Edited Transcript of NIITTECH.NSE earnings conference call or presentation 5-May-20 2:00pm GMT

May 6, 2020 (Thomson StreetEvents) — Edited Transcript of NIIT Technologies Ltd earnings conference call or presentation Tuesday, May 5, 2020 at 2:00:00pm GMT

JM Financial Institutional Securities Limited, Research Division – Director of India IT Services and Software Equity Research

Asian Markets Securities Private Limited, Research Division – Analyst of IT and Textile

Ladies and gentlemen, good day, and welcome to the NIIT Technologies Q4 FY ’20 Earnings Conference Call. (Operator Instructions) Please note that this conference is being recorded. I now hand the conference over to Mr. Abhinandan Singh, Head, Investor Relations and M&A at NIIT Technologies. Thank you, and over to you, Mr. Singh.

A warm welcome to all of you to our Q2 FY ’20 earnings conference call. You would have received our results by now. Those are also available on our website, www.niit-tech.com.

Present along with me on this call are our CEO, Mr. Sudhir Singh; and our CFO, Mr. Ajay Kalra. We will start this forum as usual with opening remarks from our CEO; and post that, we will also open the floor for your questions.

With that, I would now like to hand over the floor to Mr. Sudhir Singh, our CEO. Over to you, Sudhir.

Thank you, Abhinandan, and a very good evening and a very good morning to everyone across the world, folks. Welcome to the quarter 4 FY ’20 call where we will discuss the quarter 4 results and the fiscal year ’20 results.

At the outset, let me state that I hope that your families, your loved ones and you yourself are safe and healthy as we pass through the COVID-19 pandemic. I know that a lot of you have made time for this call when you are dealing with the other ramifications of the pandemic, and I would like to thank you very sincerely for joining us for this conversation today.

With that, I should now share details of our quarterly and annual results. This is quarter 4 fiscal year ’20. We are very pleased to report that the quarter that closed has been a strong growth quarter for us. We are equally pleased to state that the year gone by has been one of the most successful years in the firm’s history. Let me start with the quarterly — quarter 4 results first, and let’s begin with the Q4 revenue analysis.

During the quarter, revenue grew sequentially by 3% in constant currency terms to INR 11,093 million. In reported terms, revenue grew 3.3% quarter-on-quarter. The growth comes despite very strong headwinds that the firm has experienced on account of the COVID-19 outbreak, especially in the travel sector. The growth is also a testament to the depth of our client relationships, the strong order executable that we entered the quarter with, the flow-through impact of the recent large deal wins and of course, the commitment of our employees. Within this quarter, our insurance services business grew 5.8% quarter-on-quarter, contributing to 30.9% of the quarter’s revenue, while the BFS business remained flat and contributed to 15.4% of the revenue.

The travel and transport services business declined by 2.1% quarter-on-quarter, contributing to 27% of revenue. Other segments collectively expanded 8.7% quarter-on-quarter, and they now represent 26.7% of the overall revenues. The geo-based cuts for the quarter on revenue front were as follows: Americas, EMEA and the rest of the world contributed 46%, 40% and 14% to the revenue mix. The top 5 clients now contribute 27% of the total revenue and the top 10 and the top 20 contribute 37% and 50% of the total revenue, respectively. The broad-based growth that the firm has experienced is reinforced by the number of million-dollar-plus clients, which stands at 106 at the end of quarter 4. On-site revenues represented 64% of total revenues.

I shall now move on to the margins and the operating profit analysis for quarter 4. We are pleased to report that in a very tough quarter we were able to hold margins at 18.1% in constant currency terms. The reported margin was 17.9%. As you will note, our margins continue to be best in class for a firm our size. The EBITDA increased by 2.5% during the quarter and stands at INR 1,988 million. The continued growth allied with a very strong operational rigor and cost outs during a difficult quarter were the key drivers of the EBITDA growth. Finally, our net profits contracted by 7.9% over last quarter to INR 1,136 million. The tax rate for the quarter stood at 21.9% of the PBT.

Turning to a quick run-through through the quarter performance, I shall now share the annual results for fiscal year ’20. This was an exceptionally successful year for the firm. The year’s revenue at INR 41,809 million represents a growth of 18.5% over last year. The constant currency growth for the year was 17.2% on the back of growth across all the businesses of the organization. Insurance expanded 20.5% year-on-year, contributing to 30% of the revenue. BFS expanded 13.9% year-on-year, contributing to 16% of the revenue. And travel and transport was up 18% year-on-year, contributing to 28% of revenue. Other segments collectively expanded 20% year-on-year, and they now represent 26% of overall revenues.

The geo-based growth cuts also shows sustained growth. Americas, which contributes to 48% of our global revenues, grew by 11.7% owing to higher revenues in all 3 verticals. EMEA revenues grew by 27.9%, and they now represent 37% of the revenue mix. APAC revenues grew 6.7%, and they contributed 9% of the firm’s total revenue. India contributed 6% to the firm’s total revenue and increased by 33.6%.

The digital portfolio of the firm, which contributed to 37% of our aggregate revenue, grew by 47% over the previous year. The IP-led products business of the firm contributed another 6% on top of the 37%. I’ve said this many times in the past, but we continue to apply a very stringent lens to classifying any revenue as digital. The quality of our digital revenue and the higher rate realization that we get therein as a consequence has been a significant influencer in the firm recording best-in-class margins over the last 2 years. Significant revenue growth in the year was accompanied by a material uptick in operating profits during the year as well.

EBITDA increased by 22.4% during the year and stands at INR 7,467 million. EBITDA margins stand at 17.9% for the year. EBITDA margin post-RSU stands at 17.8% for the year. Strong growth allied with very strong operational rigor were the key drivers of the operating profit growth. Finally, our net profit increased by 23.2% over last year to INR 4,740 million. The tax rate for the year stood at 19.5% of the PBT.

That, folks, rounds out the revenue and the profit analysis for the quarter and for the full year. I shall now switch on to the order intake section.

