Wipro (NSE:WIPRO) Q3 2020 Earnings Call

0:00 Ladies and gentlemen, good day and welcome to the Wipro Limited Q3 FY20 quarterly investor conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Ms. Aparna Iyer, Vice President and Corporate Treasurer. Thank you and over to you. Thank you, Stanford. A very warm welcome to our Q3 FI20 earnings call. We will begin the call with business highlights and overview by Abid, our Chief Executive Officer and Managing Director, followed by financial overview from our CFO, Jatin Dallar. Afterwards, the operator will open the bridge for Q&A with our management team.

0:59 Before Abid starts, let me draw your attention to the fact that during this call, we may make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act 1995. These statements are based on management's current expectations and are associated with uncertainties and risks, which may cause the actual results to differ materially from those expected. The uncertainties and risk factors are explained in our detailed filings with ACC. Vipro does not undertake any obligation to update the forward-looking statements to reflect events and circumstances after the date of filing. The conference call will be archived and a transcript will be made available on our website. Over to your bed. Thank you, Aparna. Good evening and good morning, ladies and gentlemen.

1:46 First of all, wish you all a very happy new year. I am joined over here by my leadership team, and it's a pleasure for Us to speak to you all and share the results of the third quarter. Let me quickly provide an update on Q3, performance, our view of the demand environment and progress on our strategy. We had a strong quarter both on revenues and margin. Our revenues grew by 1.8% in constant currency terms at the midpoint of our guidance. On a YTD basis we grew at 4.3% in constant currency terms. In financial services, we saw a slowdown in our growth rates due to continued softness driven by macroeconomic environment.

2:32 We however remain confident on winning the new deals that we are participating in and leveraging our strong capabilities in digital. We are pleased with our performance in consumer, which grew 12.1% year-on-year constant currency this quarter. and the sustained rhythm that we have built in this vertical on deal widths. ENU and communications continue to grow moderately. We continue to see recovery in manufacturing and are encouraged by the order book and pipeline. Health saw seasonal uptake in HPS as Q3 has open enrollment period, while the technology business was impacted both by furloughs and slowdown in spend in the semiconductor verticals.

3:30 The overall demand environment has neither improved nor deteriorated from what I shared last quarter, but we see the same level of uncertainty due to the various geopolitical risks at play. We delivered a healthy operating margin of 18.4% in Q3 versus 18.1% Last quarter, aided by the depreciation of the rupee and some favorable movement of the cross currency. Now let me provide you a quick update on our strategy. Business transformation. In the past quarter, our customers across nearly every industry have chosen us to embed digital transformation within their business.

4:17 It is no longer just about enabling new customer experience. It's about fundamentally changing a business and I'm pleased to share our wins which show how our customers are turning to us as trusted business transformation partner. In digital, our revenue grew 22.8% year on year and now contributes over 40% of our revenues. For example, we have won a service design engagement to define the future vision and establish the strategic foundation. for digital transformation at a bank in UK in the mid-market segment called Synergy Bank. On modernization, we continue to help enterprises through their business-first strategy with an industrialized approach in enabling our customers to drive business acceleration, customer experience, and connected insights.

5:17 Our investments in Cloud Studio is continuing to pay off. We have accelerated cloud journey for our customers by migrating more than 39,000 workloads and 2,900 applications. A US-based semiconductor company has chosen Wipro to move its current engineering application infrastructure to the cloud. We will leverage our Cloud Studio offering to help the client become more agile, ensure faster time to market, and lower the total cost of ownership for the client. Our strategy on connected intelligence which covers data analytics, artificial intelligence and engineering is delivering good results. The engineering next set of offerings that I had talked about, we continue to invest in it and put the building blocks in place.

6:20 We concluded the ITI acquisition this quarter. The acquisition will help us build momentum in industry 4.0 and IoT offerings and will enable us to have a new set of clients to create differentiated value. We have won a contract from the North American subsidiary of a global automobile company to deliver the next-gen in-vehicle infotainment software as part of our Engineering Next proposition. The fourth area is around trust, focusing on enhancing our cyber security offerings. We have created a dedicated OT and IoT security practice to address the changing threat landscape due to connected systems.

