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Could you share an overall commentary on the results? Narayanan: In the first half, we have grown 11.8 per cent, in line with the double-digit growth aspiration for this year. Given how the GBS business and the new sales team are shaping up, we have upped our aspirations of 10 per cent plus growth rate for four years instead of three. Despite cost increases in the second quarter, we have maintained profitability and will look into certain cost aspects to maintain it, going forward. Operating margin was at about 17-17.3 per cent for the half year, and EBITDA of about 20.8 per cent, in line with our guidance (over 20 per cent) for the year. Whatever money we are making in terms of improvement in gross margin because of the foreign currency scenario — dollar versus rupee, we are investing into the new sales engine and GBS with an outlook that that will start paying out. GBS broke even last quarter and continued to grow this quarter. In half a year, it has been larger than in the last 12 months. They have put together use-cases and customer testimonials, and we see revenue potential of at least $50 million from those use-cases over the next three years. The news sales engine has done a run rate of about $9-10 million in the first half, and an annualised run rate of $20 million, which is a decent increase compared to where we started last year. Last quarter saw strong profitable growth, but this time there’s been a sequential decline. Could you elaborate on what led to this dip? Narayanan: We had cautioned the markets last quarter, saying that this quarter we would do our annual pay increase. The impact of that was close to ₹12 crore. We continue to invest in GBS and new sales, where we are beginning to see outcomes. For the pay increase, we covered a large part using the foreign currency movements that went in our favour this quarter. Usually, when you do the pay increase, you have two quarters to catch up. This time, because of the foreign currency, we could drop only 0.3-0.4 per cent compared with the previous quarter. If we continue to show a similar volume growth next quarter, we should cover and maintain the same profitability levels. Product and Digital Engineering Services (PDES) currently accounts for the largest share of your revenues. With increasing focus and investment in GBS, what kind of growth are you projecting in that segment? Anantharaju: We have three business units. One is infrastructure and security, which is around 16.2 per cent of our revenues. GBS is the generative AI business unit, which is around 2.6 per cent now. The PDES unit, which we are reorganising into two business units, is more of an aggregation of six industry groups — BFSI, retail CPG, ED tech, high tech & media, manufacturing, industrial, healthcare and life sciences. The work we do here is mostly on platform implementation of things like Salesforce or helping customers with data and analytics needs, doing data engineering and helping them with automation anywhere. Narayanan: We intend to get the GBS unit to at least 5 per cent of the overall company revenues. Right now, it’s about 2.7 per cent. We are hoping to do about $8 million by the year. But we will have to start tracking AI-led revenues. With GBS, we burrow into a customer, which follows through with a large number of AI-led deals. Regarding the restructuring announced in March, when do you expect noticeable results? Is the impact already underway, or is it a gradual process that’s taking shape? Venkatraman: It has been two quarters since, and we are already seeing the changes like good growth, profitability and the new sales engine. We had talked about a new sales engine and the integration of acquisitions in place, which we are executing. There could be some lead and lag in one or two of them, but that’s largely where we are. This has given us confidence for 10 per cent growth for four years, instead of three. What is the outlook for the rest of FY26? Narayanan: We are sticking to our aspiration of 10 per cent growth for the year. Right now, we are at 11.8 per cent. As far as EBITDA is concerned, we are at 20.6 per cent and the operating margin should be in the same 17-plus percentage for the year. We are hoping to do well in Q3 and maintain a similar tempo in Q4.