The order intake story remains very positive. We secured fresh business of USD 180 million during the quarter. Out of this USD 180 million order intake, the U.S. contribution stood at $81 million. EMEA was at $52 million, and we secured $47 million from the rest of the world. The cumulative order intake for this year, fiscal year ’20, was $748 million, which was 16% over the previous year. The large deal signing momentum continued from the previous quarter. We signed 3 large deals in this quarter as well. Two large deals were in the BFS vertical, and one was in the APAC business outside India. We signed 10 new customers during the quarter and with the sharpened market focus over the last 2.5 years to 3 years, we have now opened 40 new clients during FY 2019/’20, and we have opened 81 new clients over the last 8 quarters. The total number of our clients now stands at 355. Order book executable over the next 12 months has expanded again, and it now stands at $468 million. And that number, you will note, is up 20% year-on-year.

I — let’s switch over to a quick overview of delivery operations and capability build, and I shall now offer you a quick flavor of the process of activation and the stability of BCP, business continuity planning, operations and updates during the current pandemic; on core — and also on the core technical and the domain capability generation, which we’ve done in the last quarter in our delivery and our operations tactic. Let me start out by saying that our exposure to the airlines and the airports industry in the Asia Pacific region allowed us to realize the deeply disruptive implications of COVID-19 in advance starting early February itself because that region was impacted first as we will recall.

That advanced warning allowed us to frame our global operations appropriately to ensure business continuity. As a matter of fact, we did 2 dry runs of our entire BCP plan even before the lockdowns in India were announced, and that helped us in turn to resolve operational issues like laptop provisioning. In our case, over 2,000 laptops and hundreds of desktops had to be incrementally provisioned. And amongst other aspects, we also set up and more importantly, more than just set up, more importantly, tested the virtual desktop infrastructure, increased VPN licenses from 200 concurrent VPN connections to 11,200 concurrent VPN connections in 3 days flat. We believe it is a testament to the robustness of the BCP plan and its activation, which were operationalized, that within 2 days of the lockdown, almost every billable delivery team member was fully enabled and operational leading to negligible billing revenue loss.

The robust revenue growth that I talked about during the quarter is a direct reflection also of the detailed preparations that enabled us to make a near immediate and seamless switch to work from now. Another testament to the robustness of the delivery operations during this period has been that we have been able to start new critical engagements, complete key large transitions and launch new capabilities during the height of the COVID crisis. I shall be talking to some of those today.

A robust, sustainable, derisked functioning work-from-home model has been a revenue driver for us as well. During the peak of the lockdown and social distancing, a new client [turned] to us for help. They needed cover for a front-line service desk operation that had failed to address BCP in the light of COVID. Our team, which was set up and running robust operations, stepped in and provisioned over 100 service desk personnel operating from home fully productive within a week, enabling them to continue 24/7 support with 0 downtime for their client.

Another example for a top 10 customer of the firm, we had started a large transformation project in December that will change the way their audit is conducted by bringing greater transparency, speed and availability of information and its accuracy. That project was initiated just weeks before the full impact of COVID-19, and I’m very pleased to say that Phase I, which was the most complex part of the project is on track and scheduled to go live in mid-July 2020.

Building platforms and software ecosystems for our clients is a core part of NIIT Technologies’ DNA. In our efforts to drive and support the platform economy, we recently started working with APPII, which is an online personal verification platform company founded in 2016. APPII’s platform provides customers a configurable software-as-a-service that automates the preemployment checking processes, reduces the time for background checks from weeks to minutes. We are now working with APPII to expand their platform to include verified health status service, which is a critical service that is required postlockdown be it for the airports, hotel chains, malls or other public spaces. NIIT Tech is APPII’s platform engineering partner now.

As social distancing becomes a new normal, NIIT Technologies has created an AI computer vision-based inspection platform to monitor social distancing for retailers, hospitals, warehouses and offices. This platform can read real-time video and image feeds and determine if 2 people are maintaining a safe distance from each other. We are in advanced talks with a few clients or in the process of piloting this platform.

Finally, on the financial services side, with the impending elimination of the use of LIBOR in 2021, we at NIIT Technologies have developed a framework for rapid impact assessment that creates a remediation and also removes LIBOR dependence road map for clients. At this point in time, we are working with some large financial institutions to roll out our assessment framework there.

Importantly, in quarter 4, we launched the beta version of the NIIT Technologies Digital Foundry. The Digital Foundry is our digital engineering platform that enables us to compose digital solutions at an accelerated pace and explore the art that are possible with emerging technologies. Our innovation-as-a-service offering leverages our Digital Foundry’s 7 studios, 40 digital assets and [Simply Crowd], which is our crowd-sourcing service, enabling our customers to ideate, innovate and incubate.

And finally, as I round out this section, I’m happy to say that our market-leading Pega practice received an award of partner excellence in growth and delivery at PegaWorld 2019 for the second consecutive year during the last quarter.

Moving on to the people aspect. There was an increase in headcount by 307 during the quarter. The total headcount at the end of the quarter is 11,156. Utilization during the quarter was 78.1%. Attrition stood at 11.8%.

A quick recap of the balance sheet metrics. Cash bank balances stood at INR 9,365 million, which is an increase of INR 305 million over the previous quarter. It is a decrease of INR 393 million over the previous year. CapEx spend during the quarter was INR 159 million, and the debtors at the end of the quarter stand at 75 days of sales outstanding.

Hedge position. Outstanding hedges in U.S. dollars are USD 75.93 million at an average rate of INR 73.89 to the U.S. dollar. In British pounds, we have GBP 21.65 million outstanding, and that’s at INR 94.53 to the pound. And in euros, those numbers are EUR 5.83 million at INR 83.86 to a euro.

Finally, the outlook section moving forward. As you’re aware, as a firm, we have always stayed away from offering a guidance. However, given the exceptional circumstances that surround us on account of the COVID-19 pandemic, we would like to share our plans around revenue and margins for the near term as an exception.

Before I offer our outlook, it is important to recall that the 3% sequential constant currency growth in Q4 came through despite the material headwinds in the travel industry that were in effect for at least half of the quarter. This growth was a function also of the strong locked in order executable, which came off the back of 11 consecutive quarters of order intake increase. We were able to absorb the revenue losses from the airline subsegments, which account for 46% of our total travel segment volumes, and yet grow because of the momentum from the large deals that had been closed in the previous quarters and the fact that 6 out of the 7 constituent businesses of NIIT Technologies outside the travel business continue to plan for growth. As noted within the travel sector as well, our exposure to the airline segment is currently 46% of our total revenues. The quick successful and seamless billing loss-free pivot to a work-from-home model was also key to winning the trust of our clients and, in some cases, resting the share of our competitors, where our clients attempted partner consolidation during the current lockdown.