7:06 We recently launched our 15th cyber defense center in Melbourne. As an example, Wipro has won a strategic contract from a leading US-based financial services institution to design and implement A more effective risk and compliance management process for them leveraging artificial intelligence. The rapid adoption of homes continues delivering significant service improvement in IT run services, testing as well as our digital operations business. Our effort savings in fixed price projects improved from 16.5% in Q2 to 17.8% in Q3. One of the large UK based global provider of financial markets data and infrastructure has selected Wipro for a data migration contract leveraging the contract intelligence capabilities of Wipro Homes.

8:07 We continue to drive localization and now our US workforce is over 70% local. Enhancing campus hiring, deepening employee engagement, and making significant investments in training and skill development This is also reflected in the attrition rates which have improved to 15.7% for the trailing 12 months. In conclusion, we remain focused on deepening our customer relationships and converting our funnel, winning large deals that are due to close in this quarter. I will now request Jatin to give the highlights of our financials. Very good evening, very good morning to the participants.

8:53 As you know, we delivered at the midpoint of our guidance range. We also delivered sequentially 30 basis point higher operating margin. Overall, we delivered 3.2% EPS growth year on year. Cash conversion remained very robust. Our operating cash flow was 124% of net income. and Free Cash Flow was 101% of our net income. Our forex realizations remain very robust. Our realization rate for quarter 3 was 72.09 compared to 71.56 for quarter 2. We have very healthy cash position on our balance sheet. Our total cash on the balance sheet is 4.9 billion gross and 3.6 billion net.

9:42 Our ETR is stable at 20%. We had a slightly lower ETR in quarter 2 because of the changes in the tax flow as all of you are aware. Our guidance for quarter 4 is 0 to 2% sequentially in the constant currency that are mentioned in our press release. We'll be very happy to take your questions from here. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question, may please press star then 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star, then 2. Participants are requested to use handsets while asking a question.

10:27 Anyone who wishes to ask questions, please press star, then 1. Participants who would like to ask questions, please press star, then one. The first question is from the line of Sandeep Agarwal from Edelweiss. Please go ahead. Yeah, hi. Happy New Year to the management team, and also thanks for taking my question. I have just a couple of questions. Abid, as you mentioned that, you know, now over 70% of the workforce For us in US is local. So which means that, you know, we have done extremely good job in terms of, you know, avoiding any business related risk from a long term perspective.

11:24 And ideally, it should have given us a lot of advantage on the revenue growth side, number one. Number two, the amount of work which we have done in last four or five quarters in terms of deal gains and on the digital side, which is now like 40% of the revenue. Our growth momentum should have now matched the industry level or at least, you know, closer to our competition. But we are still not seeing that in translating into numbers. So two things which I wanted to understand. One, are we very close to the point where we will start seeing that transitioning into numbers? And number two, how bad is our non-digital side which is, you know, taking away all the good work or good growth of the digital side? Thanks.

12:11 So Sandeep, as you rightly mentioned, our ability to fulfill our order book that has been won and execute engagements in the market, especially in US with 70% local workforce is clearly a differentiator and especially in digital where a lot of work happens in agile scrum teams on site. It has been an advantage for us. Clearly, in some of the segments, especially in the banking segment, this quarter we saw a slight slowdown in digital simply because of furlough and this being the last quarter for a lot of banks. Some of the agile projects which typically also have SOWs for a shorter term given out, Srinivas Pallia, Anup Purohit, Sanjeev Jain, Nagendra Bandaru, Amit Kumar, Malay Joshi, Rishad Azim Hasham Premji, Aparna Iyer, Jasjit Singh Kang Coming across various verticals for us. I think the overall

13:41 business which you mentioned as non-digital, the 60%, is also part of the modernization and other strategies that we talk about where we are enabling that part of the business also so that overall that doesn't become a drag to our overall growth rate. And we've been able to rotate our business From the old to the new, relatively well. Of course, there are still parts of the business which de-grow and there's a productivity that happens over there, but we feel quite good about it on an overall basis. Okay, thanks. That's all my side. Thank you.

14:28 The next question is from the line of Parag Gupta from Morgan Stanley. Please go ahead. Hi, good evening and I wish you all a very happy new year. Just two questions from my side. So I just wanted to understand getting into 2020, how do you feel about the demand environment relative to what it was when you got into 2019? Are you seeing any sort of client pressures where deal conversions are taking time or projects are being broken up into smaller projects and just getting deferred? So I just wanted to understand that. And the second question is, you know, you talk, you know, you seem to be a little bit more confident on banking, you know, for the next 12 months. So just wanted to understand what sub segments within banking are making you feel more positive. And, you know, is there any risk that, you know, these projects also get pushed out, given the kind of pressures your customers may be seeing in their own business. So just wanted to get some sense qualitatively on both of these.

