Gargi Ray - Assistant Financial Controller S. D. Shibulal - Co-Founder, Chief Executive Officer, Managing Director, Director and Chairman of Infosys Technologies (Sweden) AB B. G. Srinivas - President and Director U. B. Pravin Rao - President and Whole-Time Director Rajiv Bansal - Chief Financial Officer Nagavara Ramarao Narayana Murthy - Co-Founder and Executive Chairman

Anantha Narayan - Crédit Suisse AG, Research Division Diviya Nagarajan - UBS Investment Bank, Research Division Yogesh Aggarwal - HSBC, Research Division Viju K. George - JP Morgan Chase & Co, Research Division Bhuvnesh Singh - Barclays Capital, Research Division Pankaj Kapoor - Standard Chartered PLC, Research Division Pinku Pappan - Nomura Securities Co. Ltd., Research Division Ankur Rudra - Ambit Capital Pvt. Ltd., Research Division Sandip Agarwal - Edelweiss Securities Ltd., Research Division Sandeep Shah - CIMB Research

Ladies and gentlemen, good day and welcome to the Infosys Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Gargi Ray of Infosys. Thank you, and over to you, ma'am.

Thanks, Inba. Hello, everyone, and wish you all a very Happy New Year. I'm Gargi from the Investor Relations Team in Mysore. I would like to welcome you to our Quarter 3 FY '14 earnings call. Joining us today on this call is CEO and Managing Director, S.D. Shibulal; Presidents, Mr. B.G. Srinivas and Mr. Pravin Rao; CFO, Mr. Rajiv Bansal, along with other members of the senior management team. We will start the call with opening remarks on the business before opening the call up for questions. Before I hand it over to the management team, I would like to remind you that anything that we say which refers to our outlook for the future is a forward-looking statement which will be read in conjunction with the risks that the company faces. A full statement and explanation of these risks is available in our filings with the SEC which can be found on www.sec.gov. I would now like to pass it on to Mr. Shibulal. S. D. Shibulal: Good morning, everyone. Let me take this opportunity to wish you a Happy New Year. We had a decent Q3. Our revenues grew by 1.7% in reported currency terms and 1.2% on constant currency basis. On-site volumes declined by 3.4% while the offshore volumes increased by 2.6%, overall volume increase of 0.7%. Our offshore referred mix went up by 1.3%. Our operating margin expanded by 1.5% sequentially, excluding the impact of provisions for visa-related matters that were made in Q2. We added 54 new clients. The number of $1 million clients went up by 26. Our growth was predominantly in non-U.S. geographies and Asian [ph] verticals. External business environment has improved marginally in most business segments. While clients are becoming more confident about spending, they remain careful when it comes to making spending decisions. Budgeting activity for our client is moving on a timely basis. Overall, across verticals, we see mixed trends regarding 2014 budgets. We expect the budgets to be flat from 2013 to 2014. At the same time, we expect the clients to be focused on cost optimization. This gives us opportunity to create solutions which will reduce their total cost of ownership. B.G. and Pravin will elaborate on verticals and budgets subsequently. Pricing continues to be stable. However, we continue to see pricing pressure on large outsourcing deals and commoditized services. Infosys Edge continues its momentum with 14 wins this quarter, 8 in platforms and 6 in products. We continue to invest and see traction in the strategic areas: social, mobile, analytics, cloud. At cloud verticals, these technologies are opening up newer opportunities. While each of these is individually powerful, the true value of the client is when these technologies come together to drive their business agenda. A relevant example is Tradex, an insights-driven sales platform that we launched in Q3, which clients are using to sense and fulfill client -- consumer demand in emerging markets. In this platform, we use analytics capability to gain visibility across distribution channels. We use mobile capability to empower the distributors and the sales force -- and the distributor sales force to accelerate order intake. Lastly, this platform is delivered on the cloud to help clients drive lower cost and accelerate rapid penetration into new markets. We have realigned our business portfolio to further enhance our focus on deepening client relationships, increasing market share, creating service differentiation and agility in execution. We have appointed B.G. Srinivas and Pravin Rao as Presidents. B.G. will focus on global markets and Pravin will focus on global delivery and service innovation, along with their business portfolios. We had earlier expanded the Executive Council so that the heads of units and business functions can participate in Executive Council deliberations. We had multiple transformations in progress. However, under the new structure, now that we have implemented 2 presidents, they will put in place appropriate governance sectors for their respective areas. Hence, the Executive Council has been disbanded effective April 1. Based on our performance from Q1 to Q3 and what we expect in Q4, we have increased our revenue guidance to 11.5% to 12%. This will be 12.4% to 12.9% in constant currency terms. I will now ask B.G. to talk about his business segments. B.G.? B. G. Srinivas: Thanks, Shibu. Good morning to all of you. I will now cover the following business segments: financial services, manufacturing, energy and telecommunications. I will be brief about the sectors and will be happy to take questions as we go forward. In financial services, we continue to see clients significantly focusing on taking out cost from their operations and, definitely, some of those are diverting those