Infosys Ltd

NSE:INFY

Earnings Call Transcript 2022-Q2

[Rishi Basu]

[Audio Gap] press conference. In true essence of a hybrid model, we are delighted to host some of our friends from media at our Bangalore campus, while some are joining us virtually. All participants on ground are vaccinated, and we are adhering to all COVID-19 protocols. Before we begin, allow me a moment to go over a few house rules. Friends from media who are here with us physically, we -- when we announce you during the Q&A, kindly press the button below the mic to ask your question, and release the button thereafter. Our friends from media joining us virtually, you will be on mute by default through the press conference. Once we announce you, kindly remember to unmute yourself. Our photojournalists friends, kindly remain seated since this is a hybrid model and we have video feeds all around. As always, we request one question from each media house so that we can accommodate everyone over the next hour. For those joining virtually, in case you get disconnected, kindly rejoin using the same link.With that, let me invite our Chief Executive Officer, Mr. Salil Parekh, for his opening remarks. Over to you, Salil.

[Salil Satish Parekh, MD, CEO & Director]

Thanks, Rishi. Well, good afternoon and welcome. Welcome back. Welcome back to the campus. I'm really delighted that so many of you have been able to join us here in person. We are, of course, thrilled to be here on the campus and to start this new hybrid approach that we are working on. And also, thank you to all of you that are joining us remotely.I'm delighted to share with you another exceptional quarter from us. We have increased market share gain. We have demonstrated more and more trust with our clients. We are really seeing the strength of our digital cloud capabilities. Our growth was 19.4% year-on-year in constant currency, 6.3% quarter-on-quarter. What is even more assuring and reassuring for us is this growth is organic, and we are seeing this coming with a lot of our client work. I would like to thank the entire 270,000 employees of Infosys for their incredible dedication to our clients and to making an impact with the work that they're doing.On a year-on-year basis, our growth was the fastest in 11 years and builds on the strong quarter that we already had last year at this time. Our growth has been accompanied by resilient operating margins at 23.6%. We delivered these margins while keeping at the forefront and all of our focus on employees, the compensation increases and the expansion of benefits. Our digital business grew at 42%, and now it's 56% of our overall revenue. And within digital, our cloud is growing even faster. Our global capabilities are especially resonating with our clients.Some other highlights. We had broad-based growth across all of our sectors' client service lines. Our Financial Services grew by 20.5%, Manufacturing over 42%, Retail over 17%, Life Sciences over 26%. In terms of geographies, North America grew at 23%; Europe, over 19%. Our large deals were very strong at $2.15 billion.And we had a net headcount increase of over 11,000 people at home where we are attracting the leading talent from the market with our clients. And we remain comfortable with our ability to support our clients in all of their digital transformation work. We are also expanding rapidly our global talent pool, and we are going to increase our college hiring number to 45,000 for this financial year. I'm also delighted with our ESG focus. As many of you know, we are already being carbon neutral since 2020. But our ambition for 2030 is well-articulated, and we are building on the momentum that we have created. We are accelerating our goals with launching Infosys Springboard to bring digital skills to millions of students.With a strong start to the financial year and a good deal momentum in Q2 and a good pipeline, we are increasing our growth guidance. It was 14% to 16%. We are taking it to 16.5% to 17.5% in constant currency terms. Our operating guidance remains the same.In addition, we have a really special moment this quarter. It will be Pravin's last full quarter before he retires. It has been an incredible journey of 35 years that Pravin has been with Infosys where he has, in so many ways, shaped the company. His contributions are truly innumerable. We will miss and I will personally miss the tremendous depth of knowledge that Pravin has with the business and his contagious sense of humor. My best wishes to Pravin in all his future plans. We will announce a new future structure in the coming weeks, well before Pravin steps down, and then we'll communicate it externally.With that, I will pause, and over to you, Rishi, for the questions from everyone here and virtually.

[Rishi Basu]

Thank you, Salil. We will now open the floor for questions. Joining Salil are Mr. Pravin Rao, Chief Operating Officer, Infosys; and Mr. Nilanjan Roy, Chief Financial Officer, Infosys.

[Nilanjan Roy, Chief Financial Officer]

Thank you.

[Rishi Basu]

We open with the first question, which is from ET Now. Vinnii Motiwala joins us on video. Vinnii, kindly unmute yourself and ask your question.

[Vinnii Motiwala]

Gentlemen, congratulations on posting a good earnings. My question is actually in 3 parts. The first one, Mr. Salil, could you give us a color on the deal pipeline? And could you cross more than you bagged last year? And also with the supply side issues, are the new deals coming in at a better pricing? Okay, my second part -- question is to Pravin. Could you give us your sense on whether the high attrition is here to stay and for a longer time? Or do you see this transitory? Basically, how long can this pain be there for? And last one, again, Salil, if you could give us a sense on what are the headwinds and the tailwinds in the medium term as well.

[Salil Satish Parekh, MD, CEO & Director]

So thanks for your questions. I think the pipeline looks really strong and robust. Our deal wins have also been excellent for this quarter and for the half of the year. And we've had a good momentum building up on what was, in this environment, a strong digital and cloud capability that our clients were looking at. There are 2 sets of areas where growth is coming from. One is from the wins that we see in the market, and one is from our existing client base, which is a very strong client base, which is looking to expand what they're doing with Infosys. So keeping all of that in mind, I'm quite comfortable we see a good outlook for this year. We continue to see, with an increase in growth guidance, a feeling that growth is looking strong, going from 14% to 16%, to 16.5% to 17.5%. I'll come back on the third one. Go ahead, Pravin.

[U. B. Pravin Rao, COO & Whole]

On the attrition trend, the high attrition is a reflection of the huge demand that we are seeing as well as supply shortage. And to some extent, it's also lack of mobility in some of the geographies that we are seeing. The high attrition is expected to continue for next few quarters, still the supply situation eases. From our perspective, we have been able to meet all our planned commitments through aggressive hiring, reskilling as well as increased use of subcontractors.

[Salil Satish Parekh, MD, CEO & Director]

On the pluses and minuses with what we see, we are really seeing a different kind of growth that's coming in today, which is from our client side. As Pravin shared, we are working extremely focused way on expanding the capacity of our teams. We've increased the graduate hiring to up to 45,000, and we're doing several other actions to make sure that all of the work that our clients are giving us, we are able to work on. So really, we see a lot of that in terms of good demand in the market today.

[Rishi Basu]

The next question is from Mugdha Variyar from CNBC TV18. Mugdha is here with us on ground. Mugdha, kindly unmute yourself.

