an enterprise scale AI platform and deployed intelligent agents for one of the world's largest automobile companies across their legal manufacturing, operations and procurement functions through our Blueverse foundry. We set up an enterprise-wide AI automation center of excellence for a leading manufacturer of water management products enabling AI-infused touchless processing across their sales, finance and procurement operations and reducing cycle times by 40%. We unified a fragmented HR system across 70-plus countries for a leading global aerospace and defense manufacturer delivering a 62% reduction in service request. I will now share key highlights of Lakshya '31, our 5-year strategy framework. As enterprise adopt AI at scale and demand real outcomes, the work is shifting from stand-alone technology execution to integrated domain-led problem solving. The opportunity ahead is materially larger than the ones we have historically operated in. This is where I believe LTM truly sets itself apart. When every company has access to the same models and same tools, the differentiator is no longer in the intelligence itself. It is a depth of demand understanding and the creativity to apply intelligence in ways that fundamentally reimagine how businesses work and create value. This is the domain tech convergence opportunity. At LTM, we call this business creativity. It is an axis around which our entire strategy is built and forms a basis for our new identity LTM, the business creativity partner. This is more than a new name. It's a mind shift. From a technology-first organization to a business creativity partner that brings together the very best of human insight and intelligence system. Lakshya '31 translates this strategic shift into a structured execution framework. Our strategy is anchored in an AI-led foundation built on future-ready talent, reimagine delivery and structurally improved productivity. A key enabler for this foundation is our transition from a traditional delivery pyramid to a skill-based rolls driven workforce model designed to strengthen innovation while maintaining contextual relevance at scale. Building on this foundation, we are executing across 3 focused AI frameworks. The first is domain technology convergence, embodying industry knowledge into digital engineering and AI-led solutions to deliver business-relevant outcomes. The second is reimagine capabilities, structured through 3 integrated lines of business. [ I Run ] focus on AI-enabled platformized technology operation, structuralizing the cost of running the enterprise through automation and intelligent orchestration. [ I Transform ] drives enterprise-wide modernization of platforms, data and digital capabilities, a critical step that makes client involvement AI ready. Business AI is our new key growth engine. This is where we apply a reasonable demand-led AI to reimagine business processes and create new roads to value. Our Blueverse ecosystem powers these 3 lines of businesses bringing together agency corporations and a shared knowledge fabric across the technology and business services. The third pivot is reimagine partner ecosystem, focused on deepening relationship with hyperscalers and expanding engagement with our new age AI and domain-specific platforms to accelerate the translation of ideas into impact. Finally, our markets approach, we are deepening our presence in U.S., scaling across Europe and making focused bets in select emerging markets. Across our segments, we are building a more balanced portfolio and mega verticals while diversifying into a high potential micro verticals. As part of this, we will consolidate our reporting under 4 business segments starting quarter 1 FY '27. These segments include banking, financial services and insurance, technology, media and communication, production and consumer. Together, these elements constitute a coherent strategy that positions LTM to lead in the enterprise agenetic era and to continue to deliver greater value for our customers. Starting FY '27, we have launched a new program called New Horizons. New horizons to govern the strategy execution. The program will have 4 tracks to help us reimagine new horizons for growth, new horizons for competency and capabilities, new horizons to drive operational efficiency and to scale our AI pivot. With that, I will hand over to Vipul for financial updates.

