展覽品99.3
記者會
"印孚瑟斯有限公司
Q2 FY25媒體見面會看漲
2024年10月17日
公司參與者：
Salil Parekh
首席執行官及董事總經理
Jayesh Sanghrajka
Chief Financial Officer
Rishi Basu
企業通訊
記者
Ritu Singh
CNBC TV18
哈里普里亞·蘇雷班
NDTV盈利
楚恩德拉·S·斯里坎斯
| Moneycontrol |
Beena Parmar
經濟時報
賈斯·巴迪亞
| 薄荷 |
維娜·馬尼
印度時報
Padmini Dhruvaraj
Financial Express
uma Kannan
新印度快报
桑雅娜 B
印度商業線
Sonal Choudhary
Deccan Herald
Rishi Basu
非常
晚上好，各位，感謝您參加印孚瑟斯的第二季度財務業績報告。我的名字叫Rishi，我代表印孚瑟斯，想要歡迎所有人。對於許多印孚瑟斯的人來說，這個大廳帶給他們許多美好的回憶。
2001年10月，拉坦塔塔先生訪問印孚瑟斯，為這個以塔塔集團創辦人賈姆什吉·塔塔先生命名的大廳剪綵。拉坦塔塔先生在我們的校園度過了幾乎整整一天的時間，並種下一棵樹以紀念這個場合。多年來，那棵樹茁壯成長，成為一個幸福的提醒，提到這個場合以及他所的立場，如今它成為他在印孚瑟斯的遺產的標誌。
讓我與你分享一些那些回憶。我們可以看到那段視頻嗎？
[視頻演示]
我現在要求所有人加入我們，默哀一分鐘，懷念拉坦·塔塔先生，一位印度產業的泰坦和一位通過其生活和工作體現印度精神的領導者。我要求大家把手機調成靜音，並請求大家起立。謝謝。
[默哀]
謝謝。
現在我想邀請我們的首席執行官Salil Parekh發表開場白。輪到你了，Salil。
Salil Parekh
謝謝， Rishi。
拉坦先生給我們的國家留下了難以磨滅的印記，讓我們每個人都可以擁有偉大的夢想，卻又能保持腳踏實地。我們都會懷念他。
現在讓我與你分享我們業績的最新信息。我們在第二季度表現強勁，增長強勁且廣泛，運營利潤穩定，現金生成效益強勁，大型交易增多，員工人數增加。我們的營業收入按不變貨幣計算季度同比增長3.1%，年同比增長3.3%。
金融服務增長2％，製造業增長兩位數，能源、公用事業和服務業以5.8％的速度增長，所有板塊都是按季計算。我們看到所有地區都在季度內增長。我們的Q2營業利潤率為21.1％。美國的金融服務板塊繼續看到資本市場、抵押貸款、信用卡和支付的自由支出增加。我們在歐洲的汽車板塊看到增長放緩。除了這些板塊，需求趨勢仍然穩定，客戶繼續優先考慮成本支出而不是自由倡議。
我們正在加深在生成式人工智能方面的研究。我們正在部署企業生成式人工智能平台，打造自己的小型語言模型，並為我們的客戶開發多代理解決方案。考慮到我們在第二季度的優異表現和目前的展望，我們已調整了財政年度'25的營業收入增長指引。新的指引為全年以不變的貨幣計算增長3.75％至4.5％。營業利潤率指引仍然保持在20％至22％。
有了這樣， 我們開放提問。
Rishi Basu
薩里爾，謝謝您。現在我們將開放提問環節。一如往常，我們要求每家媒體提出一個問題，以便在接下來的一小時內滿足所有人的需求。加入薩里爾的是印孚瑟斯(Infosys)的致富金融(臨時代碼)長傑伊什·桑格拉吉卡(Jayesh Sanghrajka)先生。
我們收到了來自CNBC TV18的第一個問題，提問者是Ritu Singh。
Ritu 辛格
您好。首先，在指南修訂方面，如果您可以為我們細分，需求環境現在與幾個季度前相比有多大程度的改變？這次修訂的增加多少是有機的，而不是因為在科技方面所看到的貢獻？首先，您是否可以告訴我們這個？
同時，在過去八季中已有七次對營業收入指引進行修訂。您能告訴我們，就您所談到的轉折而言，您現在有哪些顯著的見解？
金融服務是您強調的一個領域，但您一直在提到的其他領域，如零售、高科技等，您在這些領域看到了什麼？您從客戶那裡聽到的有關自由支出方面的消息？
您的員工人數 也許是過去七個季度中首次增加。上次您告訴我們，您今年打算招聘大約15,000至20,000名新人，您是否按計劃進行？如果可以的話，對於指引，還有一個問題。您已維持毛利指引在20%至22%，但您將工資調整延後到第三季度。這將會有多大的影響呢？
儘管您進行了馬克西姆斯服務項目，但實際上並沒有實質擴張。請給我們一個關於為什麼會發生這種情況的想法，儘管在印度盧比看到的情況，為什麼沒有發生，並因為加薪而帶來的影響，您預計下一季將損失多少？謝謝。
Salil Parekh
讓我開始控制項回答你提出的一些問題，然後Jayesh將稍微補充一下邊際，還有營業收入增長指引。所以，首先要談到營業收入增長指引，我們的方法是基於本季度所做的工作。然後我們看看我們的管道，以及我們的預期並根據這些因素，截至今天，看到這個財政年度，即Q3和Q4，我們期待增加營收增長指引。
第二個問題是您在企業界提出的。因此，我們看到金融服務的自願支出看起來穩定、強勁，尤其是我們在資本市場、信用卡和支付方面所強調的。另外，在汽車行業中，我們看到歐洲市場動能減緩。在其他行業中，對客戶的看法和討論是類似的。因此，我們沒有看到任何變化。沒有新的自願支出，尤其是您提到的零售業或高科技行業。