[Mugdha Variyar]

Thank you, firstly, for calling us here. It's great to be here after within 5 quarters, and congratulations on a strong quarter again.Salil, my question to you is, again, about the deal environment. The big deal wins seem to have plateaued a little bit. Is there some concern there? Or are you seeing now a mix of deals? If you can just highlight what the mix of deals is looking like. And also, I have to ask you because this is something that we see every day on Twitter and social media about the IT portal. You did put out a statement last month that 3 crore taxpayers have transacted, but glitches are still remaining. What is the status on -- status update on that? And we are also seeing taxpayers complain about glitches on the GST portal after 4 years of GST being live. So what is the strategy to tackle these glitches so that taxpayers are not impacted? If you can throw some light on that. Nilanjan, you -- I want to ask you about how much was the boost in the revenues from the Daimler deal, firstly. And secondly, in your comments, you have said that you will look to continue to invest in your employees to remain a preferred employer of choice and seamlessly fulfill client demand. And this is duly a big concern right now, the high attrition, the supply shortage, et cetera. What exactly what -- if you can elaborate on what you mean by how you look to invest in your employees. Pravin, of course, attrition is a big challenge. You said it will continue for the next few quarters. How are you looking to tackle that? And what will be the pressure then on margins given also that subcontractor costs are rising? And finally, when it comes to hybrid model, you had said in the last quarter that you expect to see 20% to 30% employees coming back to office. What is the hybrid policy going to be like? And how many employees are you now seeing coming back to office, really?

[Salil Satish Parekh, MD, CEO & Director]

Well, thanks for those questions, and thanks for being here in person. It's good to see everyone here in person.First, on the large deals, what we have seen today is a very good pipeline for large deals for us. The number of deals that we are working on is solid. We feel comfortable with the pipeline that, that gives us a good traction into the market. Of course, last year, we also had some, beyond large deals, some mega deals. When we look internally and we normalize for that because those are always difficult to predict when those things happen, we have some of those in the pipeline, we feel that the deal pipeline looks strong today. And that's given us the confidence, in addition to what we've done in the past, to increase the guidance. Overall, the type of deals that we are doing, the type of trust that our clients are putting in us, and a lot of that which is in this digital transformation areas which relate to cloud, we're seeing good traction in that. For example, with Cobalt, we are starting to see a lot of work which is related to private cloud, hybrid cloud. We have strong partnerships with the Infra-as-a-Service players in the market, and those are giving us good impact. And we have very good traction with the SaaS players, and those are giving us impact. So we see a nice set of pipeline in terms of what's going on with the overall large deals. On the income tax project, I will make a couple of points and also on GST. Pravin may add to it when he responds to the other attrition questions. So first, we are seeing a steady progress on the income tax system. As of yesterday, we had over 1.9 crore returns that have been filed using the new system. Today, the income tax return Forms 1 through 7 are all functional. Most of the statutory or several of the statutory forms are available on the system.Over the past month, the portal has been further bolstered. The system has seen steady increase in usage over the past few weeks, and the taxpayers' concerns are being progressively addressed. Over 18 crore log-ins have been observed on the portal, and approximately 3.8 crore unique users have successfully completed various transactions. The system is seeing somewhere between 2 and 3 lakh returns being filed each day.There are some other stats, which I also wanted to share, for example, from the previous assessment year, 96% of the returns have been processed. For the current assessment year, over 1 crore returns have already been processed, which was part of the benefit of this new approach, integrated system with the filing and the processing.To ensure a smooth filing experience for the users, Infosys is continuously engaged with more than 1,200 individual taxpayers. Over the last several months, we've also been working closely with the chartered accountant community to ensure that a comprehensive set of user scenarios are supported and thoroughly tested before deployment. We remain committed to making further progress, and we are confident of ensuring a seamless experience for all the taxpayers. We take pride in partnering with the government of India and continue to work closely with various departments to accelerate the digital evolution of the country's technology capabilities. On the GST as well, you mentioned we are working very closely with the department, with the agency to make sure all of those areas are addressed. It's actually a system that's been working extremely well for the last several years. There are situations which come up, which we look at and address on an ongoing basis.With that, let me pass it to Pravin for some of those other points.

[U. B. Pravin Rao, COO & Whole]

Yes, on a -- from an employee attrition perspective, to contain attrition, we have undertaken several initiatives. One, of course, is we have given a couple of compensation increases this year. One was effective January and the other one was effective July. In addition, for high performers as well as people with niche skills, we also rolled out a skill-based compensation increase recently. So that's one thing we have done. We have dramatically increased the number of promotions that we have been doing. We have come up with some elaborate retention plans as well, which we are trying to execute on that. There is a lot of focus on employee engagement. There is a lot of focus on career aspects. We are investing a lot in terms of employee training, reskilling. We have come up with new roles like digital specialists. We are also looking at bridge programs, which help people to move across different roles in the organization. Of course, there is a lot of focus even in terms of ensuring that when people are working remote as well, we have an inclusive culture where they are also getting rolled in the employee life cycle process. So there are multiple things we are doing trying to contain the attrition as well. And we are also, at the same time, looking at a long-term strategy. We are relooking at the employee value proposition. It's not only about attrition, but it's also the fact in the new normal, the whole employee value proportion has to be relooked at, where the new normal will be fundamentally different from what we have seen in the past in the pre-COVID world. So that's more a long-term initiative. That's something we have started taking a look at. So these are some of the interventions we have done trying to contain attrition. On the return to work, today, we have -- globally, we have about 97-and-odd percent still working from home. And at one hand, in China, we have 91% working in office. On the other hand, in India, U.S. or in U.K., we have 98.5% working from home. In Continental Europe, it's probably in the mid-90s. In Southeast Asia, about 80% or so. Starting July, both in U.S. as well as in India, we actually opened up our offices across all the DCs where we -- employees were allowed to come into office on a voluntary basis. Of course, we follow strict protocols in terms of vaccination, et cetera.Starting October, we will probably now start looking at things in a much more formal manner. In October, in India, we are requesting all the senior leaders to come to office at least once a week. We are also requesting them to have several interventions for employees at least once a month so that we have a larger population coming to the office. And based on the feedback and the outcome, we will fine-tune the process, and then we will figure out what will happen in the subsequent quarters.End of the day, everyone recognizes that this is going to be a huge chain management. There is no one size fits all. So we have to keep in mind the client requirements as well as keep in mind the employee preferences as well. So we are really working on a model which allows us to -- which provides flexibility to the employees, but also enables us to react very -- with great speed and agility to whatever is happening. So very comfortable with our current thinking on this. And so far, we have been able to meet all the client requirements without that much further.

[Rishi Basu]

Thank you.

[Nilanjan Roy, Chief Financial Officer]

And then your other question on Daimler, of course, we can't comment on a particular client. You can see the impact, of course, of the Manufacturing segment, which has grown handsomely. But across all segments, as Salil mentioned, we've had very broad-based double-digit growth, both on a year-on-year basis and sequentially as well all the segments have grown. So I would say Daimler had been more like an icing on the cake. Even without Daimler, we've seen strong growth.