Thank you, Venu. Hello, everyone, and thank you for joining the call. Let me now walk you through the financial highlights for the fourth quarter and the financial year 2026, starting with our revenue performance. We ended fiscal year 2026 with a revenue of USD 4.76 billion, registering a growth of 6% in dollar terms and 5.3% in constant currency terms. EBIT margin for FY '26 was 15.4% compared to 14.5% in FY '25. Reported PAT margin was at 11.8% compared to 12.1% in FY '25, while the absolute reported PAT for the full year was INR 4,983 crores, an increase of 8.3% over FY '25. The reported PAT includes an exceptional item in both quarter 3 and quarter 4 on account of change in the labor code. PAT margin, excluding the exceptional item impact was at 12.7% for FY '26. The operating cash flow to PAT was at 96.3%, and the free cash flow to PAT ratio stood at 78.1% for FY '26. We closed the year with an all-time high cash and investment balance of USD 1.63 billion or INR 15,445 crores, up from INR 13,346 crores in FY '25. Return on equity was at 21.3%. For the fourth quarter of FY '26, revenue stood at USD 1.22 billion, reflecting a growth of 1.2% quarter-on-quarter and 8.1% year-on-year in dollar terms. The corresponding constant currency growth was 1.2% quarter-on-quarter and 7% year-on-year. The revenue in rupee terms stood at INR 11,292 crores, which is a growth of 4.7% quarter-on-quarter and 15.6% year-on-year. Quarter 4 operating EBIT margin declined by 100 basis points sequentially to 15.1%. The decline was primarily on account of partial wage hikes implemented from 1st Jan and due to productivity commitments we have made in key accounts, offset by the ForEx benefit. Adjusted profit after tax for the quarter stood at INR 1,341 crores, and PAT, including the exceptional items, stood at INR 1,387 crores. The effective tax rate for the quarter was 26.3% compared with 26.5% in quarter 3. Basic EPS, including the onetime impact of exceptional item was INR 45.4 for the quarter as compared to INR 47.7 in quarter 3 FY '26. Our total DSO for quarter 4 stood at 84 days versus 85 days last quarter. Return on capital employed for the quarter was at 29.2% against 29% last quarter. As of March 31, 2026, our cash flow hedges stood at USD 3.86 billion and hedges on the balance sheet were USD 421 million. Our utilization, excluding trainees, stood at 85.7% for the quarter compared to 86.9% in quarter 3. For the quarter, our trailing 12-month attrition improved to 13.3% compared to 13.8% in quarter 3. The Board of Directors has recommended a final dividend of INR 53 per share, subject to shareholders' approval, taking our overall dividend for the full financial year to INR 75 per share. On the ESG front, we were placed in the top 5% of over 200,000 companies assessed globally under the Achilles ESG framework, achieving an overall ESG score of 82 out of 100 significantly above the average score of 56 earning the highest grade of excellence. Further, we ranked among the top 3 companies in the IT and digital services sector and top 15 across sectors in Business World India's most sustainable companies rankings 2025, among 200 evaluated companies. I now hand it back to Venu for the business outlook.

Thank you, Vipul. As we step into FY '27, we see continued demand for AI-led transformation and remain well positioned to sustain our growth momentum. We are confident in our ability to execute supported by strong pipeline and differentiated capabilities. Lastly, I take this opportunity to invite all of you to LTM's Investor Day on June 3, 2026 in Mumbai. Vikas and his team will share the invites with all the event details in due course. I look forward to seeing you there. Thank you. With that, we can open the line for questions.

[Operator Instructions] We invite Mr. Sulabh Govila from Morgan Stanley.

My first question is on the client behavior. I'm just trying to better understand how clients are thinking. So given that there is a gap in the pace of technology change as well as versus the pace of enterprise adoption, which is probably dependent on how ready a particular client is. So if you were to break down your portfolio by the kind of enterprise that we are catering to. So the ones that were better prepared for this change as of today, how are they comfortable signing longer-term contracts today, given this pace of change? And is there any change in the way contracts are being structured today to give them more comfort example, this kind of savings which are promised after year 1? And apart from this is that the ones who are not, how long do you think it will take them to get there.

Sulabh, thank you. I know I'll take that question. Look, there are multiple sections that needs to be covered in your questions, right? So firstly, if you look at the contracts related to the core IT services, right, whether it is to build systems or run systems or those kind of systems, which has a predictability scope and been associated with them for many years. Those contracts are still long-term contracts, right? I mean we're still signing a deal with 3 years, 5-year contract terms. Then you have the second category of contracts, which are related to the modernizing systems, whether it's modernizing data, modernizing infrastructure and modernizing applications, right? They are pretty much funded through a discretionary spend category within the budget. And they always happen to be for the duration of that particular project. And that hasn't changed what it used to be before. Now we have the third new category of it, which is what we are after is the spend related to the AI adoption, right? The spend related to reimagining the business process and increase the AI adoption. And that category of spend happens to start as a project-related spend, and then it gets structured into a long-term operations kind of a construct. Considering that various customers are in a different degree of maturity, I would say that FY '27 would be the year where you will see an acceleration of that particular category of spend where there will be much larger adoption of AI that will happen, specifically the business operations area as we go along. And that will shape up also how the contracts will be structured. But to begin with, it will be for the project duration over a period of time as the scale increases, it becomes the longer-term contracts. I hope I sort of answered that question across the 3 broad categories.

