LTTS — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

MR. RAJEEV GUPTA – CFO, MR. PINKU PAPPAN – HEAD, INVESTOR RELATIONS Q2 FY22 Earnings Call October 19, 2021

Disclaimer

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve number of risks, and uncertainties that could cause our actual results to differ materially from those in such forward-looking statements.

L&T Technology Services Limited (LTTS) does not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.

Moderator · Conference Operator

Ladies and gentlemen, good day and welcome to the L&T Technology Services Q2 FY2022

Questions and answers

Moderator · Conference Operator

Thank you very much.

We will now begin the question-and-answer session.

The first question is from the line of Mukul Garg from Motilal Oswal.

Please go ahead.

Mukul Garg

Good quarter guys.

Amit, just two quick ones from my side.

First on the attrition side, your attrition performance this quarter clearly was much better than what some other Indian IT Services companies have reported over the last few days, but have you seen any cancellation or loss or probably push out of some of the business to third quarter which is giving you the confidence in your growth trajectory despite the furloughs which are coming up in the December quarter?

Amit Chadha

You had two questions.

So what is the second one?

Mukul Garg

Second one was on the margin side - 18.4% is a fairly sharp pickup do you expect to continue to benefit from operating leverage in Q3, Q4 also or do you think your hiring plans over next two quarters will kind of bring it down from current levels?

Amit Chadha

Let me address the first one and I will request Rajeev to take the second one.

So the first one on attrition, I do want to acknowledge, Mukul that it has been a tough time for us.

On one side we have had deal wins and the curated vision that we had created for ourselves around six dimensions and six bets has got traction and we have seen deal wins happening therefore and solutions being there.

At the same time there has been attrition.

I want to complement the work done by our middle management across delivery organization, sales organization to manage some of this and I can share with you proudly and humbly that we have not had client cancellations because we lost people so that does not happen but yes, I mean, could we have done, could things have been more, had we had lesser attrition or if we would have been able to hire faster , there is always that plus and minus that continues to happen we have to be mindful we do not want to hire in advance to demand so much that we get into a problem.

So there should be a balanced view to find and we have worked in that balance that is number one.

Number two is from a hiring standpoint I want to confirm that we have gotten aboard 1,200 freshers in the last two quarters and we are going to be taking another 2,000 freshers in Q3 and Q4 loaded largely towards Q3. So you will see Q3 head count going up from a fresher standpoint.

If you remember, Mukul we had set up a global engineering academy or training academy.

It was done by our COO last year, that has come into good use.

From one side our CHRO has done an amazing job in widening the net to colleges that he has been able to get and people he has been continued to get for us and ramp up a lateral hiring engine in the US, in Europe and in India and Japan and on the second side the head of training academy as well as all the business units heads have really taken advantage of this global engineering academy to take people in, keep open minds and then starting to deploy them.

So, all of that if you ask me is going to help us as we move forward into the year.

Again, do I have all the answers?

No, but we continue to work around our axes to see how we get there.

Margins - Rajeev will comment.

Rajeev Gupta

Mukul in terms of margin I think your question was, will we continue to see such a sharp spike going forward?

Q2 FY22 Earnings Call October 19, 2021

Mukul Garg

Rajeev, it was of about like in another Q3, Q4 should see a moderation versus Q2 because of the new hires coming into the system?

Rajeev Gupta

I would call out of course the tailwinds and the headwinds which is of course where we have got to balance it out so one in terms of growth and the quality of revenue is going to be a major lever in terms of improvement on margin.

Also, that will lead to economies of scale like we have seen in Q2. The second is if you look at productivity improvement and that has been one of our consistent ways of improving margins that is another area that we will continue to look at.

The third is around the segment mix.

We talked about improving margins on transportation segment and telecom & hi-tech segment.

Transportation, we are now in the range of 19% plus margins, telecom & hi-tech has also started to show improvement.

We believe we have got further headroom around telecom and hi-tech and that will show improvement in the coming quarters.

