Sandeep Mahindroo - Investor Relations Dr. Vishal Sikka - CEO and MD Pravin Rao - COO M. D. Ranganath - CFO Mohit Joshi - President, Head, Financial Services and Head, Infosys Brazil and Infosys Mexico

Keith Bachman - Bank of Montreal Moshe Katri - Sterne Agee Rishi Jhunjhunwala - Goldman Sachs James Friedman - Susquehanna International Group Joseph Foresi - Cantor Fitzgerald Arvind Ramnani - Gordon Haskett

Ladies and gentlemen, good day and welcome to the Infosys Earnings Conference Call. As a reminder, all participants’ lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I would now hand the conference over to Mr. Sandeep Mahindroo. Thank you. And over to you, sir.

Thanks Serena. Hello, everyone and welcome to Infosys earnings call to discuss Q4 and FY16 earnings release. This is Sandeep from the Investor Relations team. Joining us today on this earnings call is CEO and MD, Dr. Vishal Sikka; COO, Mr. Pravin Rao; CFO, Mr. M. D. Ranganath; along with other members of the senior management team. We’ll start the call with some remarks on the performance of the Company by Dr. Sikka followed by comments from Mr. M. D. Ranganath. Subsequently, we’ll open up the call for questions. Before I pass it on 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 must be read in conjunction with the risk 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’d now like to pass it on to Dr. Vishal Sikka. Dr. Vishal Sikka: Thank you, Sandeep. Good morning and good afternoon folks. Thanks for joining our earnings call. Let me start by saying that I’m really proud of our Company’s achievement in my first fiscal year as a CEO of Infosys. We started the year just two quarters into our strategy to reimagine services and to transform Infosys. And over the course of this year, we saw that our endeavor which is to bring automation, innovation, education and operational excellence, relying on our human potential that is amplified by technology rather than delivering the same work for less, starting to show concrete results in the organic growth of our client relationships, in our win rates in large deals, and in the types of projects that we’re seeing in strategic areas where we never participated before. I am proud of what our teams have achieved this quarter and in the year. And yet despite these heartening results, they’re still based on metrics of the past in many ways, of the way the industry has been. The world of our future looks entirely different. It is a world that is being fundamentally reshaped by digital technologies and it is our endeavor to create great value for every business through solutions built on our AI technology and open cloud platforms to have Infoscions amplified by intelligent technology, to bring purposeful innovation to life to drive collaboration and an entrepreneurial spirit from within to transform our relationship with clients. And in that sense, we are still very much at the beginning of this journey. With this in mind, let me turn to the numbers. We ended Q4 of fiscal ‘16 with revenue of INR 16,550 crore or US$2.446 billion and it grew in Q4 for the first time in the last three years. This translates to a quarter on quarter growth of 4.1% in rupee terms, 1.6% in U.S. dollar terms and 1.9% in Q3 constant currency. For the full year, our revenue has grown 13.3% in constant currency and 9.1% in reported terms, ahead of the guidance that’s provided in January of this year. Volumes in Q4 of fiscal ‘16 grew by 2.4%, indicating a healthy momentum in the underlying business and shaping us up well for fiscal ‘17. Utilization including trainees was 74.7% and 80.1% excluding trainees. Blended per capita revenue decreased 1.1% and our operating margin for the quarter was 25.5% compared to 24.9% in the previous quarter. On a full year basis, operating margin was 25% compared to 25.9% for fiscal ‘15. While still within our band of 24% to 26%, we believe the results of our initiatives in automation and tighter control of the operating metrics will help us improve profitability in the coming year. We reported earnings per share of INR 15.74 for the quarter, up 3.8% and in U.S. dollar terms earnings per share was $0.23. For the full year earnings per share is INR 59.03 or $0.90. Attrition for the quarter decreased further to 12.6% and total employee strength is now 194,044 employees. Let me now turn to the client relationships and large deals. Once again in Q4 of fiscal ‘16, we had a record quarter in large deal wins. We signed six large deals with a TCV of $757 million. Additionally, we signed another two large deals in financial services in Americas where based on the present volume of business, we can get another $470 million in revenue. We saw a 45% increase in TCVs of large deal signings in fiscal ‘16 compared to fiscal ‘15 that is $2.79 billion versus $1.927 billion, and this actually excludes other large same contracts that were signed but not included in our reporting. Our large deal win rate has gone up significantly for the whole year. Thanks to our focus on better solutioning that leverages automation and innovation in our IT door services, better articulation of value proposition and focusing more on the clients’ point of view the challenges that the clients face, using design thinking as the fame work in how we create our proposals. These bookings will help secure our revenue base for future years. The number of $50 million plus clients grew to 52 and the number of $10 million plus clients grew to 177. We added 47 net new clients during the quarter. Our top 10 clients grew by 12.3% for the full year and the top 25 grew 9.3% in constant currency term. Our financial services segment lead by Mohit Joshi saw a stronger traction in the year. Along with Finacle, our financial services portfolio grew by 15.3% for the full year. In our retail and CPG portfolio led by Sandeep, we saw strong traction for our new software and services business. With this, I wish to congratulate Mohit and Sandeep on being appointed presidents of our Company. My friends and colleagues, Manish