No, thanks for that comprehensive answer. And my second question is, in the last 2 years, we have increased the mix of longer-term contracts in the business mix. And for the deals that were signed in the last 2 to 3 years, is the -- are these contracts coming up for renewals sooner than they were signed earlier. And if not, do you see that as a risk, how are we mitigating that risk from that going forward?

Look, the trigger point for any contract, I look this as not as a contract, I look this as relationships, right? Because contract is a very transactional perspective when we're dealing with clients. And these are the clients where we have a relationship with spans more than a decade in some of them for more than 2 decades, right? So these are the relationships. So if the relationships needs to take a different shape because the contract needs to get restructured, then there has to be a certain trigger points. So I don't see any trigger point, which is very trendy in nature that I can call out to say, okay, it's happening early. The trigger point usually happens to be at the point of renewal or the trigger point could be, okay, there is a new technology modernization program happening. Hence, you need to revisit the scope of the contract that we have. So if these triggers come in and these figures were something similar to what is to happen earlier as well. So I don't see any specific trend that I noticed in our relationships with our customers, where the contracts are getting negotiated earlier than what their time lines were. What they would do, though, is that they will ask for better innovation on the existing contracts, on the existing scope, better productivity, better innovation of AI infusion of the existing book of business. Those conversations are happening and those things we are delivering it as well.

No, understood. But just a quick follow-up. The trigger point in my process could be...

Sorry, go on. It was my city watch.

Sure. So just as a follow-up, the trigger point in my thought process would be the competition pushing for incremental savings to clients given that the lack of growth is there, and they are coming up with innovative solutions. So that can be a trigger point from that point of view.

Look, if the trigger point is a competitive force, I mean, we'll deal with it, right? These are -- as I said, these are relationships, right? These are long-term relationship. We have better context, better domain. And I can only tell from a statistic standpoint, we have one more of the competition renewals than we have lost our contracts. I mean most of the large deals that we announced all of this year, has been the renewal of someone else that we picked up that hours.

Understood. Just last one, if I can squeeze in. So from an F '27 perspective, some of the peers who have already reported results, it seems like there is a lack of acceleration going into F '27 versus F '26. From your own perspective, do you think what we thought of earlier which is doing better in F '27 versus F '26 that still stands? Or there is a change to that thought process?

Look, I think as I covered in my -- the final closing commentary that we are confident to continue the growth momentum that we have with. If you look at it this quarter, we delivered 8.1% year-on-year for the corresponding quarter. I was directionally indicating this percentage sometime back as well to some of you. So pretty much over there. And I feel confident that we'll continue to keep the growth momentum for the full year, right? There may be a quarter here and there because of certain macroeconomic things or the things that may happen within the 3 months period of a quarter, you might see some softness in a particular quarter and so on. But when I sit here and look at the full year outlook, I see no reason then to believe that we'll continue to -- continue the same growth momentum that we have built in the entire FY '26 that will flow into FY '27.

[Operator Instructions] We invite our next participant, that's Vibhor Singhal from Nuvama Equities.

We do 2-part question from my side, and then I'll have 1 follow-up for Vipul. So Venu, in this quarter, we saw sharp decline in the BFSI business and also in the top 5, 10 and 20 bucket. I'm assuming that is because of the top line in the BFSI account, that was kind of known that would happen in this quarter. So are the other basically parts of the BFSI business intact? And how are you seeing the BFSI vertical overall for the -- from the FY '27 perspective? And the second part of that question is, you mentioned in the last quarterly call that 4 of the top 5 accounts have kind of stabilized, and they should report growth. I think we saw good growth in the high-tech segment, which is kind of a testimony to that. So from Q1, can we expect the entire top 5 bucket to start contributing towards growth. And hence, in FY '27, the top 5 bucket to be a growth poster rather than a tracker than it was in FY '26?

