Wipro Ltd (WIT) 2008 Q1 法說會逐字稿

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  • Operator

  • Good morning, ladies and gentlemen.

  • I am Sandhya, the moderator for this conference.

  • Welcome to the Wipro quarterly earnings conference call.

  • For the duration of the presentation, all participants' lines will be in the listen-only mode.

  • I will be standing by for the question and answer session.

  • I would like to hand over to Mr.

  • Rajendra Shreemal.

  • Thank you and over to you, sir.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Hello and -- this is Rajendra Shreemal here.

  • Ladies and gentlemen, greetings from team Wipro to all the people joining in from different parts of the world.

  • Aravind, Lalit from Bangalore and Sridhar from the US and myself form part of the IR team in Wipro.

  • We are delighted to have you with us today.

  • In today's call, we will discuss the results of the quarter gone by and outlook for the quarters ahead.

  • And to do that, we have the entire top management of Wipro.

  • We will begin with a short address from Mr.

  • Azim Premji, Chairman, and Mr.

  • Suresh Senapaty, CFO, and follow it up with a Q&A session with the management team.

  • But before we do that, I have a small duty.

  • During the call, we might make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

  • These statements are based on the management's current expectations and are associated with uncertainties and risks which could cause the actual results to differ materially from those expected.

  • These uncertainties and risk factors have been explained in detail in our filings with the Securities & Exchange Commission of the USA.

  • Wipro does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of filing thereof.

  • This conference call will be archived and the transcript will be available in our website, www.wipro.com.

  • Let me now hand over the floor to Mr.

  • Azim Premji, Chairman.

  • Azim Premji - Chairman

  • Good morning to all of you all and welcome.

  • I am sure you have seen our results, which have been posted on our website.

  • I'd like to spend some time reflecting on our performance for the quarter.

  • Following that, Suresh Senapaty, our CFO, will share financial highlights and the management team will be happy to take questions.

  • Let me start by sharing some of my thoughts on the environment.

  • With the oil prices spiraling out of control, we continue to see a lot of uncertainty.

  • Our focus is to retain close proximity with customers and partner with them in their business priorities.

  • With the completion of our revised organization structure, we are in a good position to deliver better customer value.

  • Moving on to results, given the headwinds of macroeconomic uncertainty, our results for quarter one have been satisfying.

  • Wipro Limited recorded revenue growth of 43% year on year and net profits grew by 25% year on year.

  • In our IT business, Services revenue for the quarter was $1,067 -- $1,067m with a year-on-year growth of 37%, as against the guidance of $1,060m.

  • In rupee terms, the growth rate of our IT Services business was 39% year on year.

  • Growth continues to be driven by our differentiated service lines.

  • TIS, Testing and BPO grew upwards of 40% year on year.

  • Our Financial Services business continues to show resilience in the face of strong headwinds, with another quarter of 47% year-on-year growth.

  • We've also grown well in Retail vertical.

  • Our early investments in India and Middle East emerging markets continue to pay rich dividends, with another quarter of 50%-plus growth year on year.

  • We've won a few multi-year, multi-million dollar contracts in India and Middle East market and the deal pipeline is encouraging and strong.

  • We are seeing our investments in global programs, leadership in infrastructure services and enhanced sales footprint start to pay dividends in terms of large deal wins.

  • We announced seven multi-year, multi-million dollar deals in Services business during the quarter and the pipeline looks healthy.

  • Our ability to provide end-to-end solutions on infrastructure services and our enhanced global footprint helped us win large deal with the worldwide leader in the manufacture of high-quality audio and electronic products for management of infrastructure across Americas, Europe and Asia Pacific.

  • Our Products business grew 44% year on year, driven by systems integration wins and our leadership in IT business in India and the Middle East markets.

  • Our strong products -- presence in products, in addition to services, in these geographies gives us a leadership on end-to-end systems integration and total outsourcing deals.

  • Wipro Consumer Care & Lighting business continues to see good momentum, with industry-leading growth rates.

  • Our domestic business continued its robust revenue growth at 32% year on year, tenth consecutive quarter of 25%-plus growth.

  • Unza continues to grow well in all the countries we operate in.

  • Going beyond business, we recently launched Eco Eye, a corporation-wide initiative on ecological sustainability.

  • It is a comprehensive program that drives increasing ecological sustainability in all our operations, as also in areas of influence.

  • The initiative attempts to engage, with increasing levels of intensity, with all our stakeholders, Wipro's own employees, partners, suppliers, customers and immediate (inaudible).

  • We work on dimensions of carbon neutrality, water balance, water -- waste management and biodiversity.

  • I would now request Suresh Senapaty, our CFO, to comment on financial results before we take questions.

  • Suresh Senapaty - CFO

  • A very good morning to all of you, ladies and gentlemen.

  • I'll touch upon areas in our performance in financials that I believe will be of interest.

  • Our IT Services revenue for the quarter was $1,067m against a guidance of $1,060m, a sequential growth of 3.5%.

  • As communicated during our last earnings call, we have revised the reporting segments post the reorganization of our IT business.

  • We will now report Services margin at an overall level, as we believe that, post our reorganization, there is integration of our BPO and (inaudible) business with our IT Services business and it makes more sense to view them as one rather than separate businesses.

  • Considering that we are in a transitory phase in reporting, we believe it would be help for analysts if we give apple-to-apple numbers for quarter one, so as to compare with the quarter four numbers.

  • Our Global IT business stood at $996m in quarter one, as against $960m for quarter four, a sequential growth of 3.7%.

  • Similarly, on the margin front, our Global IT margin was 21.1% for quarter one, as against 21% for quarter four.

  • The margin for Combined IT Services was 20.9% in quarter one, similar to the quarter four level.

  • The sequential growth is driven by strong performance of Financial Services and Retail, both growing 5.5% and 7.8% sequentially.

  • Our differentiated service line of Testing grew 6.4% sequentially.

  • The US and Japan geographies grew above Company average sequentially.

  • Infocrossing business continues to get well integrated and has a healthy pipeline of contracts, with closed contracts with TCV valued at $42m for the Infocrossing business.

  • And that compares with a run rate of about $37m of the ITO business per annum -- per quarter.

  • During the quarter, we added 31 new customers, four of which were Fortune 1000 / Global 500 customers.

  • The number of clients more than $50m on a trailing 12-month basis has increased to 14 in quarter one from nine in quarter one of last year.