and Rajesh continue to lead their respective businesses in healthcare, life insurance and hi-tech for Manish; and energy, communication and service for Rajesh. In delivery, our global delivery engine under the leadership of Ravi has had an exceptional year. The renewal of our existing service lines has shown tremendous momentum. Our data analytics, testing and enterprise system practices grew especially well. Zero Distance, our program to support grass roots innovation in every project is establishing a new way to achieve project management excellence. Nearly 100% of our projects have proactively proposed incremental innovative ideas. In addition with the opportunity to expand the scope of these projects, this program has built confidence in our teams and help drive a culture of innovator, a culture of innovation across the Company. Ravi’s extraordinary leadership this year has been instrumental in our growth and our ambience of innovation and I wish to congratulate Ravi on being appointed as President of our Company. On IIP, we completed more than 220 engagements and announced the availability of our IIP, our Infosys Information Platform on AWS. And on IAP, our Infosys Automation Platform, more than 125 engagements in IAP have now happened across our segments and 21 additional deployments went out this last quarter across our key accounts. In Q4, we released 1,710 full time employees equivalent worth of work across service lines using our automation platform, which brings us to 3,900 FTEs released over the course of FY16 due to automation. These numbers are still small in fiscal ‘16 but will continue to rise as the deployment of items and the tools themselves evolve to handle more complex activities that are today performed manually. In addition, we did our first major project to bring the power of automation and information platform capabilities internally to review our own financial processes under Ranga’s leadership. We identified and then massively automated the things that cause latency in our system due to bad processes and we have created a better user experience across our systems. This focus on automation for example, we went from four hours to one hour in revenue accounting, from two days to completely automating project attribute changes from 36 hours to 12 hours for accounting at the project level and many other dramatic simplifications. Congratulations Ranga and your team. In the coming quarter, we’ll focus on even more on reconciliation and instant reporting, leveraging our Infosys Information Platform. Panaya and Skava continue to gain attraction, both as a part of the large client engagements where these products were central to the value preposition as well a standalone deals. This quarter, the EdgeVerve business sustained momentum with 18 wins and 24 go-lives for both the Finacle and Edge suite of solutions across various market regions. In consulting, under Sanjay’s leadership, we continue to focus on consulting as our tip of the spear and it is the part of our engagement since strategic initiative is planned and in growing client relationships. Specifically in design led services, I’m pleased to see design-thinking as a key fabric of our work, making it way into every engagement and rapidly reaching all our clients. Expanding the reach of our own work, we continue to make investments in the ecosystem. This quarter, we invested in Waterline Data Science to expand what we offer clients in an automated data discovery and governance areas. I’m personally very excited to announce an RSU and option plan for employees. We’re starting with managers to drive retention of our highest performing leaders and also to attract the best leaders in the world to Infosys. Over time, my endeavor is to extend this to all Infoscions as we used to do it before. Additionally, we’re providing a 6% to 12% compensation increase offshore; it will be towards the higher end of the range at junior level, and at senior level it will be towards lower end of this range. Of course for higher performers, these numbers will be significantly higher. For onsite similarly, we’re providing 1.5% to 2% average compensation increase and this vary across geographies, based on prevailing market condition. In Q4, the Infosys Foundation continued to invest in support programs in the areas of sanitation, health care and rural development. During the quarter, the foundation signed a memorandum of understanding with the Asia Heart Foundation to enable the adoption of robotics in healthcare through a grant of INR 8 crore and provided a INR 5 crore to Sahakara Mitra Sanstha, a center for collective development, to enhance the livelihood of the farming community in the Indian states of Andhra Pradesh and Telangana. It also successfully completed the construction of 365 toilets in the 110 schools of Odisha, to support the Indian Prime Minister’s Swachh Bharat, Swachh Vidyalaya Abhiyan mission. In the state of Karnataka, it launched the Jaldhara Project in drought-hit villages of Dharwad, Haveri, and Gadag districts by deploying tankers to provide drinking water. In the U.S., the Infosys Foundation USA continued to engage with the local communities and invest in computer science related programs that are fundamental to our future. The foundation announced a grant of $1 million in partnership with the National Science Foundation to support computer science professional development for teachers. This collaboration will provide opportunities to as many as 2,000 school teachers and bring value to tens of thousands of students to deepen their understanding of computer science. Finally, our revenue growth guidance for fiscal ‘17 is 11.5% to 13.5% in constant currency terms, based on our visibility at this time. As the year evolves and our visibility improves, we’ll continue to revisit this. And to close, I am proud of what we have accomplished this year. Our strategy is starting to show concrete results and we’ll accelerate this in fiscal ‘17 and beyond. More importantly, what we have seen is that our strategy