So, these are some of the tailwinds that we have.

In terms of the headwinds, like I said in my opening commentary, there are going to be of course challenges to deal around attrition and there could be wage hikes that we will have to deal with in the coming quarters and that is going to be a balance to strike.

The second is there could likely be inorganic investments that we make to support growth and finally we may see travel come back in the coming quarters not in entirety but it will gradually start to show up so that is where it is.

We will balance this out to be able to see how best to manage this operating margin trajectory.

Moderator · Conference Operator

Thank you.

The next question is from the line of Pankaj Kapoor from CLSA.

Please go ahead.

Pankaj Kapoor

Thank you for the opportunity.

Amit, my first question to you on the longer-term outlook for the growth, near-term we have a very strong visibility and that is reason why you have taken the guidance also up but if I just try to extend it further, what are the typical markers one should look at.

Your deal win is good but it is broadly in line with what you have been doing so anything else which I should be looking at to take a view on how the revenue growth could be say on 23-24 onwards?

Amit Chadha

Pankaj, longer-term our business is built on consumer demand, it is built on if products are consumed if products are manufactured - we are in business and that is what is the basis, that is one.

Second when the demand patterns shift or there is flux if I may call it in the market or in the demand, it is good for us, it creates opportunity.

So as I see it today I will share the tailwinds that I am seeing right and then I also share the headwinds very honestly.

So the tailwinds I am seeing right now are around in transportation there is demand in electrification in auto, in trucks as well as connected vehicles and I am starting to see electrification conversations in aerospace, so that is one.

Second, in medical, I am starting to see people talking about home care, miniaturization of devices, bringing things, making it easier for a patient to do a lot of self-diagnostics, etc. telemedicine.

So that is the second that I am seeing as a tailwind.

Third industrial products we continue to see demand for digital products, digital services, digital engineering, if I may, and digital manufacturing.

So, there are three clear areas.

Now let me come to the not so (or for us) right and others could be different.

In Plant, people are starting to talk about new capex, oil companies are talking about upgrading stuff, etc. but then money has yet to hit the market, one.

People talk about sustainability across, but that money is still to hit the market.

Third on telecom Q2 FY22 Earnings Call October 19, 2021 5G has been a buzzword for a very long time, but money still has to start flowing like it is flowing in transportation today.

So that is where it is digital manufacturing, digital products we continue to see around connected, collaborative, intuitive, we have talked about it I would not spend more time but it is moving towards intuitive and collaborative.

Finally the headwinds and I called it out in my remarks as well is that today if you look at CEOs of large companies and our customers that I have been meeting in the last few weeks and talking to Chief Operating Officers their mind space is clouded and they are thinking about supply chain a lot more than they used to.

So that is one thing I don’t know how it will play out.

So, longer-term I am reiterating what I had said in our IAD, Pankaj, that we are confident to get to 1.5 billion dollars in FY25 as a run rate so that still stays and we will continue to update you we will continue to talk on how things go forward.

Pankaj Kapoor

Thanks to this Amit.

That is very helpful.

Just one clarification - do you think that there was some pent up demand this year which of course while it structurally things all remain good, may probably normalize next year?

Amit Chadha

Pankaj, very clearly we have been looking at quarter-on-quarter growth rather than annual because last year was a very low base.

We all know we had a bad year so we are looking at sequential growth is how we charge our teams internally on, though they look at long term for solutions which is a two to three-year period, service offerings are like annual and then performance and execution is quarterly.

I would be fairly comfortable at this stage to say that maybe there was a little bit of pent up that was there earlier but I do see this demand to be there for some time.

Pankaj Kapoor

Thank you.

That is very helpful.

Just one small bit how many of your employees are now back in office.

Amit Chadha

Thank you for asking that.

We have got about 26% of our employees that are back in office.

There is no formal mandate or dictate to come back.

Our HR, our delivery teams have worked and function teams have worked very carefully to make sure that we make it a safe working place and we are nudging people to come back.