15:25 Thank you. On the second part of your question on banking and financial services, I'll have Angan Goha, who heads that business, give you some color. And answering the first part of your question, compared to last year, we don't see a significant change in the demand environment, either positive or negative. Level of macro uncertainties do continue. But from a Wipro perspective, we had a very robust order booking. In Q3 and we are entering the calendar year with a bigger pipeline that we entered last year. Deal closures, we are not seeing any extended time compared to last year.

16:10 So, you know, the time that deal closures are taking is pretty much the same. Actually, the deals, we have a larger component of large deals. So the deals are definitely getting larger, especially in digital. The deal sizes are bigger than last year. and Parag, this is Angan Guha. So as you know, Parag, over the last three years, you know, BFSI has delivered industry leading growth. Now this quarter, we had a challenge because of furloughs, because of certain clients in the capital market space in sourcing. And that is why we saw a little bit of headwind. But you know, I'm confident because our funnel is probably bigger than ever. And if we can close some large deals, like Abid mentioned, Next year will be much better. And the confidence comes in from the funnel size.

16:59 I think our deal size has gone up and the funnel size is significantly higher than what it was in the same period last year. Got it. And maybe if I can just ask one more. I do remember you talking about digital work also being discretionary in nature, which potentially runs the risk of either getting pushed out or made smaller. If there is an issue in the market or in the demand environment. So just wanted to understand, is that still the case? Are you still seeing some sort of those conversations happening? Or do you think digital is a lot more strategic right now and hence is likely to come through even though there may be other challenges faced by your customers? We have Rajen who's the president of Wipro Digital.

17:46 I'll let him throw some color at it. Hi, this is Rajen. Actually, both the statements you made are sort of true. It is discretionary to the extent that it is up to the client to really spend it. But it is essential because this is the long-term future of the enterprises. To that extent, change is becoming the new entity. So we feel that they have no option but to spend it. But as Abid said in the opening, certain segments have sort of this quarter tightened the belt, but we believe that's a very short-term phenomena because they will come back and spend the money on digital because that's the only way out for them to optimize their overall estate.

18:34 Thank you. Okay, great. Thanks a lot. Thank you. The next question is from the line of Sudhir Guntupalli from Motilal Oswal. Please go ahead. Good evening, gentlemen. Thanks for giving me this opportunity. Within the consumer BU, if I may ask, what are the sub-segments driving growth? Because the strong reported growth seems to be at odds with commentary of some of our competitors, especially in the sub-segment of, let's say, retail. So within the consumer BU, what are the areas where you are seeing strong growth and what is your take on the specific segment of retail? Sudhir, I'll let Srini Pallia, who is the president for our consumer business, Srinivas Pallia, Anup Purohit, Sanjeev Jain, Nagendra Bandaru, Aparna Iyer, Jasjit Singh Kang Sure, thanks a bit. Hi Sudeer, this is Srinivas Pallia here.

19:52 So there are two parts to this industry that we see. So specifically on the retailers, obviously you would have seen the news that they had a good holiday season in the US, thanks to the consumer confidence. And if you look at overall retail, last quarter grew 3.4% during the holiday season. And of course, like Abid mentioned, e-commerce grew almost 19%. While e-commerce still contributes only 15% of the overall retail and however brick and mortar actually declined 1.8%. So net net what we are seeing is retailers investing in technology to kind of create a core differentiation in this above context which is e-commerce picking up quite a bit and whoever is investing in technology are doing well.

20:41 We also see attraction in modernization. and the digital transformation that, again, Abidinran talked about. Overall, retail market, from my point of view, will continue to be choppy and volatile. with our customers and specifically focus on executing to their strategic priorities. Now, the other part of retail behavior of consumers, right? And if you look at, there's a lot of dynamics around that. and specifically on the consumer business in addition to digital transformation. Brand companies are looking at going direct D to C which is direct to consumer and they're also investing significantly on their supply chain modernization.