gives us a new path forward for Infosys and brings [ph] purpose and passion to our work. It creates a space for a new type of a services company, a human company that our humanity is amplified by technology to deliver a great value and a great experience for all the services company that we aspire to be. Thank you very much. And now my friend and colleague Ranga will take you through more details of the financials before Q&A. M. D. Ranganath: Thank you, Vishal. Hello everyone. This is Ranga here. Let me first start with Q4 revenue performance. In dollar terms, revenue grew sequentially in Q4 2016 by 1.6% on reported basis and 1.9% in constant currency basis. On a year-over-year basis when compared to Q4 2015, revenues have grown 13.3% in dollar term and 15% in constant currency term. Coming to full year performance, our full FY16 reported revenues were $9.5 billion, a growth of 9.1%. In constant currency terms, we grew by 13.3% and at 31st March 2015 rates, growth was 9.3%. Coming to volumes, volumes grew by 2.4% during the quarter as compared to 3.1% in Q3 2016. On quarter-on-quarter basis, onsite volume grew by 2.7% and offshore volume grew by 2.3%. On a full year basis, volume growth for FY16 was 14.5% compared to FY15. On a yearly basis, onsite volume grew by 16.8% onsite and offshore volumes grew by 13.6%. On Realizations, our realization for the quarter declined by 1.41% on reported basis and 0.9% on constant currency basis compared to Q3 2016. Realization drop for the full year FY16 as compared to full year FY15 was 4.7% on reported basis and 1.1% in constant currency basis. Our utilization including trainees increased by 50 basis points to 74.7%; however, excluding trainees, utilization declined by 50 basis points to 80.1%. Onsite mix increased marginally to 29.6%. Our operating margin for the quarter was 25.5%, increase of 60 basis points during the quarter. You would recall that operating margin in Q3 was 24.9%. Margins for the quarter increased 20 basis points due to increase in utilization, which I mentioned earlier; 20 basis points due to drop in subcon cost and 60 basis points due to rupee depreciation. This was offset by 40 basis drop in margins due to realization decline. Operating margins for full year FY16 was 25% as against previous year’s 25.9%. Operating cash flow generation was very strong during the quarter. We generated operating cash flow of $562 million in Q4 as compared to $474 million last quarter. Capital expenditure during the quarter was $115 million. Our cash and cash equivalents as of March 31st were $5.202 billion as compared to $4.765 billion last quarter. At the group level, we added 9,034 gross employees during the quarter with a net addition of 661 employees. Attrition continues to be on the declining trend. At the group level, annualized attrition was 17.3% as compared to 18.1% last quarter. The quarterly annualized attrition on a standalone basis is declined to 12.6% from 13.4% last quarter. DSO for the quarter was 66 days as compared to 65 days in previous quarter. As you all know, we had a very volatile currency environment in Q4. We managed to navigate the volatility effectively. Rupee depreciated against the dollar by 2.3% on an average basis and 0.2% on period end basis. U.S. dollar appreciated 6% against the GBP. However, against euro and Australian dollar, USD depreciated by 1.4% and 1.2% respectively. Our hedge position as on March 31, 2016 was $910 million. Yield on other income was 8% this quarter as compared to 8.6% in Q3, which is -- this drop is a reflection of softening interest rates in India. The expected yield for FY17 is to be approximately 7.5% as compared to 8.6% in FY16, which is a drop of 110 basis points. The effective tax rate for the quarter was low at 27.9% on account of write back of tax provisions on closure of audit in certain jurisdictions. Effective tax rate for FY16 was 28% on reported basis. However normalized for provision reversals, the effective tax rate for FY16 was 29.7%. Full year effective tax rate projection for FY17 is expected to be in the range of 29% to 30%. This is on account of certain software export zone units that will move from 100% exemption to 50% exemption during FY17. Our net margin during the quarter was 21.8% and remained unchanged quarter-on-quarter. Our EPS for the quarter was $0.23. EPS grew 1.7% on a sequential basis and 7% on a year-over-year basis. Coming to our top account growth, our revenues from top five clients increased by 0.2% quarter-on-quarter in reported terms and 1% in constant currency terms. From top 10 clients, revenues declined 1.7% quarter-on-quarter in reported terms and 1.3% in constant currency terms. However, on a full year basis, our revenues from top five clients grew 11.4% in reported and 12.8% in constant currency. Similarly for our top 10 clients, full year year-on-year revenues grew by 8.3% in reported terms and 12.3% in constant currency terms. These numbers are significantly higher than the previous year. Coming to segment performance for Q416 amongst vertical, ECS grew 4.6%, RCL grew by 2.4%, manufacturing grew by 1% while financial services and insurance declined 0.3% due to seasonal softness in insurance sector. Overall growth in Q4 was backed by all geographies. Rest of the world grew 4.4%, Europe grew 2.4%, North America grew 0.5% and India grew 9.1%. Growth in India should be seen in the context of smaller base, which is changes due to wrap up and wrap down for certain projects. During the quarter number of $100 million accounts increased to 14 from 13 clients in the previous quarter. Number of $75 million plus clients increased to 31 from 28 clients in the previous quarter. We’re guiding for a constant currency growth of 11.5% to 13.5% for FY17. On operating margin, we expect our medium term bank to be between 24%-26%. As in every financial year, in Q1, margins would be impacted by compensation increases and salary increases and visa costs; we expect it to play out this year’s Q1 as well. With that, we open the floor for questions.

Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] First question is from the line of Keith Bachman from Bank of Montreal. Please go ahead.

I wanted to ask if I could on, you highlighted that you’ve taken a number of deals, or won a large number of deals over the really past two, three quarters. I was hoping that you could talk about what part of those deals came from share shifts or take away from you competitors versus deals that might be renewals? Dr. Vishal Sikka: We don’t include renewals in this number. These are deals that we win net new. And the kind of work that is covered to a large degree comes at the expense of somebody else but in many cases it is also new work that was being done by the clients themselves. This is generally the background. Obviously we win these deals within an intensely competitive environment and that’s why we’re particularly proud of this particular statistic. It also gives us a good base for future. And I think that as I now have mentioned in the press release, there is -- every once in a while we hear this thing about winning because of low prices and this is something that is absolutely not true. When we look back on the deals that we have won, we talk to our clients, we find that every deal that we win is because of superior value that we offer and the great experience, the great articulation of the value and most importantly, a great solution that we bring to the table using our innovation and for no other reason. Pravin, do you want to add something?

This is Pravin here. I just wanted to correct. We do include renewals here as well. We don’t -- at this stage we don’t have the exact data for how much is the renewal. But even in the case of renewals in majority of the cases, it will come with incremental share at the expense of other competitors as well.

Okay. But if I could just push you a second because it seems like Infosys is certainly doing better over the course of last few quarters, if not the last year. Has your win rate against the competitors, particularly taking business away from your competitors that they previously, I want to say owned, but certainly enjoy the benefits of existing relationships. Would you characterize that your win rate to take business away from competitors has improved over the last few quarters.

Absolutely, and in FY16, we won 21 large deals total TCV of $2.8 billion and that’s compared to FY15 of $1.9 billion or 45% growth over FY15. And definitely in majority of the cases, we’re definitely taking away business from the competition.

Okay, just one more from me, if I could, just financial services was -- if I look at sequentially, financial services was a little bit weaker than the rest of your business. How should we think about financial services as we think about the constant currency guidance of 11.5% to 13.5% for this fiscal year; would you think that financial services would be in line with that guidance, better or worse than the overall guidance for the year? And that’s it from me, thank you. Dr. Vishal Sikka: I think that financial services had in fact a record year. Mohit can add to my answer. I’ll just give a high level answer, Mohit, and then you can add. We’re actually very bullish on the financial services, even though we continue to see a challenging environment in some banks because of the nature of the offerings and the value proposition that we bring. We did see some slowdown in the insurance area in the last quarter but I’m not concerned about that. I believe there was a short lived and a transient thing in certain plans and so forth. We are actually -- our work is resonating quite well with a bunch of new engagements that we’re involved in and working on. So overall, as I look at the year ahead to borrow a famous line from my friend Mohit, we are cautiously optimistic.

Thanks Vishal. So, as Vishal mentioned, look, I think we had a very good year overall. And the sort of weakness that you’re attributing to the particular quarter is partly because of seasonality and partly because of some slowdown in insurance in the quarter, which we believe is typical to this quarter only. Overall, as Vishal mentioned, while there are obviously headwinds in the sector, we continue to be -- we continue to be cautiously optimistic. And the fact is that we have won in Q4 itself fairly significant component of the large deal wins that Vishal alluded to, again from financial services. I believe that our story of Renew, which is built around automation and artificial intelligence, resonates with the need for banks to cut down costs and to industrialize operations. I believe that our story around New which is around design-thinking, around innovation, around digital is resonating with banks as banks need to dramatically transform their operations. Obviously, there continues to be significant spend in the industry around the risk and compliance area, which is an area of strength for us. And there are certain areas in the banking sector which are transforming themselves. If you take the payments portion of the business that is transforming itself and it is an opportunity. On the whole, banks today despite headwinds are spending significant amounts on technology and therefore for a company like us and with the strategy like us, I do believe that there is an opportunity for us.

Okay, fair enough; many thanks, gentlemen.

Thank you. Next question is from the line of Ron [indiscernible]. Please go ahead.