我們確實看到更多專注於成本節省方面。就利潤部分，讓我先交給Jayesh，然後可能有一些關於營業收入的其他評論。
Jayesh Sanghrajka
是的。所以，只是補充一下薩利爾提到的指引部分以及你問的有關in-tech的問題，如果你還記得，上一次我們宣布指引時，已經澄清in-tech現在完全包含在上一次的指引中。因此，由於in-tech，本季度沒有額外影響或額外收益。這在上一季度的指引中已經考慮進去了。
關於這一點，我們在提供建議時會考慮多個因素。強勁的上半年業績，以及我們具有大宗交易和少於5,000萬美元交易的項目。我們少於5,000萬美元的交易也在本季度錄得雙位數增長。因此，這也有助於提高我們的指引。
就您提到的毛利問題，如果您看看本季我們的毛利，我們的毛利保持在21.1%，與上一季相似。如果您看看支出和收入，我們從馬克西姆斯服務獲得了80個基點的好處，來自貨幣的10個基點被佔用，因無形資產攤銷而抵銷了30個基點的收購，而60個基點是因為工資和變量增加以及我們提供的其他成本。因此，馬克西姆斯服務一直在做出貢獻。它正在抵銷我們正在進行的補償增長和變量增加。
We have guided for 20% to 22% for the full year. At this point in time, we are confident of our guidance with the wage hike that we are planning in Q4. The wage hike is going to be in a phased manner. Some part of that will be effective in January and the balance will be effective in April.
Ritu Singh
On fresher hiring?
Jayesh Sanghrajka
We are on track to onboard the 15,000 plus freshers that we talked about last time. We have on boarded many of them in the first half, but we are on-track to onboard 15,000 to 20,000 at a group level in FY'25.
Rishi Basu
Thank you. The next question is from Haripriya Sureban from NDTV Profit.
Haripriya Sureban
Hi, guys. Salil, if you could give us a sense on the budgets opening up, right, the U.S. Fed decision and the elections also coming to a close now. More stability is expected at least in the U.S. markets. So how do you see that in your conversation with your clients? Do you see more budgets opening up? Does this mean that Q3 and Q4 will be significantly better?
Also, give us some sense on the growth you are seeing in the emerging markets, because we see that it is an up-and-coming opportunity for other players as well. So how is it panning out for you? And on the margins, just to double-tap on that, you have been on the lower end of your guidance consistently now. So, do you think with the markets getting better, demand coming back, that should also translate into better margins, and you probably reached the higher end?
And on the fresher hiring specifically, you have mentioned your goals there, but with the new AI roles coming up and so much of work with generative AI, do you think you will do more specialized hiring, and will the salaries be better there, even on the fresher level and the lateral hiring?