21:29 So both retail companies and CPG companies to my point, in my mind, will continue to invest significantly on technology. And if you look at the growth of some of the CPG companies that we have seen, They are actually growing in emerging markets and they continue to invest in that, which is their next way of growth. And our presence outside of the U.S. is also helping us to go after that part of the business. So net-net, the industry will continue to be volatile and choppy. We'll stay focused on where the customers are investing, especially on the technology transformation. I think that's the right way to go in my point of view, Sudeep. Sure, that's very helpful. And the other question is, there seems to be a sharp improvement in the vertical margins in communications, almost 450 basis points or so, and this came despite revenue remaining more or less the same.

22:20 So any color on the same will be helpful. Yeah, so... I wouldn't see too much into the quarterly variation. We had a one-time collection which reversed the provision for doubtful debt and that has improved the quarterly operating margin. I would look at a four-quarter trend for a normalized sustainable margin. Okay, so this quarter if I adjust for that provision, what would be the normalized margins, adjusted margins? Well, that would be difficult to break out, but if you see the trend, you should be able to see that additional which is sitting there.

23:06 Sure, sir. Thanks so much and all the best for the future. Thank you. The next question is from the line of Sandeep Shah from CGS CIMB. Please go ahead. Yeah, thanks for the opportunity and congrats on good execution. Just a bit wanted to understand if you can throw some light in terms of is it fair to say most of the portfolio specific issue in the global markets outside of India is largely behind because last quarter we called out manufacturing. Now you are foreseeing some amount of green shoots and tailwinds also coming out of manufacturing. So is it fair to say outside India, Most of the client specific or portfolio specific issues are behind for Wipro.

23:51 Yeah, Sandeep, I would say including India PRE, most of the portfolio issues that we had that we were working on the turnaround are behind us. Of course, the state run enterprises, which is a segment outside, still has restructuring work to do and there also we are making a lot of progress. Having said that, Amit Kumar, Anup Kumar, Anup Kumar, Anup Kumar, Anup Kumar, Wipro specific issues as well as a lot of the investment in capability that we have been doing where we get the mind share and traction with customers with a very robust set of deal wins gives me confidence that those issues are behind us.

25:03 Okay and just to follow up a bit around three four quarters back we said that the growth outperformance in the banking financial service is largely driven through higher penetration of digital offerings in the banking as a vertical. So if you need to put that number in terms of penetration, are we able to replicate that success which we have done in terms of digital penetration in banking in other segments or still that's a work in progress? I think, you know, learning from what we did in the banking and financial services segment, you see the evidence of replicating that in the consumer segment also it's a function of both the horizontal capabilities that go with digital as well as the vertical capabilities that each one of the business units are building to be able to contextualize digital to their own vertical and the second part of that is also the uptake and spend that these companies in particular industry verticals have in terms of investment on digital So I feel good, for example, we are seeing good deal traction in the healthcare piece outside of HPS.

26:18 In our health business, where healthcare companies are investing in patient experience, which essentially is part of digital, and we are winning a fair share of our business. In the ENU business, in the energy space, there's a lot of investment happening in digital and cloud, and we are winning A fair share of our business. So, you know, I can go vertical by vertical, but essentially to answer your question, yes, we've been able to take our expertise, our horizontal capability, banking-led, because banks were the first to invest, but we are able to translate those capabilities in each one of the verticals. And each vertical, I would say, is at a different level of readiness as well as industry uptake to be able to take digital.

27:04 Okay, and just last two questions. If I look at the commentary on the funnel, looks really positive, especially on the banking financial service. So can you throw some light in terms of the sales cycle here and where are we standing in terms of the number of competitors? Is it more proactive, reactive? And the last question to Jatin. This is the fourth quarter where the EBIT margin on IT service has been close to 18% despite the headwinds on the margins. So do you believe that this is a sustainable levels to look for and there could be a further improvement if the growth pickups? So Sundeep, the funnel looks good. It has a combination of both what I would call as deals of large size as well as average size deals. We've not seen any change in the time it takes to close a deal but typically a large deal Srinivas Pallia, Anup Purohit, Sanjeev Jain, Nagendra Bandaru, Aparna Iyer, Jasjit Singh Kang Okay, and a question on margin.