[Rishi Basu]

Thank you, Nilanjan. The next question is from CNBC Awaaz. We are joined by Harshada Sawant, who is joining us on video.

[Harshada Sawant]

Gentlemen, it's [Foreign Language] and congratulations as to [Foreign Language]. Salil, [Foreign Language] digital may [Foreign Language] as a percentage of your revenue, may I just notice [Foreign Language] 50%, 53% [Foreign Language]? Or are there [Foreign Language], primarily cloud, AI, IoT [Foreign Language] other demand [Foreign Language] geographically, North America, Europe [Foreign Language] struggled in the last quarter [Foreign Language] on ground or [Foreign Language] on-site talent [Foreign Language] visibility here.

[Salil Satish Parekh, MD, CEO & Director]

Then you have 3 questions. Okay, let me try and address the first part. The digital capabilities are really resonating well with clients. We see tremendous growth. With 42% growth of digital, the percentage of our overall revenue is now 56%. So that is constantly increasing from what we had in the last few quarters. That growth of 42%, we don't see that in today's outlook plateauing. In terms of what we are seeing great traction for within our digital Pentagon, we see tremendous traction for the cloud area because of our Cobalt capabilities, which are resonating with clients. We have now 300 industry templates within Cobalt, about 30,000 different assets. Those are what clients are really gravitating to. We also see good traction on our data and analytics capabilities. There, we see a very strong growth. We see good traction for our experience, our digital development, cloud-native work, and we see good work again on cybersecurity and IoT. So all the elements of our digital capabilities are showing good traction today. Cloud, of course, being the most dominant in the marketplace today.

[U. B. Pravin Rao, COO & Whole]

With respect to the geographies, with increased pace of vaccination, we are seeing the market opening up both in U.S. and Europe as well. Both are major markets for us. In fact, we had over 20% growth year-on-year on a constant currency basis in U.S. in this quarter and close to 19.5% in Europe. So from a growth perspective, things are looking good.With the market opening up and with travel easing, we expect a good deal of flexibility going forward as well, probably sometime November, December onwards. But at the same time, we have to also recognize that with exploding demand, now the key is about talent availability. So wherever talent is available, clients are open to source the talent from wherever it's available.So while markets may open up, most of the talent still is in India, and we'll continue to see a lot more opportunities in India as well. But the fact that the travel is opening up will give us some flexibility to move people around and have mobility of talent.

[Rishi Basu]

Thank you. The next question is from Sajeet Manghat from BloombergQuint. Sajeet joins us on video.

[Sajeet Manghat]

Salil, just I want your thoughts on the demand environment, especially in the U.S. and the European markets. And the fact that there's a lot of medium and small deals which are around in the market, but large deals have largely either slowed down or it's taking longer to close. And that's really visible from the fact that the top 3 players are saying the same thing that medium and small deals are much more in the market today. So are we seeing a plateauing of these digital transformation deals happening in the market? For Nilanjan, if you can give me some more color on the kind of supply side challenges, which you're going to face in the next couple of quarters, even though you have increased guidance and maintained operating margins, but you have increased the hiring from campus. What kind of supply side challenges you are seeing there? And for Pravin, if you can give us some idea of how BFSI and Retail is doing. We saw the contribution coming up marginally in the kind of quarter-to-quarter basis. But do you see some plateau in there? Because these were the growth engines from the last 3, 4 quarters, and now there's some plateau coming in those segments.

[Salil Satish Parekh, MD, CEO & Director]

So let me start first on the geography and the composition of the deals, large deals and medium deals. We are seeing really, in North America and in Europe, very strong demand. As we had shared earlier, over 20%, 23% growth in North America, 19% growth in Europe. A good set of demand, good deals. Even if I look in the pipeline, we see good activity.Digital transformation is still very much part of what clients are driving. They are driving that change agenda through their businesses. We are interacting with them. We are working with them to see how that becomes a large part of all of the work that they want to put in place on a multiyear program. The mega deals, as I was sharing earlier, will always be not predictable in which quarters they will come. Yes, there is a lot of deal flow, which is what we call medium and large deals. Our large deals' values are based on all deals which are above a threshold of $50 million. And hence, we have various ways internally of looking at these things. But overall, my sense is the pipeline is strong. We see good growth. And the way that clients are looking at it, each industry, the incumbents are going faster to transform themselves. The native -- cloud-native digital players are scaling up massively. So this is a good time in that sense for the demand. And the real testament is we've increased our guidance for the full year with what we see in the pipeline and with what we've developed so far.

[Nilanjan Roy, Chief Financial Officer]

So on the supply side, like Salil mentioned, this is an exceptional demand scenario. And frankly, nobody was really prepared. And with freshers, which is the main source of talent for this industry, really, that hasn't filled into the pipeline. And therefore, you've been seeing the sequential increase even by us and the industry in terms of taking more and more freshers. At the end of the day, I mean India generates 1 million freshers engineering graduates each year who can come into this industry and really fuel the volume growth. Attrition is fundamentally rotational, right? My attrition is somebody else's lateral, and somebody else's attrition is my lateral. So end of the day, I think once the freshers speed into the system, they get reskilled and upscaled, you will see the supply side easing off. But I like -- like I say, I'd rather work in an industry where demand is chasing supply rather than supply chasing demand. So I think in a way, it's a problem, but a better problem to have than the other way around. And I think increasing our freshers to 45,000 this year is going to fuel some of that supply side to make sure we remain committed to our existing deliveries of our clients, which is number one; and number two, new volume growth, which we can also sustain.

[Sajeet Manghat]

Is there a stabilization part of it? Would you expect 2, 3 quarters of stabilization requirement for this particular challenge?

[Nilanjan Roy, Chief Financial Officer]

Yes. I think like even Pravin has said, I think the 2 quarters, I think we will have a lot of freshers coming in. And you will see some of this attrition and also the retention measures a lot of us are doing. Whether that's promotion, whether it's in terms of compensation, whether it's targeted retention, I think all that will come into play.