Salil Parekh
Let me start off I think first on the budgets and then a little bit on the emerging markets, and then Jayesh will add on the margins, and we will come back on what is going on with generative AI. On the budgets, what we see today is, in Financial Services, we are starting to see the discretionary spend improving. We shared that last quarter, and we see that continuing as we saw this Q2 roll out.
In the other industries, in automotive, we still see the slowing in Europe, which we referenced before. And then for the other industries, whether you look at Retail or Hi-Tech or Telco, we still see the discretionary spend part of the budget is constrained, and there is still much more emphasis on the cost and efficiency discussions.
On the emerging markets, in that sense, our presence is much more in Western Europe, in U.S., Australia, though for us, some of the newer growth markets, we do see good traction in Japan, good traction in Middle East, but relative in terms of size, they are still quite small, but a good outlook in those markets.
Do you want to go on the margins and come on Gen AI?
Jayesh Sanghrajka
Yes. So, on the margins if you look at where we are for the H1, we have delivered 21.1% for H1, both the quarters as well as the same numbers. That pretty much is slightly above the midpoint of our guidance. Our guidance is 20% to 22%. If you look at contributions from Maximus, as I was saying earlier, I think we have got a lot of benefit. Every quarter we have been calling out the contribution from Project Maximus. If you look at the tracks that have delivered well, the value-based selling has been consistently delivering. The lean and automation has been delivering. Our utilization is pretty much at all-time high levels. Subcontractor has reduced.
So, there are multiple tracks which are running well. What the program has delivered at this point in time is, we have arrested the margin decline, and we have offset all the cost headwinds in terms of comp, in terms of additional variable pay, etc. So, despite that, we have been able to maintain our margin. Our aspiration continues to increase our margins in the midterm.
Rishi Basu
Salil Parekh
On the recruitment part with generative AI -- on generative AI we have a huge amount of focus in three specific areas. We are building enterprise-wide generative AI platforms. We are building a small language model that will be rolled out across industries, and we have launched already what are called multi-agent solutions. So, this is beyond being an assistant. It is really an agent which does a lot more of the solutioning within clients. So, we see a huge amount of opportunity, a very deep approach that we have built for generative AI and so that recruiting will continue with those skillsets.
So there, the distinction will be much more focused on as people mature and get deeper in their career. We have for example, within the company, a program called Power Programmers, which is focused on different sets of skills. So as those skills become deeper, we will look at those options.
Rishi Basu
The next question is from Chandra Srikanth from Moneycontrol.
Chandra Srikanth
Salil, on the face of it, you know, your numbers are below what the street was expecting because they were very optimistic of a 3.9% to 4% quarterly growth. Margins, I think the expectation was around 21.3% and even the guidance was between 4% to 5% and I think the TCV number that brokerages were expecting were closer to the 3 bn mark. So, can you take us through, if there were one off factors or some deals did not sort of come through this quarter?
Secondly, why do you not just move to a quarterly revenue guidance, instead of revising the annual guidance every quarter because as Ritu said, this is the seventh guidance revision in the last eight quarters. Is that something that you will consider?
And thirdly, can you take us through the contribution from pass-through revenues, third-party software sales this quarter because I think that was a significant component last time around. Jayesh, despite deferring wage hikes to Q3, you mentioned that the acquisition costs kind of got baked into the margins. So, what other tailwinds will you have in Q3 to maintain it at 21.1 or 21.2? Have all the freshers been onboarded, those who have been hired in 2020 to 2023?
And finally, Salil, tell us about your small language model, how many parameters is this going to have? When will it go live and for which industry are you building this first? And are you building this on top of open-source platforms or are you leveraging your partnership with OpenAI? Thanks.
Salil Parekh
So quite a few questions. Let me see if I can remember them one-by-one On the way we have seen our growth, our focus is really on what we are driving in the business. We see a lot of traction that we started to see in Financial Services, which has given us a good growth last quarter and this quarter. And we have called out last quarter and also now that outside of that, we do not see other industries yet starting to have a change in the discretionary spend. So that is the outlook of where we built out our growth guidance.
We are actually very positive and delighted that we have gone from 3% to 4% to 3.75% to 4.5%. So, it is a huge upward movement in the growth guidance.