I do believe longer term because before you ask that so the way we are modeling this is I do believe that once we have passed these waves and all that I do believe that you will get back to about 80%-90% back to office but that is where you will be.

Smaller cities like Baroda, Mysore will go to maybe 90%, bigger cities like Bengaluru and Mumbai will go to 80% that is where it will be.

I do not see 100% coming back but we are at 26% right now and our focus is not to get people back in office.

Our focus is to make sure people are safe, people are vaccinated and once we get them completely vaccinated we will start prodding people to come back further.

Just last point we lead from the front, so I am going to be in India.

I am in India already.

Our offices in Mumbai this week and Bengaluru, Mysore, and there are leaders that have traveled from overseas plus the leaders that live here who are traveling to other locations so we are trying to lead from the front and create this effect that it is safe to come back, if we are here you can come back as well.

We are not making big, tall claims, nor do we want to make any press releases about this, we will work it in our way but we will get it done.

Moderator · Conference Operator

Thank you.

The next question is from the line of Vibhor Singhal from Phillip Capital.

Please go ahead.

Q2 FY22 Earnings Call October 19, 2021

Vibhor Singhal

Congratulations on great performance yet again.

Amit two questions from my side; one is just wanted to pick your brains on the auto segment.

I know you have already talked about it at length but just wanted to check basically on the auto segment - has there been a difference in the kind of engagements or in the kind of demand that we have seen pre-pandemic and post-pandemic in the kind of nature of work or let us say a more shift towards the electric vehicles part or has that got transferred up so any changes that you might have seen in the auto segment which is potentially different from the pre-pandemic levels?

My second question was on an interesting number that I just wanted to pick your brains again on is normally, fixed price contract share of our revenues, that number has actually been coming down over the past few quarters and at the same time of course our digital share of revenue has also been increasing so is this just a correlation or a causation here that is leading to a higher T&M in terms of what percentage of revenue it is or isn’t there any specific reason that for the fixed price contracts coming down?

Amit Chadha

Let me address this question in three ways, one I am going to talk about the overall pre-post on auto.

I will request my colleague, Abhishek who is here to talk about some of the solutions that we are building that is helping us in that journey and then Rajeev will pick up the FP and T&M.

So auto segment pre-post, I will tell you one thing that happened was and immediately knee jerk the moment the pandemic hit which was March, April, May I was talking to the Head of Engineering and the Head of one close friend who was Head of Engineering and Supply Chain and he was saying I do not see nos coming back for the next three years.

I do not see that, and immediately they stalled, they stopped these engineering development programs or delayed it and that is where we got hit and they said we do not know whether we will sell or not, that was pre-pandemic or in pandemic, pre-pandemic there were projects they always as you are aware the design cycle is only about so if they want launch something in three years they do the engineering now then it goes through whatever, whatever and we get engaged in that three-year prior period to what you see coming out right two, three years so pre-pandemic is continuing.

Also the amount of discussion on electrification and autonomous level discussion, infotainment there was a lot of discussion but electric as well as autonomous there was conversation but not a huge amount of conversation…come post pandemic or we are not even post pandemic I am saying post April, May, June.

The moment they realized that people were not stopping from buying cars, actually people buying more cars because now they wanted their own ride, they did not want to sit in the bus, they did not want to sit in a train so they saw that happening immediately the conversation shifted to how soon can you start getting stuff done (a), (b) the amount of conversations and the amount of work that we are getting now in electric and connected area is there is a huge demand that we are seeing right now and everybody wants it like yesterday.

There is an adage that we use in consulting language it says hurry up and wait.

So, it has been the other way around where we have had to it is all of a sudden and we are working towards it and that is part of the training etc. we are doing.

Second part of it that we have seen is solutions that we have built on especially EV and I am going to request Abhi to spend a couple of minutes about it and then we will hand over to Rajeev on FP and T&M.

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

I think what we could have done on the automotive sector especially with regards to investments over the last I would say one and a half years is paying us off very well.