[U. B. Pravin Rao, COO & Whole]

In terms of BFSI, we have had extremely good growth, industry-leading growth or 20% on a year-on-year constant currency basis. And we are -- and there's probably several quarters in a row, we have had this kind of growth in this segment. I'm also happy to share that we were ranked #1 by HFS in their banking and financial services service provider ranking. We are seeing a lot of traction across and great momentum across geographies, both in Europe as well as North America. Our clients are investing in customers' experience using advanced analytics and AI. We are also seeing a lot of focus on remote customer management, like virtual banking, remote advisories and so on. Of course, we are also seeing a lot of cloud-based transformation deals.Our focus on building capabilities and platforms around some of the sub-verticals like regional banks, asset management, wealth management services, mortgages, et cetera, it's paying huge dividends, and we're able to win a lot more deals and then market share. Today, we are very well positioned as an end-to-end transformation player given our depth in demand, depth in IT, depth in ops as well as digital transformation capabilities. And we expect this momentum to continue.In Retail as well, we have seen good double-digit growth this quarter. We are also seeing decent sequential growth. With economies opening up, we are seeing a lot of pent-up demand. And so retailers have started aggressively investing in building new digital capabilities in marketing, in commerce and in supply chain. We are seeing a lot of traction around digital consumer. We're seeing a lot of traction around promotions, around personalization and so on. And our recent new launch of Equinox platform also is an added advantage for us in this space. We are seeing good traction both with existing clients as well as new clients. We expect steady growth in this segment in the coming quarters as well.

[Rishi Basu]

The next question is from Kushal Gupta from Zee Business, joins us on video.

[Kushal Gupta]

Gentlemen, [Foreign Language] business segments [Foreign Language] constant currency growth, specifically manufacturing [Foreign Language] or other percentage [Foreign Language] 10.9% [Foreign Language] So FY '22 [Foreign Language] Financial Services [Foreign Language] given the kind of growth [Foreign Language] constant currency [Foreign Language] particularly competitive strategy [Foreign Language] freshers key hiring [Foreign Language].

[Salil Satish Parekh, MD, CEO & Director]

[Foreign Language] Let me start by answering the first one. I think Manufacturing is extremely strong area for us, and we've seen a very good growth which shows, again, good client traction for us. The step back within the company, we have a broad, well-diversified focus on different industries. Of course, Financial Services is the largest for us. Consumer Products and Retail is a very strong industry for us as well, as Pravin was sharing some of the statistics on that. And Manufacturing has always been a strength, but we are now seeing further expansion with what we've been able to do over the last few years.So yes, those will be very important. But that's not to say areas which are very strong for us, utilities, telecommunications, high tech, life sciences, those will continue to play a big role because we do have a well-diversified set of industries where we work exclusively with a lot of clients in those areas, large enterprises in those areas.The second part was -- sorry, what was the second question that you had?

[Kushal Gupta]

Sure. [Foreign Language] freshers key hiring [Foreign Language] company strategy [Foreign Language] it would be the focus you have, but it is [Foreign Language].

[Salil Satish Parekh, MD, CEO & Director]

So there, the approach we have put in place, as we have shared, is a combination of things. We have a tremendous focus on large deals, which are deals above $50 million for us. And we've had a good track record over the last 3 or 4 years of the way those deals have come about. And that continues. We have a good pipeline of those deals. But that doesn't mean that we don't work where there are smaller deals, and that's also a very significant part. As you see, the number of accounts, client relationships that we have, which are, for example, over $100 million, over $50 million, those keep expanding very well because we spend time to work with each of our clients to expand in all sizes of opportunities there. So that approach is not going to change. The idea of bringing in more people into the company with college hiring is simply, as Pravin and Nilanjan were sharing, to expand the amount of people we have to serve all our clients. So both on large deals and on other deals within our client base, we will continue with that approach.

[Rishi Basu]

Thank you. The next question is from Chandra from Moneycontrol. Chandra is here with us. Chandra, kindly unmute.

[Chandra Ranganathan]

Great to be back at the Infosys campus in Electronic City. Salil, I want to start by asking you in terms of the total deal wins. Initially, post-pandemic, the argument was cost optimization. Are you seeing the cycles getting longer? Are there more discretionary projects now with companies emerging out of the pandemic? And if you can also give us a breakup between the net new deals and the renewals out of the total TCV that you have won.Nilanjan, you managed to kind of hold on to margins despite wage increases, despite attrition spiking. Was it also because your sales and marketing cost was a little flattish? Do you expect this to change because you haven't really changed your margin guidance? So how you're going to kind of balance those levers?Pravin, you're sort of the veteran in the company. You've seen all the ups and downs. So tell us about your last day and what is the future structure going to look at? Will you have a multiple COO structure? Are you guys planning to do away with it all together? And what are you going to do post Infosys?

[Salil Satish Parekh, MD, CEO & Director]

Okay. Let me start off with a little bit of what we're doing in terms of what we are seeing with clients today. We are definitely seeing that, that activity with clients is giving us good traction. We think all of the work that is going on, whether it's related to cloud, whether it's related to digital, is still giving us good growth and good momentum in that area. Our focus will remain very much on making sure that we work both with existing large clients and also with new deals that are coming in. We don't see, in that sense, a distinction on any of those areas.Let me come back later and address some of the points that you asked Pravin, but let me pass it on to Nilanjan first.

[Nilanjan Roy, Chief Financial Officer]

Yes. From a margin perspective, as you know, we've dropped about 10 basis points quarter-to-quarter. A broad breakdown of this is comp hikes was about 110 basis points. About 50 basis points was the headwind on sub-con because to meet the existing demand, we had to actually go up and ramp up on sub-cons. So actually, there was a headwind of over 1.6%. We've offsetted about 80 basis points of this from cost optimization and operating parameters like utilization. Another 50 basis points is the impact of an SG&A, which will be operating leverage, and that is very core to our strategy as well. And about 30 basis points remaining is coming from pricing and currency.So it's not simply about SG&A. It is making sure that we are working on a very aggressive cost optimization program as well to negate some of these headwinds. And from a margin guidance, the 22% to 24%, we are very comfortable to that, and we don't see any reason to change it.

[Salil Satish Parekh, MD, CEO & Director]

Pravin will certainly answer the points about what he's doing afterwards. I'll just take a couple of seconds to talk about what we're doing within the company. As I shared earlier, we have already put together what we're looking to do in terms of our structure. We will announce it internally in the coming weeks, and then we will obviously communicate that outside. So very soon, you will get to see what that is. We have a very strong set of leaders within the company. So I'm extremely confident that we will have a structure that will work for our clients and for our business.

[Chandra Ranganathan]

Salil, sorry, just one follow-up. Considering Pravin has sort of been leading the delivery management for you based in Bengaluru, you're based in Bombay, again, do you see some difficulty there? Because this is the first big top level of change that we will see after you came in. So any difficulties that you anticipate there? I just want to understand.

[Salil Satish Parekh, MD, CEO & Director]

No. From our side, I see that this is going to be a case of -- Pravin has built an incredible team over the years, and this will be an evolution. So I'm looking forward to having many of the new leaders step up and focus in on the areas that Pravin was focused on. Of course, the company and I personally will miss Pravin tremendously.

[U. B. Pravin Rao, COO & Whole]

Okay, on -- I mean I just wanted to add what Salil said. For all the functions I was handling, I had a strong set of leaders running those functions. So I really don't expect any challenges in transition or any missteps. I'm very confident about a smooth transition and succession of the role. My last day is December 11, so I'll be still around until then. And at present, there is no concrete plans of what I will do beyond that.