Our view is, we want to share as we see each quarter what we see the outlook for the year. We are not looking at whether that is a change or not. That sometimes happens, sometimes does not happen. But this way we give a clear color for a full year as best as we know when we close the quarter and look at the parameters. So, those are really the factors that have gone into what we have done.
Let me talk a little bit about the small language model and then maybe Jayesh you can pick up. So, there it is an incredible approach that we have taken. We are building this on various open-source components. We have a narrow set of data which is from industry and also Infosys proprietary data set that will comprise the small language model.
We are working on different industry applications for the small language model, and we believe it will be a huge way for clients to leverage what they can do on top of that, building some business logic on top of this small language model. So, we think it is an incredible differentiated approach and we are seeing some good discussions on that basis with clients. So that we are not sharing yet. The work has started. The idea was to make sure we share the way we are going about working in generative AI. It is at a very deep level across those three areas.
Jayesh Sanghrajka
So, if you look at margins, as I said earlier, we have delivered 21.1% which is slightly above the midpoint of our guidance, which is 20% to 22%. As we get into the H2, we will have headwinds coming from compensation increase. Our last compensation increase was in November. So, we have decided the next one to start from January in a phased manner in two steps. So, part of that will be effective January and the balance will be effective April. We will have headwinds in terms of softness, which is regular -- which is seasonal in H2 for us. Furloughs, the lower working and calendar days, etc. So, those will be the headwinds. The tailwinds will continue from Project Maximus, which has been delivering well over the last few quarters. And at this point in time, we are confident of our margin guidance of 20% to 22% with an aspiration to increase in the midterm.
Yes, so as I said earlier, we are on track to onboard 15,000 to 20,000 freshers at group level in FY’25. We are not breaking it up between what was the past and this, but we are onboarding all the 15,000 to 20,000 freshers.
Yes. So, look -- first of all, it is the third-party cost, which is integral part of all the large deals or many of the large deals that we embark on, where we have taken over the turnkey projects for the clients and third-party costs are integral part of that project. And it comes as part of the mega and large deals that we sign. So, there is nothing specific there. It will come as and when we sign those kinds of deals, but it also increases our propensity with the clients and stickiness with the clients.
Rishi Basu
Thank you, Chandra. The next question is from Beena Parmar from The Economic Times.
Beena Parmar
Firstly, the North American geography has seen further de-growth. Could you list out what are the core reasons and what kind of impact do you see because of the rate cuts that we have seen by global central banks?
Also, the status of onboarding, just to follow up, could you tell us as to, if all the onboarding has been done from the previous years, 2022 and 2023 and how many freshers have been added so far maybe in this fiscal year and what kind of fresher onboarding that you will look at going forward? While you have said it is 15,000 to 20,000, but what is remaining? And what is the impact of the wage hike, can you quantify it? How much is the wage hike as well, if you can just tell us that?
Jayesh Sanghrajka
So, on the wage hike, we do not quantify the impact, nor have we quantified how will it be, in the phased manner, starting from Q4. On fresher onboarding, we will onboard 15,000 to 20,000 freshers during the year.
Beena Parmar
How many have been hired so far in these two quarters?
Jayesh Sanghrajka
We have not given that break-up, but you can see the net numbers for us have been declining for the last few quarters. This is the first quarter where we had a net increase, so that is an anecdote you can write, but we will onboard all the freshers that we have committed in the past.
Beena Parmar
North America?
Salil Parekh
North America, yes. So there, first quarter-on-quarter, we have seen growth in North America. There again, Financial Services were a big part of it. On a year-on-year basis, we saw negative growth. We see as you mentioned, the rate cut in the U.S. plus the lower inflation would indicate signs of some more spend. Certainly, in Financial Services, we have seen that, and we will wait to see in the other industries when that starts to happen.
Beena Parmar
Just to follow up on the mega-deal’s lineup as well, what is the pipeline and where is the current growth coming from in terms of the deal closures?
Salil Parekh
So, the pipeline is still quite robust on large deals. The type of large deals is still much more on cost and efficiency and not so much on digital transformation. So that is sort of the lay of the land in terms of the deal outlook and we are seeing a lot of discussion in cost and efficiency still across all industries.
Rishi Basu
Thank you. The next question is from Jas Bardia from the Mint.