In quarter 1 fiscal year ’21, where we are already approaching the midway mark of the quarter, we expect to see a sequential single-digit revenue decline, which shall be driven by the erosion in volumes that we anticipate from our existing travel clients led by those in the airline sector. In quarter 2, based on the direct impact of the 3 large deals we have signed in quarter 4, which I talked about, which would have completed transition in quarter 1, along with the bounce back from the non-airline travel segments, we expect to see a sequential revenue growth.

Over the last 3 years, thanks to management team reconstitution at NIIT Technologies, we have delivered industry-leading organic growth. Importantly, that growth has been predictable and has been in line with the plans that we have shared in advance. Our plan is to grow in fiscal year ’21 despite the COVID-induced headwinds. In fiscal year ’21, we do intend to stay at or near the head of the pack of IT service providers on organic revenue growth. On the margin front, we took very strong and very urgent action. And the speed of those actions was in line with our approach to the rapid BCP implementation as well that I’ve spoken about.

In addition to reflecting strong and immediate cuts across all non-personnel part of our costs, we have canceled all salary hikes for the year. As a consequence to these plan measures, we expect our margins for the year, net of [these soft] costs to be within 80 bps of our fiscal year ’20 margins.

That, ladies, gentlemen, brings me to the end of my opening remarks. I shall now hand this back to Abhinandan to take us forward. Abhi, over to you.

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Operator [4]

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Shall we begin with the question-and-answer session?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [5]

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Abhi, are you there?

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Abhinandan Singh, NIIT Technologies Limited – Head of IR and M&A [6]

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Hello. Yes. Thanks, Sudhir. I was actually on mute. Operator, can we start the Q&A session, please? Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from the line of Sandeep Shah from CGS-CIMB.

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Sandeep Shah, CIMB Research – VP [2]

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Hope the management team is safe and all at NIIT are being safe. Hello, can you hear me?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [3]

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Yes, Sandeep.

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Sandeep Shah, CIMB Research – VP [4]

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Yes, yes. Just first question, Sudhir. Thanks for the — giving the outlook in — during the uncertain times. Just wanted to understand how the Travel & Transportation as a segment is behaving in terms of your negotiations with the clients as a whole. So is it the project cancellations, which are happening? Is it the billing rate cuts, which are coming? And on — how you are so confident to say that the second quarter may see a Q-on-Q increase in the growth because there could be some pressure, which has started to — visible in 1Q will have a full quarter impact in the second quarter as a whole. And within your top 20 accounts, do you see any systematic risk with any of your clients where their existence may be questionable as a whole because of the COVID situation?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [5]

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Let me take the first question around the travel piece, Sandeep. Travel for us is — the issue in the travel industry, and those issues are particularly acute when it comes to the airline industry, is something that we’ve already live with, experience and been exchanging very detailed notes with our clients over the last — over the second half of last quarter itself. So quarter 1 isn’t necessarily going to be a quarter where we will start getting a full sense of what has gone down. We believe that travel is an industry that is going to be distressed, and within travel, airlines are going to be distressed for a while. As we look at the future, we don’t expect these airlines to start bouncing back anytime soon. And we bake those projections and those assumptions into the planning that we’ve offered here.

Overall, the way we approach travel is to look at travel as an industry as a composite of airlines, travel technology players, [airports which span] hospitality and surface and rail transport. Airlines, as I said, during the results readout constitute 46% of our travel industry volumes, and we believe that those volumes are going to continue to stay under stress. They were under stress last quarter. They will be under stress in quarter 1. They will be under stress in quarter 2, and as we model the future, we are modeling the fact that they will continue to be under stress in quarter 3 as well. So our projects — our current assumptions around growth bake in significant and long-term compression in IT spends in airlines. They also bake in the impact of the $468 million order executable that we are walking into the next quarter with, the impacts of the 3 large wins on top of the 4 large wins in the previous quarter that will come in; the impact of a few non-large win deals, which are very material like a $9 million ACV deal that we’ve signed in insurance where the revenue will come in the current year itself; and the impact of scalable engagements in newer verticals like health care. We started a 100-member engagement last quarter, which will start flowing in.

So if I were to come back to your question around travel once again, travel is an industry that we recognize is under distress. Within travel, we look at the industry as a composite of 5 subsegments. One of those, which represents 46% of our volumes in quarter 4, is particularly distressed. We have baked in a long cycle recovery there. And on that conservative basis, looking at order executable; looking at the large deals that we’ve locked in, which will start delivering for us; looking at the impact that we are getting in terms of scalable wins from new verticals that we are incubating; looking at the fact that even within travel where airline customers who had been under stress have consolidated, they have gone with us; and looking at the ground-up build of our best estimates, we’ve offered the outlook that I did on behalf of NIIT Technologies.

Coming to your second question around looking at the top 20 clients and if there is a systematic risk, at this point in time, for any client that we see going into quarter 1 as a top 20 clients, we do not see a systematic risk of any 1 of them going down. As you can imagine, there are a few airlines in the top 20. We have assumed very compressed revenue generation from those airlines in the next few quarters, but there is no systematic risk that we see in the top 20 clients.

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Sandeep Shah, CIMB Research – VP [6]

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Okay. Okay. This is helpful. Just on the first quarter, you are seeing a single-digit decline, while some of your large peers are indicating a mid-single-digit kind of a decline in the first quarter, which is similar to what GFC slowdown has seen. With your portfolio more concentrated with the airlines, is it fair to say that your decline in the first quarter could be higher than the industry average?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [7]

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I think the first thing that we need to recognize is that our growth in quarter 4 has been — as far as some of the results that are monitored have been significantly higher than industry average. So that’s the base that we’re entering quarter 1 into. At this point in time, we would like to state that after that 3% growth in quarter 4, which I think we all recognize is high, we do not expect anything more than a single-digit sequential decline in quarter 1, followed by growth in quarter 2 as I said. It might — it will be difficult for me to say at this point in time whether it’s going to be low single digit, mid-digit or high single digit, Sandeep, but we are very clear, since almost half of the quarter is gone, that it will be in the single digits only.