[Chandra Ranganathan]

Pravin, just one clarification. You said you've handed out promotions in large numbers. Can you give us a sense of previous years, how much would it be? This year, how much is it because of the unprecedented war for tech talent?

[U. B. Pravin Rao, COO & Whole]

It's -- I mean we normally don't give out those exact numbers, but it's significantly higher than what we have done in the past. I can just state that we typically don't give those specific numbers. I also wanted to take a moment to thank all my media friends for their best wishes and support to Infosys over the years. I have enjoyed all my interactions. And once again, thank you very much.

[Rishi Basu]

Thank you. The next question is from Saritha Rai from Bloomberg. Saritha is here with us. Saritha, kindly unmute yourself.

[Saritha Rai]

So my question is about inflation. And you are now competing against start-ups that are offering such sweeteners as BMW bikes and the shutdowns, 3-day work week. I wanted to ask you, what new creative measures Infosys is taking? You're a 40-year-old company, and you're now competing with 2- or 3-year-old start-ups. So obviously, this calls for some really innovative thinking. That was my first question. And my second question is about...

[Rishi Basu]

Saritha, sorry, could you come closer to the mic, please?

[Saritha Rai]

My second question is about the whole travel is going to come back, the return to office, all of the costs involved, how is that going to affect your margins or your -- how are you going to control cost? And will that sort of revive the H-1B visa issue that's been sort of under control or has sort of receded into the background in the last few quarters?And my last question is about -- this is a kind of a time when a lot of shopping is going on in various sectors. And I wondered whether Infosys is looking at any kind of acquisitions, big or small.

[Salil Satish Parekh, MD, CEO & Director]

Okay. Let me start off again. Thank you for being here in person. The -- what we have in terms of the connects with our employees is incredible. We are a company, as you mentioned, a 40-year-old company. We have tremendous longevity and a strength that comes from that and very exciting projects that we work on because we are working on these digital transformation, cloud, data analytics projects for large global enterprises. And that's still very exciting. The statistic that we shared earlier, 45,000 college hires, for each of those, we are probably going to look at 10 to 15 people for each person that joins us. And it's still a hugely competitive environment for someone to join Infosys. So we are very positive and confident. Of course, there are many people, and the start-up ecosystem is fantastic everywhere around India, but especially here in Bangalore as well. And there's all good success to that start-up ecosystem. Of course, in start-ups, there are different pros and cons. For a company like us, we have tremendous training, a good, long career and exciting projects that our employees work with in addition to all the benefits and a phenomenal campus environment that we have. So we are very comfortable and confident that we can attract the talent and then we can develop and grow it over long periods of time. I'll address the third one that you mentioned. We are absolutely looking for acquisition opportunities on an ongoing basis. We've done several in the past 2 or 3 years that you're aware of on cloud, SaaS companies, on areas which are related to customer relationship management, on areas that are related to technology, digital experience, digital design studios.So those are the things we are continuing to look for and look at. At this stage, there are also things which are active in the pipeline. But those things, as we've discussed in the past, happen when all of the elements come together, the culture, the value and what we can do in scaling it. And as and when they do, we will continue with that path to the acquisition. I'm sorry, the middle question?

[Nilanjan Roy, Chief Financial Officer]

On margin and cost. So I think the point you're making that yes, we will see some costs coming back like travel, for instance, some of the work from office once some of the work resumes. But having said that, even during all this period, we've seen a very, very active cost management program, cost takeout optimization program, and that's been years, whether this is the on-site offshore. Automation is a big part of this as well. It's continuing to look at automation of bot factory, the pyramid.So I think there are number of initiatives. We continue to take hiring and do it overseas, for instance, in the U.S. as well. And I think our quality graduate program outside India now is above 3,000, 3,500 fresh graduates, which earlier we wouldn't have had as many. So I think we have a lot of continuous work happening on this, and we seem quite confident in our margin guidance.

[Rishi Basu]

Thank you. The next question is from B D Narayankar from UNI who joins us on audio. Kindly unmute yourself.

[B D Narayankar]

Firstly, I would like to congratulate the Infosys team for beating the Street estimates. I have only one question and that is, what is the one big reason why Infosys has done better than TCS?

[Salil Satish Parekh, MD, CEO & Director]

So let me try and address that, and maybe Pravin, Nilanjan might have other things to add. I think our focus is absolutely on our clients today. We are very much building and have built a set of capabilities which are focused on digital and cloud, and those are things that our clients are looking at. That is the main reason why we see tremendous market share gain that you point out. We have seen this over the last several quarters. We are consistently making sure that we enhance our capabilities. So you look at Cobalt today. Pravin mentioned Equinox. Equinox is a capability which is designed for the completely new world of e-commerce. And we have the leading capability, in that sense, a platform, which we can deploy and have deployed at many different client situations. So things like Cobalt, Equinox, the reskilling that we've done with all of our people, when clients work with us, they see that those capabilities are relevant. And that's the reason why we are seeing all this traction. Of course, there is also a focus that we have put in to all of our teams, whether it's on the delivery side or the sales side, all of our BEF functions, which is working in a joined-up way, in one Infosys way to make sure that all of this is put together without looking internally, only looking externally.Those are the reasons working in this one Infosys way, building the new capabilities that is helping us. And the real resonance that you point out is what we see in terms of our growth and how the overall operating environment is working, and that we are really delighted to see that clients are looking to us more and more as their trusted partner.

[Rishi Basu]

Thank you. The next question is from Romita Majumdar from The Economic Times. Romita joins us on audio.

[Romita Majumdar]

Congratulations, gentlemen, on a very good set of numbers. My first query is with respect to the Retail business since you mentioned that there's been like good growth there, and there's a lot of aggressive investment happening in this space. I would kind of like to understand where the new deals are coming in Retail, from what kind of segments, what kind of client demand do you see? Is it B2C? Is it B2B? Also, what is the duration and value of such projects that you see on the Retail side?And I have another query with respect to the supply side issues. I want to understand, because there's this attrition issue that we are talking about, what employee categories in terms of experience or roles do you see which are reporting maximum attrition? And do you think that going slow on on-boarding talent when the pandemic hit or letting go of people before the pandemic impacted your ability to deal with the kind of massive demand that you're seeing right now?