  • In the current quarter, our realization improved by 3.9% for onsite and 3% for offshore sequentially.

  • On a year-on-year basis, rates for onsite and offshore improved by 5.4% and 4.6% respectively.

  • The improvement in rates was mainly due to improved realization in fixed-price projects and a few of our non-linear initiatives.

  • During the quarter, we were able to maintain our margins in spite of RSUs grant etc.

  • to improve realization and utilization.

  • On the foreign exchange front, our realized rate for the quarter was INR41.26 versus a rate of INR39.94 realized for the quarter ended March 31, 2008.

  • Our cost rates for foreign currency costs also went up during the quarter.

  • On a q-o-q basis, ForEx gave us positive impact to margins of about 0.1%.

  • As at period end, after assigning to the assets on the balance sheet, we had about $2.6b of contracts at rates between INR39.50 to INR45.

  • We raised an external commercial borrowing of $350m in March '08.

  • This is in effect a hedge for our overseas investment.

  • Translation loss of INR66 crores has been recognized in translation reserves in our balance sheet, which offsets the gain on translating our overseas investment.

  • In US GAAP, the translation loss of ECB are recognized in our P&L account.

  • Similarly, there is an equity fringe benefit tax of INR46m on ESOPs recognized in our P&L account.

  • This is reimbursed from employees, which show up in equity rather than as a P&L expense credit.

  • We believe that, in the short term, accounting principles sometimes do not completely reflect our effective economic results.

  • We will, effective this quarter, provide additional information in the form of an adjusted non-GAAP net income statement, excluding currency translation impact of (inaudible) on ECB and India fringe benefit tax on ESOPs.

  • We believe this will help our stakeholders see our underlying business results even clearer.

  • In arriving at adjusted non-GAAP net income for the quarter, we have excluded the translation loss of ECB and fringe benefit tax on ESOPs.

  • Of course, we will also continue to publish results as per GAAP and we will also provide a detailed reconciliation between GAAP net income and adjusted non-GAAP net income.

  • For the quarter ended September 2008, we expect volume-led growth with stable pricing.

  • We will have the impact of salary increases of our offshore employees in the current quarter.

  • We will be glad to take questions from here.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • It's over to you now.

  • Could you -- Sandhya?

  • Operator?

  • Operator

  • Thank you very much, sir.

  • We will now begin the Q&A interactive session.

  • (OPERATOR INSTRUCTIONS).

  • The first question comes from Mr.

  • [Sandeep Shah] of ICICI Securities.

  • Over to you, sir.

  • Sandeep Shah - Analyst

  • Yes.

  • This is -- the FBT on the ESOP, is it the main reason for the huge gap between US GAAP and Indian GAAP numbers on the (inaudible)?

  • Suresh Senapaty - CFO

  • No, that is only one item, which is about INR48m.

  • But the biggest item is the ECB, external commercial borrowing, which we took against a hedge of our investment in US dollars, where, because the loan was in Japanese yen and the investment was in dollars, the US GAAP does not permit hedge accounting and therefore it has to be charged off to the P&L account.

  • And that seems the biggest two differences -- the biggest differences.

  • But the balance others are typically in terms of -- on tangibles.

  • So for example, if you look at the net income under Indian GAAP and US GAAP, quarter one you have a gap of [90%/10%] which means 90%.

  • Typically, we would have a gap of about 1% to 2%.

  • So if you adjust for these two items, which is about INR71 crores, then the -- it is within 98% of the Indian GAAP.

  • Sandeep Shah - Analyst

  • Okay.

  • So, sir, these two taken together is INR71 crores, including INR4.8 crores from FBT?

  • Suresh Senapaty - CFO

  • Yes.

  • Sandeep Shah - Analyst

  • Okay.

  • And can you tell us the recurring FBT charge going forward for this year?

  • Suresh Senapaty - CFO

  • On the ESOP?

  • Sandeep Shah - Analyst

  • Yes.

  • Suresh Senapaty - CFO

  • Well, we don't know, because it is a function of when the employee exercises that.

  • You know there's new FBT rules that came in, as a result of which the -- it got subjected to ESOP -- it's subjected to FBT.

  • So this particularly is a problem vis-a-vis all the installed base of the FBT -- sorry, ESOPs, April 1, '07.

  • So you -- whatever recovery happens, it goes into the capital account and whatever -- sorry, the recovery goes to the capital account and payout comes to the [debit to the] -- under the -- at an operating margin level.

  • So this is the contrast we tend to do.

  • So the quarter one impact of that is about INR46m.

  • Sandeep Shah - Analyst

  • Right, okay.

  • And secondly, sir, if we look at our [consolidated] IT Services, the volume growth is roughly 2% and the pricing growth is 3% to 4%, but the dollar revenue growth seems lower, at 3.5%.

  • So is it more to do with the translation amount?

  • Suresh Senapaty - CFO

  • That is correct.

  • Sandeep Shah - Analyst

  • Okay.

  • Thanks.

  • Operator

  • Thank you very much, sir.

  • The next question comes from Ms.

  • Priya from Enam Securities.

  • Over to you, ma'am.

  • Priya Rohira - Analyst

  • Yes, hi.

  • Good morning to the management team.

  • My first question relates to if you could just give us an update on your [call] technology and telecom space, the business environmental change in terms of pricing or new opportunities.

  • Sudip Nandy - Chief Executive Telecom and Product Engineering Solutions

  • Hi, Priya.

  • This is Sudip Nandy.

  • Priya Rohira - Analyst

  • Yes.

  • Sudip Nandy - Chief Executive Telecom and Product Engineering Solutions

  • We had reorganized our erstwhile Telecom and Product Engineering business significantly this quarter.

  • We have now merged the Media & Entertainment business, which was elsewhere before, as a part of this, because of the convergence and synergies that we see in the Telecommunications and the Media Entertainment business.

  • We've also made the Product Engineering business horizontal, so that we can address markets and customers accessed by Manufacturing, Medical Devices, Retail and so on.

  • We've had a number of good wins, both in the technology sector as well as in the communications and media sector.

  • We, for example, had a win from a large equipment manufacturer in the computing space for complete design, development and delivery of a high-performance computing platform, which is a 18-month project.

  • And depending -- it's an outcome-based price model, so the revenues could be anywhere between 35m to 75m, depending on how successful the customer is.

  • We won a project for -- in the telecom space in the Middle East for WiMAX rollout for OSS management, which is a big win we have had.