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Sandeep Shah, CIMB Research – VP [8]

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Okay. Fair enough. And just for clarification, you said FY ’21 growth would be actually a positive growth at or near the industry, where we could be slightly ahead of the industry on an organic basis and the margin you are seeing, 80 bps plus or minus to the FY ’20 margins, right, reported margins.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [9]

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That’s absolutely correct, Sandeep. And the point that I was making was, in the last 3 years, if you look at our organic constant currency growth, it’s been the highest or right next to the highest over the last 3-odd years that the new team has been in place. This year as well, when we look at the future, when we look at quarter 1, when we look at quarter 2 and quarter 3, quarter 4, obviously, we haven’t talked about. It will definitely be a growth year as we see it and as we are planning for it, and the intent of course is that despite, despite the compression that we see on the airline subsegment. We would still like to be at the front of the pack when it comes to organic revenue growth by the end of the year.

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Sandeep Shah, CIMB Research – VP [10]

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Okay. Okay. And just last few things, if you can give color in terms of the demand scenario in the other segments in the COVID, especially in the banking capital markets, insurance and the other segments. And can you also throw some light about the extraordinary charge, which also relates to a bit of a forward-related impact? What [is the — exactly that as in nature]?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [11]

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So from a demand scenario perspective outside of the airline subsegment within travel, the travel tech piece seems to be resilient within travel itself. Airports, there seems to be a compression, but there are also conversations going on around automation and digitization so — and surface and rail transport again seem to be resilient. So that’s the overall picture of the subsegments within travel itself outside airlines.

On the BFS side, we expect to see continued growth going into next year. We actually expect to hopefully see growth on the BFS and the insurance side in quarter 1 sequentially as well. Two out of the 3 large deals that I shared with you have come from BFS and 1 has come from Asia Pacific. And that also plays into the demand into the revenue growth analysis and expectations from [our own target].

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Sandeep Shah, CIMB Research – VP [12]

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Okay. Okay. I have more question, will come in a follow-up. And congratulations on very strong execution you have done last year, and it looks like again a good year versus the industry ahead.

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Operator [13]

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(Operator Instructions) We’ll take the next question from the line of Pankaj Kapoor from JM Financial.

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Pankaj Kapoor, JM Financial Institutional Securities Limited, Research Division – Director of India IT Services and Software Equity Research [14]

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Sudhir, congratulations for the good results. Two questions from my side. First, what kind of pressure are you seeing specifically with your airline client in terms of pricing and the business volume? I mean if you can give some color in terms of any kind of a sense or what kind of a pricing demand that your clients are making, that will be helpful. And second, if you are looking at airlines under distress, airlines is roughly about 50% of our travel and transportation, overall around [15-odd] percent of our revenues. What has been the confidence about the outlook in the other verticals? Are you not seeing any similar kind of stress in the other verticals, which is making you confident of a growth on overall basis?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [15]

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Thank you, Pankaj. So when it comes to the airline clients that we talked about — and Sandeep had made a point earlier around exceptional costs related COVID-19. Part of that $1.8 million, INR 128 million that you see is a provision for a receivable of an airline in Asia Pacific that has gone into administration. So getting back more directly to your question, from airline clients, there is a very clear pressure on volumes, which began around — with the APAC airlines beginning of February and with the airlines in the rest of the world beginning of March, which is likely to continue. So there’s clear volume compression that is happening.

On the pricing side, there has been asks for pricing decreases. In a lot of cases, the ask around a pricing reduction has been accompanied by an opportunity around increasing wallet share over time because of vendor consolidation that is also being attempted by airlines. So that’s, at a very high level, the pressure on the airline client side that we see the good thing — the only good thing, the only silver lining that we’ve seen so far is the pressure on the airlines around cost is leading them to consider very proactive proposals that we made around consolidation. And in the case of 1 airline, we’ve been able to, over the last 6 weeks, actually consolidate vendors and significantly improve our wallet share, even though our revenue will stay the same in the short term but over time, hopefully, become larger.

You’re absolutely right on question #2 around the fact that airlines constitute 46% of our revenues as seen from a quarter 4 lens, the quarter that ended. In quarter 1, I expect that 46% to fall materially. Airlines, therefore, contribute roughly 13% — contributed roughly. Revenues from the airline subsegment contributed roughly 13% to the company’s aggregate revenue in quarter 4.

The distress that we see on the airline industry front and the fact that we believe that it is not something that’s going to go away in less than a 10-month window at least is being offset when you hear the commentary that I gave around quarter 2 and for the year. On the back of the fact that quarter 3 saw 4 large deal wins that we secured and those deal wins are the 1 of the reasons why we were able to grow in quarter 4 despite the airline-related headwinds, that record of 4 large deal wins in quarter 3 has been backed up by 3 new wins in quarter 4. Each of these large deal wins, as we recognize, takes about 2 to 3 to 3.5 months of transition before material revenue starts coming in. When we do a grounds-up build and we marry the executable this year, which I believe is about 20% higher than at this point when we started last year, when we marry that with the [clients and] order intake through the year was 16% more than last year. And when, most importantly, we do our own internal stress check to ensure that the large deals are not going to get impacted by COVID-19 and when we did that, we believe that those deals and that revenue flow is not going to get impacted. The transition is going on. We have a sense that we will be able to manage the downturn. We did manage it in quarter 4, but the impact wasn’t there for the full quarter. We expect a sequential decline, which you know [somehow] is unlike, unlike the kind of results we’ve given in the past because, in the last 12 quarters, we have never ever declined. This is the first time we will decline. And in quarter 2, looking at the number buildup, hence, we believe that there will be sequential — clear sequential growth over quarter 1. I hope I’ve answered that question, Pankaj.