Yes, sure. Thank you, Vibhor, for the question. Look, firstly, if you look at outside of top 5, we had a double-digit growth, right? And if you look at 4 out of 5 market segments for this particular quarter had achieved a double-digit growth, right? So we had a very healthy performance. Now coming to the BFS part of it I think I had indicated it in the last earnings call as well that this is the quarter where I'm really going to push it for that number to be bottomed out so that we can push the productivity benefit accelerator and get it done. I believe we have done that, and that's why you see slightly more decline than what you and me would have anticipated. But in my view, that's in some way, it is good to get that done because you can look forward as you go along. . So in Q1 onwards, I would expect the growth trajectory will begin for that particular account. It is just that the recovery acceleration will not match the speed of the decline deacceleration that happened, right? So the speed at which it reduced versus the speed at which it will climb not necessarily is going to be the same. So I just want to set that part of the expectation. But throughout the year, as we go along, I expect that we will end up with a nice weight on that particular account. And again, outside of the top account, we have grown double digit in FY '26.

And the BFSI vertical also looks good outside of the top account?

Yes, yes. Even if you look at the whole year performance of 3.7% for the full year, in spite of having a decline in that category of that account that you're highlighting, we still grow, right? So that means the business outside of the top account is pretty is doing very well, right? So if I didn't have this productivity journey going through in the top account, probably would have delivered much more. But yes, it is what it is.

Got it. Got it. A quick question for Vipul. Vipul, we had a very strong margin performance this year right up until Q3. And of course, in Q4, we had the wage hike which impacted the margins. Having reached 16.1% margins in Q3. Where do we see ourselves going over the next, let's say, 1 year or 2 years? Do you believe that I mean, 16% is kind of the levels at which we will kind of settle down and post any benefit post that, we will reinvest back into the business. Or are we looking to expand that to probably reach somewhere in the range of 17% to 18%, which we used to be, let's say, before the merger happened?

Sure. Thanks, Vibhor. I think on the margin front, while I would not like to give a specific number as a guidance in terms of what we are targeting, but the focus is very clearly to continue to work on cost optimization and efficiencies. And as Venu mentioned in his opening remarks, the New Horizons program is having 4 pillars and one of those is operating efficiencies. So we are going to continue to focus on that. And at the same time, we are going to continue to focus on the growth side as well because the remaining 3 pillars are going to be focused on growth as well as driving our AI strategy further. So overall, we are taking an approach which kind of looks at this balanced growth over the next few years as a part of our Lakshya plan as well. But yes, as a part of that journey, we are looking to expand margins further and we are working on that continuously.

We take our next question from [ Prateek Maheshwari ] of HSBC Securities.

I've had some questions on the Lakshya strategy. So Venu, I remember that you, at one point, had explained that it's important for the business to kind of derisk from the top accounts and kind of expand into expanding verticals, which are manufacturing, consumer health care, right? And generally, what we have seen is that companies, they actually add verticals to kind of become more laser-focused and try to grow them, right? In this case, what you're seeing is that you guys have actually subsumed a vertical into one and your BFSI and media remains, right? So just wanted to understand on how are you taking on this and I'll ask my follow-up later.

No, sorry. I think -- I don't know, there's some confusion. The BFSI market segment is exactly the same market segment, it was there. We'll continue to report it. That's one of our biggest market segment. So there's absolutely no change on that. Same thing with regard to the technology, media and communication reporting, the same reporting that continual over there. What we used to call it as manufacturing and resources. I'm just putting it as production now because it includes the manufacturing and energy and utility business, which is doing pretty well for us. So we're putting that under a new market segment name called [ Productions ]. And the health care, life science is an emerging vertical for us. And that is a vertical which we are merged into the consumer business reporting. So from a 5 we sort of going into the 4 market segment reporting, right? But the strategy is very clear. The strategy is doubling down our big verticals, which is BFSI, tech vertical. We want to grow much faster that, absolutely yes, and that's very core to our Lakshya strategy. At the same time, we want to grow much faster in the emerging verticals and in other market segments like consumer and production Americas as well. And finally, I would say on the regional markets as well, while U.S. is our biggest market, and we want to grow faster over there. But we also want to grow in Europe faster than Americas. And you saw that this year, Europe grew by 12% plus and Europe, Americas was 4%. So -- and you can expect the same trend to continue, and that's the aspirations we have. So it's a strategy of focusing on the core that we have, making sure that we doubled down our focus on core. At the same time, make sure that the white space that exists in the marketplace, as an example, Europe as a market, as an example, or within Americas, if you look at it, the things that we can double down in the consumer market segment is a big white space in the consumer market for us. So this is what we want to focus on. So it's -- that's how I put the summary, Pratik. It's about retaining the core, doubling down the core at the same time looking at the white space.