  • We've also had a managed BSS network services from a private telecom operator in Indonesia.

  • We've had a win in continental Europe from one of the top tier telecom providers.

  • These are all wins in the quarter, but they have not translated to revenues yet.

  • We hopefully will see revenues in the coming quarters.

  • In the core telecom equipment vendor space, that is not growing as we expected it to.

  • There is a lot of activity, but consolidation is still taking place.

  • R&D budgets are frozen.

  • We are seeing an equal number of ramp-downs than ramp-ups.

  • As customers rationalize their product portfolio, we are suddenly getting information about particular projects ramping down.

  • Within two weeks, we are getting another order of a new technology project from the same customer ramping up, because they have decided to drop one product and go to the other.

  • So the difference between seven, eight quarters back and now in the telecom sector is that there was -- people were frozen in the headlights, but now there's a lot of activity.

  • So this thing may continue for one or two quarters.

  • But we are seeing net positives, but not as much positive as we wanted in the telecom equipment vendor.

  • I'm hopeful of the other two giving reasonable growth as our synergies start kicking in with the new restructuring we have done.

  • Priya Rohira - Analyst

  • But would you see stability coming forward, say in the December or the March quarter?

  • Sudip Nandy - Chief Executive Telecom and Product Engineering Solutions

  • In the equipment vendor space, because the others, I think, are not having the same kind of a challenge.

  • The telecom (inaudible) space is really growing very rapidly and the technology space is reasonable growth.

  • But the equipment vendor, yes, it may be March quarter or so when we -- provided there are no further acquisitions and consolidations.

  • It has taken two years for what has happened to become stable.

  • If there are some more consolidations, it might be another two years, but we don't know that.

  • Priya Rohira - Analyst

  • Sure.

  • And if you could give us an update on the profitability of the acquisitions, especially Infocrossing, where we are at this point of time.

  • Suresh Senapaty - CFO

  • If we look at Infocrossing at this point in time, as we said, in the shorter term, there will be a little bit of up and down in the margins, because we were looking at investment in the IHS space - IHS is the healthcare services space - because [well, clearly the] platforms -- the platforms are there.

  • They are being enhanced and more optimized to look at the current situation.

  • And (inaudible) also from the ITO point of view, there are global delivery models, which means you have to incur costs on both sides at this point in time to [sustain] it fully, so it gets into more of complete offshoring.

  • So on a shorter term, like we said, we expect good results towards the end of this fiscal and going forward in the next year.

  • Suresh Vaswani - Joint CEO and Member of the Board

  • Just to add on to that -- this is Suresh Vaswani here.

  • We see significant revenue pick up in terms of TCVs that Infocrossing has been able to get.

  • So last quarter, we got $42m, which is very specific TCVs for Infocrossing in terms of an order inflow.

  • And we are beginning to see stronger and stronger synergy benefits coming out of Wipro Technologies customers and Infocrossing customers in terms of integrated [opportunities].

  • Priya Rohira - Analyst

  • Sure.

  • And just one data point.

  • Out of the 8.8m of operating income which you have in IT Services, how much of it is coming from acquisitions at this point in time?

  • Suresh Senapaty - CFO

  • We, Priya, don't give that separate number anymore, because it's a consolidated thing, because typically when the integration is very complete and integrated, the tracking separately becomes an issue.

  • So we no more track that as a separate item.

  • That is the way we try to do it.

  • And for the first two to four quarters and thereafter once we have (inaudible), the [tracking] is no more separate.

  • They could [be very notionally] separate, but actually it sometimes reflects here, sometimes reflects there.

  • So it's not a very accurate measurement, except the first few quarters.

  • Priya Rohira - Analyst

  • Sure.

  • And if you could just also give us an update on the offshore salary hikes which will be coming from the next quarter and the reason why we saw employee q-o-q decline in Global IT.

  • Suresh Senapaty - CFO

  • Yes, Pratik.

  • Pratik Kumar - EVP HR

  • Priya, hi.

  • This is Pratik here.

  • Priya Rohira - Analyst

  • Yes, hi, Pratik.

  • Pratik Kumar - EVP HR

  • Hi.

  • We typically have an offshore hike in Q2 and we have not yet confirmed which month exactly we will be effecting the hike from.

  • So as we go through the quarter, we will be able to conclude on that.

  • Priya Rohira - Analyst

  • But of course, we could expect a moderation as what we are seeing for other players.

  • Pratik Kumar - EVP HR

  • (Inaudible) we have been maintaining almost the last -- about four quarters and, as we have heard the rest of industry leaders also speaking on the subject, there is certainly going to be a moderation compared to the range of hikes which were witnessed last year.

  • And we expect it more in the region of about 8%, [9%].

  • Priya Rohira - Analyst

  • Okay.

  • And also in terms of Global IT, we've seen net additions being negative rather.

  • What has been the reason for this attrition?

  • Pratik Kumar - EVP HR

  • So let's look at it in two [pockets].

  • Attrition, in fact, has come down compared to the previous quarter and [just picking up on the same theme], it had a lower base.

  • So compared to 18.5%, which was at the previous quarter, this quarter overall basis was about 8.4%, so (inaudible).

  • Our [own] effort during the quarter has been in pushing for higher productivity and making sure that our ability to deploy and move people across is much improved (technical difficulty) in this quarter and I think we are beginning to see some success of it.

  • Also, it is a fact that, in the quarter before, that is quarter four, close to the back end of the quarter we did end up taking a number of freshers joining from campuses.

  • And because of that spillover which we have had, we felt that we could actually moderate the intake during this quarter.

  • Priya Rohira - Analyst

  • What was the gross intake this quarter?

  • Pratik Kumar - EVP HR

  • The gross intake, it's -- what we end up sharing, Priya, is the net movement of the headcount.

  • On a gross basis, we do not end up indicating this number.

  • Priya Rohira - Analyst

  • And any indicative plan for Q2?

  • Pratik Kumar - EVP HR

  • No specific indication during the -- for Q2.

  • Suresh Senapaty - CFO

  • We don't share that information.

  • All we can talk about is the campus hiring [commits] that we have.

  • Priya Rohira - Analyst

  • Yes.

  • If you could just give that a bit, it would also be helpful.

  • Pratik Kumar - EVP HR

  • Yes.

  • So during the course -- the bulk of the campus hiring -- the joining season is biggest from Q2 onwards.