28:33 Yes, Sanjeev Jatin here. So as you know, we have delivered for this fiscal 18.4 in first quarter, 18.1 in second, and 18.4 in third quarter. So that we have demonstrated the discipline of execution, even as we have continued to invest incrementally in our big bets through the course of the year. As we always maintain, our priority is to get A superior growth trajectory for the organization because we believe that is the source of margin expansion or margin sustenance in medium term. And therefore, we'll remain always committed to initiatives and investments that we need to do to get the growth trajectory up. So far we have been quite successful at finding those dollars by squeezing the costs that we believe we can squeeze out and that would be our endeavor going forward. We are not guiding on margins.

29:30 As I said, we will remain committed on getting the growth trajectory further improved from where we are. Okay. Thank you and all the best. Thank you. The next question is from the line of Madhu Babu from Centrum Broking. Please go ahead. Hi sir, so last one year we have been going slow on acquisitions. So currently around 25,000 crores is the net cash on balance sheet and we generate almost 10,000 crores of free cash flow per year. So would we start looking to increase the payout ratio more of interim dividends because anyways the buyback for the next buyback would be only post September of this year. So with such a high cash component on the balance sheet, would you look for more interim dividends from here on?

30:17 So, as you know, we have had two cash events in the year and I think that's optimal. We have declared an interim dividend in this quarter. The board will continue to evaluate as we move forward on what should be the way of returning cash to the shareholders. For last two years, if you see, we have gone significantly ahead of our Commentary of paying 45 to 50% of net income in over a block of years. And therefore, you know, our philosophy has been around what we don't need for our growth, we will certainly look at returning, but in the guided range that we have spoken about.

31:07 So we will continue to look at opportunity and board will make decisions as it deems fit based on our requirement of funds. And one more on the top two clients in the banking. I think the top accounts have been weak and one of that is a banking account. And even within the top five, there are two banking accounts. So what are the outlook on those two accounts for next year? Well, we cannot talk specifically about which two because your two could be different now in this quarter compared to the two that we had in previous quarter. But overall, I wouldn't worry about the commentary specific to customer. You know, Abhidha and Angan have spoken about our overall outlook on BFSI space, and I would see that as an important step forward from our side because individual times can always go up or down, but what I'm sure you're looking at is the portfolio outcome from the BFSI.

32:05 And last one on the engineering side sir, I think we brought in a new team and also could you elaborate more on so next year what is the target growth because that segment actually some of the pure play vendors are growing at a much faster pace. Yeah, so we as I mentioned in my opening remarks, we are making significant investments. We just closed an acquisition also over there. I let Harmeet Chavan who heads our engineering business give a little more detail color. on how we feel about our engineering business. Hi, this is Harmeet here. As you know, we've been operationalizing our new strategy for last two to three quarters, including the acquisition of ITI, which we completed in Q3.

32:51 We also rolled out new engineering NXT offerings, which is to truly enable innovation for clients across 11 different industries. for both accelerating time to market and also delivering efficiencies. So based on where we sit, based on where we are, we believe that we are headed in a phase where we have a complete stack of engineering offerings to really sharpen our value creation for our customers. And that should position us in the industry-leading growth. Even if you see in quarter three, we have delivered Q and Q growth, and we believe that momentum to continue going forward. And of course, The other data point I would like to share as part of your operationalizing strategy is customers are really engaging us across 5G, across IoT, across Industry 4.0, across connected products, across software products.

33:44 So the breadth and depth we are seeing in terms of addressing and, you know, we are winning against competition. We have seen in Q3 as well a significant traction of growth across geographies, North America, Europe, and in Japan as well. So I remain bullish, my team remains bullish to deliver on industry-leading growth going forward. Thanks. Thank you. The next question is from the line of Abhinav Ji from SBI Pension Funds. Please go ahead. Good evening, sir. Thanks for taking my question. I just wanted to couple of things. First one is that our digital and platforms are doing better. So is there any tailwind coming from homes?

34:35 And the second part is, can we give more color on the AI? How are our capabilities with our peers? Are we doing some work on cognitive AI as such? Thanks. Yes. Homes, both as part of a lot of the run deals that we bid for, becomes an essential part of our solution. And it is a differentiator for us. If you remember a couple of years back, as the engineered homes, we had picked up some of our large accounts and run engagements in those accounts to deploy homes, to build use cases, to build... Interfaces so that they can be deployed at an enterprise level.

35:23 Those deployments as well as that IP along with the overall homes framework has helped us win a large number of run deals and deliver productivity and margin within those deals. As AI technology has become available primarily also from the cloud providers, We've identified use cases where we can inherit technology from each one of the cloud providers, whether it is Azure, whether it is AWS or GCP. And we've created use cases across platforms so that we can deploy homes in a cloud environment in the work that we do for them.