savings into investing and creating new products and services. Digital transformation risk and compliance-related spending, modernization of infrastructure and legacy applications are influencing some of these spendings. Pipeline is relatively healthy and comprises a good mix of large deals as well as there's an uptick in the focus on platform-related deals for Infosys. At the sector level, we have definitely seen a pickup of the spend momentum in the last 2 quarters. The client IT spend outlay for the coming year is a big mixed bag. We see, in some of our clients, there is a relatively flat budget. In some, there is an uptick in budgets. But overall, we see a greater degree of stability in the way the budget outlay pans out. Switching to the next sector, manufacturing. We see, by and large, the business momentum remaining stable. While we see some improvements in the automotive, commercial, aerospace and industrial manufacturing, there is definitely some weakness in the high-tech sector which is putting pressure on the discretionary spend in this particular vertical. Information management, analytics, digital consumer are some of the key themes emerging in the sector and helping -- creating a transformed -- a transformation of sorts within the clients' business. There is also a lot of focus within the manufacturing segment and in simplification of the internal processes and consolidation. The budgets are expected to be flat overall for the sector, while we definitely see some decline in budget, specifically in the high-tech sector, due to the impact of reduced PC sales. While in automotive, commercial aerospace and industrial manufacturing, we are seeing increased budgets. Switching over to the next sector, the telecom industry continues to face challenges and this is not surprising. The spend levels are muted as clients continue to see revenue challenges which are keeping a check on both discretionary and nondiscretionary spend. The pipeline is healthy in only a few pockets. We are definitely looking at newer means of creating opportunities as the sector continues to face challenges going into the coming fiscal year. The budget outlay for this vertical in the telecom does not indicate any respite so there are expected budget cuts. The energy sector is doing pretty well. We see a great degree of stability. The IT spend is both on discretionary and nondiscretionary spend. There is a lot of focus, again, on consolidation of typically, most of these sectors have large ERP landscapes. There's consolidation, simplification, and in some cases, we also see re-implementations, and in a few cases, upgrades. And within instances, we are very well positioned to address some of these challenges for our clients. Overall, again, as we look into the fiscal year 2015 for all the sectors barring telecom, we are much more optimistic as we look forward as compared to where we were at this point in time last year. With this, I would now hand over to Pravin to cover his business portfolios. U. B. Pravin Rao: Thanks, B.G. Good morning. In retail, CPG and logistics, we have seen increased spend in the areas of cloud, infrastructure, business intelligence, analytics and ERP-led transformation. We are seeing an uptick in discretionary spend. However, they remain in a stop-start mode. The deal pipeline has improved marginally over the last 3, 4 quarters. We expect the budgets to remain flat with an upward bias for the coming year. In Life Sciences on the other hand, we have some headwinds in terms of patent cliff [ph] . There is still some transparency leading to an opportunity for us in terms of large outsourcing deals. We also see continued investments on ERP-led transformation, but there is definitely a lot of pressure on budgets and we expect budgets in this segment to be either flat or probably marginally down. In the per person utilities vertical, we see a lot of focus on cost optimization as well as investment in cloud, mobility and analytics. In addition, in global resources, companies are also focusing on simplifying their operations and improving supply chain efficiency. Budgets for the sector are down due to revenue challenges facing the clients. In the growth markets, unit comprising of Australia, China, Japan and Southeast Asia and Middle East, we see different dynamics that play in individual markets. There is focus on cost reduction and consolidation of spend in Australia. In China, clients are investing in ERP and analytics as they look at centralizing their operations. In Japan, demand is being driven by the need to simplify IT and drive revenue-generating spending. Overall, in the region, the deal pipeline is decent, though the ticket size is small. In the services sector, the new age information services companies leveraging digital are seeing increasing spend, while the traditional print media is cutting spend. The travel and hospitality segment is seeing an uptick in spend driven by economic stabilization and mild recovery in the U.S. Coming to cloud and Big Data, in this quarter, we have won over 20 engagements in cloud and Big Data. Cloud is driving the IT organization towards more outcome-based, SLA-oriented constructs. Clients are also excited about the possibility for contestability and open standards that would help eliminate vendor lock-in and maximize performance. In mobility, we have started over 25 engagements in quarter 3 in the areas of sales force, automation, device management and enterprise productivity. Clients are looking to establish mobile lab factories to cater to their mobility requirements, thus preferring to opt for platform-independent technologies over native frameworks. We see good levels of interest for managed pay-per-use models. I will now pass on to Rajiv to elaborate on the financial performance.

