Cyient Limited (NSE: CYIENT) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Krishna Bodanapu — Executive Vice Chairman and Managing Director
Sukamal Banerjee — Executive Director and Chief Executive Officer
Prabhakar Atla — President and Chief Financial Officer
Analysts:
Sandeep Shah — Analyst
Jyoti Singh — Analyst
Shradha Agarwal — Analyst
Dipesh Mehta — Analyst
Vikas Ahuja — Analyst
Pratik Kulkarni — Analyst
Hasmukh Vishariya — Analyst
Ankur Pant — Analyst
Karan Uppal — Analyst
Presentation:
operator
Sam Ladies and gentlemen, good day and welcome to Science Limited’s Q3FY26 earnings conference call. As a reminder, all buyers win lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes should you need assistance. Ladies and gentlemen, good day and welcome to Science Limited’s Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Krishna Bodhinappu, executive Vice Chairman and Managing Director. Thank you. And over to you sir.
Krishna Bodanapu — Executive Vice Chairman and Managing Director
Thank you very much and good evening ladies and gentlemen. Welcome to Science Limited’s earning call for the third quarter of financial year 2026. I’m Krishna Bodhanapoo, Executive Vice Chairman and Managing Director and present with me on this call are Sukumal Banerjee and Executive Director and CEO and Prabhakaratla President and cfo. I would like to mention that some of the statements made in today’s discussions may be forward looking in nature and may involve risks and uncertainties. A detailed statement in this regard is available in our Investor update which has been emailed to you and is also posted on our website.
The call will be accompanied by an earnings presentation the details of which have already been shared with you. At the beginning of this financial year we are reporting group performance under four segments DET which now excludes our semiconductor business and is the crux of the technology services business of signed DLM which is signed DLM and Design led Manufacturing Semiconductor and others. As always, the focus of this call will remain the DET segment and to that extent all numbers for DET segment are like for like to the previous period which basically means that these numbers are restated to exclude our semiconductor business and the group numbers will include performance of all four segments put together.
Coming to the key highlights and updates for the quarter, I will first spend a few minutes on the group companies while Sukhmal will spend a majority of time of this call on DET and providing you an update on determination firstly on semicon, as I’ve said in earlier calls, we carved out the semiconductor business assigned semiconductor with a clear mission to build India’s first and largest semiconductor company. Our intent is to own IP and deliver chips through a fabless model and I’m pleased to say that we firmly remain on the growth path that was envisioned with several transformative updates.
This quarter we delivered strong Q3 growth 10.7% on top of 12% in the previous quarter. Order intake is up 36% year on year which is a healthy indicator for the business. And though we are still loss making, margins have stabilized over the last quarter. Some key achievements include the strengthening of our analog and powered leadership through a definitive agreement to acquire a majority in Kinetic Technologies who are a leader in high performance analog, mixed signal and analog semiconductor or power related applications. They have 250 products and over 100 patents and this will give us a much larger access to markets which are driven by data centers, power applications and related industries.
So in our intent to become a product company in the semiconductors in the power space for semiconductors, Kinetic will be an important milestone and we look forward to closing this soon. We also secured a strategic role in the modernization of India’s oldest integrated semiconductor fab SCL. This is under MITE’s semiconductor program. Signed Semiconductors has been selected as the preferred partner for the critical package centered around technology, IP design, enablement with additional MES and automation responsibilities. You may have seen a press release from MITEI where three partners have been selected and the total value of the project is about 4,500 crores and we have one of the projects.
I just say it’s not one third of the revenue does not come to us, but we are a significant partner in the hold pipe. We’re also advancing GAN adoption in India. Very simply a majority of semiconductors or chips are made using silicon. But where high power high voltage is involved, GAN or gallium nitride is the material. And this material becomes very important in AI driven data centers given how much power that they consume. With the partnership with Navitas, we will now be able to bring high voltage high power GAN chips to India which again like I said are critical for AI data centers and AI infrastructure.