[U. B. Pravin Rao, COO & Whole]

Okay. On the Retail front, as I said earlier, most of the increased demand we are seeing are in the areas of newcomers, new ways of doing digital marketing in the supply chain areas and so on. So there is a lot of focus on hyper-personalization, and this is across geographies. So this is -- and this is also across different kinds of deals. I mean we are seeing this traction both with existing customers as well as with new prospects. In fact, out of 22 large deals that we won, 3 of the large deals were in the Retail space.So from that perspective, I think it's been pretty broad-based. And as I said earlier, we expect this traction to continue for quite several quarters given that the economy is picking up and there is a lot of pent-up demand. Again, from a sales perspective, it is -- I mean we predominantly work with B2B companies. So most of the things we are talking about is from a B2B perspective.But obviously, for our plans, the demand is coming from end consumers. And so the moment there is an increase in demand, then that translates into increased opportunity for us as well. So that's what we are seeing in the Retail space. On the supply, what are the...

[Salil Satish Parekh, MD, CEO & Director]

On the supply side, do we see that coming in?

[U. B. Pravin Rao, COO & Whole]

Yes. On the supply side, typically, the attrition, I mean, irrespective of current situation or historically in the industry, the attrition is normally high between 3 to 5 years or 3 to 6 years. I mean that's where people are still not emotionally connected with the organization, and the attrition tends to be high. Even though in the current situation, while the average for us this quarter, we had about 20.1% average on an LTM basis, the attrition at 3 to 6 years was probably higher than what we have seen in 2022. And that is normal, and that is typical to what we have seen. And from -- what would be the...

[Romita Majumdar]

In terms of going slow on on-boarding talent last year compared -- before the pandemic, during the pandemic, do you think that impacted your ability to address the demand that you see right now?

[U. B. Pravin Rao, COO & Whole]

No, from our perspective, we never went -- though at least from an Infosys perspective, we continue to recruit. We continue to on-board people. But to some extent, yes, the immediate -- I think whilst many companies stopped recruiting and suddenly when there was demand, then the attrition picked up and there was a lot of cross-movement of people. But having said that, the kind of demand we are seeing is probably unusually high. And in fact, many reports really talk about the kind of demand. Last we have seen this kind of demand goes back to 2010 or something like that. And several reports talked about the tech intensity increasing from 3% to 5%. So historically, total spend would be 3% of revenues, and now it's increasing to 5%, and this is going to be a multiyear demand.So in that sense, I think the demand is significantly higher than what we have historically seen in the past few years. To some extent, in the short term, lack of hiring during pandemic may have caused this attrition. But this supply of talent will persist. Still, new freshers gets deployed, a lot of reskilling happens. And as Nilanjan said and as I also talked about earlier, in the next few quarters, we expect this application freeze and the attrition come back to normal levels.

[Rishi Basu]

Thank you. The next question is from Malvika Maloo from EnterpriseStory. Malvika is joining us on audio.

[Malvika Maloo]

My first question is on hiring. Could you give us some idea about lateral hiring that you're doing? And what are the kind of -- what kind of areas you are looking at in lateral hiring, what particular areas? Because you say you're seeing a lot of demand for cloud, AI. So if you could shed some light on that. Secondly, if you could tell us more about how -- what -- how you are planning to deal with acquisition, what areas, what companies you're looking at? And how have the acquisitions in the past helped you to deal with the demand that you're seeing right now?

[U. B. Pravin Rao, COO & Whole]

Okay. In terms of talent on the lateral hiring, we are really looking at hiring people with digital skills. But many times, there is shortage of digital skills. So we also look at adjacent areas and then reskill them internally on digital skills. So that has been our approach. Our approach is also about reskilling our existing people as well. So on an average, in the last few quarters, nearly 80% of our incremental demand on digital has been met with internal reskilling, and that's something we'll continue to focus on.We don't give specific numbers on number of hiring from a lateral perspective. From -- but from a fresher perspective, so far, we have hired about 25 people -- 25,000 people globally in -- from campuses. And we have increased that to 45,000 through the year. Earlier, we had talked about hiring about 35,000 campus graduates this year, and we have increased it to 45,000.

[Salil Satish Parekh, MD, CEO & Director]

On the acquisitions, as you might have seen over the past few years, we've done acquisitions which are focused on the SaaS area with different partners, capabilities we've tried to accelerate. We've done acquisitions which are focused on the public cloud area. We've done acquisitions which are focused on engineering services and then on experience and design, digital design type of capabilities. All of those areas are growing extremely well in the market. And so what we have learned is, one, with the careful work that the team has done to make sure operationally integrates well and then drive incremental impact to the client and to Infosys. Those acquisitions are working quite well today, and they are part of what is helping us to further expand our capabilities in the digital and cloud area.

[Rishi Basu]

Thank you. The next question is from Shilpa Phadnis from The Times of India. Shilpa joins us on video.

[Shilpa Phadnis]

Attrition has gone up substantially to 20%. How are you baking in the potential price increases in your client base, either through upfront cost or ordering the pricing constructs towards outcome-based pricing? If you can tell us about the cost optimization levers to normalize the pyramid because sub-con expenses have gone up, so is backfilling expenses. Also, would you see yourself at the current threshold from an offshoring standpoint?Salil, this question is to you. You've landed to form in the acceleration phase. People are talking about how there is a tech instant -- intensity has gone up substantially. Would you take a strategic refresh at this point in time? Would your new strategy capture the new growth momentum?Pravin, also many congratulations on a stellar career over 3-plus tickets with Infosys. Would we miss out to see a role which is location agnostic and individual agnostic? How will the structure look like?

[Salil Satish Parekh, MD, CEO & Director]

Okay. Let me start with the point which is around what we're seeing with the acceleration and the demand there, Shilpa. There, yes, we've been fortunate to see a tremendous acceleration with 19% growth this quarter and an increase in guidance. Our focus, which is really on digital capabilities, remain steady.As and when we are ready with the next phase of what we want to develop and think, we will obviously communicate that. For now, we are seeing a lot of activity which is going on with the areas we've talked about today, the cloud areas, the cybersecurity areas, artificial intelligence, IoT. And a building up of capability in that space has really helped us. On the first part, I think, was on attrition. Maybe Pravin, you want to address that one? Can you just repeat that first question, Shilpa, please?

[Shilpa Phadnis]

Yes, sir. So I just wanted to understand how you're making the potential price increases in your contracts, especially either it's through upfront investments or it's outcome-based pricing because all the other levers look healthy. And also, if you can talk about the cost optimization levers, how do you plan to normalize the pyramid with tuck-on expenses and backfilling expenses also going up. Would you also see yourself at the current threshold from an offshoring standpoint?