Thank you, Pravin. A very happy New Year to all of you. Let me take you through the financial highlights for the quarter. Our third quarter revenues were $2.1 billion, as against $2.066 billion in the previous order, a growth of 1.7% in reported terms and 1.2% in constant currency terms. In INR, the revenue was at INR 13,026 crores, a sequential growth of 0.5%, primarily because of the rupee appreciation of 1.2% during the quarter. Our gross margins for the quarter improved by 80 basis points to 36.1%. The operating margins for the quarter have improved by 1.5% to 25%, mainly on account of initiatives to increase efficiency in our operations. Net margin for the quarter expanded to 22.1% compared to 18.6% in Q2 which, excluding the visa-related matter, was at 20.2%. EPS is at INR 50.32 as compared to INR 45.96 last quarter excluding the visa charge, which is a sequential growth of 9.5%. Our revenue per person increased by 2.2% on a sequential basis both on-site and offshore. Our on-site mix has fallen from 31.2% to 29.9%, and utilization, excluding trainees, is marginally down to 76.9%. Our other income was higher by INR 221 crores as against the previous quarter, mainly on account of ForEx gain of INR 119 crores in Q3, versus a ForEx loss in last quarter of INR 87 crores. As you will recollect, last quarter, we witnessed extreme volatility in the currency market which resulted in the loss of INR 87 crores previous quarter. During the quarter, on the average, rupee was at INR 62.03 as against INR 62.77, an appreciation of 1.2%. We have outstanding hedges of $1.049 billion as of December end. Effective tax rate of the quarter, 18 months, it is at 27.9%. Our cash flows from operations during the quarter is at INR 2,745 crores, which is a very healthy 95% of the net profit. After paying dividends of INR 1,339 crores and CapEx of INR 159 [ph] crores in the quarter, our cash and cash equivalents, including available-for-sale assets and certificates of deposits, is at INR 27,440 crores. We have increased our FY '14 revenue guidance in dollar terms to 11.5% to 12%. This is based on what we achieved in the first 3 quarters and based on our expectations for the fourth quarter. Lastly, I would like to reiterate that, while we have seen early results of our initiatives to increase efficiency, we continue to evaluate our business needs and make investments wherever necessary. With that, I open the floor to questions.

[Operator Instructions] Our first question is from Anantha Narayan of Credit Suisse. Anantha Narayan - Crédit Suisse AG, Research Division: I had 2 questions. The first one for Rajiv, and If you just look at the implied guidance for the 4Q, the lower end obviously suggests a slight revenue decline. Are you just being conservative or do -- that seems a bit surprising given that December, typically, is a seasonally weak quarter. And the second one, to Shibu also, just on the new org structure. It just seems a bit strange that it's just 2 or 3 months back since you have expanded the Executive Council significantly, and now, you sort of decided to disband it. I would love to understand what really transpired in the last 2 or 3 months that would change the management's thinking on the structure?

Let me do the first question. I think if you look at our guidance of 11.5% to 12%, it implies a Q4 number of minus 0.4% to 1.4% growth for the fourth quarter. This is based on what we see today. I think it is not about being conservative or being aggressive. It is what we see today. Q4 is, again, a seasonally weak quarter. If we look at the number of working days, because of February being the shorter month, it's the start of the client budget cycles. The client budgets have to get closed. They have to be transferred into orders and then we have [indiscernible] . So usually the fourth quarter is always a weaker quarter and considering what we see today, I think -- we believe that it will be somewhere in the range of the guidance that we have given. S. D. Shibulal: This is Shibu. As you may notice that over the last few months, we have been transforming ourselves to drive efficiency, to drive clients' efficiency to create better solutions and to achieve higher levels of growth and margins. As part of that, we felt that it is important that a wider set of people participate in these deliberations. And with that, we had expanded the Executive Council. At the same time, the 2 presidents that serve this [ph] that we have put in place just now, has been a work in progress and now, we have done it. We have created 2 presidents. We will consolidate all the business -- the more -- almost all the businesses and the business portfolios under these 2 presidents. And given the fact that, that is happening and they will be putting in their own governance sectors in place, we felt that it is right to disband the Executive Council as of April 1 and the 2 presidents will create their own governance sectors.