We did investments in two segments one is internally we have structured ourselves by practices - powertrain practice, Q2 FY22 Earnings Call October 19, 2021 connected, autonomous, body engineering, vehicle electronics and each of these practices are very clear detailed plans on investment areas.

I will just touch upon the EV front which is something which is giving us great returns over the last few quarters.

So, we have a EV lab which we have spoken of in the earlier quarters in which we invested quite a bit of money during the COVID times to set up this lab.

What we have also done now is, we have a complete electric car we have developed.

Now when we say electric car development, it is not about getting into the car segment but to demonstrate our capabilities on every element of what goes into electric car.

The battery management system is our technology, the cable wire harnessing that has been done is ours, the vehicle control unit, power distribution unit every component that you can think of an electric car is something that our engineers have developed in-house and we continue to enhance this, in fact even the connected part of the car where we have Alexa integrated in the car and Alexa takes commands to start, stop various elements of the car unit is something engineers have done so I think the way we are going about it is we are keeping ourselves ready to demonstrate capabilities to our customers and Amit spoke about from business front 6% growth quarter-on-quarter and I think this journey will continue, we are seeing extremely good traction.

Rajeev Gupta

Vibhor to answer to your question around the T&M mix, I think I have already touched upon it in my opening commentary.

I mean we are seeing the incremental signing happen on the T&M side and this is more so because when there is a greater share of let us say new technology or a generational leap in product or processes that customer is undertaking, we are seeing more of T&M kind of contracts being signed for example use of scrum methodology.

Our take is that we will be in this range going forward as well, Vibhor.

Moderator · Conference Operator

Thank you.

The next question is from the line of Abhishek Shindadkar from InCred Capital.

Please go ahead.

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

Thanks for the opportunity and congratulations on a great execution.

My question is generally the perception was ER&D firms have to have employees in office but if I look at the offshoring mix we are almost now at 60% so is this a structural shift in terms of clients engaging ER&D firms and that offshoring can increase further that is first question and the second question is on the margins what could be the key reason for lower than company average margins for telecom and hi-tech is it that it is more onsite driven business because we are not yet anywhere close to the peak margins and how much of that is a lever in the margins going ahead?

Amit Chadha

Abhishek, the way we are seeing this is that all our customers, so I am not talking about ones that we do very small business but our top 30 or next 20 customers they have almost treated our employees as their employees.

There is a new thing called envelope of health safety …HSE envelope what HSE envelope means is Abhishek that whatever they do to their employees they want it done to ours that is how they want to operate this is the principle.

So if they do not have their employees coming, they do not want our employees coming to office and they have gone through great lengths and I thank our customers and our partners, and I have done that, where they are enabling this work from home so we have been thankful to them for having enabled that.

Having said that, short-term you have seen offshoring improve, you also know that countries that shut down their visas etc., etc. we were not able to fly people in …recruiting locally blah, blah.

I Q2 FY22 Earnings Call October 19, 2021 do believe that a little bit more offshoring could happen, I mean that has to be seen how things develop because the point is a lot of behaviors have changed over a period of time let us say all of a sudden one day COVID goes away …then how will people behave.

I do not have that answer.

But I do believe that whatever offshoring has been achieved is something that is sustainable and we will work to see as to how this can further go in a direction etc. (a), (b) what we have done in terms of this is to make sure that we have been able to so, you again said engineering cannot be done remotely that is not correct because yes there are some mechanical pieces of work there is some embedded work there is some plant engineering work that needs machines, that needs people in offices but there is other stuff that can be done remotely, which is being managed.

Again, do I have a golden bullet of answer for this answer is no we will continue to work on this.

On lower telecom margins, I will hand over to Rajeev to address.

Rajeev Gupta

So Abhishek in terms of the lower margin on telecom & high-tech I think this is something that we have called out in our earlier earnings calls as well.

There were two segments that we were consciously working in terms of improving margin - one was transportation, second Telecom Hi- Tech.