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Pankaj Kapoor, JM Financial Institutional Securities Limited, Research Division – Director of India IT Services and Software Equity Research [16]

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Yes, this is very, very useful. So please let me just squeeze one more, so 2 parts. One is what kind of a sense you are getting on the deal closures in the current quarter or maybe going forward. I understand the momentum of deal closures has been fairly good in the fourth quarter, which is giving us the revenue visibility going into the second quarter. But do you expect any kind of a slippage happening on the closures in the current quarter or maybe in the second quarter, which can have a lag impact on the second half of revenue growth? So that is first question. And second is that, of course, this is a time when a lot of clients should be looking at vendor consolidation as an area to drive pricing. What makes you confident that NIIT, given the scale it is in, will not come under increased pressure from the much larger-scale players?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [17]

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Sure. So let me take the first question first, Pankaj, which was around deal closure. The deal pipeline getting into quarter 1 is looking robust. Quarter 3, 4 large deals were signed. Quarter 4, 3 large deals were signed. We have some good irons in the fire. We have some good deal conversations that are in advanced stages. And the deal pipeline, despite the COVID-19 impact for quarter 1, of deals that can possibly close within quarter 1 continues to be robust. The flavor of the deals has changed a little bit, Pankaj. Some conversations are more centered around taking over small, captive units that were set up by some of our clients. A lot of them are centered around consolidation, and we are focused more on consolidation where we are the first to go back, and that’s something that we’ve done in quarter 4, where we were the first to go back with a proactive proposal instead of waiting for the client to get a deal adviser and then run a structured process. And there is a certain flavor in some of these deals, which has to do with the rebadging of existing employees of clients where the clients want to offload cost themselves. So the flavor of the deals has changed a little bit, but the size and the velocity of closure continues to be on the lines of what we had seen in quarter 3 and quarter 4.

As far as consolidation is concerned, our intent is to — was to actually — it’s not as to. Our intent right at the outset when we first started seeing issues in the travel airline sector in February beginning of the year was to make sure that in quarter 4, we went back with proactive consolidation proposals. From our point of view, this isn’t the case of trying to create proposals going forward. Everything that we wanted to propose on the consolidation front has been presented, in some cases re-presented to the clients. We have already secured one consolidation win. There is another one which we think we might have over the next 1 month. When it comes to consolidation opportunities and when I gave you the commentary around margins actually being 80 bps — potentially up to 80 bps lower next year, a lot of that analysis is based on the fact that we will, in the short term, have to offer some discounts or big discounts in some cases to increase our wallet share.

It’s also, as you can imagine in the case of a mid-tier player like us, a function of choosing our battles. It’s a function of speed, and it’s a function of showing keenness and flexibility. Those things and those attributes are the ones that have allowed us to grow fast. The consolidation proposals are in. Some wins have been registered. Looking at where some of the other conversations are, we feel good about where we are. We understand that in some cases, we will have to discount to them. And I think the appetite is very clearly there not to be underbooked.

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Operator [18]

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The next question is from the line of the Dipesh Mehta from SBICAP Securities.

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Dipesh Mehta, SBICAP Securities Ltd., Research Division – Information Technology Analyst [19]

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Just a couple of questions. First, about the (inaudible) data points, which you generally said about NITL and WHISHWORKS, revenue and margin. And then maybe I can ask you a second question thereafter.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [20]

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Sure, Dipesh. So WHISHWORKS, the revenue for the quarter in Indian rupee terms was INR 721 million. The margins for WHISHWORKS for the quarter was 35%. For NITL, the revenue for the quarter in India rupees was INR 735 million. The margins for NITL for the quarter were 40%.

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Dipesh Mehta, SBICAP Securities Ltd., Research Division – Information Technology Analyst [21]

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Sudhir, based on these 2 business, I think these 2 business seems to have very strong quarter, WHISHWORKS as well as NITL. If you can help us understand what drive this strong performance in Q4 and how we expect them to play out. Second question is about the FPP and T&M mix. If you look at businesses, you can see significant change this quarter. So if you can provide what is playing out there. And the last question is about the request from client about having extension of credit period. If you can provide your perspective and how NIIT Technologies is handling that.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [22]

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Thank you, Dipesh. Let me take all the 3 questions in order. WHISHWORKS and NITL, you’re correct. This has been — this was a strong quarter for the businesses. As a matter of fact, the entire year was a very good, successful story for both WHISHWORKS and NITL. WHISHWORKS, from our point of view, was particularly important because this was a new entrant to the NIIT Technologies family. They’ve integrated, they’ve settled down, and they’ve contributed as a leadership team. Moving forward, we continue to expect them to keep chugging along at the same pace and with the same level of commitment that, that team has shown. NITL, again, as you would have noticed on the margin numbers that have gone up from the revenue number that has again been going up, we expect for a product business, our ability to continue to perform well even under a work-from-home environment to be particularly strong and robust. NITL, in many ways, is a product and is a software business. Everything that we see at this point in time from a specialty insurance domain perspective and from a software product operations perspective gives us comfort that the business again is going to go into quarter 1 and beyond and perform well for us. That’s the response to question number one, Dipesh.

Fixed price and T&M, from what I recall, I believe fixed price was roughly about 51% and T&M is about 49%. Fixed price component has gone up as some of the larger deals have started playing more into the revenue mix. Fixed price also could have gone up, and we obviously need to do some more analysis here because the share of the maintenance business and the support business, which then typically tends to be more fixed-price-driven, is going up. And the third reason why fixed price business is going up is because we have been pushing that construct over the T&M construct because it allows us more leeway to expand our margins by driving operational productivity and retaining some of the benefits of what the operational productivity delivers for us, hence the increase on the fixed price fee that you referred to.

Finally, client extension of credit. We have received asks from clients. We have definite asks for extension of credit terms over the next 1 quarter. So they want credit terms to be extended for the next 3 months. Each of those cases is being handled on a case-by-case basis. And where we believe that the credit worthiness is not and will not being fair, we are taking and will continue to take business calls in that regard.

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Dipesh Mehta, SBICAP Securities Ltd., Research Division – Information Technology Analyst [23]

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Just one question on the WHISHWORKS and NITL, whether you expect margin or profitability, whether actually it’s sustainable going forward.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [24]

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I expect the margins and — yes, and the profitability both to sustain, Dipesh. And I’m talking about fiscal year ’21 as well as the plus and minus that happens on a quarterly basis. Across the year, I expect the margins to sustain.

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Operator [25]

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The next question is from the line of Sudheer Guntupalli from Motilal Oswal.

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Sudheer Guntupalli, Motilal Oswal Securities Limited, Research Division – Research Analyst [26]

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I have just one question. Sir, regarding the name change of the company, just trying to understand what is the thought process at this juncture especially given the fact (inaudible) context, this name change will be required to have some — involving both time and money. Secondly, there is also going to be a cost associated with the rebranding of the company.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [27]

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Sudheer, a pleasure to speak to you. You are my namesake. So the name change, the process of the firm is underway. The different options around name, the connotations and time lines and associated costs were presented to the Board. The Board has approved the new change and we are planning to communicate shortly. Since we’ve received approval from the MCA, we will be reaching out to the stock exchange to share the new name with them from a regulatory compliance perspective. There is going to be a downstream process post that, and we expect the name change to get rolled out depending on what the market outlook is, somewhere between August to October of this year.