Venu, I understand that. The other question, we knew was that your sister concern had same -- they had also shared their Lakshya strategy and also told about the growth rate expectation for the next 5 years. Do you also have a quantified expectation for next 5 years or probably for our next 1-year perspective as well?

Yes, absolutely. I'm looking at doubling down the revenue in 5 years.

We take the next question from Sandeep Shah of Equirus Securities.

Just wanted to understand the growth momentum to continue in FY '27, are you talking about the momentum, which we have seen at 8% in Q4 to continue or 5% in FY '26 to continue in FY '27?

Yes, Sandeep, it's a good question. But as you would know that we don't give any specific guidance number. So I don't want to farm into that. Instead, I would say that whether it is 6% or 8%, we are looking at be an industry-leading growth, continue our growth momentum. And for the full year, I think we are very well positioned for that not just based on where we are exiting in Q4 but it's also based on the strategy that's in execution already, right? It's 1 year of strategy execution has worked out very well for us. We have detailed that out for the next 5 years. So with that, we will navigate all the challenges that comes which are beyond our control. But as far as our belief and confidence goes based on the momentum we see with our clients and relationships, I'm confident that we'll continue our growth momentum for the full year of FY '27.

Okay. And just wanted to understand Venu, you have 2 top clients, which still contributes materially to the consol numbers. So in that scenario, you believe there is slow growth pace, to some extent, could be a hurdle in terms of growing the top line in the coming years under Lakshya as a [ medium ] or you believe that should not be the hurdle going forward to achieve the growth trends better than the earlier year?

So look, I think from a business potential standpoint, these are mega accounts, right? So their ability to adopt new technology and their clients are very grand plants, right? So obviously, I want to take more wallet share in those big accounts because the plants are grand, the potential are grand. So -- and you saw that in one of our tech account after we passed rough the productivity phase, we've actually grown in the later part of this year. We've actually grown and that's reflected when you look at our top account numbers. And I'm sort of expecting the same thing to happen in the BFSI top client as we go along. So that's with regard to how we look at these 2 counties, our deep relationships, strategic relationship. They have grand plans on how they want to transform from an AI perspective and we want to be part of it. Now when it comes to the concentration risk, look, I think in my view, if you look at the fact that we have grown in other verticals at a much higher rate, we are on that journey. And the concentration risk will get addressed by not doing less business with others, but actually doing more business with those white spaces that are there. So that's our strategy. So we will continue to focus on the balanced portfolio. And you will see that our portfolio has got much more balanced than what we used to be before when you look at the top 2 clients concentration risk.

And last question, 6 large deals, about $100 million can you update on the progress of ramp-up, which has been done in FY '27 and will have an incremental upside in FY -- sorry, FY '26 and the incremental upside in FY '27.

Yes. See, more -- I think 3 or 4 deals we announced late in the first half of the year, I think up to beginning of Q3. So those deals have done the transition phase, and some of them are still undergoing transition phase. And the deal that we announced, which is the CBD deal in India, is going through a very -- we'll go through a slightly longer transition period because it has a dependency on certain hardware delivery and all that. And there is, as you know, that the hardware delivery time lines in the current times are much more extended and so on. So I expect the last deal of CBD, which we announced, we'll actually have a much more extended transition time line before we see the ramp-up happen. But the deals we announced in the beginning of the year, the 2 big deals that we announced one after the other, those ramp-ups are happening, they are almost at the final stages of transition phase.

We take our next question from Sumeet Jain from CLSA.

Am I audible?

Yes, sir.