36:08 So I feel pretty good over time. 280 customers now have homes deployed with use cases. We have about 17.8% of our work being done in FT equivalent terms through automation, which is primarily driven by homes. The second area where we see attraction with homes is what we call as homes for business. One of the examples that I gave, In my opening remarks is an example of Homes for Business. We've identified about 12 industry use cases where the applicability of artificial intelligence and cognitive technologies delivers business transformation.

36:57 And we have deployed one or more instances of those use cases with our customers. A lot of those deals are also proactive. they are also part of our business transformation offerings and including change management we are able to do those deployments although the size of those deals are small right now but we see quite a lot of traction and we are building more accelerators leveraging homes across different industry verticals. Thank you. Thank you. Participants who would like to ask questions, please press star, then one. The next question is from the line of Harit Shah from India New Age Shares and Securities.

37:45 Please go ahead. Yeah, thank you for the opportunity. I just want to get a sense, you know, of what is happening on your top clients. So, you know, the revenue in dollar terms is down, you know, at its lowest level in more than, you know, two years. So, you know, some sort of, you know, color on what is happening or the trends that are playing out in that space. That would be helpful. Thank you. So Harshit, we've been talking about the cross-sell and client mining across our top clients for the last many quarters. And as you saw, we saw double-digit growth in the last two or three years, which we've seen a little bit of slowdown in the last couple of quarters.

38:30 If I give some color on the mix of the top clients for Wipro, our top clients are primarily from banking and financial services industry and technology industry vertical. And both of these, as we have discussed, you know, financial services last year because of the, as you guys know better than anybody else, because of the interest rate change, a lot of banks did curtail their spend. We had some challenges at a macro level in the capital market space, and that has impacted because they form part of our top 10 clients. Similarly, in the technology space, of course, Q3 always is a difficult quarter for technology because of furloughs.

39:19 But apart from that, we are seeing, again, due to macro issues, challenges in the Srinivas Pallia, Anup Purohit, Sanjeev Jain, Nagendra Bandaru, Amit Kumar, Malay Joshi, Rishad Azim Hasham Premji, Saurabh Govil, Aparna Iyer, Jasjit Singh Kang and next year we feel that it will be back to growth and there will be uptick in both of these. So the relationship with our top clients are very robust. We are gaining market share even when sometimes our revenue goes down as they consolidate, as they renew. So we feel quite good about our overall top client portfolio.

40:20 Sure, that's helpful. You had mentioned last quarter that you do a lot of digital related work for your top clients. And you had mentioned that some digital projects had ended and renewal is taking a little bit of time. So have you seen that trend continue this quarter also? And any kind of renewals taking time maybe because of the new budgets being decided or any other reason? Yes, so specifically in our Q3, which was the last quarter for a lot of banks, We did see customers holding their spend back sometimes to address their own internal budget challenges because as you rightly mentioned digital work is also a lot of discretionary spend and they may decide to pause work and not renew the SOWs and we did see that coming into January we are starting to see that demand coming back but it's too early to call right now. So we have built that uncertainty. in our 0-2% guidance that we have given.

41:23 Okay, and my last question, a bookkeeping question. What are the outstanding forex hedges that you have at the end of the quarter? Yeah, so we have $2.6 billion of outstanding hedges as of December. And what rate would that be on an average? You know, as you know, we have stopped sharing those rates, but we typically hedge at any point in time for next 50% of our next four quarters net inflow. And you can gauge what rates we would have booked those at. Shanoban, thank you very much and best of luck. Thank you. The next question is from the line of Nitin Padmanabhan from Investec.

42:09 Please go ahead. Hi, thanks for taking my question. Abid, you clearly highlighted that there's an improved funnel that's driving confidence of growth sort of improving going forward. And also the fact that there's a potential deceleration of headwinds from the existing client buckets and at some point they would actually start spending. So I just wanted your thoughts on two things. One is In terms of the funnel, are these more cost takeout kind of spends or are these higher on the digital side of spends? And second, something that's at loggerheads with the broader thought process, if you could clarify, is that the broader market environment appears to be, continues to be weak, at least if you look at banks and their own profitability and so on and so forth. What in your mind is changing that they will actually come back and really spend? And what is the confidence of that really happening?