As far as the marketing spend associated with the name change goes, I and the team look at the marketing spend as a composite. Over previous year, given current outlook, our intent is to spend $2 million less on marketing costs in the current year over previous year. However, with the amount that is left and is retained, we believe that in the context of a B2B entity, which is who we are, we should be able to do a good job largely leveraging digital technologies and digital media to effect the rebranding. So a slightly long-winded answer but that’s how we see the name change, Sudheer.

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Operator [28]

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The next question is from the line of [Abhishek S.] from Elara Capital.

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Unidentified Analyst, [29]

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The first question is regarding the Others segment. I would appreciate any color around Others segment both for Q4 as well as what you’re expecting for ’21.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [30]

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Sure. So the Others segments for us, [Abhishek], is a composite of the revenue that we get from retail, from high tech, from health care and from media. We have — and we discussed this a little bit in the last quarterly call as well. We have been dipping our feet in the water to test verticals and subsegments within those verticals where we might, over time, enter full force. The Others segment growth that you saw in this quarter and for the year has been driven fairly significantly by the growth that came from the WHISHWORKS team that has become a part of our organization and our family. It’s come from the world that the Incessant Pega team continues to do well and continues to do at scale. We have experienced material upside in the last quarter since we did a pivot in the health care segment and there was — there has been a new client that we’ve added, [stayed out] with 100 people in quarter 4 itself in the health care space. So health care and high tech, given where we are right now, are the 2 other verticals where we are increasingly tuning ourselves, too. BFS, insurance and travel transport will continue to be 3 core verticals. High tech and health care, where we hired new sales heads based in the markets under a new overall global sales leader, are also increasingly becoming focus areas and more than focus areas, investment areas for us as we look at the future. Long story short, we expect the Others segment, given the fact that now we are focusing a lot more on them and are likely to construct newer verticals across those, should continue to grow and hopefully accelerate growth at some stage when we can — prices are lower, whatever — however many quarters it takes in the future.

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Unidentified Analyst, [31]

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That’s helpful. And the second part of the question, it’s a 2-part question. The first one is on the margins. You — thank you for giving a guidance for ’21. If you can just elaborate on the headwinds, tailwinds. And also, can we have a walk about the 4Q margins? The second part of the question is the expectation of growth in the second quarter. Is it building any captive monetizations or acquisitions? Or is this an organic number that you’re talking?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [32]

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Thank you, [Abhishek]. Let me take the first — second question first because that’s a lot easier. The quarter 2 sequential growth that I talked about is organic sequential growth that we are targeting. It does not have any inorganic or a captive acquisition [to look at].

Moving on to question number one. The first question around margins, headwinds and tailwinds. Clear headwinds that we see at this point in time are pricing headwinds that have come into play particularly in the travel sector. So that is something that we’ve seen now playing out for, I’d say, about 2 months. And we’re living through those and we are responding to those and, in some cases, taking advantage of those. The tailwinds that we see are the very aggressive cost cuts that we have done. Just as I believe we did — we approached the BCP exercise with tremendous speed, we prepared ourselves and re-prepared ourselves, tested, retested before the lockdown came. From the end of January, given our exposure to APAC airlines and airports, it was clear to us that we were going to hit the kind of issues that we did.

The cost-outs that we have done, we believe, have been extremely aggressive. When I gave those cost-outs and their implication on the margin and trying netting off the headwinds that we see in the compression on the margins that might arise as a consequence, that math leads us to believe that we will still, for a firm that is almost operating at an 18% EBITDA at our size, still be within 80 bps of that 17.9%, 18% EBITDA benchmark that we created for ourselves. You will recall that our organization used to operate at about 15% EBITDA till about 3 years back, somewhere in that benchmark of 15% to 15.5%. There were very aggressive measures that we had taken around SG&A. And as a consequence, a firm our size of about $600 million went all the way to 18%. We normally do a very granular and a very structured and a very intense process around looking at our costs. And we do, we believe, a very diligent process as we take very diligent and strong actions to make sure that what we plan for gets met. In this case, almost all the actions around cost have been undertaken or communicated. There is nothing that we are waiting on which we will act out in the future. They have either been undertaken or they have been communicated and are about to be undertaken.

So in some ways, those cost savings are under our belt. The headwind, clearly at a time like this, is going to come on pricing. We have real intent of starting to lose business that we would like to retain just because we could not match a discount ask if you wanted to retain that business. Hence, the netting of gets us to within 80 bps. And hence, the confidence around their margins are likely to end up despite the very clear headwinds that we see. And I’m sorry if I answered your question fully, Abhishek , but that’s how we look at headwinds to even, and that’s how we look at the sequential quarter to grow.

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Unidentified Analyst, [33]

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That’s very helpful. I just wanted to — last, a clarification. The increase in the receivable days, I thought were — you will have — you kind of link to the increase in provision, the onetime. Is that right?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [34]

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So I’m going to request our CFO, Mr. Kalra, to respond to that. Ajay, would you like to take that?

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Ajay Kalra, NIIT Technologies Limited – CFO [35]

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Thank you, [Abhishek]. Thank you for this, Abhishek . The increase in the DSO was because some of our payment got stripped from 31st of March. Though they have been realized, both of that, as of 31 March, we saw higher receivables days.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [36]

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I also want to just add on that in dollar terms, Abhishek, our DSO was 69 days, right? There’s — obviously, as Ajay said, there’s a certain set of things that are playing in. But if you really look at our DSO in dollar terms, [it’s positive].

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Operator [37]

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The next question is from the line of Manik Taneja from Emkay Global Financial Services.

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Manik Taneja, Emkay Global Financial Services Ltd., Research Division – Research Analyst [38]

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Congratulations for a good execution. I just wanted to pick your brain on a couple of things. Number one is that you mentioned that there is potential to acquire some of the captives. So would this be limited to the travel vertical or you were positive even outside of that? That’s number one. The second thing is that do you also see increased offshoring and higher share of offshore revenues going forward as customers look for more cost-optimal uses. And the last question was just a clarification question with regards to the revenue realization rate that we’ve seen in the current quarter, which is significantly lower than what we’ve seen for players — other players in the industry. So what’s driving that?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [39]

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Sure, Manik. Let me take the first 2 questions. And on the third one, I’m going to request our CFO, Mr. Kalra, to jump in. Capital acquisition is — as we look at it, there is a certain size bracket that we are considering when we look at captives. We clearly are not in the game to acquire 10,000 people or 5,000 people captives. The intent also is to look at captives that are adjacent to the verticals that we operate in and some of the conversations that we are having are with existing clients or the prospects who we were already in active conversations with in the past. So it’s not a stretch. It’s not an exercise around taking over a 6,000 to 10,000 to 20,000 people captives.