Shibu, let me add. This is Narayana Murthy. As Shibu pointed out, we are a company in transformation. We have had several initiatives on the anvil to make this a better company. A few of them completed their conclusions earlier, and an important one, like having the organization restructuring having 2 presidents, took a little bit more time because it needed lot more deliberations. As a man in a hurry, I wanted to get on with the job and therefore, when the recommendations on expanding the Executive Council came up, I said, "That's fine. Let's go ahead and do it." However, when the recommendations on the 2 presidents came, our review demonstrated that this new structure, with the kind of governance structure that they will put in place, as Mr. Shibulal pointed out, would render the Executive Council redundant. As an organization that is focusing on bringing efficiency in every one -- every dimension of our operations, we wanted to set an example at the highest level. And that's when we had to take the tough decision of disbanding the Executive Council. That's the reason why even though we had expanded the Executive Council a few months ago, perhaps a couple of months ago, we bit the bullet and said, "We will do what is right by the organization."

Our next question is from Diviya Nagarajan of UBS. Diviya Nagarajan - UBS Investment Bank, Research Division: On this offshore shift in cost efficiency initiatives that you have been putting in place, could you kind of give us a sense on how far along the way we are and could you also give us, if possible, a mix of the industry verticals or geographies that you've had the most cost efficiencies and offshore shift play through during the quarter? S. D. Shibulal: So this is a journey which we have undertaken. Our belief is that we should add maximum value from offshore and that's the best way we can reduce the total cost of ownership for our clients and deliver the highest level of quality and scale. We have made some progress. We will continue to -- we will continue on this journey. And there are various factors which goes into it like customer comfort and solution maturity, new automation and productivity improvement. So as I said, this is a journey which we will continue to take. On the specific industry verticals, I don't think there is any secular difference. We have seen a shift in almost all of them. Some of them may be marginally higher but generally all of them have shown improvement. Diviya Nagarajan - UBS Investment Bank, Research Division: And a question an attrition, if I may. On a quarter annualized basis, it's come down, but we have seen negative headcount addition this quarter. We have spoken about fresher hires starting next year, but on the lateral side, are you comfortable with the kind of additions that you're seeing here, and could you also give us a sense of where this attrition is the highest attrition, please? S. D. Shibulal: So the attrition in absolute terms have actually come down from last quarter to this quarter. While in the annualized terms, it has gone up, and that is because when you -- it's a moving window. It does not reflect the current quarter in the sense it reflects the last 2 quarters. In absolute numbers, it has come down. Over the last 6 months, we have done multiple things to address -- to make sure that our employees are happy with us. We have given compensation increase. We have done promotions. We have changed the weight of our compensations. We have done enormous amount of communication to our employees over the last 6 months. We will continue to do this in the coming months, and the next cycle of promotions and other things are being looked at.

Our next question is from Yogesh Aggarwal of HSBC Securities. Yogesh Aggarwal - HSBC, Research Division: I just have a couple of questions, if I may. Firstly, can you provide a bit of detail on large deals signed in the quarter, because like last quarter, you had 5 deals with 450 [ph] million TCV? So something on that. And secondly, the revenue per client has been consistently falling last 8 quarters, so is this -- has there been impact on client mining and the relationship with all the restructuring going on or is it just incidentally so just... S. D. Shibulal: Can you please speak loudly? B. G. Srinivas: Can you please speak up? We were not able to hear the question. S. D. Shibulal: The first part of the question we heard. It's on large deals. Let me request B.G. to respond to that. And the second question, if could you kindly repeat. Yogesh Aggarwal - HSBC, Research Division: Yes, so the second question was the revenue per client has been falling for the last 8 quarters consistently. So has there been an impact on client mining or satisfaction because of all the restructuring going on? If you could just elaborate on that. B. G. Srinivas: This is B.G. I'll take the first part of the question. The large deal pipeline continues to be pretty decent. We have not seen any major shift either way. We have had pretty good wins in the last quarter, about 3 in Europe, a couple of them in the U.S. There are 2 large deals within the financial services sector. One is related to testing consolidation. We are also seeing clients increasingly focus on app decommissioning. That's an area where we have also specialized. So the second deal win was more to do with app decommissioning. The U.S. wins, 2 were -- both were in the area of vendor consolidation. Again, we were very well positioned with respect to our solutions and hence, we were able to grab these 2 deals. Looking forward, again, the pipeline, as we go into quarter 4 and the next year, we continue to see momentum in large deal wins. There is primarily -- it's primarily driven by 2 distinct areas. One, clients continue to have increased focus on efficiencies and cost optimization. We are clearly seeing an integrated effort from our clients, both on IT as well our operations coming together, and in some of these deals, we are pretty well positioned. The other area where we continue to see activity within our clients, particularly in large initiatives, is one is on business transformation, the other is on internal simplification of processes. And here, again, we have specific solutions and our platforms, particularly the investments we have made, is coming to play, in differentiating our offerings in some of these deals. S. D. Shibulal: So on the second part of the question, we are actively broad-basing our clients. Actually, if you look at this last year Q3 to this year Q3, we have added 112 new clients. As of last year Q3, we had 776 clients. And as of this Q3, we have 888 clients. So we are actually broad-basing our clients. Simultaneously, if you look at it this quarter, we have added 25 new clients to our $1 million club. As of last quarter, our $1 million clients were 469, and this quarter, it is 495. Most of the other parameters are somewhat stable. Our top 10 clients continue to give us -- some maybe doing 23% to 24%. This quarter, it's 23.5%. Top 5 U.S., 14.1%. So it is a reflection of our active strategy to broad-base our clients.

