Q2 2021 Tata Elxsi Ltd Earnings Call Oct 15, 2020 (Thomson StreetEvents) — Edited Transcript of Tata Elxsi Ltd earnings conference call or presentation Thursday, October 15, 2020 at 9:30:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * G. Vaidyanathan Tata Elxsi Limited – General Counsel, Company Secretary & Compliance Officer * Manoj Raghavan Tata Elxsi Limited – MD, CEO & Director * Pai Nitin Tata Elxsi Limited – Head of Marketing and SVP ================================================================================ Conference Call Participants ================================================================================ * Apurva Prasad HDFC Securities Limited, Research Division – Research Analyst * Ashish Aggarwal Principal Mutual Funds – Senior Research Analyst * Bharat Sheth Quest Investment Advisors Pvt Ltd. – Head of Equities * Deepak Poddar Sapphire Capital Management LLC – Portfolio Manager * Dipan Anil Mehta Elixir Capital Limited – Chairman of the Board * Hiten Jain Invesco Asset Management (India) Private Limited – Research Analyst * Kunal Shah ICICI Securities Limited, Research Division – Research Analyst * Manish Bhandari Vallum Capital Advisors – Founder, CEO & Principal Portfolio Manager * Mayank Babla Dalal & Broacha Stock Broking Pvt Ltd., Research Division – Research Analyst * Nemish Shah Emkay Global Financial Services Ltd., Research Division – Research Analyst * Nitin Shakdher * Ravi Naredi * Rohan Pramod Advant Multi-Act Equity Consultancy Ltd. – Portfolio Manager * Senthil Manikandan * Umang Shah * Varun Sharma ================================================================================ Presentation ——————————————————————————– Operator [1] ——————————————————————————– Ladies and gentlemen, good day, and welcome to the Tata Elxsi Q2 FY ’21 Earnings Conference Call. (Operator Instructions) Please note, this conference is being recorded. Also, we’d like to inform participants that this call is for approximately 60 minutes and will end by 3:55 p.m. Indian Standard Time. I now hand the conference over to Mr. Vaidyanathan. Thank you, and over to you, sir. ——————————————————————————– G. Vaidyanathan, Tata Elxsi Limited – General Counsel, Company Secretary & Compliance Officer [2] ——————————————————————————– Thank you. Good afternoon. I welcome all of you for the — to the H1 Q2 FY ’21 earnings call. We have here with us Mr. Manoj Raghavan, CEO and MD; and Nitin Pai, CMO and CSO. The agenda goes like this. Manoj will give a brief of the results of Q2. And thereafter, you can pose your queries and restrict 1 query per person — participant so that we can give chance to others. Now I request Mr. Manoj Raghavan to take it over. ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [3] ——————————————————————————– Thank you, GV. Good afternoon to — good afternoon, everybody. Thank you for joining us today, and I hope you and your families are safe. So I’m happy to report that we have delivered a very robust Q2 FY ’21. And I’m sure you’ve seen the metrics that was published. It was really an all-round performance both top line, bottom line, growth in both our key divisions, the EPD, Embedded Product Design division and the Industrial Design & Visualization division. Also broad-based growth across all the industry verticals and geographies. So I think it was a very, very satisfying performance. Our revenues from operations grew by 7.4% quarter-on-quarter and 11.5% year-on-year. And there was a request that we need to disclose constant currency growth. So this actually translates to a constant currency growth of 6.9% quarter-on-quarter and 4.4% year-on-year. So as you can see, most of this quarter-on-quarter growth has been volume led, more than 93% of the sequential growth in the quarter gone by was volume led. So all these data has been published in our fact sheet that has been put up on our website on our Investor Relations page. Now as far as profitability goes, we grew our PBT by about — by 17% quarter-on-quarter and 56.1% year-on-year. Again, a pretty satisfying growth as far as bottom line is concerned. The company’s growth was driven by — primarily by both these key businesses, that is EPD and IDV. EPD, which is the largest — company’s largest division, grew by 7.1% quarter-on-quarter and about 15.1% year-on-year. IDV also posted smart growth of 15.1% quarter-on-quarter with pretty good design project wins and so on. Within the EPD business, medical and health care continues to grow faster than the rest of the verticals. This quarter, we grew at 14.1% quarter-on-quarter. Media and communication delivered another quarter of steady growth at 6.7% quarter-on-quarter. What is also satisfying is the transportation vertical showed a smart growth of 5.6% quarter-on-quarter. So definitely, we are seeing recovery in automotive market. And of course, as you may have already seen, we had closed some good deals, including a multiyear deal with an European Tier 1 supplier for our vehicle electronics and software. We’ve also added a new automotive OEM as a customer. So in essence, we want to say that we are back to our pre-COVID momentum as far as growth rates are concerned, and we expect this momentum to continue into H2 this financial year. So as we enter into the second half of the financial year, we’re pretty confident with strong deal pipelines across geos and verticals, a good number of deal momentum, large deals that we are pursuing. And because of the performance that we have been able to generate, we are announcing salary hikes for employees with effect from October 1. So with that, I would want to hand it over to GV for the Q&A session. Thank you, and look forward to your questions. ================================================================================ Questions and Answers ——————————————————————————– Operator [1] ——————————————————————————– (Operator Instructions) The first question is from the line of Keval Asher, who’s an individual investor. ——————————————————————————– Unidentified Participant, [2] ——————————————————————————– Congratulations for the great set of numbers. The question which we want to ask is, are the margins sustainable? And can it grow forward in times ahead? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [3] ——————————————————————————– Yes. I mean, our focus is to ensure that we maintain our margins. And as I’ve just announced, we are — we would be giving our salary hikes also. So — but having said that, we would continue to guide in the 22%, 24% PBT, and we would hope to be at the upper end of that spectrum. ——————————————————————————– Operator [4] ——————————————————————————– The next question is from Kunal Shah from ICICI Mutual Fund. ——————————————————————————– Kunal Shah, ICICI Securities Limited, Research Division – Research Analyst [5] ——————————————————————————– And congratulations for a good set of numbers. Just taking the question… ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [6] ——————————————————————————– Can you be louder please? ——————————————————————————– Kunal Shah, ICICI Securities Limited, Research Division – Research Analyst [7] ——————————————————————————– Yes, sure. Is it audible now, sir? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [8] ——————————————————————————– Yes, very much. ——————————————————————————– Kunal Shah, ICICI Securities Limited, Research Division – Research Analyst [9] ——————————————————————————– Yes. So congratulations in the first place for a good set of numbers, sir. Just continuing the question on the margins front, right? You did guide about 22% to 24% PBT. I just wanted to understand 3, 4 aspects. I mean, how should one look at the other expenses going ahead because there would be a lot of discretionary expenditure, I believe, which would have been curtailed. And also, our on-site/offshore mix right has tilted very much in the favor of offshore from 57.4-odd percent to 65.3% in the recent quarter. So how should this shape up going ahead, having effect on our employee cost and other expenses? Any thoughts? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [10] ——————————————————————————– Yes. No, the on-site/offshore ratio tilting towards the offshore is what everyone dreams of, right? So I think that’s in the right direction. If it continues and if you can move more work from on-site to offshore, our margins will only improve. So that is positive. Other expenses, see, even as we speak, 95% of our employees are working from home. So literally, a lot of other expenses are not there, right? So discretionary expenses, employee, celebrations, travel, so a number of those expenses I think at least for the 1 quarter till we see opening up of the travel and so on will continue to be muted. So I can’t predict when things will get back to normal, but based on what people say, it looks like only next financial year, we’ll get back to normal. ——————————————————————————– Kunal Shah, ICICI Securities Limited, Research Division – Research Analyst [11] ——————————————————————————– Okay. Okay. Okay. So you — and how about the on-site/offshore, should we see this remaining same at least for the 1 quarter and then see how it goes ahead? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [12] ——————————————————————————– Yes. Definitely, I think, at least for the next quarter or even maybe for the next 2 quarters, again, it all depends on how countries and open up and travel restrictions are removed. You have all these reinfections coming in and more — western countries are now more and more cautious and so on, right? So you can safely assume at least for 1 quarter, these ratios will continue, maybe for 2 quarters. ——————————————————————————– Kunal Shah, ICICI Securities Limited, Research Division – Research Analyst [13] ——————————————————————————– Okay. Okay. And you did talk about the hike from 1st October for the employees. So I mean, any quantification you would say how this would pan out in the employee expenses? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [14] ——————————————————————————– We are looking at between 6% to 8%. So final detail is being worked out right now. ——————————————————————————– Kunal Shah, ICICI Securities Limited, Research Division – Research Analyst [15] ——————————————————————————– Great, sir. Great, sir. And just moving on the deal pipeline, sir, the commentary was pretty optimistic. So just wanted to understand the scenario out there. I mean, when it comes to the auto sector, and we are doing very good when it comes to broadcast and communication, so how do you see in your interactions with the clients, we see a lot of companies now kind of, first, trying to move towards cloud, which seems to be very important and then trying to spend on R&D and all those stuff. So how do you see that panning out for the company in your interactions with the clients across segments? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [16] ——————————————————————————– Sure. I think you have asked a number of questions. I think you should give time to other investors. But having said that, let me answer this quickly. Deal pipeline is looking good, both in all the 3 verticals that we are operating in. We — the — what you say, the order book that we are carrying forward is also very healthy. I think that’s why I said, we are back to our pre-COVID momentum in terms of both the pipeline and the sort of large opportunities, consolidation opportunities and many opportunities that we are looking at. So I’m pretty optimistic that things would — we will record back to our growth rates in the pre-COVID times. ——————————————————————————– Operator [17] ——————————————————————————– The next question is from the line of [Hasmukh Gala from Finvest Advisors.] ——————————————————————————– Unidentified Analyst, [18] ——————————————————————————– Congratulations for a great set of numbers. Sir, I just basically wanted to know that recently you have announced certain partnerships, long-term partnerships with say INVIDI, then GEC Schaeffler and partnering with the Google. So I just wanted to understand what kind of revenue model you will have by dealing with these kind of opportunities? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [19] ——————————————————————————– Right. Mr. Gala. This is Nitin here. So if you look at partnerships, I’ll take Schaeffler out because Schaeffler is not so much a partnership, it’s a clear customer relationship. And what we announced with them is a global engineering center. So you can think of it as an offshore development center for a customer. But of course, it will be multi-skilled, multi-areas, it will be multi-year. So that’s the signature of Schaeffler. But if you look at partnerships like INVIDI or Google, they represent how we can go to market with somebody else. So it is a joint go-to-market with somebody else so that we can provide larger or more complete solutions to our customers. For example, if you look at OTT, Google and the Widevine solution that we have partnered for is really being used to protect content. The idea being that, for example, if somebody has rights over IPL, and they want to make sure that, that IPL video is being transmitted only to people who are subscriptions or are legal subscribers, then you will need some way of confirming this. And therefore, digital rights management and the content protection that Google offers rise along with any OTT service. So not only that work for us, it is natural complement. When we go into the market to help customers integrate OTT services that look, they also take care of content protection. Similarly, if you look at INVIDI, INVIDI is one of the world leaders in addressable ads, which is how do you deliver an advertisement to a subscriber based on their profile, their background, which home they are in, which geography they are in and so on. Again, naturally, it complements our capabilities and our offerings in OTT by saying, “Look, not only it can help you deliver a great video OTT platform and a service but will also bring you opportunity to protect content, will also bring you opportunities to monetize content by providing better addressable ads, better targeted ads and so on.” So partnerships are typically used, one, to make our services more complete and to improve our own value proposition. ——————————————————————————– Operator [20] ——————————————————————————– (Operator Instructions) The next question is from the line of Mayank Babla from Dalal & Broacha. ——————————————————————————– Mayank Babla, Dalal & Broacha Stock Broking Pvt Ltd., Research Division – Research Analyst [21] ——————————————————————————– My question pertains to the top client. We’ve seen some sort of improvement in the top client account in this quarter. Going ahead, could you — if you could give us some qualitative guidance if we can expect similar momentum or better than this in the second half? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [22] ——————————————————————————– No. Again, it is — I mean, it is good that we have had a good quarter as far as the top customer is concerned. We would be happy to retain at this level because the outlook is — it’s definitely better than what we have seen in the previous quarters, but still there are some uncertainties. So we don’t want to guide anything saying that things are rosy and things will be very different. We’re happy with this current level. ——————————————————————————– Operator [23] ——————————————————————————– The next question is from Dipan Mehta from Elixir Equities. ——————————————————————————– Dipan Anil Mehta, Elixir Capital Limited – Chairman of the Board [24] ——————————————————————————– My 1 question has been answered regarding the top client. The second is that this work from home, is it really a viable option to reduce cost? Or it is a passing phase and eventually, costs will come back to their normal levels? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [25] ——————————————————————————– No, the cost as far as travel times and all of that is reduced, right? But IT costs and all of them have gone up. So actually, if you look at it, they cancel out. And unless you start closing down your offices and trying to reduce costs in that way, you will not gain any significant cost advantage by employees working from home. So as of now, we have not closed any offices. Offices are — we continue to maintain all our offices. We will take a call based on how this entire pandemic pans out. ——————————————————————————– Operator [26] ——————————————————————————– The next question is from Raj Rishi, who’s an individual investor. ——————————————————————————– Unidentified Participant, [27] ——————————————————————————– I just want to find out whether like what sort of possibilities there for nonlinear growth? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [28] ——————————————————————————– Raj, this is Nitin here. If you look at opportunities for nonlinear growth, obviously they would be similar to any company that you would see in this space, which is, one, you either go significantly towards products. The logic being that, yes, you build it once and you sell it to many, unlike services, which is headcount and linear. Option two would be that you go and acquire somebody else and therefore, inorganically you look at accelerating your revenue. We have initiatives going on both. ——————————————————————————– Unidentified Participant, [29] ——————————————————————————– Okay. Presently, how much would be your product — IPR-based revenue as a percentage? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [30] ——————————————————————————– So right now, it is sub-5%. It’s in the low single digit. ——————————————————————————– Unidentified Participant, [31] ——————————————————————————– Okay. And what’s the aspiration, if you can share it with us since, say, 2, 3, years? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [32] ——————————————————————————– So I would rather not call it so much as a product versus services aspiration, I think it is really a movement towards solutionizing. The idea has been that as customers look at what they need to do in their own digital transformation. It’s not just products that will answer it, it is solutions that couple products and certain accelerators along with services. And I think that is our aspiration that it should strengthen our value proposition rather than become the value proposition. ——————————————————————————– Unidentified Participant, [33] ——————————————————————————– Okay. Okay. Can I squeeze another question, if it’s possible. ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [34] ——————————————————————————– Since we are limiting it to an hour, if you can kindly come back please. ——————————————————————————– Operator [35] ——————————————————————————– The next question is from the line of Nitin Shakdher from Green Capital Single Family Office. ——————————————————————————– Nitin Shakdher, [36] ——————————————————————————– Great set of results. My question pertains to the cash reserves and the cash on books. So approximately, there is about INR 900 crores to INR 950 crores approximately as we speak in the quarter. Now what is the plan or strategic plan of the company to improve the return on capital employed and return percentage on the cash, which is on the books? Is there any strategic form of payouts or buyouts or acquisitions plan? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [37] ——————————————————————————– Yes. Nitin has answered the previous question, we are definitely planning to see how we can use this cash reserve for inorganic options, right? So yes, there’s — there are some discussions going on. And this issue of capital allocation is also discussed at Board level. So we are working out certain options in terms of if you’re not able to use these reserves effectively, what do we do with it? So there are some deliberations happening. So it’s pretty early to come back and tell you what the allocation policy will be. But however subsequently, we’ll get back to you on this. ——————————————————————————– Nitin Shakdher, [38] ——————————————————————————– I hope it’s sooner than rather later because last quarter also, we discussed this, but assuming that the management is taking a call on that and improving the ratios and that. ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [39] ——————————————————————————– Sure. ——————————————————————————– Operator [40] ——————————————————————————– The next question is from the line of [Naveen Bothra,] who’s an individual investor. ——————————————————————————– Unidentified Participant, [41] ——————————————————————————– Congratulations, sir, for excellent set of operating numbers. I may say, highest ever top line and bottom line on TTM basis we have achieved. So congratulations to the team. My question is regarding the capital allocation policy, you have already told the earlier participant. My question is regarding the platforms business. We are having around, I think, 8 to 10 platforms. So what is our overall strategy to monetize the platform business? And how many are in the business we are using? And how many are in the development stage? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [42] ——————————————————————————– Yes. Mr. Bothra, this is Nitin here. So maybe I’ll take that question. Yes, in some sense, I’ll go back to the products part, though, products look very nice, in the sense that it does look like you just had to develop it once and you can sell it infinitely without any further cost or effort. The reality is platforms and products do require continuous investment. And in that sense, at times, they can also be more difficult than the services business because services you’ll deliver when required. While products, you’ll have to keep enhancing, keep developing, even if there are no active customers simply because you want to make sure that it can compete successfully in the market that it operates. So to that extent, I think what we are definitely and consciously doing is making sure that the platforms are part of the value proposition that we take to customers. So for example, products like FalconEye or an AutomaTE, which are products meant to automate, test and validation for media or for automotive, is part of our service offering for test and validation services. Similarly, if you look at OTT, even as we go and talk to customers about how we can help them on OTT services, TE Play becomes a platform approach. And it’s not that every customer will take that platform. There are certain customers like who may only choose to take a part of what we have, like autonomai. While it’s a full autonomous platform, customers may choose only a single module, but what it leads to is services around that module and others. So our hope is and our plan is definitely to make sure that for every percentage of revenue that a product or a platform brings, we would like 2, 3 more percentage to come from services, and that services to continue beyond the first year to become a longer tail of revenues. So that is really the goal. ——————————————————————————– Unidentified Participant, [43] ——————————————————————————– Okay. So regarding how many platforms are currently in the business? And how many are there in the development? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [44] ——————————————————————————– Right. So at any point of time, we have about 1 or 2 active in every vertical. So if you look at media, we have TE Play, FalconEye. And if you look at automotive, we have autonomai, we have AutomaTE. If you look at medical at this time, we really do not have a full platform. So we are investing in 1 or 2 in each of these verticals at this time. So there are some in development, which are not yet announced. ——————————————————————————– Operator [45] ——————————————————————————– The next question is from the line of Vijay, who’s an individual investor. ——————————————————————————– Unidentified Participant, [46] ——————————————————————————– Excellent results and congratulations team Elxsi. And my question — I have 2 questions. And one is on the new opportunities that you’re actually looking at like to stabilize your numbers. How do you look get the space technology, which has a potential of $50 billion in our country by 2024? That’s one. Number two, I think a month back, I think I’ve seen something on the parking technology that you were about to come on. Can you also give some — throw some color — light on to that? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [47] ——————————————————————————– Yes. This is Nitin here again. Can you repeat the second one, please? ——————————————————————————– Unidentified Participant, [48] ——————————————————————————– Auto parking. ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [49] ——————————————————————————– Auto parking. Okay. Okay. Sure, sure. So I’ll just take them one by one. On the space side, yes, we have examined the opportunity. We have worked in space programs before, including the Mangalyaan mission, right, where we delivered the telemetry unit that went on to the Mars rover. So it actually was part of the Mars Orbiter unit. So we have delivered certain work for space. We are looking at what we can do. But however, we also recognize that a lot of these are government-led programs. So to that extent, the conditions of working and how you deliver, et cetera, are quite difficult. So we are not expecting to have any large revenues out of space per se. On the auto parking, yes, that is — in many ways for us, that is the way we see how autonomai will play out. Autonomai is meant to be delivering full level 5, full autonomy. While reality is that many of the emerging markets can never achieve full autonomy because the roads don’t suit it. And the infrastructure doesn’t suit it and the signages don’t suit it. So we believe that many markets will actually leverage features rather than full autonomy. So for example, auto parking valet systems are something that are quite interesting for many automotive companies. Similarly, traffic jam assist, where in a traffic jam, the car moves automatically. You don’t have to keep pressing the accelerator or the clutch or the brake. So certain smaller features of autonomy will become more popular. So we are, in many ways, if you think about it, remastering autonomai to suit features which we think will come to market much before full autonomy. So that is something we’re actively investing in. ——————————————————————————– Operator [50] ——————————————————————————– The next question is from Pranav Thakkar, who’s an individual Investor. ——————————————————————————– Unidentified Participant, [51] ——————————————————————————– Yes. Congratulations for a great set of numbers. And my question is regarding — it is in reference to the previous meeting where in Nitin has updated that the software which is useful for telecom industry just rightly COVID-induced pandemic and 1 supervisor can monitor the employees sitting at home. And so just want to understand that this business platform, what is the update on this? And whether this can also be used in other industry as well? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [52] ——————————————————————————– Right. So this is Nitin here. I’ll take that question. I’m not precisely clear about what you’re referring to because I remember that we talked of automation of operations definitely in telecom. And when we talk of network operations automation, it’s more to do with the network itself and how you can automate some of the monitoring and control of the network to make sure that subscribers don’t have any disruption to the services. That continues. In fact, we are seeing fairly strong interest from quite a few operators in the solution that we have developed and we are developing, right? So in many ways, that is one of the platforms that we are investing in. Now will that apply to other industries? Yes, not directly, but we see that the whole concept of remote monitoring and remote management is a concept that can apply to any enterprise. And we definitely are looking at how we can adapt it to some of the other industries that we work in. ——————————————————————————– Operator [53] ——————————————————————————– The next question is from Ravi Naredi from Naredi Investment. ——————————————————————————– Ravi Naredi, [54] ——————————————————————————– My maximum questions have been answered, but just I would like to know how many new hirings we are going to? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [55] ——————————————————————————– We are going to make in the current quarter. Is that the question? ——————————————————————————– Ravi Naredi, [56] ——————————————————————————– Yes. Yes. ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [57] ——————————————————————————– Yes. So we have the — we have hired — we have actually hired about 300 fresh grads from the colleges and they have not yet been onboarded because of the pandemic. So we plan to onboard them in this quarter in Q3. On top of that, we may have anywhere between 100 and 150 lateral people that we would hire. That again depends on the requirement and so on, right? That’s an average that we have been hiring. ——————————————————————————– Operator [58] ——————————————————————————– The next question is from Deepak Poddar from Sapphire Capital. ——————————————————————————– Deepak Poddar, Sapphire Capital Management LLC – Portfolio Manager [59] ——————————————————————————– Sir, just I wanted to understand in terms of your revenue, like if I see last 10, 12 quarters, we have been in the range of INR 380 crores to INR 420 crores in that range we have been doing. So when do you see the next leap of growth that would be coming to us, maybe if you take a view of next 2 to 3 years? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [60] ——————————————————————————– I’m not sure when you say 10 quarters that we have been in the INR 380 crores. I mean, 10 quarters, maybe we have been from INR 300 crores levels or INR 320 crores levels, we would have grown to the INR 430 crores and so on. So our expectation is we’ll be able to continue this sort of a growth. There won’t be any sudden jumps because sudden jumps will happen maybe if you have an inorganic option and so on. But otherwise, the accelerated growth that we have demonstrated in the quarter, we hope we will be able to maintain that growth near about the same levels for the next fiscal year. ——————————————————————————– Deepak Poddar, Sapphire Capital Management LLC – Portfolio Manager [61] ——————————————————————————– 10%, 12% is what… ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [62] ——————————————————————————– Annually, constant currency basis, we should definitely grow 10%, 12%. ——————————————————————————– Operator [63] ——————————————————————————– The next question is from the line of Harish Kawalkar, who’s an individual investor. ——————————————————————————– Unidentified Participant, [64] ——————————————————————————– And congratulations for your results. I just — I’m just going through your customer concentrations. You have that presentation. So what is the reason basically customer concentration decreases over the period of quarter-on-quarter basis. So could you please throw some light on that? You had added more customers? Or you have less revenue from the same customer, sir? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [65] ——————————————————————————– No, we are more or less where we were in the previous quarter, right? There’s not been any great change, I would say. If you look at our top 10 customers, they have been at 49%, 50% and odd, right? That’s been the case. In Q2 last year, we were at 50.7%. In Q1, we came down to 48.6%. This quarter, we came up to 49.3%. So we are in and around the same — so essentially, what we’re trying to say is the top 10 customers — as the company grows, the top 10 customers have also been growing and growing almost in the same ratio. So I think this is a good metric to have. ——————————————————————————– Operator [66] ——————————————————————————– The next question is from the line of Ashish Aggarwal from Principal Asset Management. ——————————————————————————– Ashish Aggarwal, Principal Mutual Funds – Senior Research Analyst [67] ——————————————————————————– Sir, most of my questions have been answered. Just a couple of things. First of all, on the industrial design business, right, that business has been very volatile. And this quarter has seen a good growth. And we have indicated there is good pipeline. So just wanted to get some sense on that business. And maybe some sense on the profitability of that business. Secondly, on the offshore/on-site mix, right, so obviously, there is a significant increase in offshore. Wanted to understand once things become normal, do you think that this ratio could change towards on-site as there will be more travel, et cetera? Or do you think that this type of a shift over a longer 2- to 3-year period is here to stay? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [68] ——————————————————————————– Yes. Let me take the second question first. Personally, I would tend to believe that this is here to stay. It may not skew so much once the travel restriction relax, maybe on-site ratios may go up slightly, but it will never go to the 50/50 or 60/40, 60% on-site and 40% off. I mean, those days are gone. I think maybe we’ll eventually settle down to 60/40 or 40% being on-site and 60% being offshore or even lower than that, right? So because customers and individuals have realized that you can achieve a lot, you need not necessarily be next to the customer. You can work remotely. So I think personally, I feel that, look, you might more see a 60/40 or a 65/35 sort of a ratio, eventually, right? Now coming to the first question on IDV, IDV has been volatile in the last quarter. Beginning of last quarter, we have a management change there. We have a new person who has taken over as the Head of the Industrial Design business. And we are rethinking the strategy, and we are aligning that business more towards the EPD verticals. We have also restructured the sales team. And a lot more EPD sales team members are now carrying IDV numbers also. So there is a lot of cross-sell happening with existing customers. So I would say the focus for us is — I mean, is definitely to be a design-led company. That is clear differentiation that we have as regards to competition. So in the next 2 to 3 years, I would see IDV revenues growing much faster than EPD revenues. That is what, as an organization, we are focused on. And that is why the investments are going in. That’s where the sales team sort of focus is there. And I believe that next 2 to 3 years, this will be a very, very key focus area and business for us, right? Margins are definitely lower than EPD at this point in time. That is because the top line has not grown. The billability is on the lower side. But once we have this customer acquisition and so on, margins will go back. We have — a lot of the investments on the ground in terms of people and so on have happened. There is leg room for increasing billability. So I think margins can only go up as long as our business grows. I hope I’ve answered your questions. ——————————————————————————– Operator [69] ——————————————————————————– The next question is from Hiten Jain from Invesco. ——————————————————————————– Hiten Jain, Invesco Asset Management (India) Private Limited – Research Analyst [70] ——————————————————————————– Hello. I hope I’m audible? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [71] ——————————————————————————– Sure. Go ahead. ——————————————————————————– Hiten Jain, Invesco Asset Management (India) Private Limited – Research Analyst [72] ——————————————————————————– Yes, yes. So what explains the 14% sequential growth in other expenses, given that a large part of it is from travel and discretionary, which should have also ideally been muted this quarter. So what explains sequential growth of 14% in other expenses? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [73] ——————————————————————————– I think that is H-1B visa charges, right, that we have to — that has been charged in this quarter. It’s a onetime sort of a thing. ——————————————————————————– Hiten Jain, Invesco Asset Management (India) Private Limited – Research Analyst [74] ——————————————————————————– Okay. But — okay, okay. And the other income was quite low this quarter. So was there a significant ForEx loss? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [75] ——————————————————————————– It was about INR 1.9 crores loss. I think it is not that significant. Yes, and also, other thing is because the interest portions came down because we had paid out our dividends last quarter, right? So the amount, the interest-bearing deposits came down. So I think that it is another reason why other income was down. Yes, and of course, the interest rates are also going down, banks don’t give us, yes, what they use to. ——————————————————————————– Operator [76] ——————————————————————————– The next question is from the line of Rohan Advant from Multi-Act. ——————————————————————————– Rohan Pramod Advant, Multi-Act Equity Consultancy Ltd. – Portfolio Manager [77] ——————————————————————————– Yes. Am I audible? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [78] ——————————————————————————– Yes, you are, Rohan. ——————————————————————————– Rohan Pramod Advant, Multi-Act Equity Consultancy Ltd. – Portfolio Manager [79] ——————————————————————————– Yes. Sir, 2 quick questions. First on medical devices. In the past, you said that it could contribute 25% of our revenue for 3 years. So just wanted to understand how is that vertical moving? How do you see the pipeline? And I think it’s margin accretive. So does that stand? And is this more an annuity business? Or is it typical the R&D business where project ramp-up and ramp-downs can give way to lumpiness? This is first. And secondly, sir, on export incentives, there has been some, I think, notification that they will be drastically reduced going forward. So can you quantify how much export incentives did you get, say, last year? And if you heard anything on whether you get them this year or not? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [80] ——————————————————————————– Sure. Yes. So I have maintained that in a 3-year time frame, our medical business should be about 20%, not 25%. And I think we are on the journey there. I think this quarter, almost 9% of our revenues came from medical business, so — which is definitely positive. I think last year, we were about 4% or 5%. Now we have come up to 9%. So definitely, there is a lot of focus happening on the medical side. And as I told in the previous call also, investments in terms of sales and consultants and so on and so forth, all of them have happened. So that is something that we are pretty positive of. Medical business has multiple types of opportunities. Yes, there is PR&D, that is product design sort of a business. That could be a contract-based business. But then we have this entire regulatory piece, which is more annuity-based and so you have a mix of both project-based as well as annuity businesses. But the good thing is we do see a lot of long-term multiyear contracts in this business. And as you said, margins are pretty positive there, right? So from a medical business perspective, definitely, we continue to be bullish. Regarding the export incentives, the export incentive rates are still not announced by the government, and we really don’t know what will be the rates and so on. So last year, it was about INR 4 crores per quarter, okay? And I think from the last quarter onwards, we have not — we’ve not shown this incentive at all, right? So we’re still waiting for the government to announce the rates and so on. So it’s approximately INR 4 crores per quarter. But the last 2 quarters, I think we have not considered this amount. ——————————————————————————– Operator [81] ——————————————————————————– The next question is from the line of Hasmukh Gala from Finvest Advisors. ——————————————————————————– Unidentified Analyst, [82] ——————————————————————————– Yes. Sir, I would just like to continue my question because I was cutoff. These new deals, et cetera, which we are entering, how are they going to change our revenue profile? So are we going to get any revenue share from these partnerships? Or how is it going to work out? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [83] ——————————————————————————– It all depends on deal-by-deal basis, right? There is no 1 answer there. Some deals are on revenue share. Some deals are the traditional time and material or fixed bid. So having said that, we are pretty open to see, depending on the nature of business and the customer that we are dealing with, we are pretty okay to even go from a revenue share perspective. We have actually done such deals. And I think that has been — at least, in our experience, it has been pretty good. But however, it increases the risk profile and had to be capital while we are picking up such deals. ——————————————————————————– Unidentified Analyst, [84] ——————————————————————————– And sir, COVID has opened up some new opportunities for us? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [85] ——————————————————————————– What has opened up new opportunities? ——————————————————————————– Unidentified Analyst, [86] ——————————————————————————– New opportunities? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [87] ——————————————————————————– COVID? ——————————————————————————– Unidentified Analyst, [88] ——————————————————————————– Yes. ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [89] ——————————————————————————– I can take that, Mr. Gala. So I think COVID, one is it has accelerated transformation towards anything that allows operations to continue without disruption. That’s why I think one of the previous investors have asked about what we’re doing in automation of operations and so on. So if you think about that, that is really coming from — it being accelerated by COVID where operators and enterprises want to make sure operations are not disrupted. So can you do remote monitoring, remote management, remote subscriber service management and so on. The second part that is happening is that certain classes of devices in medical have also seen accelerated development. For example, ventilators and so on, including reengineering of ventilators to build them for lower cost profiles and so on. So I think we have seen projects like that. ——————————————————————————– Unidentified Analyst, [90] ——————————————————————————– And what is happening on the telemedicine? I think in one of the interviews, our CMD said that you look at good opportunities in telemedicine space. ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [91] ——————————————————————————– That’s right. So we are already working with certain customers in telemedicine. So we already are supporting certain telemedicine providers in software development and platform development. But however, we are also looking at what parts of a telemedicine solution we can support with ourselves. ——————————————————————————– Unidentified Analyst, [92] ——————————————————————————– Okay. And sir, last question from my side. You said that you are looking at some M&A opportunities. Can you give us broad outline as to which are the areas we are looking at? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [93] ——————————————————————————– Yes. So Mr. Gala, that would not be — that’s not publicly declared, but you can imagine that it is to accelerate our current verticals and our current capabilities. ——————————————————————————– Operator [94] ——————————————————————————– The next question is from the line of Bharat Sheth from Quest Investment Advisors. ——————————————————————————– Bharat Sheth, Quest Investment Advisors Pvt Ltd. – Head of Equities [95] ——————————————————————————– Congratulation Mr. Raghavan and Nitin on very excellent performance. So Raghavan, you just made a remark that now we are back to pre-COVID level grow in terms of the growth and all and still deal pipe is very strong. And if we expect to grow, say, in the 6% kind of a Q-o-Q and 5% to 6%, which implies that annualized growth of around 20 plus. So how do we really see from 3 years’ perspective? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [96] ——————————————————————————– Yes. So first thing I would like to say is, look, I would really want to wait for a couple of quarters more to see that this — the growth that we have demonstrated is sustainable. We believe it is sustainable, and we are working in that direction. So even before talking about the — I mean, of course, we have our 3-year plans and our strategies around that. But if we are able to continue to grow in these growth rates in a 3-year time frame, we will definitely be able to produce pretty good results, right? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [97] ——————————————————————————– Yes, I can just add. I think what we’re essentially saying is we were very clear of markets based on customers, industry progress, technology progress and so on. If you look at COVID, that is a disruption. And there’s cost uncertainty both on the demand side and on the supply side. So that uncertainty cannot be addressed by any direct projection. I think we just had to wait a little bit. We are making sure that we cover all the other parts. Projecting where industrial will go, technology will go is our job. But what happens fundamentally in terms of economics and macroeconomics, we cannot tell. ——————————————————————————– Operator [98] ——————————————————————————– (Operator Instructions) The next question is from Naveen Bothra, who’s an individual investor. ——————————————————————————– Unidentified Participant, [99] ——————————————————————————– Yes. Just continuing from the last question, some different. If you see the last 4 quarters’ results, ex of JLR, we are growing by 15% to 16%. And when we see ex of JLR top 10 accounts for the last 3 quarters, we are growing by 21%, 22%. So how you would like to — in view of the commentary, how would you like to guide us because in this year con call, you said that we will be doing Q3 of last year. We have not only done the Q3 of last year in this Q2, we have exceeded that by 2, 3 percentages. So if you can guide for me second half, seeing all these trends of ex of JLR. So are we going to have around 18% to 20% of growth, seeing the strong deal pipelines? If you can guide us, sir? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [100] ——————————————————————————– We don’t give these guidances. So that’s — that’s the dilemma that we have. But you can see that the confidence of the management, I think definitely, H2 will be much better than H1 because we’ve had a poor Q1 and that’s because of COVID. And it’s not just us, but the entire industry. But the good thing is we have been able to bounce back faster and much more aggressively than some of our competition and including the large companies because — of course, because of a small biz. I think this sort of growth is sustainable. And we see that deal pipeline in H2. I mean, I can’t give any further commentary thing, other than saying that we are bullish. ——————————————————————————– Operator [101] ——————————————————————————– The next question is from the line of Mayank Babla from Dalal & Broacha. ——————————————————————————– Mayank Babla, Dalal & Broacha Stock Broking Pvt Ltd., Research Division – Research Analyst [102] ——————————————————————————– Sir, I would just like to ask, will the second round of lockdown in Europe impact our revenues from there, if you could give some opinion or views? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [103] ——————————————————————————– The revenues — I mean, even now we are considering it as lockdown only right. We have not been able to travel. Nobody is going — everything is done virtually. So whether — and lockdown is officially announced or not, it is almost a lockdown for us only. So I don’t think it will matter for us. ——————————————————————————– Operator [104] ——————————————————————————– The next question is from Nemish Shah from Emkay Investment Managers. ——————————————————————————– Nemish Shah, Emkay Global Financial Services Ltd., Research Division – Research Analyst [105] ——————————————————————————– Sir, the Schaeffler deal, has the revenue started flowing in? Or when will that — basically, when will the revenues from that deal start flowing in? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [106] ——————————————————————————– Yes. Mr. Shah, yes, we have already started on the engagement. So we already started off with the initial core teams, and we expect that to continue and grow. So there is some revenue that we reported already in the quarter that has actually come from the Schaeffler engagement. ——————————————————————————– Operator [107] ——————————————————————————– The next question is from the line of Varun Sharma from Franklin Templeton. ——————————————————————————– Varun Sharma, [108] ——————————————————————————– My question is basically on how have our sales teams and an approach to your customers changed due to this COVID, if you can just elaborate on that? And how are we taking up marketing activities [in terms of] your customers in this environment? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [109] ——————————————————————————– So Varun, I’m not sure we heard the question right. Can you just repeat that, please? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [110] ——————————————————————————– No, how is the sales during COVID, how are we doing sales and our marketing activities, right? So sales, I think the good thing is because of COVID, what has happened is everybody is working from home, so including senior people in our customers organization or the prospects organizations, they’re all working from home. So it is relatively we — I mean, we believe that because of COVID, we have been able to reach to the decision-makers quickly. They’re able to give time to us. So everybody is working remotely. So instead of going to office and having those meetings, we are having those meetings remotely. And that is working perfectly fine. In fact, I would say, better than during the pre-COVID era. Marketing, yes, a lot of marketing now is focused on digital marketing and so on. So there are — I mean, you would see our — if you look at it, our social media presence, you would see Tata Elxsi social media presence has increased drastically in the last quarter, number of releases that we are making and solutions that are being offered and so on. So yes, marketing is moving digital. And I think that is the way to go. ——————————————————————————– Operator [111] ——————————————————————————– The next question is from the line of Senthil Manikandan from Ithought Financial. ——————————————————————————– Senthil Manikandan, [112] ——————————————————————————– Hello. Can you hear me? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [113] ——————————————————————————– Yes, please. ——————————————————————————– Senthil Manikandan, [114] ——————————————————————————– Yes. Sir, my question is specifically to the transportation vertical. So like how do you see the automobile side, like the OEMs or the Tire 1 players? How they are giving any outlooks for deal structures over there? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [115] ——————————————————————————– Yes, we have shown growth in the automotive sector. What that means is demand is picking up. But is the demand picked up to an extent of pre-COVID? I would say there’s still maybe a couple of quarters more. But definitely, what is happening because of COVID is we see with either OEMs and Tier 1s trying options to consolidate vendors and to bring down their overall costs to move away from high-cost outsourcing to low-cost countries and so on. So we see — definitely demand is better than Q1. But I would maybe wait a couple of quarters more to really see if we have touched the pre-COVID sort of the demand momentum. ——————————————————————————– Operator [116] ——————————————————————————– The next question is from Bharat Sheth from Quest Investment Advisors. ——————————————————————————– Bharat Sheth, Quest Investment Advisors Pvt Ltd. – Head of Equities [117] ——————————————————————————– Earlier, just I wanted to understand that when we are talking of moving from, say, on-site to offshore and all, so how does that really — of course, it’s a better profitability, but revenue side, could there be any impact on — because of that? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [118] ——————————————————————————– Of course, there’s an impact. So what is hidden in this is the sort of deals that we have won to be able to accelerate our revenues in spite of the on-site/offshore ratio going the other direction. So I hope you are able to understand that, that’s the type of deals that we have won. ——————————————————————————– Operator [119] ——————————————————————————– The next question is from Vijay, who’s an individual investor. ——————————————————————————– Unidentified Participant, [120] ——————————————————————————– One question I have on the Tata Group itself, I think the group is coming up with super app. Is Tata Elxsi also playing some role in that? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [121] ——————————————————————————– No. We are also listening to or hearing about — reading about the articles. We are talking to Tata Digital, the company that is making those apps. There are some opportunities especially from the industrial design perspective, we are discussing them. But right now, we are not doing anything. I mean, there’s no activity. The Tata Elxsi is performing on the super app, but that could change moving forward. ——————————————————————————– Operator [122] ——————————————————————————– The next question is from Umang Shah from Asian Markets Securities. ——————————————————————————– Umang Shah, [123] ——————————————————————————– First, the R&D is done in auto companies for the next 4 to 5 years. So I wanted to ask whatever R&D was done by you in, say, 2015, ’16, how much do you see on-road its implementation in 2019, ’20? And sir, connected to this, do you think that the decline — the delta and innovation is declining or is accelerating in the automobile itself? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [124] ——————————————————————————– Right. So Mr. Shah, this is Nitin here. I’ll take that question. So if you look at how we work with automotive companies, whether it’s suppliers or OEMs, we work on programs that stretch anywhere from the next year’s model year to very advanced R&D, which may be only about 7, 8 years side, where you get into advanced research, you confirm that it’s production worthy and then you implement and then you deploy. So to that extent, I think every year, we will see work that you’ve done in the past. Partly because some of it is very near term, it was projects done 1, 2 years back, some of it is projects done a little longer back, right? So that way, you’ll always see three. In terms of innovation and change, that delta will increase but it will increase in certain areas. For example, OEMs will and the automotive industry will spend a lot more on digital and software. They will spend lesser on mechanical and materials. So that is where delta. So the overall spend may increase or decrease, but proportional spend towards software, electronics and digital, I think, is what will go up. ——————————————————————————– Operator [125] ——————————————————————————– The next question is from the line of Manish Bhandari from Vallum Capital. ——————————————————————————– Manish Bhandari, Vallum Capital Advisors – Founder, CEO & Principal Portfolio Manager [126] ——————————————————————————– I have 1 question regarding the use of excess capital on your balance sheet. You did alluded towards evaluating some kind of inorganic growth opportunities. So is there any thought process which is going on? Or maybe there will be some better use, which you can — the way TCS has done on buyback or so? ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [127] ——————————————————————————– No. So we’ve discussed this at our Board level. There’s nothing to report. And as and when we have certain decisions, we would get back to you. But yes, there are some thought process that are being discussed. ——————————————————————————– Operator [128] ——————————————————————————– We’ll be able to take 1 last question. We take the last question from the line of Apurva Prasad from HDFC Securities. ——————————————————————————– Apurva Prasad, HDFC Securities Limited, Research Division – Research Analyst [129] ——————————————————————————– And congrats Manoj and Nitin, great set of numbers. My question is on the subsegments within transportation and media broadcast. Our day tracking, I believe, there’s a lot more focus there, and it was, I think, mid-single-digit as a percentage of its revenue. So how would that be tracking the last few quarters? That will be my first one. ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [130] ——————————————————————————– Yes. So Apurva, this is Nitin here again. As far as automotive is concerned, I think what we are seeing and we continue to see is that connected and infotainment continues to lead and accelerate. That’s very near term, while electric follows and ADAS comes last. ADAS, we are definitely seeing slowdown, but I think what we’re seeing pickup in is in the implementation of features, which are a little more immediate rather than full autonomy, auto park — parking valet or traffic jam assist or features like that. When it comes to media, I think we have seen, I think, almost all around growth and similar acceleration. Within that, I think 2 pieces accelerate most. One is OTT. And you know it’s even from consumption patterns. The second is broadband and data-led services, simply because that is an enabler for OTT in any case. So in respect to who you consume media from, you definitely need broadband and data services from your operators. So that is the way I would look at it. Medical, I think, has been unaffected. So it continues. ——————————————————————————– Apurva Prasad, HDFC Securities Limited, Research Division – Research Analyst [131] ——————————————————————————– Yes. So Nitin, how would the size and scale of these subsegments we currently — so be it new media, OTT or some of the adjacencies that also you are looking at within the transportation segments? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [132] ——————————————————————————– Right. So at this time, we are not really calling out those percentages, Apurva. So hopefully, we’ll mature to that in a quarter or 2 in terms of starting to call out the subsegments. But I think as far as adjacencies go within transportation, I think we have mentioned that, that is about 4%, 5%. What we doing in rail, off-road, et cetera, has been in the low — in the single digits for us right now as far as the overall automotive or the transportation business costs. ——————————————————————————– Apurva Prasad, HDFC Securities Limited, Research Division – Research Analyst [133] ——————————————————————————– Got it. And just finally, any scale consideration in terms of the inorganic to just plan any ballpark numbers in terms of what is the scale of acquisitions that you’re looking at? ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [134] ——————————————————————————– Not really, not at all. ——————————————————————————– Operator [135] ——————————————————————————– We’ll take that as the last question. I would now like to hand the conference back to Mr. Vaidyanathan for closing comments. ——————————————————————————– G. Vaidyanathan, Tata Elxsi Limited – General Counsel, Company Secretary & Compliance Officer [136] ——————————————————————————– Yes. On behalf of Tata Elxsi, thank you all for joining the con call. And I would also like to thank Nitin and Manoj for taking the queries. Hope to see you in the next con call in January. Thank you. ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [137] ——————————————————————————– Thank you, all. ——————————————————————————– Pai Nitin, Tata Elxsi Limited – Head of Marketing and SVP [138] ——————————————————————————– Thank you. Thank you, everybody. ——————————————————————————– Manoj Raghavan, Tata Elxsi Limited – MD, CEO & Director [139] ——————————————————————————– Have a good day. ——————————————————————————– Operator [140] ——————————————————————————– Thank you very much. On behalf of Tata Elxsi Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.



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