Yes, great. So, I wanted to ask about the operating margin outlook for fiscal ‘17. To achieve your 25% operating margin midpoint of your guidance, I wanted to ask what does this assume in terms of the impact of pricing on your margin. In other words, can you quantify the impact pricing is expected to have on your margin in fiscal ‘17. M. D. Ranganath: Hi, this is Ranga here. Yes, we guided 24% to 26% last year as well and we’re exactly at the midpoint as we close FY16. And in FY16, we had year-on-year full year pricing decline of 1.1% in constant currency. And we do not see any significant, either upward or downward change. At this point in time, we do not see much of a difference in terms of the trend line. Second, as you know, in terms of operating levers, there were couple operating levers that started this quarter beginning to show some, especially the subcon expenses as a percentage of revenue, which was 6.3% last quarter, came down to 5.6%, which gave us a benefit of over 20 basis points this quarter. We’ll continue likewise on utilization. If you look at utilization constituently in the last four quarters is about 8%. And we do believe that the, we need to work on that a bit more and see what could be the trajectory of utilization in FY17. Likewise onsite effort mix was 29.6% this quarter and this number used to be around 27% few quarters -- I would say about two years ago. So, these are some of the operating levers, will continue to leverage and optimize in the coming years. In addition, of course we had to see how much of automation benefits would kick in during this particular year. So, to answer your question, yes, last year that was negative 1.1% in constant currency terms. We do not see a significant change in the secular pricing decline.

Right, I mean that 1.1% that’s a blended average price but what I’m inquiring about is what you expect the impact of pricing to be on your actual operating margin that you’re going to realize, can you quantify that? M. D. Ranganath: Yes. Typically for every 1% decline, we do see about 40 basis points.

Okay, got it. And then in order offset, assuming pricing remains somewhat negative, what is your biggest remaining operating margin lever to offset that? M. D. Ranganath: The three principal ones of course is the onsite effort mix is one that I talked about, which is currently 29.6% and we’ve seen in some of the earlier quarters that’s 27%. And every 1% drop gives us about 35 to 40 basis points. Then the utilization, utilization is 80%, just about 80.1%. There again, we have -- in their earlier quarters, we’ve seen as high as 83.7%. So, we need to see how much of that needle we need to move. Likewise, in the onsite role ratio which is another one that we’re focusing on, so -- and to sub-contractor expenses and sub-contractor expenses stayed at about 20 to 25 basis points and right now this quarter, it come down from 6.3% of revenue which was an all time high to about 5.6%. So, these are the three principal levers. Automation benefit, it’s too early to quantify for this financial year but we will see how that plays in.

Thank you. Next question is from the line of Moshe Katri from Sterne Agee. Please go ahead. Mr. Katri, your line is unmated, you may please go ahead with your question.

Yes, hi. Thank you. Can you quantify the pluses and minuses that actually impacted our benefited margins for the quarter? M. D. Ranganath: Sure. Hi Moshe, Ranga here. If you look at the operating margin for the quarter, the net drop was -- decrease was 60 basis points of which 20% -- 20 basis points due to increasing utilization, 20 basis points due to drop in sub-contractor cost and 60 basis-point due to rupee depreciation and this was offset by 40 basis points drop in margins due to realization decline. So that is the math.

Okay. And then looking at your margin assumption for fiscal year 2017, are we factoring any sort of move in FX? M. D. Ranganath: Yes. At this point in time, it’s very difficult to predict the rupee movement. If you look at of recent months, rupee has started to strengthen at least in the last three weeks. At this point in time, it is difficult for us to predict. I think the key assumption should really be around the price in decline and the volume growth as well as some of the operating levers that I talked about. So, at this point in time, it’s extremely difficult to assume, which way the rupee would move.

Okay, that’s fare. And then, final question and this is also to Vishal. You’ve done a really good job in terms of expanding or improving your quarterly booking numbers for the past two years, I think you went from $400 million per quarter in 2015 to about $716 million. And then what sort of assumptions do we have for fiscal year 2017? And then can you talk a bit about the quality of the new business that’s coming on board in terms of the blended EBIT margin contribution for the overall business? Thank you. Dr. Vishal Sikka: Hey Moshe, the quality of the businesses is actually getting better because when we go into these deals, we bring a lot of the innovation areas into these, IT door services, the software and so forth. As we realize these projects and start to bring them to life, we’re going to deploy more and more of that over the course of the project. There do continue to be many aspects of these projects that are more traditional in nature involving transition of resources and onsite hiring and so forth. So, as much as possible, we’re bringing innovative ideas to these. But I expect to see that the contribution of the innovation to this project will continue to improve, as we go forward. In terms of the visibility, we have a pretty healthy pipeline, as we look ahead. And the pipeline has improved significantly compared to the pipeline that we had one year ago. And perhaps Pravin can comment little bit more that. And therefore, I mean we don’t yet have a forecast on the bookings per quarter over the course of the next four quarters, but when we look at all of the way these projects ramp up and the revenue gets realized over the course of this quarter, all that is factored into the overall guidance. Pravin, do you want to add anything?

