Margin defended, order book soft—AI positioning unproven

Reported 2.1% CC, 2.7% INR sequential growth confirmed

Delivered 15.2% margin, in line with guidance range

$285M H1, +15% YoY; management admits order book miss, expected better delivery

Q2 ETR 29%, on track with guidance

Management cites tail-account exit and mix improvement, but order book miss signals execution gap

AWS AI Services Competency achieved; OpenAI select partner secured. Agentic AI code generation ~25% up from ~10% few months prior; 10% improvement in quarter

Management expected stronger order book in Q2. Admitted 'we did not do a good job.' Deals pushed to Q3/Q4 vs prior expectation.

E&U soft due to one European client ramp down. Management claims structural recovery in 2-3 quarters, not permanent degradation.

Wage hike 170-200 bps delivered, offset by operational efficiencies and revenue quality mix. EBITDA 15.2% vs 15%+ guidance.

Leadership hires completed; sales force expansion ongoing; dedicated AI-first capability building across service lines

Exit from non-profitable accounts completed. Annuity growing up. Confidence H2 better than H1 on signings and order book.

Wage increment 170 bps impact Q2. Operating efficiencies and revenue quality gains offset. Expect ~15% margin level sustained. Deal intake: disappointed but expected better; pushing into Q3/Q4.

Advanced AI driving margin via Agentic AI (code generation up 10% this quarter). Offshore intensity increasing. Competitive pressure acknowledged; margin confidence from capability depth.

Book-to-bill much better; trailing TCV up 9% YoY. Deal sizes becoming larger. Not yet at level needed for future growth trajectory.

Demand environment unchanged. Challenges remain. Utilization steady with incremental gains. Focus on revenue quality over headcount.

Top 10, 20 all growing in line with company. E&U ramp down is one-time client issue; structural recovery 2-3 quarters. Confidence on account health.

Advanced AI work increasingly offshore. Top 5/10/20 all growing. Manufacturing on recovery; very confident directional growth.

Both. Internal: ~25% code via Agentic AI. External: AI-infused across all service lines; platforms (Cogito, Lynx, Sigma) driving differentiation.

Leadership hiring done. Need couple quarters for leaders to be productive. Pipeline stronger; AI conversations increasing. No hard Q3 impact expected.

Q4 expected strongest (seasonal renewals, deal conversions). Beyond H2 depends on H2 signings. Management focused on order book execution; no breakout guidance.

PPE up from tech infra refresh (data centers, tech infrastructure). Intangibles from capability investments. No formal capex guidance.

Management emphasized order book quality over growth targets. H2 expected better than H1 based on ongoing conversations.

Wage hike 170-200 bps offset by operational efficiencies, revenue quality mix, and Agentic AI productivity. Q2 delivered 15.2%.

Reinvesting in data centers, tech infra refresh, service line capabilities. Part of capability and sales investment strategy.

Management admits 'we did not do a good job' on order book. Q2 deals pushed to Q3/Q4. If H2 signings falter, growth trajectory stalls.

Top 20 clients = 70% of revenue. One European Energy & Utilities client ramp down caused segment softness. High concentration is structural risk.

Q3 historically soft due to summer furloughs, holidays, lower client activity. Management expects Q3 soft; did not rule out surprises.

Large integrators competing on advanced AI services. Management acknowledged pricing pressure in competitive deals. Risk to margin expansion despite capability advantage.

Management expects recovery in 2-3 quarters (Q4/Q1) but timeline is estimate. If client ramp remains longer, E&U drag persists.