As far as offshore revenues are concerned, I think the one good thing that’s happened during the lockdown is that the resilience of the work-from-home model has been fully tested. And everything, all the way from proving that secured broadband connections work, hybrid proxies can actually help for security classification, that the file integrity management system works, SOX works, [networks], media infrastructure work, et cetera, has been improving. However, the fact that we’ve proven that the work from home is scalable or robust, to my mind, does not lend itself to clients saying that they will necessarily offshore more. I think what it has lended itself to is clients saying, yes, we feel confident about offshoring and we will sustain the levels that we have. So we’ve had very intense conversations, a lot of them not in-person conversations these days but almost on a daily basis. The refrain is we’re very happy with what we’ve seen happening. We feel very convinced that this is a model that we want to run with for years and decades going forward on the IT services, right? But I really haven’t seen anyone say that we just love work from home so much that we’re going to give you more work offshore. That’s one piece.

On the operations side, we don’t have much of an operation shop, as you know. But on the operations side, the same clients and the same client leaders who I’ve spoken to have had a fairly mixed reaction to the speed with which they call that piece of the industry respondent and the scale — the speed and the scale at which operations were able to be executed. So the jury is still out there in terms of what they will think about. So that’s how I would react to the first 2 questions, Manik, that you asked about. On the revenue realization front, I’m going to request Ajay to chime in.

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Ajay Kalra, NIIT Technologies Limited – CFO [40]

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Manik, I missed the question. Would you — can you please repeat the question?

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Manik Taneja, Emkay Global Financial Services Ltd., Research Division – Research Analyst [41]

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So Ajay, basically, when we see — look at our dollar realization rate in the current quarter, that appears to be more like between INR 71.50 and INR 72 to $1 as compared to the — to a much lower realization that we’ve seen for players in the industry. So I just wanted to understand, is this a function of us seeing higher billings in January, February or a mix of currencies? What’s driving that disconnect?

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Ajay Kalra, NIIT Technologies Limited – CFO [42]

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This is because of Europe geo and — which was — did very well in quarter 4 and high digital — and digital. So that’s what really is driving utilization.

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Manik Taneja, Emkay Global Financial Services Ltd., Research Division – Research Analyst [43]

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Sure. And if I can kick in with one more question. Sudhir, you talked about aggressive cost optimization measures that the company has taken. So does this mean some significant variable cut outs — variable cost cuts for our — for the team members? What exactly is it?

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Ajay Kalra, NIIT Technologies Limited – CFO [44]

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So the cost cuts include no wage hike. There has been wage cuts for partial year, travel cost cuts, marketing cost reduction. We’ve taken G&A actions. So both are cost measures we have taken over the period or have announced them, as Sudhir has mentioned.

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Operator [45]

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The next question is from the line of Madhu Babu from Centrum Broking.

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Madhu Babu, Centrum Broking Limited, Research Division – Research Analyst [46]

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Sir, on the travel apart from airlines, the Others segment like airports, that is also under serious stress, and the rail transport, large plants which we have. So how is the outlook in these segments? And second, on the WHISHWORKS (inaudible) these are all high project-based businesses, I mean, because of Pega and MuleSoft. So considering there’s a huge travel ban, I mean, so how the momentum is in place for these 2 units?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [47]

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Yes. Madhu, let me take both questions. As far as airports are concerned and as far as rail transport is concerned, you’re right. Some of those businesses like — actually almost all businesses are under pressure. But we do not see the same kind of pressure on the IT services spend of rail transportation players we work with or necessarily airports that we work with. In the case of airports, digitization and automation is actually becoming more important. There’s a big pandemic in place, and the fact that they are planning to reopen and, in the case of the Western countries, a lot of them have reopened and need more automation and digitalization. So that’s how airports is playing out. And quite honestly, we haven’t seen any material change in IT spend on the rail transportation and the surface transportation price. That’s answer one.

Incessant and WHISHWORKS are not very exposed to travel at all and I’m sure you know that, Madhu. The exposure that the Incessant and the WHISHWORKS business has to travel is very, very limited. WHISHWORKS is an integration business. And all digital businesses have been seeing a fairly significant increase in their demand. So the integration business continues to do well. And Pega, which is quasi — actually not even a quasi, an automation business, again continues to see good demand even though the nature of the work, as you rightly said, is project-based and has been project-based. Given the fact that the services are in demand, we expect these businesses to continue to tread this early May.

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Operator [48]

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(Operator Instructions) The next question is from the line of Shradha from Asian Market Securities.

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Shradha Agrawal, Asian Markets Securities Private Limited, Research Division – Analyst of IT and Textile [49]

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Congratulations on a very strong quarter. Most of my questions have been answered. Just a few quick questions, sir. Any thoughts on the capital allocation policy going into FY ’21?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [50]

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Shradha, the capital allocation policy is preserved with the Board. So that’s something that we communicate over time post the Board making decisions around that.

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Shradha Agrawal, Asian Markets Securities Private Limited, Research Division – Analyst of IT and Textile [51]

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Right. And you did mention that you are going in for an aggressive cost cutting. So it does mean that you’re not looking at any new, locked-in hires. So any offer which you would have already made to campus graduates, so are we sitting on to those offers?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [52]

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Shradha, we actually are not going and we’ve already executed or communicated almost the entire cost-out program, which is what Ajay was talking about as well. So that’s, in some ways, a done deal. And hence, cost savings should start rolling in cost. We are doing lateral hires because we do expect to grow in fiscal year ’21. Where we see opportunities — for example, the 100-member team that I talked about, which we ramped up in, I’d say, the last 6 weeks, on the health care side. We went to the market. We hired some of those people because we needed that domain and we did not have it in buckets, as you can understand, given our current vertical configuration. So we will hire where we need to hire because the plan is in this year to grow. However, we will be highly selective, as you rightly noted, in terms of who we hire and prioritize the bench that we have first.