Good evening. So, your peers have given mixed signals on the future outlook. Now, I want to ask whether the current prevailing macroeconomic conditions can dampen any sort of a prospect of a demand recovery; especially that has been aided by the U.S. Fed rate cut.
Second, I want to understand, is cloud a part of discretionary spending? And I ask this because over the last 15 to 18 months, Infosys and a lot of its peers have said that cost takeout deals are the priority. Now, do clients consider cloud as an expensive prospect and hence they are considering it in the discretionary bucket?
Last part sir, are you seeing any kind of a slowdown in the cloud spend over the last six to nine months? And just if I could squeeze in one more question, what percentage of your total revenue could be described as cloud revenue? That’s about it.
Salil Parekh
So, I think the start off was much more on the macro, the first question. I will go through one-by-one. On the macro, typically we have seen, at least in the past cycles, when interest rate cuts start to begin and inflation is more in control, typically in our end markets, Western Europe and U.S. and also Australia, the interest in spending on large technology programs typically increases. But today, as we have shared, we have seen this change last quarter and this quarter in the Financial Services on discretionary.
And last quarter, we had an extraordinary growth in Financial Services, this quarter, very strong growth in Financial Services. Now, we do not know when the others -- when they will come, but that is typically the way the macro affects the tech industry.
On cloud, we have a very strong cloud business. You, of course know that we have the Cobalt set of capabilities where we work with each of the large public cloud players and we build out various tools, templates, industry blueprints, which can work with the cloud provider, with the client to roll out whatever approach our clients are taking. Then we have a private cloud business, which is also part of Cobalt. And then of course, we do a lot of work with the SaaS providers, where that is part of our cloud activity.
We do not break out the cloud number, but it is in good shape within the company.
Rishi Basu
Thank you.
Salil Parekh
Cloud, so it depends. Sometimes it could be cost takeout, depending on how the cloud TCO looks from a client perspective and what is the usage. For example, when you are doing some work which is more related to the edge, not just the core, then there are different cost considerations.
If you are doing more standard, let us say migrating a set of applications from on-premises to cloud, depending on your time horizon, you could get some benefit, but sometimes you do not because a lot of times other services are also mixed in. For example, you could also do cyber security with that, and which is separate in some instances. So, it is not like, all cloud is cost, or all cloud is not cost, it depends on which way it is done.
Rishi Basu
Thanks, Jas. The next question is from Veena Mani from the Times of India.
Veena Mani
Good evening, gentlemen. So Q3 is usually the quarter of furloughs around December that is when clients -- what does it look this time? Do you think it is going to be as usual or based on your interactions with clients, would it be a lot more because discretionary spend is still on the lower side?
Also, I am trying to understand Q4, you mentioned that wage hikes will be rolled out. Now, if you could give us the quantum. For instance, HCL mentioned that 7% to 8% would be the average wage hike and for top performance it will be around 14%. Can Infosys give us some sort of a guidance on what the wage hike pattern would be and what the factors considered would be in terms of tenure or other things, what all things would be considered?
And if you could tell us a little bit about the generative AI revenues specifically and the use cases that went live in the second quarter? Some examples of, how the work around generative AI has been done for your clients? You mentioned that the revenue growth has been broad-based, but are there any micro factors, maybe one or two factors that really contributed to where the revenue is heading?
Salil Parekh
Let me start off. I think most maybe I can address. I think the first point was on the Q3 furlough situation. So first, we do not comment on the specific furlough outlook we have, whatever we have it is in our guidance 3.75% to 4.5%. Having said that, it is the start of the quarter so it is difficult to anticipate what it will look like, but we do have typically in previous years a range of outcomes that we look at. We have considered that same sort of approach in building the guidance, and it is within that guidance.
Then on the generative AI example, there are a host of examples, maybe to share something. We have built for one client, a multi-agent solution where agents work on a specific business process that they have and do the process almost completely on its own, parts of the process. So, it changes the way that they can do the process. It changes the way they can scale up what they can do as opposed to doing part of the process.
We have another example with a Telco where we have rolled out one of the items I mentioned, the enterprise generative AI platform, that platform can now -- 70,000 of the employees are leveraging that platform to build out their own use cases or benefits for what they want to use generative AI for, whether it is in knowledge area, customer service area or the coding area. So, we are doing a host of projects, not POCs, actual projects, projects that are getting completed where clients are seeing some benefits from that.