So just want to drill down on the Lakshya 5-year strategy. I mean you are guiding for a doubling of revenues in 5 years. So can I ask like what kind of advancements in the AI tools are you building in, in this 5-year journey and versus the compression in the base business, maybe because of productivity pass-through. How are you building in the new AI-led transformation revenues? That's one. And secondly, I mean, I don't see any partnership being announced by LTM with either open AI or anthropic. So is it like even without these partnerships, you are taking these solutions to the clients? So can you throw some light into it?

Look, first, I'll go to the second question quickly, and then I'll come back to the first one. Look, in terms of developing the skill development on the hyperscaler AI, if I may call them, right, the new AI hyperscalers of anthropic and OpenAI, we have actually established a center of excellence. We have -- if you look at it, our relationship with Microsoft is very strategic. So we are working with them on the Copilot usage. We, in fact, we announced a partnership on Copilot and GitHub partnership with Microsoft. And almost 70% of our developers are already on the GitHub platforms and so on. Second is we have developed -- we have, in fact, established a COE, as I mentioned, on the cloud of Anthropic and the OpenAI and also NVIDIA. We announced the NVIDIA partnership. In fact, got the award from NVIDIA, right? So I think that part of the thing we're already in the journey. We haven't gone public in announcing it, but the action has already started on that. And we have trained more than 1,000 of our engineers on cloud skills as an example. I mean more than 30,000 of developers have trained on the GitHub, Copilot and so on. So that part of thing is going on very well. We also announced the partnership is on the skilling, right, which I covered in my commentary, [ ISCT, IIT ] [indiscernible], we partnered with MIT. All this announcement we announced, we did this in this quarter. So the training part is going pretty well on that. The third is that -- then I'll go back to the first question of yours, right? And we should address in some way, even the second question. Look, the opportunity in AI revenue is in I sort of summarize it under 3 Cs. The first one is the context, right? The intelligence is fairly commodity, right? You can access the best of the intelligence by paying $20 a month subscription fees, right? So the intelligence -- basic intelligence is fairly commodity, right? The real premium is how you apply the intelligence into the right context into the right domain. That's why I emphasized the Lakshya strategy of tech domain convergence. So that's the first C of getting our -- helping our customers to apply the democratized and commoditized intelligence into the right context. That's the first opportunity that I see, right? And that's where we are developing a deeper domain into our bigger verticals and all the verticals that we are focusing on. That's why we repositioned ourselves as business creativity partner to strengthen that contextual part of it, which is the first C. The second C part of it is the cost. There is -- it's one of the topic which is very less spoken about when we talk about the hard option. It somehow believe that the technology of AI, the stack of AI is a net positive business case in all scenarios. No, it is not. In some cases, it is not necessarily net positive business scenario for customers. And that's where we are working with customers and we'll continue to help customers in actually creating a positive business case on how AI technologies, the expenses involved in AI technologies and the services that are getting associated with it, how it becomes a net positive business case for our customer. That's the second thing. The total cost of ownership will be the discussion point more and more as we get into this year. Somewhere, that topic has never been on the picture, but the TCO on AI adoption will come into the mainstream topic. The third one is the change management. As much as we think AI is a technology. It is not a plug-and-play technology. It involves a mindset change among the employees. It involves changing -- I'm talking about our customer employees, right? So we need to work with our clients to be and helping them in dealing with the change benefit within the organization. So the 3 Cs that I spoke about, context cost and change management are the cornerstone of our AI transformation. To do that, I spoke about talent transformation already. We covered the partnership strategy I also spoke about the [ Skill LTV ], which is the skills marketplace we have created for agenetic thing. And of course, we have a Blueverse ecosystem that powers all this that we go along. And we realigned our service lines. Our traditional service lines were realigned under the 3 LOBs either AI transform and business AI that will strengthen it as well. So that's how I put it in summary, but I'll be happy to present a lot more in detail on June 3, what we all meet for the Investor Day. I hope Sumeet you'll find time to attend.