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Operator [53]

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The next question is from the line of Sandeep Shah from CGS-CIMB.

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Sandeep Shah, CIMB Research – VP [54]

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Sudhir, just your good execution and consistency on revenue growth is continuing with your consistency on the order book. So just a question, entering into FY ’21, you still believe that the order intake range of $165 million to $175 million, plus or minus, may still continue looking at your efforts to go proactively with the clients. If not, you actually foresee a risk there that the FY ’22 revenue growth could be slightly at a risk. I do agree this is a long term question but if you can help us. And second, in terms of the order wins, which you are banking upon, do you believe — is there any risk in terms of any cancellation or delay in terms of the ramp-up schedules of these deal wins entering into 1H of the coming financial year? And some amount of clarification on the bookkeeping side, if you can give us a status update on the last announced buyback, when it would be implemented, whether Q1 or Q2 and why the minority interest as a charge has been much higher in this quarter as a whole. And digital revenues looks on a Q-on-Q basis as a percentage going down. What is the reason for the same?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [55]

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Okay. That’s a lot of question, Sandeep. So let me try to answer them as best as I can, and I’ll request Ajay to chime in around the minority charges and the digital revenue quarter-on-quarter growth towards the end. Starting out with the order book question. Order intake, as you know, Sandeep, the first thing we stress-tested when we understood that there was a problem on our hands in February was the integrity of the order executable number. The order executable number, as you’ve seen, is a record high, getting into next year at USD 468 million. We — I do not see any material risk to the integrity of that order executable number, which is, as you know, the revenue that is locked in for the next 12 months. So we stress-tested it all the way from February. We feel very confident that will hold and more than hold. Second, if the large deal velocity continues — and I’ve given you some color. We signed 4 large deals in quarter 3. We’ve signed 3 large deals despite everything that’s been going around us in quarter 4. And as I said, we have items in the fire around large deals in quarter 1 as well. In the large deals coming (inaudible), I think order intake numbers should hold. There’s no reason for them to go down. Most of our order intake aggregation actually is largely, to a great extent, a function of the large deal closure velocity. So that’s how I would respond to the first question around order intake and executable.

Second, do we see cancellations? Do we see ramp-ups? We’ve already seen cancellations. We’ve already booked the impact of those cancellations in quarter 4. We are aware of some cancellations in quarter 1, which is why the forecast that I’m offering you is not the forecast that I’ve offered you in the last 12 quarters as the Chief Exec. For the first time, I’m offering you a sequential, single-digit decline because we see those cancellations already behind us. I do not see any issues so far, touch wood, with any ramp-ups around the large deals. The reason why quarter 4 was a good quarter was because the ramp-up around the quarter 3 large deals happened, right? So specific to that question around do we see ramp-up cancellations, the answer is no. Have we seen cancellations in the past? The answer is yes, and that has been baked into our projections. Around buyback, the plan continues to be to execute it in quarter 1 itself. It will get executed once the lockdown in Mumbai and NCR is lifted, but the coming time line around quarter 1 folds. I’m going to step back and I’m going to request Ajay to come in and talk about the minority charges and the digital revenue Q-on-Q progressions.

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Ajay Kalra, NIIT Technologies Limited – CFO [56]

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Thank you, Sudhir. The minority charges are high because of the WHISHWORKS growth. And as Sudhir mentioned that the WHISHWORKS business has grown and 42% is a minority charge, and that’s why it is high.

On the digital business, on quarter-on-quarter, it is flat as our MuleSoft and Pega businesses did well. However, our [objective] work with our airline customers, we take some headwinds and there was a slowdown. So that was offsetting the growth in

MuleSoft and Pega.

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Sandeep Shah, CIMB Research – VP [57]

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Okay, okay. And just last question. In terms of the margin commentary of 80 bps down, you are talking on an adjusted basis of 17.9% for the FY 2020, right?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [58]

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That is correct. Again, the 17.9% margin, we believe, will go down 80 bps net of RFQ implications.

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Sandeep Shah, CIMB Research – VP [59]

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Yes. And what is this new RSU plans? And how this — how many employees being covered and how this charge will increase on a Q-on-Q basis going forward?

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [60]

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Ajay, would you like to take that question and explain the RSU, please?

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Ajay Kalra, NIIT Technologies Limited – CFO [61]

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Sure. In late March of 2020, we issued to France to senior management the long-term retention plan. Divesting of these RSUs or performance shares range from 1 year to 7 years. For most part, these are performance-based. The actual vesting will be determined based on the performance. The [advance] for — on average for a few years is approximately 40 to 50 basis points. However, as these are graded vesting, the first year charge is higher at 100, 230 basis points.

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Sandeep Shah, CIMB Research – VP [62]

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So you said 100 bps for the first year.

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Ajay Kalra, NIIT Technologies Limited – CFO [63]

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100, 230 basis points for the first.

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Sandeep Shah, CIMB Research – VP [64]

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Okay. And these are — and market price-linked? Or these are RSU or maybe at a face value you may issue?

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Ajay Kalra, NIIT Technologies Limited – CFO [65]

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These are at face value, this issue.

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Operator [66]

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The next question is from the line of Shradha from Amsec.

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Shradha Agrawal, Asian Markets Securities Private Limited, Research Division – Analyst of IT and Textile [67]

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So my questions have been answered. Thank you.

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Operator [68]

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And that was the last question. As there are no further questions, I’d like to hand the conference back to Mr. Sudhir Singh, CEO, NIIT Technologies, for his closing comments.

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Sudhir Singh, NIIT Technologies Limited – CEO & Executive Director [69]

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All right. Thank you very much. Thank you very much for your interest. Thank you very much for your participation, and thank you very much for the insights that your questions offer us. These are tough times, and I expect it’s going to be a while before we return to whatever the new normal is going to be. We suspect that most of the businesses that we work across will see a reset and not necessarily a restart. That’s what we are preparing for. Our biggest imperative over the last 2, 3 months have been to make sure our employees are safe and secure, and we’re happy to report that all of them and their families are. Along with thanking you, I just wish and I hope that you and your families in time stay safe and healthy. Thank you again for your interest, for your participation and for your time. Thank you.

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Operator [70]

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Thank you very much. On behalf of NIIT Technologies, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.

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