  • And we do want to make sure that, from the time we actually bring in the people, they go through those eight to 10 weeks of training, we are able to have them deployed in as short a period as possible.

  • And that's a factor which will [go in determining] in what sequence we bring in people.

  • So obviously, the number of campus hirings compared to the previous quarter is going to be a higher number.

  • I am unable to give you a precise number at this stage on what the exact number would eventually be.

  • Suresh Senapaty - CFO

  • But the offers that we have made for the people to admit -- join was about 14,000.

  • And typically, we have a joining rate which is between 80% to 90%.

  • Priya Rohira - Analyst

  • Okay.

  • That's really helpful.

  • Thank you so much and wish you all the best.

  • Suresh Senapaty - CFO

  • Thank you.

  • Operator

  • Thank you very much, ma'am.

  • Participants are requested to ask only one question in the initial round and can come back with a follow-up question.

  • The next question comes from Ms.

  • Nagarajan from JM Financial.

  • Over to you, sir.

  • Diviya Nagarajan - Analyst

  • Hi.

  • Most of my questions have been answered.

  • Just a follow-up on the fresher hiring that you had in the last quarter.

  • What is the actual intake of freshers that you hired in 4Q?

  • Pratik Kumar - EVP HR

  • So in the -- as I was sharing -- this is Pratik again, Diviya.

  • As I was responding to the earlier question, we had -- close to end of Q4, which is the last week of Q4, we had almost about 2,500 freshers joining.

  • So if I just keep that aside, in addition, in Q1 we had additional 800 people from freshman campus who joined us.

  • Diviya Nagarajan - Analyst

  • Right.

  • I'm also trying to reconcile your statements on productivity improvement which necessitated less additions during the quarter.

  • We haven't really seen utilization levels actually go up during the quarter and we still had a -- and like you said, attrition has actually come down.

  • Could you just explain how we had this 725 decline in Global IT Services?

  • Rajendra Shreemal - VP and Corporate Treasurer

  • In fact, Diviya, the utilization did go up by 50 basis points.

  • As you can see, from 67.4, it went up to 67.9.

  • And what you see is that the headcount decline is primarily that we were able to fulfill the volume growth with the internal resources and the attrition were not (inaudible).

  • Pratik Kumar - EVP HR

  • And this is Pratik again, Diviya.

  • What my colleague Rajendra -- what he shared was on a gross basis.

  • If I look at our net utilization, which is excluding trainees, that also moved up from about 38% to about 38.3%.

  • And if I take into account the net utilization including trainees, that also marginally moved up from about 33.8%, which was there in the previous quarter, to about 34.4%.

  • So I think we have seen the climb there, but -- and we feel reasonably confident to be able to maintain it and, if not, just push along it further during the course of this quarter.

  • Diviya Nagarajan - Analyst

  • Right.

  • So what is the improvement that you can see in utilization?

  • What is the optimal level that you would like to take it to, both including and excluding trainees?

  • Sambuddha Deb - Head of Global Delivery, IT Services

  • Diviya, this is Deb.

  • I'm the head of Global Delivery for the IT Services organization.

  • Actually, there are two parts to the utilization.

  • One is your intake of trainees, which primarily happens in Q2 and Q3.

  • This gives you a lumpiness of utilization coming down normally.

  • Now, we think we have worked that out and we have a more even spread of utilization which will go forward.

  • I think we will hold the utilization at the current stage with the current numbers that are looking like.

  • Diviya Nagarajan - Analyst

  • Okay.

  • So in effect, you're saying that, with the current kind of additions that you've had and the utilization holding steady, this would be the kind of levels that you're comfortable with in terms of [processes].

  • Sambuddha Deb - Head of Global Delivery, IT Services

  • We actually can bring it up a little further and that will depend on how the demand shapes up.

  • Diviya Nagarajan - Analyst

  • So when do you see -- do you expect to see this kind of a trend in additions over the next few quarters as well so you can continue to expand on utilization without having incremental hires?

  • Or do you think that will get reversed in the next quarter with the (inaudible) coming in?

  • Sambuddha Deb - Head of Global Delivery, IT Services

  • We have also --

  • Suresh Senapaty - CFO

  • Diviya, we don't share such granularity, because it's a pretty dynamic situation.

  • So it's not only quarter to quarter, but also what we see going forward.

  • And from that perspective, depending upon the kind of skill sets that we need to be having - should we be getting laterals, should we be getting campus more accelerated and so on.

  • So we have stayed away from giving any guidance in terms of the headcount addition, except to the extent of saying the commitment that we have made in terms of campus hiring.

  • Diviya Nagarajan - Analyst

  • Fair enough.

  • Could you just finally explain to me, of this [2%] growth that you're guiding for the next quarter, what will be the primary drivers of the growth in terms of verticals and too in terms of service lines?

  • Girish Paranjpe - Joint CEO and Member of the Board

  • Hi.

  • Girish here.

  • I think we have seen good deal wins from Manufacturing, the vertical.

  • We have seen good momentum in Package Implementation as well as in Testing.

  • So we expect that those will continue to be drivers for growth in the next couple of quarters.

  • Diviya Nagarajan - Analyst

  • Thanks and all the best.

  • Operator

  • Thank you very much, ma'am.

  • The next question comes from Mr.

  • Kunal from Edelweiss Securities.

  • Over to you, sir.

  • Kunal Sangoi - Analyst

  • Yes, thank you.

  • Could you talk a little bit about the Retail and Transportation vertical?

  • This quarter, it's also grown by about 6% -- about 7.6 percentage.

  • How do you see this demand environment in this particular vertical and any new deals that you would have won this quarter?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • So far, I think the performance, particularly in quarter one, of the Retail vertical has been very good.

  • We've grown ahead of the -- the Retail vertical has grown ahead of the Wipro average.

  • And we have -- and we see the deal pipeline there pretty strong.

  • And we have also won significant deals insofar as the Retail vertical is concerned, both on the implementation side as well as in the support side.

  • So basically, we see the outlook for this vertical going forward as strong.

  • Kunal Sangoi - Analyst

  • Okay.

  • Suresh Vaswani - Joint CEO and Member of the Board

  • We have -- you will be familiar with the acquisition that we've made, Enabler acquisition.

  • That positions us very, very strongly in front of customers as a complete solution provider and a very strong domain services provider to that segment.

  • So the outlook is strong (inaudible) for this vertical is strong going ahead.

  • Kunal Sangoi - Analyst

  • Okay.