Yes, I think in the last, as Vishal said, in FY16, we won net 21 large deals at TCV of $2.79 billion. And this quarter itself, we won six large deals. And in addition, we have won two deals where we believe we will add about another $470 million TCV of revenues over the deal period, which we’re not reflecting the large deals as it’s not fully committed revenue. Overall, in this year, we’re seeing good growth in large deals, good conversion of large deals. So, our pipeline has increased. Our conversion rates have increased. The pipeline is also pretty strong, getting to the coming year. And more importantly, the pipeline is broad-based. We have seen good pipeline across, both Europe and Americas as well as across various industries.

Thank you. The next question is from the line of Rishi Jhunjhunwala from Goldman Sachs. Please go ahead.

Vishal, you talked about eliminating almost 1,700 employees as part of -- or effort equaling to that many number of employees in this quarter. Can you just talk about basically what is the nature of the work in which we actually had these automation benefits, both in terms of service lines and verticals? Dr. Vishal Sikka: Sure. So, we did 1,710 this last quarter, about 1,100 the quarter before and about 600 the year before that and so forth, so more than 3,000 for the -- over the course of the year. The biggest contributor beyond BPO, the biggest contributor is CIS, our infrastructure management service. The nature of the work there is limited for now to fixed price projects, so that the value realized is something that goes into our automation. And in T&M, [ph] it is a disruptive thing, so one of the things that we’re working on is strategic initiative to proactively transform the T&M [ph] projects to fixed price projects, so that the benefits of that can be achieved and also to a certain degree shared with the clients and so that we have a win-win situation. Now, when you look at the nature of the work beyond the fixed price, so far, it has been dominated by L1 infrastructure operations as well as some L2 that we have started to see in the last two quarters. So that is something also that we’re working on. We have a very exciting initiative that we’re working on, I am personally working on that around bringing artificial intelligence techniques to the more advanced forms of support the L3 automation areas where we have more than 10,000 developers who work in application maintenance and work on source code maintenance and training system and things of this nature. And by using AI to the simplify some of that work, we believe that we can have a dramatic impact on this. So over time, the idea, I mean if you look at the 1,700, it is not a meaningful part of the P&L yet. 1,700 is a large number and we’re incredibly proud of it and we’ve been tracking this closely. Myself, Ravi, Pravin, Ranga, we all track this very carefully. But in the overall P&L, this is still a kind of a drop in the bucket because it’s a little bit more than 1% of the delivery force. So it kind of gets lost in the big movement around utilization and things of that nature and the number of hiring that we do and so forth. But as this number becomes bigger by making the automation wider in terms of the areas that it comes to and deeper, this number will continue to become more and more significant over the next several quarters. And it will take a big bite out of the -- both the margin as well as the revenue per employee. Currently the -- for now, the operational metric that Ranga talked about will have the lion’s share of the effect on margin and RPE. But over time, there is no doubt that this will be far go out by automation as automation becomes more sophisticated. And final your question about the distribution, perhaps Pravin you can add to that. CIS obviously was one of the biggest ones, also an application in development and maintenance in VI and package services and especially in verification also we saw significant contribution towards the 1,700. Pravin, do you want to add anything?

Yes, I think this covered pretty much, Vishal. The infrastructure business has been leading the show; in automation, we have fairly good momentum on ADM, the application development and maintenance phase. And testing services historically had a lot of automation baked into the model and now we’ve actually found new ways to add more to it. And we use software, which is our own software which is Panaya to look at automating the enterprise applications.

And any vertical skew?

There’s no vertical skew. It’s applicable pretty much in all service lines across the industries. Of course, the ones we have more infrastructure, and more application development have more amenability to it, from a standpoint of automation and from the point of using software to drive automation, which is primarily the Panaya suite of products which we have. That’s more on the enterprise application space.

Okay. Second is, recently the board and the shareholders approved the compensation structure, Vishal. And it seems like it’s been linked with revenue margin and revenue per employee targets to be achieved every year. Can you share us the targets for FY17? Dr. Vishal Sikka: No, we cannot. This is not a question for the management of the Company, this is more for the board. I mean generally, as has been shared, it is linked to the 2020 -- in that direction of the 2020 target but it’s some kind of a curve that gets up there and I guess that is something for you to ask the board.

Thank you. And next question is from the line of James Friedman from Susquehanna International Group. Please go ahead. James Friedman, your line is unmated please go ahead.

