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Key Conference Call Highlights

Segment Performance

* Transportation growth muted; deal momentum strong with ramp-up visibility: Transportation remained largely flat QoQ (+0.2% CC), affected by slower ramp-ups; however, strong multi-million-dollar deal wins across APAC (new-age OEM) and US mobility players provide medium-term growth visibility, with OEM mix rising to ~77%. Management expects 6–12-month ramp-up cycle, supporting gradual recovery

* Shift towards OEM-led strengthen revenue quality: Increasing OEM contribution (~77% of Transportation revenues) is driving better visibility, scale up and margin profile, with continued focus on deepening strategic relationships

* Healthcare & Life Sciences impacted by deal delays; recovery underway: Revenue declined 13.1% QoQ CC due to delay in expected deal closures, though a couple of deals have closed in early Q1FY27. Management indicated Q4FY26 as the bottom, with recovery expected from Q1 and acceleration through FY27E

* Media & Communications growth driven by deal ramp-ups amid weak industry backdrop: Segment grew 5.6% QoQ CC, supported by AdTech and Tier-1 US telco wins and a large deal from a global device OEM. However, industry remains under pressure due to cost-optimisation, consolidation and M&A-led redundancy

Geography Performance

* US: US performance remained mixed, with strong growth in Media and Comm. driven by Tier 1 telecom and AdTech deals, while Healthcare weakened due to delayed deal awards despite a mobility services win.

* APAC and Japan: APAC emerged as a growth driver with a strategic OEM win, while Japan expanded through a Terumo offshore development center and contributed to transportation engineering recovery.

* India: India gained momentum in Aerospace and Defense through engagements with HAL and the Aeronautical Development Agency, while also supporting the broader recovery in the transportation segment.

* Europe and Other Regions: Transportation recovery remained broad-based across Europe and other markets, with the company also initiating early-stage discussions with Chinese OEMs for future opportunities.

Margin Trajectory

* Margin expand on operating leverage, FX and execution efficiencies: EBITDA margin improved 130 bps QoQ to 24.6%, driven by FX tailwinds, utilisation gains and pyramid optimisation, partly offset by wage hike. Increased fixed-price mix and offshore delivery continue to support margin resilience

* Gradual recovery towards 27% EBITDAM by Q4FY27E: Management targets progressive margin expansion, driven by utilization, operating efficiency and better contract mix, with exit margin ambition of ~27% by Q4FY27E

* Utilization-led margin lever; hiring remains calibrated: Utilization at ~73% provides headroom to scale up to 80–82% before aggressive hiring, with demand-linked hiring strategy supporting operating leverage

AI & Growth Outlook

* GenAI-led transformation driving productivity gains: Investments in DevStudio.ai, AI tool stacks, agent frameworks and secure sandbox environments are enabling enterprise-wide productivity improvements and execution efficiency

* Emerging verticals gaining traction; investments ongoing: TELX is scaling up its capabilities in Aerospace & Defense (HAL, ADA engagements), Battery Energy Storage Systems (BESS) and manufacturing engineering, with small early wins and pipeline visibility

* Macro headwinds persist; decision cycles elongated: Clients are delaying deal signings and extending decision timelines, driven by global macro uncertainty, potentially pushing recovery by 1–2 quarters

* FY27E outlook moderated; recovery remains execution-led: Management revised growth outlook to high single digit for FY27E, with recovery dependent on deal ramp-ups, healthcare rebound and utilization-led leverage

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