  • And any particular kind of services that have been -- the demand for that service is particularly high in Retail or it's just a bunch of services?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • I must say one thing that, given our strength in terms of the Oracle implementation capability that we've got from Enabler, [we're seeing] significant customers for those types of services in that segment.

  • Kunal Sangoi - Analyst

  • All right.

  • My second question is with regards to the realizations.

  • You've seen a strong improvement in realization [3.3%] and 3.9% onsite, offshore.

  • Can you talk a little bit about your non-linear initiatives which is leading to the increase in fixed-price projects?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • What we've been able to do - and this is across Wipro, so it's not specific to any particular vertical - we've got the advantage in terms of having got [rate] increases in the past.

  • That has resulted in better realization this quarter.

  • We've also driven productivity strongly in some of our fixed-price projects and that has also resulted in better rate realization.

  • And going forward, we see the pricing environment pretty stable, but we will continue to drive productivity and we will continue to drive the non-linearity in our delivery model.

  • Kunal Sangoi - Analyst

  • Sure.

  • That's helpful.

  • Thank you.

  • Operator

  • Thank you very much, sir.

  • Next question comes from Kawaljeet from Kotak.

  • Over to you, sir.

  • Kawaljeet Saluja - Analyst

  • Hi.

  • My question is for Mr.

  • Senapaty.

  • Mr.

  • Senapaty, what would be the hedges which pertain to fiscal 2009 and what's the average rate at which those hedges have been taken?

  • Suresh Senapaty - CFO

  • The hedges that we have, which is about $2.6b, it is beyond what has been applied to the balance sheet (inaudible) March 31 -- June 30, 2008 is about $2.6b.

  • The ones that would be relating to the current year would be about one-third of it.

  • Kawaljeet Saluja - Analyst

  • One-third.

  • Is that right?

  • Suresh Senapaty - CFO

  • Yes.

  • Kawaljeet Saluja - Analyst

  • Okay.

  • And the average rate for that?

  • Suresh Senapaty - CFO

  • [The average] -- we don't have the average one, but it is a range from [INR39.5] to INR45.

  • Kawaljeet Saluja - Analyst

  • Okay.

  • Second is more on the hedging policy itself.

  • We have seen that the hedges have moved up from $600m four quarters back to $3.5b by the end of March.

  • We are seeing that coming down again.

  • So is your hedging policy governed by -- largely by a strong view in the rate on the rupee or is there any mandate about hedging cash flows for a specified number of quarters?

  • Suresh Senapaty - CFO

  • Yes.

  • We talk about four to six quarters, 50% to 100%.

  • So we have this big range going, which we [take typically].

  • [So it is in some form] a combination of uncertainty, (inaudible) movement in the past.

  • So it's a combination of both.

  • For example, we do take hedges for the long-term contracts and, for the other ones, we take a 50% to 100% kind of a range.

  • Kawaljeet Saluja - Analyst

  • Right.

  • And let's say if you have to sell -- forward sell the dollar now, what would be the realization which you would be able to get?

  • Suresh Senapaty - CFO

  • If we do a forward sell today?

  • Kawaljeet Saluja - Analyst

  • Yes.

  • Suresh Senapaty - CFO

  • For what period?

  • Kawaljeet Saluja - Analyst

  • One year.

  • Suresh Senapaty - CFO

  • I don't know what the (inaudible) would be.

  • Kawaljeet Saluja - Analyst

  • Okay.

  • Suresh Senapaty - CFO

  • About half an hour back, it was (inaudible) what we've bought and I presume the forward will be about 4% premium.

  • Kawaljeet Saluja - Analyst

  • 4%, okay.

  • The second question is for Pratik.

  • Pratik, are you on track to honor the campus commitments which you had given out in the previous year, that's the 14,000 students?

  • Pratik Kumar - EVP HR

  • Yes, Kawaljeet, completely.

  • Kawaljeet Saluja - Analyst

  • And what's the offers which you have given these campuses for people who join the next year?

  • Pratik Kumar - EVP HR

  • It's close to about -- it's -- while we are still going through the process, at this stage, we would have done almost about [6,500].

  • Kawaljeet Saluja - Analyst

  • Can you just repeat the number?

  • Pratik Kumar - EVP HR

  • Six five.

  • Kawaljeet Saluja - Analyst

  • 6,500.

  • Okay.

  • Thanks, guys.

  • Operator

  • Thank you very much, sir.

  • The next question comes from [Mr.

  • Sreevatsan] from [Spa Capital].

  • Over to you, sir.

  • Unidentified Participant

  • Just had a question on the $100m customers.

  • Could you just let us know which vertical you have those $100m customers?

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Could you please repeat your question?

  • Unidentified Participant

  • Which vertical did you have the $100m customers in?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • One of the $100m customers is from the technology vertical and the --

  • Azim Premji - Chairman

  • -- other one is from the [Energy Utilities].

  • Suresh Vaswani - Joint CEO and Member of the Board

  • The other one [is coming] from the Energy and Utilities vertical.

  • Azim Premji - Chairman

  • Right.

  • Unidentified Participant

  • Sure.

  • And (inaudible) your realized rate in the quarter revenues was about INR41, right?

  • So we just wanted to understand why is it lower than (technical difficulty) INR42?

  • Suresh Senapaty - CFO

  • I'm sorry (inaudible).

  • The realization -- realized rate for quarter one was INR41.26.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Why is it lower than INR42?

  • Suresh Senapaty - CFO

  • Why is it lower than INR42?

  • Is that your question?

  • Unidentified Participant

  • Yes.

  • Any particular reason, or it's because you had more sales in the month of April than (inaudible) your realization (inaudible)?

  • Suresh Senapaty - CFO

  • Yes, because it's a combination of when did you hedge it, what were the rates in April, May, June, what is the mix of business that has come in month one, month two, month three.

  • So it's a combination of all the factors which [might have impacted] on the rate.

  • Unidentified Participant

  • And also the --

  • Rajendra Shreemal - VP and Corporate Treasurer

  • [Sure, go ahead.]

  • Unidentified Participant

  • Hello.

  • What will be the impact of the wage hikes that we expect for the next --

  • Suresh Senapaty - CFO

  • Like we said that, so far as the wage hike is concerned, last year we gave it effective August 1.

  • This year -- this quarter, we will take a review of the same.

  • All we can share with you at this point of time that it will be moderate as compared to what we have done in the past and it will have an impact, but we have not sized it.