Our next question is from Viju George of JPMorgan. Viju K. George - JP Morgan Chase & Co, Research Division: My question is just a follow-up to the question that Anantha raised. If you find that this co-president structure is not working as optimally as you hoped, are open for a review? Is this a little bit of a trial by error kind of process that you try and see what structure works well for you going forward? S. D. Shibulal: We have just announced...

Good, I will handle it [ph] . S. D. Shibulal: We have just announced the president structure. We are consolidating the business portfolio under these 2 presidents. We clearly believe that this will allow us to create market velocity. This will allow us to drive growth. This will allow us to drive operational efficiency and productivity. This will allow us to drive customer centricity. And at the same time, while we have the portfolio dwells [ph] under B.G. and Pravin, B.G. will dominantly focus on global markets and Pravin will focus on global delivery and service innovation. We believe that these are -- this is a good structure to have. It will drive our objectives.

Well, thanks, Shibu. This is Narayana Murthy. Now we have had considerable deliberation. We have consulted all the senior stakeholders, and we have arrived at this conclusion that having 2 presidents, one focusing on the market and one focusing predominantly on the delivery effectiveness is a good one. Now we will study this. We will look at the results. We will give sufficient time for this structure to prove itself. And if it doesn't prove after giving sufficient time, certainly we'll change if it's required. Let me be very, very clear because at the end of the day, our priority is to make this a high-performance organization. And having studied several examples, we believe that this is a good structure. This will also create us an opportunity for the nominations committee to consider the internal cadre of people, along with the external candidates for the selection of the CEO when Mr. Shibulal retires in March 2015. Therefore, in some sense, it has not only created a good platform to make the organization more efficient, it also created a platform wherein it will be easier for the nominations committee to create a portfolio of candidates for selecting the new CEO. And number three, if for any reason we have -- and the nomination committee decides that there will be a new -- there will be a CEO from outside, then this is the structure that is least [indiscernible] to the stability of the organization. So looking at it from all aspects, we believe that this is a good structure because, one, it will make the organization more efficient, more effective; second, it will provide a better focus on the portfolio of internal candidates that the nominations committee may want to look at; and third, that it will review the possibility of instability should we have an external CEO. Viju K. George - JP Morgan Chase & Co, Research Division: Sure. Sir, if I may ask one more question, please. Over the past few months since you've taken over, there's been a string of high level of exits and, at the same time of course, of also maybe exits of talent at critical levels, though not high-profile enough to be covered by the media. At the same time, we don't see much evidence of Infosys hiring from outside as well. How would you assure the Street that this loss of talent may not hurt going forward?

Well, thank you. I think it's a good question. I'm glad you asked that. Infosys was the first Indian company, not just Indian, IT company -- it was the first Indian company to set up its Leadership Institute as early as 2000. At the Leadership Institute, our focus has been to develop a large number of leaders. We have a 3-tier program, Tier 1, Tier 2 and Tier 3, and these 3 tiers, together, have developed approximately -- about 600 leaders. Now if you look at this room -- I mean, I'm able to look at, you will not because you are on the teleconference, I see a set of extraordinary people, most of them in their 40s. We have 2 presidents who have just crossed -- one is just below 50, other has just crossed 50. We have a large number of enthusiastic and energetic people who report to be people that I see in this room. So therefore, I think as far as the future of this organization is concerned, let me assure you that, that future will not be compromised because of lack of leadership. Insofar as the exits are concerned, let me make a cryptic statement, and that is it is good for them. It is good for the company. We wish them the best. These are people who have added considerable value to the organization, and it is good for the company because the company has a large number of enthusiastic and energetic people who are ready to take on bigger and bigger roles. Therefore, I think while we add value to the entire industry in India and abroad, when we contribute very well-trained leaders to outside, [Audio Gap] developed leaders who are enthusiastic and energetic. Therefore, this is not my worry. Viju K. George - JP Morgan Chase & Co, Research Division: Sure, and one final question for my side, you have identified 3 levers or plans on which Infosys' revival would be with [indiscernible] , sales effectiveness, delivery effectiveness, delivery automation and the cost optimization. It seems to as that, at this point in time, it's the third mentioned lever that's working very, very well. What's the timeframe for the sales, engine firing and cost -- sorry, delivery optimization initiatives playing out?