43:16 There are three areas that I would like to touch upon. One is banks and all other industries but especially banks continue to invest in digital. So that gives us optimism because As their digital spend happens, we are able to participate in that. The second is, as you rightly mentioned, there are challenges as the macro economy slows down and it impacts banks. Banks normally lead some of these areas of slowdown and cost efficiency as well. And we have a significant play in the area of helping banks deliver a better economy. Srinivas Pallia, Anup Purohit, Sanjeev Jain, Nagendra Bandaru, Amit Kumar, Malay Joshi, Rishad Azim Hasham Premji, Aparna Iyer, Jasjit Singh Kang Experience front, in some cases it may be more of automation and AI-led business transformation. So digital is essentially part of all of that.

44:35 I wouldn't imagine a pipeline which is not 60-70% digital in today's IT services environment. Sure, that's helpful. Just one follow-up there is... Do you think, looking at the funnel, do customers really expect vendors to really invest upfront for them considering what they're going through? Is that something that's sort of there out in the landscape or that's not really the case? Actually, nothing has changed much. If I look at some of the large deals we've done in the last 8-10 years, invariably large deals have a component of skin in the game. They have a component of upfront capital investment on transformation and the gains coming over a few years. And invariably those deals sometimes require a deal structuring depending on the customer's Srinivas Pallia, Anup Purohit, Sanjeev Jain, Nagendra Bandaru, Aparna Iyer, Jasjit Singh Kang Srinivas Pallia, Anup Purohit, Sanjeev Jain, Nagendra Bandaru, Aparna Iyer, Jasjit Singh

46:14 Kang It has shown a steady improvement. So we've maintained a lot of discipline in how we leverage our balance sheet so that our quality of revenues are not impacted in the near term. Sure, that's very helpful. Just one data point, if I may, is what was the contribution from ITI this quarter?

47:05 Hi, Nitin. This is Jatin. 0.3% of our 1.8% sequential growth came from ITI. Thank you, Jatin. Happy New Year. Thank you. Thank you. Thank you. Participants, to ask a question, please press star, then 1. The next question is from the line of Sashi Bhushan from Access Capital. Please go ahead. Thanks for taking my question. Our margin performance despite growth volatility has been very stable and we have invested in building localized talent pool despite any major impact on the same. So shall we assume that margin gains through automation or high margin digital deals would be reinvested in the business for growth going forward? and we are comfortable at the current level of margin profile and not eyeing for expenses.

48:07 Shashi, you articulated well how we have delivered first three quarters of this fiscal where we have continually invested especially in our articulated big bets to get a superior growth trajectory and we have been able to find those dollars from automation and our traditional operating levers. However, we will remain very focused on growth. The priority number one for us is growth and for that we will continue to invest. So we don't want to guide forward but our effort is to not is to go ahead and invest and also squeeze that dollars out of the other cost levers that we have.

49:02 Very, very helpful, sir. Thanks a lot. Thank you. The next question is from the line of Ruchi Burde from Bank of Baroda. Please go ahead. Thank you sir for the opportunity. My question is on your retail and consumer verticals. You identified the growth and the vertical was led largely by your association with the e-commerce name. So what I'm trying to understand here is was this a function of more seasonality, strong seasonality of the e-commerce player that one witnessed or this is more structural growth uptake that Wipro witnessed and can sustain in the future? I'll let Srini address that.

49:48 Sure, thanks Abed. Now if you look at the last few quarters of where we were with the consumer BO, I think one of the, and the point that I made in the previous question as well is retail CPG companies are definitely going through turbulence, transition and transformation at the same time. What's important is look at those customers who are trying to transition and look at those customers who are trying to transform themselves and be part of that journey. And if then you are part of their strategic priorities and that actually has been helping us. So in the context of the industry itself, yes, it's going to be choppy and volatile. But from our point of view, trying to focus on those investment areas and executing to their priorities I think is what will sustain the growth and momentum in the few quarters ahead as well.

50:44 Thank you. Thank you. Thank you. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to Ms. Aparna Iyer for closing comments. Hi. Thank you all for joining the call. In case we could not take your questions due to time constraints, please feel free to reach out to the Investor Relations team. Have a nice day. Thank you very much. Ladies and gentlemen, on behalf of Wipro Limited, Thank you for joining us and you may now disconnect your lines.