[Nilanjan Roy, Chief Financial Officer]

Yes. Yes, sure. So I think on a pricing perspective, I think it's more easier said than done to say that we can just walk up to a client and ask for a price increase. So that isn't the way the world works. But I think what we are trying to work with many of our sales focus to actually focus on the value which we bring to our clients. Really, the core of the proposition we bring in our [ own organization ], speed to market, redundancy, customer service, Net Promoter Score, these are real tangible dollars which we can show our clients. And that's the way we are leading this conversation. The net idea, we shouldn't leave any cents and dollars on the table, right? And we, of course, have to be competitive. But absolutely, this is the right time to make sure that we really buckled down on this and continue to focus on looking at digital talent and saying that if clients are looking at that kind of talent, they should start paying for that price. But like I said, this is going to be a long haul. It's not a short-term, 1-quarter exercise where you can chip it around.On cost optimization, I think we continue to show across the years around the lever that, like I mentioned in terms of the pyramid on-site, offshore, I mean setting up the hubs in the U.S., that enabled us really uniquely as one of the companies to set up an on-site pyramid, right? Historically, the pyramid was only looked at offshore, whereas on-site used to be very, very steep. Now with our hubs, we actually can broad base the pyramid there, taking these quality freshers and really impact the cost structure off our on-site businesses as well.So in that sense, we are quite confident on that. If you look at the on-site/offshore mix or whether that's threshold, I think the long-run secular trend, like I said, I mean there is no other country in the world which has 1 million engineering graduates coming out English-speaking every year. So at the end of the day, this global intensity of demand, it will have to come to India. And in that sense, we are the best placed to take care of that. So secularly, I think there can be some one-offs in quarters, but I think in the long run, you should see this on-site/offshore continuing to improve.

[U. B. Pravin Rao, COO & Whole]

Shilpa, I just wanted to thank you for the kind words and on the wishes. I have always enjoyed my interactions with you. In terms of your specific question, I will pass it on to Salil.

[Salil Satish Parekh, MD, CEO & Director]

I think what you mentioned was something about location independent or individual independent. I think those are more, let's say, theoretical constructions where we've had a very well-organized, really a practical approach to how we've run the business in terms of our organization structure. And what we are now planning to do is to move to the new structure, which we'll share internally first, and then we'll communicate it outside. We have an extremely strong set of leaders within Infosys. So I'm looking forward to many of them stepping up in the years to come. And of course, we will miss Pravin and his insights and real knowledge of the business, and not just of the company, but on the business overall and the market as well.

[Rishi Basu]

Thank you. The next question is from Shivani Shinde from Business Standard. Shivani joins us on audio.

[Shivani Shinde]

Gentlemen, congratulations on a strong set of numbers. This is just a few follow-on questions. Salil, on TCVs, it does look slightly softer if I have to compare it sequentially or year-on-year. And this is just not you. I think Accenture said the same almost when it came to outsourcing. Your TCS kind of showed the same thing. Can you give us some color on what's happening in the deal segment? Are large deals becoming smaller because as the market opens up, our clients recalibrating what they are looking at because people are coming back to offices and things are maybe coming back to normal? So if you could give some more color on the TCVs or the kind of deals that you see over the next 2 quarters.Pravin, so for you, from 35,000 to 45,000, I mean these are coming from campuses. How do you intend to make sure -- I mean, will they be joining over the next 2 quarters? Or do you think this will be sufficient also for the kind of demand you are seeing? Or we will see some more numbers coming over the next 2 quarters?Nilanjan, one final one for you. You've said that there are -- you've managed this quarter really well. Assuming you're going ahead, travel starts, are there enough levers in your hands to maintain this kind of margin movement momentum?

[Salil Satish Parekh, MD, CEO & Director]

Well, thanks, Shivani. I think on the large deals, the first point from our perspective is the pipeline is in very good shape. Our number at $2.15 billion, we feel, is extremely strong. As Pravin mentioned, that's 22 deals. It's a very large number of deals in terms of large deals, the actual number of deals. And we also see, as we look back to last year or last quarter, that we are continuing to see progression as we see the number of deals in addition to the value of the deals.What we did have within our mix in the year-ago quarter, of course, as Nilanjan mentioned earlier, was one of our mega deals. Those sorts of deals, as I was sharing, we see are not predictable in each quarter. So we look much more at the overall pipeline and the intensity that we are seeing in the market. There is a real interest in digital transformation. There's a real interest in working with us because we built these capabilities. We have seen a good momentum in the last few quarters. And the real test for us is we have increased our guidance for the full year. That gives us a way to demonstrate that we are confident that the growth is looking good in the coming quarters as well.

[U. B. Pravin Rao, COO & Whole]

Yes. In terms of number of employees, I think at this stage, we feel, based on our own assessment of business demand, that 45,000 would be adequate. But we have a very agile system. We keep on forecasting on a weekly basis. If we feel the need to change that, we will be more than happy to do that. If you recall last quarter, we had talked about overall 35,000 hiring. And in the past kind of 3 months, we have increased it to 45,000. So we will continue to monitor the situation. And if there is a need, we'll be more -- I mean we'll not hesitate to add more people if required.

[Rishi Basu]

Thank you. The next question is from Sankalp Phartiyal from Reuters. Sankalp has sent us his question on message. I'll read it out for him. Question is for Pravin and Salil. Can you tell us if hiring is becoming difficult in the current demand environment? Has good talent become more expensive, both among freshers and in lateral hiring? And how does that affect margins?

[U. B. Pravin Rao, COO & Whole]

Yes. Obviously -- I mean, obviously, we have a very large talent base in India or access to talent. And today, the ability to recruit in a remote manner also gives us that scalability. And we have also been using InfyTQ and other online assessments and other things to get the right quality of people.So from our perspective, I think we are able to get the kind of quality we need. And there's an extensive focus on training as well because we are probably one of the most sought-after training. In Infosys, we train people for 4 to 5 months, and we are probably the best finishing school in the industry. So we are not too much worried about the quality of talent, and we are able to manage.

[Rishi Basu]

Thank you. The next question is from Sai Ishwar from the Informist. Sai joins us on audio.

[Sai Ishwar]

Sir, for my first question is for Salil. Sir, do you see any fundamental change in the way pricing is built up? Because right now, do you see the element of gain sharing that is where the service provider has taken more gains from the edge of fixed pricing where -- because in digital deals, you're adding more values? And also in terms of cost cutting, you're actually reducing cost for the client. So do you see a fundamental change in the pricing element where the gain-sharing element becoming more and more prominent?And my second question is to Pravin. Sir, first of all, all the best for your future endeavors, sir. And so when talking about the third quarter, has now October, December quarter become -- it's historically said to be a weak quarter, right? But with the outsourcing -- I mean the offshoring becoming more -- less and less relevant and also with work from home becoming more and more prominent, the -- can we see that October, December quarter becoming like seasonally weak? Is it now a thing of the past? Or how do you see the initial traction in this quarter?

[Salil Satish Parekh, MD, CEO & Director]

So let me start with the view on gain sharing and different elements of pricing there. Today, in the market, we don't see that much difference, let's say, from the last few quarters in that specific area. There's always discussions with clients, a small percentage of clients, which relate to gain sharing, whether it's on value in the transformation or on cost in terms of reduction. But it's not a large percentage of our clients. And usually, these sorts of things are range-bound because there's some possibility of upsides, but usually capped if we ever enter those sorts of things. But there's been no big change that we have seen that suddenly does increase the gain sharing or it has gone away. A small percentage, we always have that discussion.