Sure. So I don't know if you listened to my AGM lecture. When I spoke about these 3 initiatives, the sales effectiveness, the delivery effectiveness and customer optimization, I did say that they have -- very clearly that cost optimization is one and -- it's one of the initiatives that is likely to yield results earlier than the other 2. I think in my opinion, the second initiative that -- I mean, the cost optimization would, I say, yield result between -- somewhere between 6 months to 18 months. Insofar as sales effectiveness is concerned, I believe that it will bring us value anywhere between 9 months to 21 months. And insofar as the delivery effectiveness is concerned, I think it will take, perhaps, up to 3 years. When I talk about this effectiveness, I don't mean incremental changes. I mean for Infosys to become, once again, the leader in the industry, I believe that you are looking at the cost optimization taking anywhere between 6 and 18 months. We are looking at sales effectiveness taking anywhere between 9 and 21 months, and we are looking at delivery optimization -- delivery effectiveness optimization taking anywhere between 12 months to 36 months.

[Operator Instructions] We will take our next question from Bhuvnesh Singh of Barclays. Bhuvnesh Singh - Barclays Capital, Research Division: Sir, I -- this question is to Mr. Murthy. Sir, I just heard that how we take Infosys to, again, the leading light in Indian IT services industry. Now one part of that which we have seen over the last decade has been a focus on value addition to climb [ph] . And based on that, Infosys has always guided us to getting the top margins in the IT services space. So when you look at medium term, how do you think that Infosys margins would behave? And how is the changing environment changed our view on margin?

So I think, as you know, we give our guidance once a year now, and we keep revising the guidance every quarter. Rajiv, correct me because I've been out of touch on this. So I don't think I can make any such forward-looking statements about the specific margin. I think that is not fair. All that I can say is this. The -- looking at the faces in this room, I see confident faces. I see joyful faces. I see kindred spirit. That's one. Second, I think we have been working on several initiatives. We saw work in progress in terms of innovation, both in the area of sales effectiveness and delivery effectiveness. I don't want to comment on these initiatives at this stage because they're all work in progress. They will take some time. But as I pointed out earlier, you will see -- hopefully, you will see the positive impact of these in the next -- as I said, anywhere from 1 year to 3 years. So that's what I will say. And in terms of margins, I think Rajiv will give margins as -- from quarter after quarter when we go to the relevant time. I don't think I would like to comment on that. Bhuvnesh Singh - Barclays Capital, Research Division: Rajiv, just one follow-up question to you, see, Bloomberg reports that you have said something about medium- to long-term operating margins of 25%. First, is that correct? And second, do you -- if that is correct, do you think that will be the top end and important [ph] in the industry?

No. What I have said -- yes, I have stated that I expect operating margin in the medium to long term to be about 25% to 26%. And -- but at the same time, if we need to make investments, we would make investments [indiscernible] about the future for ourselves. So seen in -- if you look at the phase [ph] of the operating, there are a lot of technology changes happening. There are a lot of disruptions happening in the space. And that time, we have to make investments in the whole social mobility, [indiscernible] cloud space. So I think in the medium term, a 25% to 26% operating margin is a good margin for this business. Bhuvnesh Singh - Barclays Capital, Research Division: And that also holds for the industry, if I may ask, sir? You will be again at the top end of industry with this margin?

Yes.