  • Unidentified Participant

  • Thank you.

  • Operator

  • Thank you very much, sir.

  • Next question comes from Mr.

  • Sumit Poddar of Birla Sunlife.

  • Over to you, sir.

  • Sumit Poddar - Analyst

  • Yes, hi.

  • Good afternoon, gentlemen.

  • I just wanted a color on the large deals that we have bagged, from which verticals and geographies that these deals are coming in.

  • Suresh Vaswani - Joint CEO and Member of the Board

  • Okay.

  • So let me answer this.

  • This is Suresh Vaswani here.

  • We have bagged, in terms of total contract value, deals close to $0.5b in terms of all the deals combined.

  • And these are typically deals which span out over five years.

  • Three of them have been between the $50m to $100m range and the rest of the seven deals have been lower than the $50m range.

  • There is no specific vertical that one is able to single out in terms of preponderance of deals.

  • It is pretty broad-based.

  • So we have seen deals in Retail, and we spoke about them a bit earlier.

  • We have seen deals in Manufacturing.

  • So it's pretty broad-based in terms of where the deals are coming from.

  • The other thing what we would like to say is, in terms of customers adds, customer adds have been pretty uniform across all the geographies.

  • And we've had also significant wins in terms of new customer adds in India and the Middle East regions as well.

  • Sumit Poddar - Analyst

  • Okay.

  • And what is the nature of these kind of deals?

  • Are these deals [RSP]-based or out of any kind of vendor consolidation or out of the existing clients?

  • Girish Paranjpe - Joint CEO and Member of the Board

  • Again, there is -- Girish Paranjpe here.

  • There is a combination.

  • Some are outright RSP-based, brand-new clients, where we have not done work before.

  • But an equal number of deals with existing clients, where we are going from [slivers] of work to more managed services across a broad range of work that we provide to them.

  • Sumit Poddar - Analyst

  • Okay.

  • And are there any cases where you have bagged deals from the incumbents because of the vendor consolidation kind of thing?

  • Girish Paranjpe - Joint CEO and Member of the Board

  • Some will involve vendor consolidation, because most of our clients and prospects do have existing providers.

  • So when we do a large outsourcing deal, there is automatic vendor consolidation.

  • Sumit Poddar - Analyst

  • Okay.

  • And specifically to the deals that we have bagged, are there any in this or --?

  • Girish Paranjpe - Joint CEO and Member of the Board

  • Yes, there are.

  • Sumit Poddar - Analyst

  • Okay.

  • Great.

  • Thank you so much.

  • Operator

  • Thank you very much, sir.

  • Next question comes from Mr.

  • [Priyadarshan Jha] from Standard Chartered.

  • Over to you, sir.

  • Priyadarshan Jha - Analyst

  • Yes, hello, sir.

  • Sir, your net profit margin has come down significantly to 11.6% from 18% in FY '08.

  • Any specific reason for that?

  • Suresh Senapaty - CFO

  • FY '08, we had some tax write-backs.

  • (Technical difficulty).

  • That's why we will be -- overall margin for the current fiscal will be equal or better than the last fiscal --

  • Priyadarshan Jha - Analyst

  • Okay.

  • Suresh Senapaty - CFO

  • -- although it's below the average of the last year.

  • Priyadarshan Jha - Analyst

  • Okay, okay.

  • Suresh Senapaty - CFO

  • So hopefully we'll make up the balance, remaining period.

  • Priyadarshan Jha - Analyst

  • Okay.

  • And, sir, you have mentioned that you have got seven multi-million, multi-year deals.

  • What's the approximate average size of the deals?

  • Suresh Senapaty - CFO

  • Like Suresh said, there are about three deals which are $50m to $100m and the balance are multi-year, multi-million.

  • Priyadarshan Jha - Analyst

  • Okay.

  • Suresh Senapaty - CFO

  • But there will be some $20m, $30m, $40m kind of thing.

  • Priyadarshan Jha - Analyst

  • Okay, understood.

  • Suresh Senapaty - CFO

  • And just to answer the earlier point, there's also the interest income, because as you know we did two large acquisitions last year.

  • Priyadarshan Jha - Analyst

  • Okay, okay.

  • Suresh Senapaty - CFO

  • And consequently, the surplus that we have, net of debt, is a much lower amount.

  • So the other income that we used to have on interest side last year is significantly lower this year.

  • So a combination of these three factors.

  • Priyadarshan Jha - Analyst

  • Okay, sir.

  • And my last question was do you see impact of slowdown in US economy in coming years -- means coming quarters?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • There is a global economic challenge and everybody is familiar with that.

  • That translates into challenges on the IT Services side.

  • Priyadarshan Jha - Analyst

  • Okay.

  • Suresh Vaswani - Joint CEO and Member of the Board

  • But coming from where we are coming, we do believe that the environment actually is an opportunity for us.

  • Given our spread of services, Package Implementation to Infrastructure to BPO, and given the investments that we are making in consulting and global programs, I think we are uniquely positioned to create a variety of opportunities with customers rather than only RSP-based opportunities and deliver some solid value to our customers.

  • So we see this as an opportunity going forward.

  • Priyadarshan Jha - Analyst

  • Okay, sir.

  • Thank you.

  • That's from my side.

  • Operator

  • Thank you very much, sir.

  • Next question comes from [Mr.

  • Shantanu] from (inaudible).

  • Over to you, sir.

  • Unidentified Participant

  • Good morning, sir.

  • I just wanted to know how this depreciation of rupee has affected your top line in terms of translation gain and how it has impacted your ForEx loss.

  • So what is the net gain (inaudible) throw us some numbers on that?

  • Suresh Senapaty - CFO

  • The ForEx loss was about INR67 crores.

  • Unidentified Participant

  • INR57 crores?

  • Suresh Senapaty - CFO

  • INR67 crores in quarter one.

  • Unidentified Participant

  • Okay.

  • Suresh Senapaty - CFO

  • And the impact on the operating margin, the EBIT, was 0.1% in comparison to quarter four.

  • So overall, realization is higher, again INR39.94 to INR41.26 in current quarter, that is quarter one, but the cost also has gone up.

  • Net net between the realization rate and the cost rate, having both gone up, there is a 0.1% favorable impact.

  • Unidentified Participant

  • Okay.

  • Thank you.

  • Operator

  • Thank you very much, sir.

  • Next question comes from Mr.