Hi, sorry about that. When we look forward to the guidance, I was wondering how should we think about the contribution from the top clients since a great portion of your success has been from mining those clients. Is that pattern going to continue as we move into this fiscal? Dr. Vishal Sikka: Yes, I think that. I mean as we look back over the last year, the contribution of large clients to the growth of the Company has been significant. We did about 12.3% constant currency growth in the top 10 clients and similarly the top 25 as well as the top 50 clients grew significantly. Last year, in FY15 for instance, growth in the top 10 clients was only 1.5% or something like that, perhaps Ranga can correct me. So that number has been increasing significantly and we expect to continue to deliver tremendous value to the large clients. See, in terms of the depth of knowhow, the depth of the relationship, both in the client account engagement side as well as the delivery side and consulting, quite significant in the bigger clients, there were deeper understanding of their business. I engaged with them as well as Pravin and our management team. So, we expect that the -- we have -- this is an area that we have addressed well and I’m happy with that. I think there is still room for more improvement being more proactive, becoming more strategic to these clients and we expect to continue to do that. But at the same time, we are a Company operating now at a scale where we should be able to walk and do them at the same time. So, this is not to say that there is any dilution in the focus towards new account openings, that is incredibly important and it continues to be, in fact if you look at the percentage of the revenue coming from the new accounts or new projects versus renewals that has improved, which is a good thing, and we want to continue to see it go that way. And we’re also excited about opening certain new market segments, in particular the smaller businesses. And we have been doing great work with the team on the startup engagement and venture investing, and Ravi is also working together with Sandeep on building alliances towards the mid market and we expect to share more about that at our conference event later this month.

Thank you. And next question is from the line of Joseph Foresi from Cantor Fitzgerald. Please go ahead.

Hi. First on financial services, you mentioned winning some deals. I was wondering where in financial services you’re winning those deals and how would you describe large bank budgets overall?

I think the deals that we won, one of them is basically to do a suite of -- look at the bank’s entire suite of applications and do well to support across them using our Infosys Automation Platform. We’ve also won a couple of large frame agreements with large global banks. So, I think that is where we see the opportunity. On the capital market side, we are seeing some volatility but overall, the wins have come from across the board.

And then my second question is just on pricing. Given that some of the business has matured over the years and there’s some level of commoditization and we’re talking about maybe a little bit of caution around the banks, and this is more of a hypothetical thing, but do you -- how disciplined do you feel like the industry is right now around pricing; and if there was a downturn, could we see you know dramatic price decreases?

I think look, as far as the banking deals are concerned, I think banks have realized that there is a limit to how much you can squeeze out on a per unit basis, that in any case that’s not something that they’re looking at. So, all of the deals that we have had very significant components of software in them. So, you got people plus software that allows you to give that leverage whether it’s automation or it’s artificial intelligence as the use of frameworks and tools, that is what is allowing us to give those long term cost advantages to our clients, rather than just pointing at rate reduction because that could not accomplish what the banks are looking for or not others but own purpose. Dr. Vishal Sikka: Hey Joseph, let me add to Mohit’s great observation. The banks are -- actually many of the large banks in certain geographies are under such savior pressure from a regulatory perspective, from an economic perspective that simply doing the same thing that they have been doing cheaper is no longer enough. A vendor in order to succeed in this climate has to bring capabilities and technologies and innovation that not only others are not able to but the banks themselves are not able to. So, you have to be able to do things in new ways that were not there before. So, if you look at the large deal that as Mohit mentioned, the automation in this case of maintenance, this was a maintenance IT operation support project that we won, one of the large deals out of the 757, this would not be possible by simply doing the same management and maintenance cheaper but you need to bring the capabilities of artificial intelligence to be able to bring in dramatic automation based economic improvement as well as the quality improvement in the process with the visibility, with the regulatory reporting aspect and so forth. So, in order to be able to successful -- in order for a vendor to be successful in this climate with the bank, we have to have innovation in the story; we have to have a deep understanding of what is going on in the clients and that is what it takes. And it turns out that if you have those, then the fact that the banks are under tremendous pressure doesn’t matter; in fact that is a good thing and it allows us to win more business. So, the deals that Mohit mentioned, the two same deals that we did not include in the 757 are also both in the financial services industry.

And I just want to add one final point, which is that, if you take a U.S. specific prospective, then obviously there has been core dime banks have been working with us for many, many years but we serve a larger market. If I look at Europe or if I look at Australia for instance or I look at parts of the Asia Pacific, there are still several areas where banks are still struggling the technology where they are still investing sort of fairly early to make sure that there are good applications that their entire environment is up to spec. And that also gives us significant opportunity. So, while there is the industrialization piece which is focused on cost reduction which is focused in efficiency, which is focused on not to mention on platforms, there is also the entire piece [ph] around the renewal of the banking landscape around making a new sort of digital footprint for banks around the opportunities that the new digital technologies allow us. So, while there is a focus on cost reduction in certain parts of the industry, especially within the capital markets space, there is a huge growth opportunity in parts of retail, corporate banking and the asset management business, which are now getting increasingly impacted by technology and therefore need to invest to make the change.