Our next question is from Pankaj Kapoor of Standard Chartered Securities. Pankaj Kapoor - Standard Chartered PLC, Research Division: Sir, I have, actually, 3 questions. First, just looking at the decline in the sales and marketing headcount cost and the concurrent decline in the sales and support headcount, I was wondering if, indeed, we are seeing some attrition on our front-end sales force, if you can comment on that, please. Second, on the offshore shift, can you give some indicator, like where do you expect this to settle down? Or what could be the optimal level that you are targeting? And finally, last quarter, you had highlighted that the portfolio reshuffle is one of the reasons for a weak revenue outlook for the second half. Now with this latest reorg of appointment of co-presidents, do you expect the impact could actually continue for a longer period, maybe, say, first half of FY '15? B. G. Srinivas: I'll take the first part of the question, which was reference to the sales expenses, as well as investments. We will continue to -- as Mr. Murthy mentioned, continue to focus on increasing sales effectiveness. And in that context, we have relooked at, one, what are we looking at in terms of enhancing client focus. And in that context, we will continue to make investments into sales force, driving more and more talent, walking our client corridors and making an impact. We are also enhancing the sales training in terms of adding value to our clients. We will continue to increase headcount in business development, opening new accounts, and this will be across all geographies and the industry vertical segments. We are also looking at how to improve overall sales productivity and increasing the effectiveness and their initiatives in place. So in a nutshell, we will continue to increase our investment into sales. We want to continue to make sure that in the market, we have extensive coverage both within our existing client accounts, as well as opening new business. At the same time, every year we look at new geographies to expand our footprint. And in that context, we are looking at Canada, Latin America. We also increased our sales focus in the 2 large markets within Europe, namely France and Germany. S. D. Shibulal: So on the onset of [indiscernible] , and this will be the journey which we will continue to take, our focus is always to have the highest developed value from offshore. That is what allows us to deliver higher -- a higher level of quality, higher scale and higher value to our clients. We will continue to focus on delivering more and more from offshore. And one was on business [indiscernible] . Pankaj Kapoor - Standard Chartered PLC, Research Division: And sir, on the reorg impact, do you expect that [indiscernible] ? S. D. Shibulal: Right. So mind [ph] the organization is going through transformation. There may be some minor disruptions, but at the -- as you can see over the last 2 or 3 quarters, while all the transformation has happened, we have continued to focus on our clients. We have continued to focus on growth. We have continued to focus on margin improvements, and the numbers are showing them. Numbers are reflecting those areas of focus. So I do not expect some and continuing impact. B. G. Srinivas: This is B.G. Srinivas again. Just to add to what Shibu mentioned, you must realize at this stage, while it's a bit radical in terms of some specific initiatives, which we are driving on the delivery effectiveness and talent management, but by and large, in the market, these are less disruptive. They have -- these are leaders who are already focused on these verticals and markets. There has been a consolidation of business segments between me and Pravin Rao. And hence, from a market perspective, these are least disruptive. These leaders, business leaders, who are occupying positions, leading business industry vertical segments, have been in the market for many, many years, and they have been with Infosys. So from that context, there is not much of a change. Our client partners and then our business development market -- managers in the market, again, continue to focus on the respective verticals and service lines. Again, there is no disruption in that context. While there has been a change, it is evolutionary, and hence, we do not expect any major disruption. There will be, of course, realignment and planning in next level of government, which we'll establish in the next month or so. Beyond that, from April 1 onwards, we should be actually in a relatively stable position in terms of reorganizing and realigning our portfolio. Pankaj Kapoor - Standard Chartered PLC, Research Division: And sir, if I can just maybe squeeze one small clarification. For our wage hike, are we reverting back to the cycle from April onwards? Or is that question still looked into?

Our desire is that we should get back to the April cycle. That's what Shibu, B.G., Pravin, Rajiv and I, we, are all working. And at this -- and of course, Tan, the head of HR. At this stage, it's still work in progress. It's still in a set of deliberation. So we cannot comment at this stage, but let me assure you that our desire is to get back to the old cycle.

Our next question is question is from Pinku Pappan of Nomura. Pinku Pappan - Nomura Securities Co. Ltd., Research Division: Just as a follow-up to the earlier question, are there any headcounts cut from your sales force in this quarter versus last quarter? S. D. Shibulal: Well, there are normal attrition in the sales force. What you are seeing is not a secular trend. These are just quarterly fluctuations. Pinku Pappan - Nomura Securities Co. Ltd., Research Division: Okay. And what is the total [ph] ...

In fact, as B.G. pointed out, there is a big push on enhancing the headcount in sales force, and you will see that as we move forward. So I don't think that there is that there is going to -- there won't be reduction in sales force except, perhaps, based on performance. Pinku Pappan - Nomura Securities Co. Ltd., Research Division: Okay. That is helpful. Could you talk about your win rates especially in this large deal, outsourcing -- large outsourcing deals in the recent past? B. G. Srinivas: This is B.G. again. As mentioned earlier, definitely, our effort to improve conversions are -- that will result particularly in large deals. As you are aware, we have a strategic global sourcing team which brings in the competencies of the solutioning clients, employee transfers [indiscernible] specific cases, destructuring, solutioning and the overall competitiveness of the deal itself. In the last many quarters, there has been an increased focus of driving internal effort productivity improvements and increasing automation, which, in that context, helped us to compete particularly in large deals, where there is a significant focus on cost takeout. And that is something which is definitely yielding results. We have also made sure that we connect with the deal advisers and consultants, who pretty much advise most of our clients in this sector. We have frequent engagements, and we continue to articulate our value proposition in this area. So we should continue to see increased traction in both participating and winning large deals. Pinku Pappan - Nomura Securities Co. Ltd., Research Division: Okay. Margining [ph] on the same topic, could you quantify the TCV of delivery won in this quarter? I think there was a question asked earlier to what would be helpful to get a sense of the totalities that you won. S. D. Shibulal: So we have multiple wins this quarter. I think the total TCV won was close to $500 million. But please remember these deals are multiyear deals, and the realization in the first year is -- especially when you are in the second half, is very, very small in the first year. You, approximately, get about 20% of that in the next year.