[U. B. Pravin Rao, COO & Whole]

Yes. In terms of quarter 3, in some sense, you're absolutely right. It's very -- it's probably not right to compare with what we have historically seen. So because of the pent-up demand and ramp-ups that are happening, maybe this quarter 3 may be different from the previous historical quarter 3 that we have seen in the past. Having said that, there is this element of furlough we have provided in both because in the past as well, that has to do with demand, that's more to do with the holiday season and other things. We don't have a view on that at this stage. So there may be that element of it. But in general, I think you are right. I mean maybe this quarter, at least this year, it will be probably fundamentally different from what we have seen in the past.

[Rishi Basu]

Thank you. The next question is from Bismah Malik from Business Today. Bismah joins us on audio.

[Bismah Malik]

Gentlemen, congratulations on a very good quarter. I wanted to ask Mr. Parekh on the large deal signings. I know it's been asked before. But from your -- it's been a fairly good quarter at over $2 billion value for the large deal signings. But from here, I wanted to understand whether the momentum for these kind of deals is going to continue, especially with markets opening up and our digitization spend as per analysts may go down, especially in the remote work set.The next few questions are on the hiring front, whether the cost of talent acquisition has really gone up considering the kind of environment we are in right now. And this has impacted your margin so far. Also, if you could give any indicative figures on what would be the percentage of lateral hires for the rest of the financial year. Again, one more important question, on the return-to-work front, that some employees had reached out to us from the other organizations saying that they've been asked to report to their office locations from their hometowns. They've been asked to migrate back. So what kind of targets has Infosys set on return to work see by this year front -- by this year-end?And also, about your hiring plans in the global markets like Canada, of course, you've set up a digital development -- digitization development center and another such market like U.S. So what are your plans there in the global markets on the hiring front? Yes, that would be it.

[Salil Satish Parekh, MD, CEO & Director]

Okay. Thanks for the questions. Let me start on the large deals. We -- the question you had about what is the type of evolution of that. My own sense, which I have shared before, is we see our pipeline of large deals very strong. We see that digital transformation work is still something that clients are looking at. We did, in this quarter, signed 22 deals in our large deals, which is deals above $50 million. And we see that clients are looking at us because we are well positioned in these areas and capabilities to help them with their digital transformation. Yes, there is changes in the environment with the initial focus on work from home and so on globally. But there's still a tremendous amount of work that needs to be done for large enterprises as they become much more online and digital, not just with their employees, their own customers, the way they're connecting with their suppliers, the way they want to scale their business. And there's also a tremendous amount of work on the cloud that many of these companies are driving through. So at this stage, we see a good pipeline for that and a good traction for the large deals.

[U. B. Pravin Rao, COO & Whole]

On the return to work front, I mean, basically, from our perspective, we are giving flexibility to people. I mean, today, more than 50% of the people are in Tier 2, Tier 3 cities where we don't have any development centers. So -- and we are asking them to return to work. Obviously, we are giving them flexibility to work to any DCs, nearest DCs where they are required to work.But as I said earlier, at this stage, it's purely voluntary. We are not really forcing anyone to come back to work. The situation will evolve, and one size doesn't fit all. There's a dependency on the nature of projects. There is a dependency on client requirements. Sometimes there's a regulatory requirement as well. So all these factors really come into play in terms of location where we are expected people to work. So from our perspective, the only thing that is clear is future will be hybrid where there will be a lot of flexibility for people. But what percentage, who will have to be in office, what life cycle stage of the product, everything will depend on the nature of the project, client requirements and so on. And this space is fast evolving. So we have a very good framework. Our ability to react fast is pretty good. We are very confident about it, and the framework is very flexible. So we're well prepared for whatever the eventuality is, but the situation is still unfolding.

[Bismah Malik]

I wanted to ask about the cost of talent acquisition also in terms of lateral hirings. What percentage of...

[Rishi Basu]

We're out of time. We'll have to take your question later. But I'm very sorry. You can e-mail us later with additional questions. No problem. Thank you.The last question this evening is from Arun Kalyanasundaram from TV 9, who joins us on audio.

[Arun Kalyanasundaram]

I've just got 3 questions. Could you give some idea about what is happening as far as that particular project was concerned, the IT portal project, by when do you expect it to be formally completed.Second question is whether any payment has been received on that particular contract. And there has been some speculation doing the rounds suggesting that there could be some kind of a penalty clause being imposed. So could you throw some light on that?And the last one is relating to these large deals. Recently, we did come across a situation where the market regulator, he clamped down because of certain unsavory incidents which took place, where information relating to large client deals was shared with perhaps rivals. And that led to a situation where it gave an indication that perhaps things were a little bit porous. So what have you done in terms of stepping up the vigil and ensuring that matters in terms of pricing and how you put through your bids, et cetera, that doesn't go out and it's not shared and people don't stand to make money out of that and bringing some kind of a bad image or name for the institution?

[U. B. Pravin Rao, COO & Whole]

On the income tax project, as we've said earlier, we have seen significant progress. All the income tax return forms are already available. Majority of the critical forms are also available. We are continuously working on improving the user experience, working with the stakeholders. There is still some pending functionalities which are available in the earlier portal that we are working to expeditiously deliver. There's also some new functionality, which was not available in the earlier portal that will take after we have completed whatever is available on the current portal. So this continues to be a top priority for us, and we'll ensure that we are able to deliver and meet the expectation in a short period of time.In terms of payment or penalties, we typically don't comment on these matters on any specific client. I think I would not like to comment on this.

[Nilanjan Roy, Chief Financial Officer]

Yes. On the trading case, which you mentioned about [indiscernible], which SEBI has passed against a former employee of ours, Infosys is not a party in the matter. We have very, very strong code of conduct and business ethics [indiscernible]. And of course, we think of another measure with -- okay. Yes. So I think, like I said, this was a matter against a former employee named by SEBI, and the company is not a party to the matter. And we have a very strong code of conduct relating to all this and investigation process as required.

[Rishi Basu]

Thank you. With that, we come to an end of this Q&A. We thank our friends from media for being part of this press conference. Thank you, Salil, Pravin, Nilanjan, for being here today.

[U. B. Pravin Rao, COO & Whole]

Thank you.

[Salil Satish Parekh, MD, CEO & Director]

Thank you.

[Nilanjan Roy, Chief Financial Officer]

Thank you, everyone.

[Rishi Basu]

Before we conclude, please note that the archived webcast of this press conference will be available on the Infosys website and on our YouTube channel later today. We request our on-ground friends from media to join us for some high tea outside. Thank you once again. Have a lovely evening.