Transportation, as you may have noted over the last two quarters consistently, we are able to see improvement in margin and largely that is driven by growth and also optimization measures.

As far as Telecom & Hi-Tech we made conscious investments in Telecom & Hi-Tech and that also follows from the fact that we did the Orchestra Technology acquisition in Q3 of last year.

So some of these investments have been deliberate.

I may also call about investments in 5G.

What we believe I think those investments will now start to yield benefit so the margin trajectory for Telecom has started to move on the positive side.

We believe in the coming quarters it will be even better than what we see.

Moderator · Conference Operator

Thank you.

The next question is from the line of Vimal G from Union AMC.

Please go ahead.

Vimal G

Amit my question is just wanted to pick your brains on industry growth for ER&D especially.

Over the past one year you have seen this industry take two rounds I mean we come up from Q1 FY21 till today in this one and a half years have you changed your view or have you increased we have really seen growth increase for LTTS but do you see this for the industry as well or the growth rate for this industry have pretty much remained where they were expected to be over the longer period and you expect LTTS to sort of ultimately gain market share and that is where the increased growth for LTTS is coming from?

Amit Chadha

There are two things here Vimal.

One and I will refer to data from people like Zinnov and IDC and market analysis they have done.

So they are talking about that the engineering industry in 2020 was at about $1.5 trillion - Broadly about a trillion dollars in legacy engineering, about $0.5 trillion dollars or $500 billion dollars in digital.

Now if I look at a view on say 2026, so I know that one of you also talked about a longer-term view so if I look at that, the expectation is that this $1.5 trillion will go to $2.6 trillion.

The legacy will only grow at about 2% but the digital will grow at about 19% CAGR.

Now all of this cannot come to people like us it will go to captive centers, it will go to people like us, it may go to Eastern Europe etc., but broadly there is an increase in engineering spend that we expect to come up.

Second part, and this is also going to come out in different verticals.

So, be it transportation, be it industrial products, be it medical and health, Q2 FY22 Earnings Call October 19, 2021 telecom, hi-tech, so each of these will have their own trajectories of growth in engineering spend be it digital, be it legacy and some digital may also start getting called legacy tomorrow.

The second part is of the digital part itself we expect that… so if you broadly break up, if I may, digital into connected, collaborative and intuitive three packets and where today 60% of the digital spend is getting into connected people are still connecting stuff and intuitive may only be 5% if you look at $1.5 trillion when it gets to we would expect connected to only be at about 30% with the majority of the spend going into collaborative and intuitive.

So I do think that there is avenues of growth that is there from a spend standpoint.

From LTTS standpoint there are five segments that we have agreed to work on and there are four horizontal areas that we work on that we have talked to you about and we believe that as long as we can continue to build solutions as long as we can continue to remain agile, think long-term plan medium-term execute short-term.

I do believe we will continue to gain market share in the market in specific areas.

Vimal G

Fair enough.

Thanks a lot and all the very best for the rest of the year.

Moderator · Conference Operator

Thank you.

The next question is from the line of Sudheer Guntupalli from ICICI Securities.

Please go ahead.

Sudheer Guntupalli

Thanks gentlemen for giving me the opportunity.

Amit, the starting hypothesis for most of us analysts and investors is that growth rates in ER&D tend to be higher than in IT services.

But if we look at the FY21 performance and FY22 performance… expected performance rather of LTTS and kind of benchmark it with some of our services, IT services companies a couple of our sister concerns so on and so forth clearly the growth differential seems to be very wide for FY22 now this is despite the fact that FY21 has not been a very bad year for some of them like it is for us so on a two year CAGR basis if I look at we are running close to around 8% FY21 and FY22 and this comes on top of FY20 which is also which was also a weak year.

So just trying to understand your perspective around is anything changing in this cycle in terms of the expectation around whether ER&D growth rates can be higher than the top IT or will goes be lower than the top IT that is my first question?

Amit Chadha

What is your second question?