  • Shekhar Singh of Goldman Sachs.

  • Over to you, sir.

  • Shekhar Singh - Analyst

  • Hi, sir.

  • I just wanted to know, since your deal pipeline seems to be pretty strong and there were very encouraging comments made regarding the wins which happened in the quarter -- now -- and more importantly, if you look at (inaudible), the growth has been pretty strong, why is your guidance for next quarter just 2%?

  • Girish Paranjpe - Joint CEO and Member of the Board

  • You know the -- Girish Paranjpe here.

  • The deal wins are of course very encouraging, but I think you have to bear in mind that this is a multi-year deal, so not everything will play into the next quarter.

  • There is transition and only after that billing will start, so there is some amount of lag effect of that.

  • The second thing is that, in some industrial sectors, there's also ramp-downs where clients have been affected because of the slowdown, or some specific factor, as a result of which there is actually reduction in volume of business with those clients.

  • So our guidance is really a combination of deal wins, expected ramp-ups based on transition and the multi-year nature of the deals, and some ramp-downs that have taken place because of client issues.

  • Shekhar Singh - Analyst

  • Okay.

  • And if you can just elaborate on those deal ramp-downs - are these specific to BFSI vertical or are they happening in other verticals also?

  • Girish Paranjpe - Joint CEO and Member of the Board

  • No, they're not specific to any particular vertical.

  • They are spread across.

  • They've been there in telecom.

  • They're in hi-tech.

  • So it's a fairly broad [swathe].

  • Shekhar Singh - Analyst

  • Okay.

  • Thanks, sir.

  • Operator

  • Thank you very much, sir.

  • Next question comes from Mr.

  • Anthony from Arete Research.

  • Over to you, sir.

  • Anthony Miller - Analyst

  • Yes, hello there.

  • It's Anthony Miller here at Arete.

  • I think I noticed that your European revenues declined a little, sequentially, as a percentage of the total.

  • Was that primarily due to the telecom equipment manufacturers ramping down or were there other factors there?

  • Suresh Senapaty - CFO

  • Part of it was resetting of -- based on the total IT Services business of ours and the growth there has been a little lower than the US.

  • But overall, sometimes quarter on quarter [there is a] little variation, but there has been good enough wins from Europe.

  • And let's say quarter four we had one particular European customer where -- you remember that, in the IT Infrastructure Services business, we had about 30% sequential growth - the one customer from Europe had contributed to a large extent.

  • And some of that corrections happened.

  • So it is a muted number so far as quarter one is concerned, but there is no [secular] trend.

  • Anthony Miller - Analyst

  • Okay.

  • In fact, you mention Infrastructure Services, but that also seems -- the contribution seems to also have gone down sequentially from quarter four, from 19.7% to 18.6%, yet you seem very bullish on TIS and particularly on IFOX.

  • So what was happening there?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • This is Suresh Vaswani here.

  • If you look at our Infrastructure Services business, which has actually three elements that we're reporting on a consolidated basis -- it has infrastructure business global, it has infrastructure business in India and it has the IFOX business.

  • That business has grown actually 75% year on year.

  • So we are seeing a good trend in that business, a good growth in business in quarter one [in terms of] 75% year-on-year growth.

  • There has been a sequential decline -- marginal sequential decline because of the lumpiness of this business.

  • In Q4, we had some big system integration projects that we had completed and therefore that shows up as a marginal decline.

  • But if you look at it on a year-on-year basis, the growth is 75%.

  • Suresh Senapaty - CFO

  • Even on a two-quarter basis, the growth is very good, better than the average.

  • Anthony Miller - Analyst

  • Okay.

  • And can you just split out what contribution IFOX made to revenues this quarter, please?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • So the contribution of IFOX -- we are reporting the entire Infrastructure Services as one business going forward.

  • But since you raise the question, the contribution was roughly $59m, close to $60m.

  • Anthony Miller - Analyst

  • Okay, that's great.

  • Thank you very much.

  • Operator

  • Thank you very much, sir.

  • Next question comes from Mr.

  • Dipesh Mehta of Khandwala Securities.

  • Over to you, sir.

  • Dipesh Mehta - Analyst

  • Most of my questions have been answered.

  • I have only one little query about customer side issues.

  • Is there any (inaudible) between the clients, because we have seen $10m to $20m decline in this quarter?

  • Azim Premji - Chairman

  • You are talking about the top 10 customers?

  • Dipesh Mehta - Analyst

  • No, no.

  • The bracket -- [bracket-wise] clients, the $10m to $20m bracket.

  • Suresh Vaswani - Joint CEO and Member of the Board

  • Okay.

  • I think what has happened there is that a few customers were moved up the thing.

  • So if you look at it, we had customers more than $50m which moved from 11 to 14.

  • There is a movement of customers from the bottom to the top, which is basically our mega gamma strategy, our focus on the top customers, which has led to higher increase in those customers and moved from the lower budget to the higher budget.

  • Dipesh Mehta - Analyst

  • That's what I want to understand.

  • The movement is across, or $10m to $20 moved to $50m?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • No, I think what happens is that if you have a customer --

  • Suresh Senapaty - CFO

  • If we take a look at the $1m accounts have gone up.

  • And (inaudible) the top echelon, which is about more than $50m accounts, $20m to $50m (inaudible).

  • In the middle, they'll keep shuffling (inaudible).

  • Some [will be upgraded], some (inaudible) a quarterly downgrade (inaudible) lower, will move here and there.

  • (Inaudible) to see is whether we are increasing the [number] of more than $50m accounts or more than $1m accounts.

  • Dipesh Mehta - Analyst

  • So there is nothing like only three clients moved from $10m to $50m.

  • Suresh Senapaty - CFO

  • No, no.

  • Dipesh Mehta - Analyst

  • That is across the [movement].

  • Suresh Senapaty - CFO

  • That's right.

  • Dipesh Mehta - Analyst

  • Okay, thanks.

  • Operator

  • Thank you very much, sir.

  • Next question comes from Mr.

  • Hitesh Punjabi of Religare Securities.

  • Over to you, sir.

  • Anurag Purohit - Analyst

  • Hi.

  • This is Anurag here.

  • Good afternoon to the management.

  • My question is regarding the CapEx cuts that we are seeing across all the geographies.

  • It's not only US, but we are also getting news from other geographies as well where customers are decreasing their CapEx.