Our next question is from Ankur Rudra of Ambit Capital. Ankur Rudra - Ambit Capital Pvt. Ltd., Research Division: So in the prepared remarks, sir, you mentioned that you had seen the prospects of demand as relatively exciting. However, you did mention, across business segments, that budgets are either flat or down. Can you help me reconcile that difference? And is it -- is your optimism based on greater acceptance of offshoring emerging now versus earlier periods? S. D. Shibulal: So what I mentioned was that the external business environment has its own marginal improvement in most business segments. We have seen improvement. The marginal improvement in the quarter has declined in spending, but at the same time, clients are very much focused on cost optimization. They also remain very, very careful when it comes to making the spending decisions. Budgets are expected to be flat. While we are seeing variations in various verticals, overall, we are expecting the budgets to be flat. The current account optimization, it does give us opportunity to create solutions which can reduce their total cost of ownership, and that is an opportunity which we are focusing on. Ankur Rudra - Ambit Capital Pvt. Ltd., Research Division: If I could just squeeze a follow-through. Revenues in the U.S. were a bit soft this quarter. I was just wondering if this was exaggerated seasonality only in that geography. Or is this a focus impact of the offshore shift there, maybe the acceptance of greater offshore delivery's higher than that geography now? S. D. Shibulal: I wouldn't say it's the secular trend. I think we need to wait a couple of more quarters. I don't expect a secular trend in that direction.

Our next question is from Sandip Agarwal of Edelweiss. Sandip Agarwal - Edelweiss Securities Ltd., Research Division: So I think all of my questions are answered, only one final question. I don't know who would answer that best, but my question is, in 2004 or '05, when we used to get Infosys offer letter in hand, we used to simply throw away all the offer letters of the competition. When we will go -- get back to that position in the campus, what is the reason for that? And how that will be achieved?

Well, I think -- this is Narayana Murthy. I am so happy to hear -- you would say that at one point in time, you used to throw out the letters of offers from competition. That is our aspirational target. When you talk of aspirational target, it's very difficult to give a clear deadline by which we'll achieve those. But let me assure you that every hour of the working day, that we are all concerned -- the leaders in this room are all concerned about making Infosys, once again, the aspirational company that it was. We will leave no stone unturned to make sure that it happens, but I am not in a position to give by what date we will be able to achieve that objective, but there are lots of initiatives within the company that are all work in progress. And therefore, we cannot talk about it. And I hope they will all yield the results that both you and all of us in this room want.

Our next question is from Sandeep Shah of CIMB. Sandeep Shah - CIMB Research: Just last one, I think, on the new organization structure...

Could you speak a little bit louder? Sandeep Shah - CIMB Research: Yes, just a last question in terms of the organization structure, so if we assume that either external or internal candidate has been selected as the CEO, one can assume that the number of president with the new structure will continue to remain 2, not higher than 2 or lesser than 2?

What is it, number?

President.

Yes.

Will remain to be 2 or it might be higher.

Again, I don't think we should be close-minded on these issues. As long as we are progressing on a path of improvement, as long as the senior management of this company decides to take initiative that accelerates that improvement, I think that is the philosophy we should take. I don't know -- there could be 3 -- who knows, there could be 4. Who am I to say that it will only be 2. It's not that -- not the right statement. So all that we can tell you is we will bring about such changes, as well, enhance the energy and enthusiasm of this organization. We will bring on more and more leaders and give them -- I mean, and make sure that they get more and more responsibilities so that the organization becomes stronger and stronger. We don't want to set any limit on the number of presidents and -- or whatever structure. So we want -- we are very open to those things, and I'm sure you will appreciate our open-mindedness on that. Sandeep Shah - CIMB Research: Just the last one, the revenue growth from a top line in this quarter has declined by 3.6%. So is it a quarterly aberration? Or is it more offshoring? Or is it more to do with the competitive intensity? S. D. Shibulal: No, I don't think there is any secular trend. There is the quarter-to-quarter fluctuations, and some of it could also be because of holidays and furloughs and other things.

Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference back to Ms. Gargi Ray for closing comments.

Thanks, everybody, for being on the call. We look forward to talking to you again. Thank you.

Thank you. Ladies and gentlemen, on behalf of Infosys, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.