No, surely, surely, when we're looking forward to it. And I think my other question is, I mean, if I look at the overall macro in U.S., it definitely looks better than last year in terms of tariffs largely in the base and manufacturing to some extent, reviving the banks in U.S., Europe are continuing to do well with the trading revenues around the whole market volatility? And then for your own business, I can see the order book is pretty strong. The exit rate this year is better than last year, plus your top account in BFSI is getting -- is already bottomed out. I don't know how much visibility you have, it will start ramping up from next quarter onwards. But what stops you to give a guidance of growth next year better than FY '26?

Look, one is we -- as a practice, right, we have never give guidance, right? So we don't give guidance, right? And I also urge that when we're dealing through a very strategic shift in the industry on having an air transformation model, having the confidence to deliver growth is what I want you to evaluate on, right? Because when we talk about strategic transition shift in the industry, we are trying to work on 2 tracks. We need to transform, and we still need to perform, right? It's not sequential in nature. We can't come back and say that, okay, will transform and then we'll deliver the performance. It's about delivering performance while we are transforming, right? So hence, I want to focus a lot on delivering performance while transforming then getting caught in any specific number guidance. But I can assure you that the entire management confidence level for the full year growth is still positive. There may be 1 or 2 quarters where we will go through sort of a softness because of some recovery in some of the top account that I mentioned may not happen at the speed at which the deacceleration happened. Bearing that, I'm optimistic.

And maybe if I can probe just last question. I mean in your top BFSI account, I think for the last 3, 4 years, I think we have been forecasting that it has bottomed out and it will start growing -- and at the parent level, their focus is to give more business to their GCC in India. So now what gives you confidence that this has bottomed out?

Look, I don't know, not through years. In fact, last year, we grew much, much higher. I don't remember the percentage of the hand, but we grew the top account significantly higher. The AI productivity journey started in Q3, right, in fact, in the later part of Q2, went up to Q3. And I said that in the Q3 earnings call, I would expect this to go for the -- the plan was to go for another 4 months, but we wanted to squeeze it in 3 months. And that's why I said it we want to make sure that it bottoms out this thing. And from there onwards, we look at recovery plan they're working on. So look, most of these bands have GCC, Sumeet, right? It's not just 1 or 2 account. Everybody has GCC, right? But the area that we work is very complementary to the GCC. So hence, I don't think we never said told about this recovery last year before or something because we've always been growing in that account. The AI productivity topic is a topic that started in FY '26 because that's when the clients started making plans and we started working with them.

We take our next question from Ravi Menon of Axis Capital. Mr. Ravi Menon, could you please unmute your microphone and ask your question.

Venu, you talked about how there's a lot of importance on domain to take advantage of AI. So does this mean that you're going to become competing a little bit more with the consulting providers. And what does that mean for your employee which is the kind of people that you need to attract or you already have? How does the competition change? And how will the margins change?

No. Thank you, Ravi. It's a great question. I think in my view, the domain still has 2 dimensions, right? One is a contextual dimension. That means if I'm supporting a CRM application for a retail industry do I understand what the CRM context is for retail, right? That's -- I call it as a contextual attribute of the domain . The second is understanding the CRM in general for the retail industry and helping the retail companies to reimagine the CRM as an example. The second category is not what we are going to build on because the second category is what you can associate with some of the big 4 consulting firms, it is their strength. And that's a pure-play consulting play. We are looking at -- when I talk about domain tech convergence, I'm not talking domain in isolation. That's why I have raised the word called domain tech convergence. The domain tech convergence is about having an understanding of the technology in the context of the domain which we are doing implementation. That's a skill set that already exists within our business. We do that in all of our verticals, the kind of work we do. We already know what does it mean to manage the CRM processes for retail customers using Salesforce as an example, because our sales force team now. That is a skill we want to get better and better with them because most of the agenetic implementation will happen on those platforms. And we are -- you can understand the platform, we understand the context and as well we start bringing this together in that understanding and implementing the agenetic solutions, we will have more opportunity to win them. So that's how I look at it. I just want to make sure that you don't read this as trying to become a pure-play consulting company. No, that's not what it is. There is a contextual part of the domain.

And a follow-up to that, thinking about helping the client reimagine some of these process. Do you think it's some time to think about setting up a VPS segment which can actually run these reimagine processes even supported by agenetic...