Sudheer Guntupalli

Related to same again we are running at around 8.5% sort of CAGR for the last two years despite FY20 being very weak and I think referring to one of the earlier questions from Pankaj there would have been some pent up which would have come into the system in this year now even after that we are talking about around 20% sort of growth going ahead when this pent up kind of fizzles out, our guidance is sort of hinting at around 17%, 18% overall growth in which I am assuming an organic growth rate of at least around 14%, 15% so how do you think about achievability of those organic growth rates?

Amit Chadha

Sudheer, if I may I would request do not take a base year of FY21. In fact if you remember, you have been with us for some time, you would see so after we went IPO we did have a bad year at that point of time which where we had a certain there was issues beyond that we ran two years at successive growth rates that was above 20% organic and then we had a year where we had two Q2 FY22 Earnings Call October 19, 2021 client situations not in our control.

Had those not been there or if I was to remove those two client situations we would have still been at that 20% clip.

So now last year was an aberration.

Look at us as a three-year five-year CAGR.

I would not look at it as a one year, two year if I may please and having said that engineering and technology industry is different from IT and therefore I would look at us differently.

I do believe that each one has their own trajectory, each has their own nuances, we work out of a profit center.

IT is largely a cost center play and not a cost play they are cost center play, we are more on an innovation model that is a difference so there is differences there so I would not do that that is what I would say one.

Second how do you see the 2019 to 2020 is that good, is that bad is something we will see and we continue to work on our numbers we continue to see where the opportunity is.

We are focused right now… more than a trajectory we are focused on basic principles I am sorry Sudheer we are all engineers we are focused on getting to technology in making sure we are competitive, making sure we are giving our clients their competitive advantage and with the shifts in technology we are seeing we do believe that we are not at the top of the S curve in terms of that it is done and the days are over.

I do believe we are in a part of an S curve that we will see further climb.

Moderator · Conference Operator

Thank you.

The next question is from the line of Nitin Padmanabhan from Investec.

Please go ahead.

Nitin Padmanabhan

Thanks for taking my question.

Just a couple.

So one is, if I look at the attrition I think the attrition numbers are something that we are not used to if I look at history.

It is clearly at the top end.

First question is - do you think the attrition has peaked or you see this going up further?

Two are you seeing attrition more on the domain side or on the horizontal side of things or is it just experience based attrition that you are witnessing at this point?

Third you spoke about wage increases just wanted your thoughts on do you expect that to happen in the second half of the year and so that was the third one and finally in terms of acquisitions just wanted your thoughts on the areas of focus and do you just expect tuck-ins like history or do you expect a larger one?

Those were the questions.

Thank you.

Amit Chadha

So, if I may, I got 16.5% not good has it peaked or will it be more.

Third was wage hike are you planning wage hike.

What was the second question can you repeat that please.

Sorry I did not catch that?

Nitin Padmanabhan

Yes, so on the attrition was higher than history and will it go higher?

Is it more domain specific or horizontal specific or it is just experience-wise of three to five years or one to five years.

So those were the questions on attrition and obviously wage increase in the second half.

Do you expect it to have a meaningful impact so those are all on the attrition and wage maybe I will ask the last question after that?

Amit Chadha

I am going to request Rajeev to talk about M&A but let me cover the attrition part for you and then if I miss out something my colleague, Abhishek can add to it.

So number one we are not proud of 16.5%.

I want to be very honest with you it personally hurts my heart when I see an employee go because at some point I think does he not believe in our dream?

Does he not believe in our six dimensions?

Does he or she does not believe in our bets but reality is I cannot match dollar-to- Q2 FY22 Earnings Call October 19, 2021 dollar.

This cannot happen…we don’t have an open wallet, don’t have an open checkbook number one.

Number two the opportunity in India and US and Europe has expanded.

We had somebody talking to us in fact we had Satya Nadella talk to us on our subject and he said the number of changes he is seeing on LinkedIn…he has never really like seen so many people changing jobs and they of course have access to data that you and I do not maybe you do I do not.