Rishi Basu
Question on wage hike?
Salil Parekh
On the salary increase, we do not comment on the specifics.
Rishi Basu
Revenue growth factors? That was the last, I think.
Salil Parekh
Specific factors for the growth, I think more of what we discussed before, it is really more focused with what the traction we saw on Financial Services and then each of the others, we have seen quarter-on-quarter growth, except for Retail if you look at our Q2 performance.
Rishi Basu
Thank you, Veena. The next question is from Padmini Dhruvaraj from the Financial Express.
Padmini Dhruvaraj
Hi. So, your large deal TCV has shrunk to $2.4bn from $4.1bn last quarter, so is this lumpiness because of the factors you mentioned that other sectors barring BFSI, it is still yet to rebound. And so, this demand for BFSI is it because your clients want to adopt to AI? And what percentage of your top line came from in-tech's revenue contribution?
And your peers, especially in the mid-market space, have said there is a burst in 1 to 10 mn deals. So, while your client addition in that space has declined, so are you losing market share there? So, are you collaborating with any GCCs here for digital modernization? How many have you partnered with?
Salil Parekh
Okay, so quite a few questions. The first one - the large deals growth, right? So there typically our large deals are much more lumpy, if you look at over several quarters, some quarters a few more, some quarters a few less. Our focus really is making sure that if you look at all of H1, those are converted and are already into delivery mode and we are seeing that coming through with the large deals, a lot more focus on cost and efficiency.
On the smaller deals or smaller size programs. In fact, as Jayesh shared earlier, we have seen what deals below 50 mn value which is outside of our large deals, which are not in the large deals, we have seen a huge increase, double digit increase in that pipeline. So, we see a lot more traction of that sort of work that we already see. And the point you made on Financial Services, we do see the discretionary spend there, but in the other industries, not yet.
Padmini Dhruvaraj
And your collaboration with GCCs here?
Salil Parekh
On the GCCs, so we are working very closely with GCCs all around. We are working with clients when they are setting up their GCCs. We are working with them when they do a build, operate, transfer and we participate in it with the build, operate and when they transfer. We are working with them, with GCCs in India, to help scale them, to help with recruiting. And we also working in some instances with clients when they are exiting from GCCs, when we have programs where we take them, and they become part of us. So, a very strong connect with GCCs across India.
Jayesh Sanghrajka
So, in-tech contributed 80 bps to this quarter's revenue.
Rishi Basu
Thank you. The next question is from Uma Kannan from The New Indian Express.
Uma Kannan
Good evening. In general, I just want to ask you like, how your acquired companies have performed in Q2? And today you have announced an acquisition of Blitz, right? So how this will help you in your overall revenue growth?
Jayesh Sanghrajka
So, we do not specifically give out the performance of each of the acquired entities. But overall, our acquisitions have contributed well, both organically as well as in terms of synergy over the years.
Uma Kannan
So Salil, you did speak about BFSI, but I just want to understand why there is de-growth in Retail. Is there any specific reason in terms of revenue? Retail contribution is, yes.
Salil Parekh
No, I think we have talked about Retail in the last few quarters that industry is going through some change. So, nothing has changed except to say that it has not actually come back with the discretionary spend. So, it is not like we are pointing out something has changed in the behavior there, as opposed to FS where there is better discretionary or automotive in Europe where it is a little bit softer.
Uma Kannan
I just want to ask you one question on Gen AI. You did speak about Gen AI, but I just want to understand how the pipeline looks like? And are you seeing any particular sector growth? Say for example, whether it is BFSI, Retail, which particular sector you are seeing growth, in terms of deals?
Salil Parekh
So generative AI, first, it is not in any specific industry or sector, it is across every industry. And part of generative AI work is, it is already becoming embedded in everything we do. So, any large program or transformation or cost efficiency productivity, a part of it is generative AI. Then we have different ways of looking at it because say you look at a tech and ops deal in customer service, there will be a large part of generative AI or if you look at something where we are building out new capabilities, there will be some productivity benefits through generative AI, but it is not the full deal. It is parts of almost every deal that we are doing.
Rishi Basu
Thank you. The next question is from Sanjana from The Hindu BusinessLine.