Got it. And then justly from me, we talked about automation and you gave some headcount numbers, which were obviously on the smaller side. How do you see that playing out over the next couple of years? Do we hit an inflection point where those numbers become meaningful in a shorter or a long period of time and what’s their impact on margin? I know you’ve given color in the past, so I just wanted to get an update on how you see it playing out? Dr. Vishal Sikka: I think in order for this number to start impacting the margin, it will still take some more time. If you look at the utilization that Ranga mentioned 80% -- 80% to 83% is what a few thousand people. So, it has the same impact for now as it does in the world of automation. But on the other hand, if we’re able to get automation to a much larger percentage of our employee population, the nature of the work that the employees do that is the one third of the employees or our 40%, 50% of the employees work activities can be more and more automated. Then, we’ll see a dramatically larger impact of automation to the bottom line than to any of the operational - the traditional operational measures. It is somehow like you can feed the horses better and you can whip the horses and get better horses and so forth. But at some point, you need an automobile. And that is sort of -- it’s a horrible analogy probably but this is what comes to my mind. The other part of it that we quickly realize is that as we bring more intelligence to the operational processes, actually the cost simplification from automation becomes dwarf by the value improvement because of automation. More straight true processing, more integrated process, better improvement of the experience trying to understand the point of a business process and improving, then that becomes much more about innovation and then creating much larger value and so forth. So that has its own unexpected and significantly larger benefit. So, all of this -- I’m really excited about all of this playing out. I mean one thing that gets lost in the middle of all these large deals is that a lot of that has been happening because of the automation and so forth as well. So, it is in my view a very fundamental part of the future of our industry and certainly the future of our Company. And there is only one way forward and that is full speed ahead.

Thank you. Next question is from the line Arvind Ramnani from Gordon Haskett. Please go ahead.

Thanks for taking my question. Can you hear me? Dr. Vishal Sikka: Yes Arvind, go ahead.

The question is for Vishal. It’s been almost two years since you’ve joined Infosys, can you provide us color on the nature of your conversations you’ve had with your clients? Specifically when you’ve started, you spoke to probably a number of your current and prospective clients, they were going you feedback on their perception of Infosys. And I am sure you’re continuing conversations now. So, can you elaborate how the perception of Infosys changed amongst clients and possibly like some of the underlying reasons for this change in perception? Dr. Vishal Sikka: First of all, when I think of two years, does it really mean that long, it feels like yesterday. I think frankly, my answer to this would be somewhat not objective and perhaps even self servicing. So, it is little bit awkward for me to answer that especially because I see a distinction, conversions have improved dramatically, the relationships have become much more elevated and more importantly the nature of the work that we do has had become more elevated. There are kind of strategic projects that we’re starting to do now with clients; it’s just extraordinary. We work on their digital future and we work on bringing AI to their most complex problems. We recently had a huge company from Europe that was going through a very structural change, and they actually did their entire rebranding exercise in our office in Palo Alto. There were -- the entire leadership team of this huge company was locked in our office and working on deep extensive questions about their future and their identity and it was just unbelievable experience. We recently had the entire management team of a massive industrial company visiting our office and they were shocked to find a small team, one of the design teams that we have growing little plant inside the office. And they were like what is the story with these plants, and actually these were plants that they were growing for an agricultural company, one from these clients in an heavily instrumental atmosphere of where the entire plant the soil that it was in and all of that had tons of sensors in plant and these people like people from these giant industrial company were absolutely shocked to see that. So, I mean those are the two random examples that came to my mind at the end of F14, our long day. But the nature of the relationship, the nature of engagement, we’re designing actually a workspace if you can believe; we’re designing an entire building of our one of the large companies in the United States because they saw our space; they were very impressed by our ability to build green and highly open collaborative workspaces and so forth. So, there has been an absolutely marked changed in the nature of the relationships with the clients, certainly not with all of them but evident increasing number of these -- I would say these are actions, the ones that we’ve been able to touch with our strategic method at the strategic levels. And I certainly expect to and that I wish to see this is our certainly our goal and our aspiration to see more and more of that.

Congratulations and just a quick follow-up; in terms of comparative you’re seeing have also changed and have the number of kind of deals that are kind of you get pre-approved for fiscal [Indiscernible] has that also changed? Dr. Vishal Sikka: I have no idea. Is your question that are we wining more deals at the expense of competitors or are they also changing their story which one -- what was it?

Are you basically entering situations there, the kind of -- your clients basically kind of pre-selective, do not even open up some of the projects -- to competitors, are you winning projects where you are really like get selected versus going through like entire RSV process? Dr. Vishal Sikka: This -- I don’t have the statistics on this. But informally, I would say that the sole source of the non-RSV deals number has at least from where I see, and this is certainly a fraction of the client base. This number to me seems to have increased dramatically.

Thank you. Ladies and gentlemen that was the last question. I would now like to handover the floor back to Mr. Sandeep Mahindroo for his closing comments. Over to you, sir.

Thanks everyone for joining us on this call. We’ll look forward to talking to you again. Have a good day.

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