Growth at guidance floor, margins at cycle lows from strategic investments

Constant currency 6.5% YoY in Q1; nominal 14.5% inflated by forex

11.5% YoY CC; 4.7% QoQ natural currency—strong vs peers but from low base

6.7% YoY CC; OEM now 78% of auto revenue; US/APAC offset Europe softness

-0.3% QoQ CC in Q1; deal awards delayed. No momentum yet.

370 bps of headwinds: 150 bps one-timers (transition, retention, upfronting), 220 bps strategic (onsite, subcontractors, AI). Real run-rate pressure evident.

Media +11.5% YoY vs prior quarter underperformance; M&A tailwinds realized. Transport +6.7% YoY but Europe softness offset by US/APAC recovery.

Expected growth; delivered -0.3% QoQ. Delayed deal awards from key customers. Contingency flagged in prior guidance now manifesting.

Prior call indicated margin pressure in Q2 due to wage hikes (now confirmed, but quantum TBD). No 21%+ EBIT margin guidance stated; 19% floor implied for subsequent quarters, but with caveats.

Investments in AI infrastructure, specialized talent, and platforms (Neuron, ViTel) accelerated; 220 bps of margin drag in Q1, expected to improve as platforms monetize.

Transport 6.7% YoY, media 11.5% YoY. Europe soft but US/APAC strong. Margin headwinds: 150 bps one-timers (fade in 1–2 Q), 220 bps investments (stickier, improve over time as deals ramp).

OEM 78% of auto revenue. Adjacencies quantification by end of FY27. No specifics given on current mix.

Strong SDV pipeline in US/APAC. Utilization 75%, hiring freshers moderated (100–150 added Q1). Sales headcount added in US/Europe; spending on industry events for brand visibility.

Guidance unchanged; healthcare growth needed to hit target. AI adoption cautious/measured; no client deflation expected. Domain complexity, regulatory rigor keep pricing power intact.

Mix of talent, AI infrastructure, cloud, tools. Large deals have 3–5 year lifecycle with front-loaded transition bubble costs. Platform investments separate (not deal-specific).

Coding is 1 part of SDLC; product planning/architecture/regulatory align larger. Customers prioritize quality/time over cost. Platform traction fantastic; adoption calibrated/long-term, not transactional.

Tactical for current consolidation deals. Target remains 75/25 (offshore/onsite). Partial revenue uplift visible in Q1 US/media; full benefit Q2+.

Europe ~40%, US ~25–30%, APAC remainder. Q2 wage hikes offset by one-timer removal; post Q2, sequential ramp as revenue grows and wage hike baked in.

Visa-driven (H-1B scarcity), not customer demand. Wage hike quantum deferred to Q2 results. AI shift is budget reallocation, not permanent R&D cuts.

Both roles, but company not being re-evaluated (demonstrated superior value). Visa fees absorbed into COLA negotiation; no line-item pass-through to customers.

Attrition 16% overall, but niche AI/domain talent highly competitive. GCCs hiring aggressively. Need to retain key talent ahead of revenue ramp.

Q2 wage hike offset by one-timer removal; net impact TBD based on hike quantum and cost normalization. H2 ramp as hikes fully baked, revenue accelerates.

Contingent on healthcare segment recovery. Q1 delivered 6.5% CC (at lower bound). Media/transport visibility strong for 2–3 quarters; healthcare timing uncertain.

150 bps of one-timers (transition, retention, upfronting) expected to exit next 1–2 Q. 220 bps of investments (onsite, subcontractors, AI) stickier, to improve over time. Wage hike quantum TBD.

Q2 will be 'combination of two things' (wage hikes + one-timers going away). Post-wage hike baking, ramp up expected toward Q4.

Healthcare expected to drive FY27 growth; Q1 delivered -0.3% QoQ. Delayed deal awards from key customers. If healthcare remains flat/negative, high-single-digit FY27 target becomes very aggressive.

Europe contributes ~40% of transport (auto) revenue. Germany OEM slowdown noted; 'wait and watch' stance. Deal ramp-ups slowing in Europe. Middle East conflict headwinds cited but not quantified.

Q1 EBIT margin 21.2% (-330 bps QoQ). Management attributed to 370 bps of headwinds. Q2 wage hikes will further pressure margins. 220 bps of investments (onsite delivery, AI tools, specialized talent) expected to 'improve over time' but quantum and timeline vague.

One customer filed Chapter 11 in Q1, leading to higher provisions (reflected in ₹135 Cr other expenses). OEM now 78% of auto revenue, concentrated in large tier-1s. Media/telecom consolidation creates customer concentration risk if acquirer re-evaluates.

US ramp-ups constrained by visa availability. Company using third-party contractors (~90 bps onshore ratio increase in Q1) as stopgap. Visa fees (including H-1B $100k+ stories) cannot be passed to customers; absorbed internally or hedged via COLA negotiations.