  • How does the management see the direct impact of that onto their IT spending, both the discretionary as well as the non-discretionary nature?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • This is Suresh Vaswani here again.

  • Very broadly, customers are circumspect about the discretionary spending insofar as IT is concerned.

  • Therefore, any major implementation project, customers are circumspect in terms of wanting to make the investment.

  • Of course, on the hardware side, typically customers tend to be much more circumspect.

  • But if you look at the managed services part of the IT Services business, if we can get strong value to the customer in terms of service transformation and cost transformation, customers are very, very keen to look at those types of opportunities.

  • So clearly, like I said earlier, some of the work that we've done in our global programs side, some of the work that we've done on the consulting side, enabled us to consider strong service transformation, cost transformation opportunities for customers, which enabled them to see some strong business value.

  • So net net, discretionary spending is circumspect.

  • Managed services type of spending customers are looking at it keenly and are looking at it from better delivery at better cost.

  • Anurag Purohit - Analyst

  • Okay.

  • Also, sirs, if you could provide me what was the translation loss on the ECB loans?

  • Suresh Senapaty - CFO

  • About INR650m.

  • Anurag Purohit - Analyst

  • Thank you very much.

  • Operator

  • Thank you very much, sir.

  • Next question comes from [Mr.

  • Sunil] from [Valley Quest].

  • Over to you, sir.

  • Unidentified Participant

  • Hello.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Yes, yes.

  • Please go ahead.

  • Unidentified Participant

  • I just wanted to know you have hedged $2.8b at what rate?

  • Suresh Senapaty - CFO

  • It is ranging between INR39.5 to INR45.

  • Unidentified Participant

  • To INR45.

  • And sir, what was the utilization rate in this quarter?

  • Suresh Vaswani - Joint CEO and Member of the Board

  • 67.9% gross.

  • Suresh Senapaty - CFO

  • This is gross.

  • And net --

  • Suresh Vaswani - Joint CEO and Member of the Board

  • And net it is 74.4%.

  • Unidentified Participant

  • 74.4%.

  • And then, Q2, what are you expecting this number to be?

  • Suresh Senapaty - CFO

  • We don't specifically give any guidance vis-a-vis the utilization, but our endeavor would be to improve that.

  • But it is not necessarily always so, because it will also be a function of how many people we add on which date.

  • So if you typically add towards the beginning of the quarter, then you tend to improve the utilization as you [exit].

  • But if you add towards the end of the quarter, you drop it.

  • So we don't give a specific guidance with respect to that, but we give you an actual data point after the end of the quarter.

  • Unidentified Participant

  • Okay.

  • Thank you, sir.

  • Operator

  • Thank you very much, sir.

  • (OPERATOR INSTRUCTIONS).

  • Next question comes from Mr.

  • Sreevatsan from Spa Capital.

  • Over to you, sir.

  • Unidentified Participant

  • Hi.

  • Just one follow-up question regarding the (technical difficulty).

  • You said the environment is still cautious.

  • I just want to know whether there are any client issues that you're facing [for the full] year.

  • Girish Paranjpe - Joint CEO and Member of the Board

  • Hi, Girish Paranjpe here.

  • No, nothing about individual clients.

  • I think the caution is across the board and really driven by the broad economic environment.

  • Unidentified Participant

  • The reason why I asked this question was basically because your Financial Services is just 25% of your revenues, compared to some of your peers who have a higher rate, basically.

  • [So you should be] feeling a little bit more optimistic about the environment, maybe.

  • That's the reason I --

  • Girish Paranjpe - Joint CEO and Member of the Board

  • Well, it kind of plays everywhere, because we have a smaller percentage of revenue coming from Financial Services.

  • Last quarter, sequential growth has been fairly strong in Financial Services.

  • But the environment being what it is, I think it pays to be cautious.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Can we have the last question, operator?

  • Operator

  • Sure, sir.

  • Next question comes from [Mr.

  • Ashakiran] from Span Capital.

  • Over to you, ma'am.

  • Unidentified Participant

  • Hi, good morning.

  • Can I get the numbers of addition of [employee this year]?

  • Suresh Senapaty - CFO

  • Addition of --?

  • Unidentified Participant

  • [Employees].

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Campus.

  • Unidentified Participant

  • Employees.

  • Pratik Kumar - EVP HR

  • Addition of employees.

  • We had 108 employees net addition for the quarter.

  • Unidentified Participant

  • No, I mean financial year 2009.

  • Pratik Kumar - EVP HR

  • We don't give the guidance for the whole fiscal, because it's always commensurate with the business that we get.

  • Unidentified Participant

  • Okay.

  • And this year's net (inaudible) investment is [INR347] crores negative.

  • Can I know why?

  • Suresh Senapaty - CFO

  • Sorry, can you repeat the question?

  • Unidentified Participant

  • Cash flow from investment -- investing activities (inaudible) INR347 (inaudible) negative.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Basically, what happens is that there's a continuous investment of -- okay.

  • Basically, what happens is that there's an investment of money which has happened.

  • So this is the money which has got net invested and -- so that is why it is reflected here as a negative one.

  • Unidentified Participant

  • Okay.

  • Suresh Senapaty - CFO

  • It's not a loss.

  • It's an investment made.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Increase.

  • Suresh Senapaty - CFO

  • Or increase in the investment.

  • Because whatever cash we have, short-term basis, we put it in the mutual funds, etc., etc.

  • So that is classified as investment.

  • And the delta between the investment before to investment now is reflected in the cash flow in that manner.

  • Unidentified Participant

  • Okay, thanks.

  • Suresh Senapaty - CFO

  • Thank you.

  • Operator

  • Thank you very much, sir.

  • At this moment, I would like to hand over the floor back to Mr.

  • Rajendra Shreemal for final remarks.

  • Rajendra Shreemal - VP and Corporate Treasurer

  • Thank you ladies and gentlemen for participating in this call.

  • Should you have missed anything during this call, the audio archive of this call will be available on our website and we would also be putting up a transcript of this call very soon.

  • And of course, should you need any clarification, the Investor Relations team, that is myself, Aravind, Lalit or Sridhar, would be delighted to talk to you.

  • We look forward to talking to you again next quarter and have a wonderful day.

  • Thank you.

  • Operator

  • Thank you very much, sir.

  • Ladies and gentlemen, thank you for choosing WebEx conferencing service.

  • That concludes this conference call.

  • Thank you for your participation.

  • You may now disconnect your lines.

  • Thank you and have a nice day.