We also launched India’s first indigenous silicon platform for smart utilities. This was developed with Azimuth AI a chip called Arca GKT1 and this was unveiled by the Honorable Union Minister for Electronics Sriyashwini Vaishnav about two months ago. And again this stands as a strong endorsement of our custom silicon capabilities and design leadership and our ability to execute to scale. Looking ahead, our markers remain unchanged from the last quarter which is consistent revenue growth over the next four quarters. Integrating Kinetic Technologies, an ASIC pipeline of over $100 million by Q4 and becoming EBIT neutral in FY27 we expect the Kinetic transaction to close in March or April and then the integration will start.
But following the closure of this transaction, Science Semiconductor will be India’s largest chip company and we are excited about what lies ahead and appreciate your continued support. Very quickly on DLM, DLM witnessed a revenue degrowth of about 30% year on year. But this was driven by some customer specific pushouts, year end holidays and of course the tariff uncertainty. So this was expected. But I’ll say that over the years we’ve talked about the criticality of that business delivering double digit EBITDA margins and this quarter we delivered double digit EBITDA margins. They grew 207 basis points year over year and this was because we did higher value programs and of course better execution.
Our order book momentum remains strong. We had a book to bill ratio of more than one for three consecutive quarters which means that we have a very strong order book and that order book is increasing because we’ve also significantly increased the capability of the sales team there. Net, net we’re increasing with the healthier mix of customers, the increase in revenue momentum, the industries that we’re focused on. We believe that the revenue momentum there will significantly increase from Q4 and margin trajectory will continue to increase and, and there are not many companies in that sector that consistently deliver 10% operating profit which we are confident of delivering going forward.
Lastly, on Science AI labs, as you know we’ve consistently prioritized the development of industry ready skills to support India’s er, Indian technology landscape. In this spirit we’re working towards accelerating inclusive AI skilling across India through several flagship initiatives and the intent here is to empower youth and advance the national vision of Wixted Bharat 2047. We believe these technology led skilling initiatives will help create a resilient and employable workforce at scale across the country. And as you know that workforce is also very, very important for science as it enables our future growth. With this, thank you very much and I will hold, I will hand over the call to Sukhumal who will take you through some of the key initiatives underway in DET and the business performance for the quarter.
Sukumal.
Sukamal Banerjee — Executive Director and Chief Executive Officer
Thank you Krishna. Good evening everyone and thank you again for joining us for our Q3FY26 earnings call. Today I’ll focus my comments on two areas. Firstly on science point of view on AI and how it’s resonating in the industry and second, the business performance and the key highlights for the quarter. So to start with, in the last quarter at a time when the market was leaning hard on AI First Chorus we made a bold choice not to join that theater. We stayed true to what has always worked for us. Intelligence must be human and domain led, built into engineering and carried through to outcomes.
That commitment was anchored with our publication on November 19 last year when we officially launched Embracing Intelligence. Publicly, this was not a reaction to market noise. It was the articulation of work that had already been underway for more than six months and an expounding of the intelligent engineering focus we spoke about at our 2023 investor meet. Today, that view is gaining acceptance across engineering services industry. The industry is beginning to recognize that an AI first approach on its own isn’t sustainable or scalable. Human knowledge, domain expertise and ethics come first. AI offers a clear opportunity for acceleration and compression of time to market as well as optimizing maintenance and lifespan.
However, as we stand today, AI is an amplifier, a value multiplier and not the solution standalone. This is now being validated by broader industry publications. Recently, findings from the January 2026 Anthropic Economic Index highlight a critical theory which is Education matching principle, which is the complexity of an AI’s output is a direct reflection of the education level of the user’s inputs. In high stakes field like software engineering and system engineering, the data shows that high value outcomes require a baseline of at least 14 years of specialized domain knowledge. For Scient, this reinforces a simple truth.
Our domain expertise is the intelligence that enables AI to operate at expected standards for product engineering. Our approach embracing intelligence is key to building assured systems that required defined authority, escalation paths and evidence with human embedded throughout critical control points not as an ethical add on, but as an engineering necessity that ensures accountability and explainability. At scient, we apply embracing intelligence across the product life cycle from design and development through manufacturing, supply chain operations, maintenance and lifecycle extension. Intelligence is applied in context, grounded in domain understanding and engineered for the realities of mission critical systems and processes.
