AI momentum offset by flat earnings; hedged near-term guidance

13.6% YoY growth delivered; 1.7% QoQ modest vs. expected acceleration

EBIT 15.6% (+10 bps QoQ), PAT 11.7% (-100 bps QoQ due to Q1 Voicing.AI one-time gain)

13.4% of ₹11,808 Cr = ~₹1,581 Cr AI revenue; growth claim plausible vs. order inflow momentum

Claimed but unverified; TCV not fully reflected in delivered revenue; management willing to wait for conversion visibility

Management explicitly moving to 'AI-centric, short-tenured, faster revenue realization' deals vs traditional large TCV engagements. This reduces deal value visibility (TCV metric less relevant) but accelerates cash recognition. Order book composition changing materially.

USD 1.3 billion inflow (vs USD 1.25 billion Q1) reflects AI-led deals. Management claims this is strategic and margins are better on AI work, but project tenure is 6-12 months vs 2-3 years on traditional deals—execution risk on sustained revenue ramp.

Consolidated EBIT maintained at 15.5-15.6% for FY27 (similar to prior year). This is a `maintained` stance, not an upgrade. Management cited M&A (Randstad Digital) will have negative EBIT impact from amortization; organic margins holding steady.

Q2 QoQ revenue growth 1.7% vs prior trend; Q1 was also modest. Management blamed seasonality (Tech Services renewal cycle) and Saudi Middle East headwind (~0.7% of revenue). Expected to recover in Q3+.

Added $100 million+ account in BFSI (first such in several years per management); expanding all client categories ($5M+ to $100M+). Multiple AI-driven wins across industries (banking, construction, insurance, CPG, music).

Yes, financial year of top tech customer starts July, creating renewal cycle seasonality. We've managed this historically. This year, also a Saudi JV business impact. Growth trajectory normalizes Q3+.

Deal TCV has declined because we're pivoting to shorter-duration AI-centric deals that are project-based. Traditional large TCV deals come from vendor consolidation (less frequent). AI deals have faster revenue recognition because they're 6-12 month engagements vs 2-3 year traditional deals.

Valid point. We'll wait a couple more quarters before splitting ACV vs TCV in communications. For now, just know that the order book is majority AI-led, faster conversion, but we need 1-2 more quarters of data before we're definitive on ACV breakdown.

CBDT contribution is there; hardware delivery and pricing constraints are improving from Q1. We are on track for FY27 to come close to FY26 growth. Good demand outside Saudi. Three of four verticals grew >7% YoY.

Gratuity provisions taken in Q3 last year; now funding that obligation (multi-year outflow to October). TDS outflows both India/US happening this quarter. Dividend TDS paid in Q2, not Q1. All are one-offs. Expect normalization in Q3.

Maintaining consolidated EBIT at 15.5-15.6% (similar to prior year). Randstad Digital acquisition will have EBIT headwind from amortization, but organic margins continuing to hold. All in, looking at margin maintenance, not significant expansion, on consolidated basis.

That engagement went from 50+ vendors to ~5 vendors. We are one of the five. Productivity headwind already taken in Q3-Q4 last year when consolidation was announced. Sequential growth now happening in Q1-Q2 this year. We've announced $100M+ account, first in several years, showing we can grow within consolidation.

Balancing growth investments (M&A, organic capex, AI/BlueVerse) with shareholder returns. Increased payout from ~40% to ~45%. Still being prudent given acquisition pipeline and long-term value creation from reinvestment.

AI projects are 6-12 months, depending on area. Margins are better than traditional services. We're building capabilities (BlueVerse, SLMs) and will see compounding margins over time. Gross margins on AI work definitely higher.

Consumer grew 8.6% YoY but flat QoQ. Travel/hospitality energy crisis hit fuel prices; customers budgets temporarily constrained. Expect them to come back and put deferred budgets into new AI-led transformation projects in the coming quarters.

Following consistent layered hedging policy for 2-3 years rolling basis. Losses below EBIT may continue similar to this quarter but all depends on rupee depreciation. We maintain consistent earnings profile over time.

Macro has been consistent last 6 months, nothing new. We're not seeing slowdown. It's a reflection of our shift to AI-led deals. Traditional large deals still there but we're pushing sales team to AI native deals, which have different deal profile.

Traditional deals under pricing pressure. But we created AI rate cards with premium pricing above traditional rates. We've signed customers on AI rate cards. Belief is that AI pivot hard = sustainable business and high growth. That's where we've built pricing power.

Hard to say industry-wide, but for us, material clients done with deflation journey. 60-70% of portfolios have moved past productivity headwinds. 20-30% still cycling through renewals/consolidations, but new AI infusion cycle will accelerate growth.

Vague qualitative target. FY26 had strong YoY growth; management 'working towards' matching it. H2 expected stronger sequential growth than H1 (5.4% delivered in H1).

Q2 delivered 15.6%; company targets similar levels despite M&A (Randstad Digital amortization impact). Organic margins holding. No expansion expected.

Q2 PAT margin 11.7% compressed due to gratuity funding, TDS, dividend timing. All temporary. Expect normalization as these outflows conclude by October.

Management committed to quarterly SLM (small language model) development, AI talent development, and global delivery center expansion (Kolkata, Hyderabad new centers). Reinvestment strategy over near-term higher shareholder payout.

Middle East business (Saudi Arabia via JV) declined materially this quarter; management estimates 0.7% of total revenue at risk. Uncontrollable; duration/resolution unclear. Tech Services segment most exposed.

Company shifting to short-duration AI-led deals (6-12 months vs 2-3 years traditional), making TCV metric less relevant. Revenue conversion timing and deal flow sustainability unclear. Management refusing to commit to ACV split for 1-2 more quarters.

PAT flat YoY (-0.1%) despite 13.6% revenue growth indicates weak earnings leverage. PAT margin compression (-100 bps QoQ) from one-off items (gratuity, TDS) but also shows underlying headwinds. M&A (Randstad Digital) will add further EBIT headwind from amortization.

Despite management insistence that macro is stable, sequential growth at 1.7% QoQ is subdued. Travel/hospitality (Consumer segment) impacted by energy crisis and fuel prices. Risk of broader demand softening if macro deteriorates further.

Major BFSI customer reducing vendors from 50+ to 5; LTM is one of five selected. This is positive (shows competitiveness) but creates revenue lumpiness risk. Consolidation cycle extends multi-year; next phases may see further rationalization.