Sure. Look, we don't call it as a VPS, but we incubated a new business unit called business AI that I also mentioned in my Lakshya strategy. And that business is already managing. For example, when we do the contact center, we are managing the contact center processes. We're managing that, but I still don't categorize them under VPS purely because VPS is built purely on running the process operations. So here, we're talking the technology aspect of the solutions. And then the outcome of that is to run the business processes, whether they're horizontal or industry processes in the convergence of human insights and intelligence systems, which is slightly a new business model, if I must say. Hence, I'm sort of resisting to classify it as a classic VPS.

We take our next question from [ Vivek Desai ] of Investec India.

Hi. This is Nitin Padmanabhan here. I hope I'm audible.

Yes Nitin.

Yes, perfect. So the first is, I think in the technology communications media vertical, it's shown reasonable growth this quarter. In the last quarter, I think the commentary was that expect a gradual recovery rather than a sharp rebound. So I'm just looking for some context on what sort of that delta this quarter? And how should we sort of broadly think about it on a going forward basis?

Yes. Look, if we record faster, you should not ask questions.

Driven by any specific large deal engagement that's ramped up and one shouldn't sort of think of extrapolating that? That's the question.

Yes. No, I understand. That is -- on a serious note, I understand where you're coming from. Look, I think it is related to this faster ramp-up of a couple of SOWs than what we had envisage. So that's sort of specifically the few programs in top account in that particular segment that you're referring to, especially related to the cloud acceleration. We saw a bit of an uptick much faster than we anticipated. So -- and that's the reason why we had a good recovery in Q4 and thereby it actually led to even the full year for that vertical came better than what we anticipated.

Yes, sure. And how should we think about it going forward considering the SOWs have already come through is the deal pipeline and the deal wins that are already in place, sort of do you think that sort of supports growth because last year has been weak. Last quarter was very strong. So how should we broadly think about it in terms of growth? Or if you could at least give a sense in terms of, if I just look at all the verticals put together, who do you think leads growth going into next year going by what you already have in terms of wins? And what sort of leads and what sort of lags?

Look, I don't want to pick a vertical ranking on here, but I still want to stick to the commentary that for the full year outlook, we are fairly confident of continuing our growth momentum. And with regard to the tech and media vertical specifically, yes, we'll continue to see the momentum in the short term as well. So that's the best I could answer at this stage, Nitin.

Perfect. That helps. And just one last question. So in your overall 5-year thought process of maybe growing 15% CAGR to double, how are you thinking about the inorganic piece of it? Is that a component there? And how are you thinking about what those pieces are to drive that 15%?

Yes. Yes, there is an element of inorganic also planned in that, right? And -- but you know how it sort of works. I can't guarantee the time line for that inorganic. But yes, there is a part of inorganic was also baked in the plan that we're talking about doubling our revenue in 5 years as an inorganic component.

Yes, I got it. What I was referring to is, are you looking at -- see, there are a couple of types of acquisitions, right? So one is, are you looking at acquisitions wherein maybe you're looking to sort of pick higher growth areas? Or do you think there are opportunities because in the current context, there's a lot of vendor consolidation. So pieces that sort of increases share within a certain customer? Or what are your priorities in terms of the kind of acquisitions you'd look at is what I was trying to understand.

Yes, sure. Look, I think there is a capability part of the opportunities that comes out where having an access to a certain competency technology gives us a bit of a jump start into the newer areas. So that is one category of companies. The second is there is still a lot of white space in the market which may take a longer period to build things organically. For example, the sovereign solutions in the European market is going to become very big, right? So whether it's the building the entire sovereign stack into the industries that we operate in, whether it's the manufacturing sectors or the banking sector, right? So that's out of the category part of it where if there's any acquisition that comes our way, which will help us to strengthen the sovereign solutions that most of the countries we are going to accelerate the adoption of it, especially in the context of AI security. That's the second category. And the third one is about -- it could be just a pure white space. of clients that we don't have. For example, we don't work in aerospace, defense, automotive much in the European space as an example. So if you get an opportunity in that area, we'll seriously look into it.

Ladies and gentlemen, we take that as a last question for today. On behalf of LTM Limited, that concludes today's conference. Thank you for joining us, and you may now click on the leave icon to exit the meeting. Thank you for your participation.