So I do believe that attrition so again do we think it is peaked?

We are working various measures and let me take some of those number one we had a very bad year last year we did not give increments but this year we divided it up juniors got increments in April, seniors got increments in July the reason that was done was we wanted to make sure people understand that leaders do not eat first.

They eat last.

Second we have done corrections where we have not been able to do enough etc., but like I said limited dollars, limited checkbooks on these things so we have done what we could there.

Having said that we are trying to provide a holistic experience.

We are running a program within the company called Project Rendezvous, that is focused on trying to enhance & improve employee experience.

Two weeks ago while we closed the quarter the CHRO, the COO, the CFO myself the CTO and the business unit heads and some other select sales head sat down and there are 130 people involved in the company that came and gave us suggestions on what do you need to do in five specific areas around Project Rendezvous and we have given approvals to implement some of those the others will get done over the next three months.

We will do a pulse check again on our employees in quarter four of this year.

So we are doing that to provide a holistic experience.

Third, while COVID is going on we continue the process of CEO club, Youth League, we created a Leaders League on and on to make sure that we are not just talking about dollar to dollar but what are we doing beyond.

Fourth, technical training was established and that continues to enrich our employees as they move further.

Now are we going to do any further corrections… maybe.

We are working, we are studying the situation and we will see what we have to do in specific areas and we will make that intervention happen if it needs to be done.

Lastly, on domain it has been broadly broad-based in terms of attrition that we have had, I mean we do not give out data on city wise but we have gone down to city wise attrition, gone down to business unit wise attrition and we are taking various steps to try and stem it.

I again want to say inspite of the attrition we have had, I am proud to say that I lead a team that has made sure they can make things happen.

It is nerve wracking but people are doing it and we will take various measures and try and improve it.

Abhi anything you would like to add before we hand over to Rajeev.

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

No. I think you have covered it all.

I think just one point which at least we are getting very good feedback from employees is the broad-based training programs that we have done.

More than 75% of our employees have been touched by at least one of the training programs globally and not just in India, globally in the last six months and that I think is…we are getting very good feedback on that from employees that we will continue to invest in them.

Amit Chadha

Nitin having said that I do want to say that our plan to address attrition is there… we have got backup plans and we are working towards it, we are hiring freshers, we are training people, we are hiring laterally so all that is happening.

I have given out numbers earlier to one of the questions as well so we believe that we will work this out.

This is an industry thing not just an India thing it is India, US, Europe combined thing we will work towards it.

Rajeev would you like to take M&A?

Q2 FY22 Earnings Call October 19, 2021

Rajeev Gupta

Nitin I believe your question was… are we looking at more like tuck-in acquisition.

So let me clarify and we have said this earlier as well in our IAD, we are looking to do acquisitions to really build capability in the white spaces and the spaces really is one on the auto new tech, the Medtech and ISV.

The second is while in the past we have done acquisitions more in the range of $20 to $25 million, we are now open to do even larger acquisitions that could be in the range of say $50 to $75 million range and for that range, we believe that there could be capabilities that could expand beyond the three spaces that I talked about so it is not necessary that is only going to be a tuck-in acquisition but we are not closed I mean what we are looking to do essentially is to build capability in the white spaces and that is the length we are looking at.

Moderator · Conference Operator

Thank you.

Ladies and gentlemen that was the last question.

I would now like to hand the conference over to Mr. Pinku Pappan for closing comments.

Pinku Pappan

Thank you all for joining us on the call today.

We hope we were able to answer most of your questions.

I am available on email so please write to me if you have additional queries.

Look forward as always to connecting with you and we wish you all safe times and a great evening.

Thank you.

Moderator · Conference Operator

Thank you.

Ladies and gentlemen, on behalf of L&T Technology Services that concludes this conference.

Thank you for joining us.

You may now disconnect your lines.

Note

This transcript has been lightly edited for clarity and accuracy.