Sanjana B
Good evening, gentlemen. Salil, last quarter, you had mentioned that while these Gen AI projects are not POCs, they are not large revenue projects either. So, when do you think this change will come? And also, from what I can see, much of your revenues are divided between North America and Europe. There has been a flat growth like between your revenue shares, between the rest of the world, and India.
So, with emerging markets like LATAM and Africa, is that something that you are looking at and is nearshoring a strategy that you are employing? And beyond the margin guidance in the medium term, what is your aspirational margin? That is all. Thank you.
Salil Parekh
So, on the generative AI, we do not break out the revenue as we had shared before. What we do see is, the work we are doing is quite deep now. We are building enterprise generative AI platforms; we are building a small language model. We are working on multi-agent frameworks. So, these are things which are quite deep within the generative AI landscape and where clients are really appreciating the sort of, let us say, thought leadership, industry leadership that we have on generative AI.
In terms of the geographies, we have of course, a strong focus within North America, within Europe, within Australia. We do not have a business outside of our Finacle business in Africa, so it is a small part of our business. In Latin America, similarly a small part of our business. On nearshoring, we see a lot of traction that we are seeing across different nearshore markets.
In Europe, there are certain markets. For North America, there are certain markets. And even in Asia, we have some markets in which we are building nearshore capability. So that is certainly moving along well.
On the margin aspiration, we absolutely have an internal aspiration to drive margin higher and higher with all of the approach we are taking, but we have not shared that externally.
Rishi Basu
Thank you. The next question is from Sonal Choudhary from the Deccan Herald.
Sonal Choudhary
Good evening, gentlemen. While you have pretty much highlighted everything, there is a few questions that I would like to ask. Firstly, on the hiring as everyone has already asked, the 2022 letters that went out and the hiring which you promised that will be done from October, I just want to know if these two years, 2022, 2023, the letters which went out in those years and the hiring that happened now, so was there a lapse or anything on that front?
Salil Parekh
Was there a what, sorry?
Sonal Choudhary
| Lapse? |
Salil Parekh
No, I think first, we are going to hire everyone that has got a letter and an offer from Infosys. We have a phased approach to this hiring and that is in process right now.
Sonal Choudhary
Okay. Also, your operating margins, they are flat. They were expected to be at around 21.3%. So, is there anything, any color that you would like to add to that? Is that something that you were also expecting?
Jayesh Sanghrajka
So, as I said earlier, our margin guidance is 20% to 22% and we are slightly above the midpoint of the margin guidance, right? If you look at the puts and takes, we had 80 basis points coming from Project Maximus, 10 basis points coming from currency and 30 basis points of tailwinds from the acquisition that we did, mainly on account of amortization and the balance 60 basis points was invested in terms of salary hikes, in terms of additional variable pay and other costs.
So, net-net, it offset each other, and we have reported 21.1% at margin. We do not really call out what we were expecting and where we are, I think we have delivered on what we were planning for.
Sonal Choudhary
And you are expecting this to go ahead? I mean increase going ahead, right?
Jayesh Sanghrajka
In the medium term? Yes.
Sonal Choudhary
Okay. Also, GCCs you have spoken about it already. The popular mandate did put out that, you know, it is like a competition while you have clearly highlighted that it is not, you collaborating rather. So how many GCCs have you collaborated with till now?
Salil Parekh
So first, GCCs are doing a fantastic job. We are quite fortunate that we are working with many of the client organizations and their GCCs in India. There is a large number of GCCs here. We do not share specifically which GCCs we have collaborated with, but to give you a sense, in Financial Services, in Telco, in Life sciences, we are working with a large number of those GCCs in India and helping them and supporting them. But we do not give specific, the number of GCCs we are working with here. It is part of our overall client relationship.
We have teams that work very closely because there are different needs sometimes for what the GCCs are looking for and sometimes it is a holistic need across the client between the GCC in India and between the global organizations.
Rishi Basu
Thank you. With that we come to the end of this press conference. We thank our friends from media for being here today. Thank you, Salil and thank you, Jayesh.
Before we conclude, please note that the archive webcast of this press conference will be available on the Infosys website and on our YouTube channel later today. We request all of you to join us for Hi-Tea outside. Thank you once again and have a lovely evening.