From a business perspective, this holistic life cycle support fundamentally changes our trajectory. By moving beyond a traditional engineering services partner viewpoint to a product lifecycle partner, we significantly expand our addressable Tam by nearly 10x and deepen our integration into our customers most critical value chains. With that, now let me turn to our performance for Q3. Before I talk about the results, I want to take a moment to thank the science leadership team, all the associates for the journey over the last nine months. It has been a challenging one and of course an exciting and a fulfilling one.
I would also like to thank our key customers our board members for their encouragement and belief as we navigated through the challenges. That is what has gotten us to the results that I now present. Signed DUT grew 1.9% quarter over quarter and flattish year over year, about 0.7% down in constant currency terms, which is 1.5% quarter over quarter and 0.9% year over year growth. In USD terms and in INR that translates to 3.5% quarter over quarter and 6.5% year over year growth. The EBIT margin also expanded by 25bps over Q2 to 12.4% in this quarter we saw the second quarter of increasing headcount with 481 net additions.
These results reiterate the message I have shared in previous quarters calls regarding the progress expected in FY26. We expected a period of stabilization followed by consistent growth and improved profitability. This is exactly the path we are on when we look at the performance so far this year in constant currency we have demonstrated improving quarter over quarter growth trajectory for each of the last three quarters. What I would like to call out is also the progress across all our business units. Transportation and Mobility grew by 2.9% quarter over quarter and network and infrastructure grew 2.5% quarter over quarter driven by focused account mining and sales approaches across value chain of our customers.
Strategic units cluster remained flattish Q3 with a marginal drop of 0.2% in line with our anticipation as we continue to build up our presence into some of these critical sectors for the long term. In terms of key business highlights, I’m happy to report a number of key deals that we closed in Q3. Our mining producer chose SIEME to deploy an asset management data uplift program across their global mining operations. This program will be executed over the next two years. A major air space manufacturer chose Scient for software support for a new airline program. A global off highway equipment manufacturer chose Scient to scale focused autonomous and perception systems for their construction equipment.
Our global aerospace OEM chose Scient to support multiple systems for requirement management, verification and certification support using the help of AI. An APAC based utilities company chose Science for network data capture services. This was a customer we won back from competition after a period of few years. These wins reflect the breadth of our capabilities from core engineering such as verification to advanced software, perception systems and asset management across a wide range of industries, demonstrating how our positioning around embracing intelligence is translating into real client outcomes across the product lifecycle. We support our customers, design new age systems and products and are with them to ensure smooth efficient operations throughout the product life cycle which can last a few decades.
I am also very happy to report that we have added eight new logos of strategic importance across industries. In addition, as I look forward, we have a robust funnel built up over the last few months with large deals funnel being the highest ever in signed history. Our key accounts continue to demonstrate strong revenue growth with a 5% quarter over quarter and 15.5% year over year growth performance continuing the growth we have seen in earlier quarters driven mainly due to our focused account mining efforts. Science was recognized in two major categories by isg firstly as a leader in manufacturing, services and solutions globally and second in power and utilities for smart metering and grid modernization for North America.
In addition, Cyant has been recognized as a top employer India for the first time. We also received the HR association of India awards in 2025, reinforcing our strong and differentiated people’s practice. In this quarter we also worked on adding to our leadership strength with two key hires focused on the growth trajectory for technology. Harjot ATRI joined us as a Chief Business Officer responsible for technology growth and high growth markets which we couldn’t cover in the past. Bhavesh Acharya joined us as a Chief AI Architect responsible for building depth and differentiation in our data and AI services.
Their expertise will help accelerate our journey in helping customers embrace intelligence in meaningful ways. Overall, I think Q3FY26 is a demonstration of of growth based on some fundamental initiatives we have been hard at work on. I am confident to say as an organization we have turned the corner and built the momentum for continued consistent growth in the future. With this I now conclude my remarks and I would like to hand this over to our CFO Prabhakaratla to provide more color on our financial performance for Q3FY26.
Prabhakar Atla — President and Chief Financial Officer
Thank you Sukumal and hello everyone. Thank you very much for your time and for your kind participation in the call today. Krishna and Sukhmal have covered much of these in their previous update, but as a quick summary, here are the key financial highlights for the quarter. As with the previous quarter, the DET numbers are excluding our semicon business and all previous period det K metrics have been accordingly restated. On revenue front we had a strong quarter for DET as Sukumal spoke which delivered a revenue of $167 million a quarter on quarter growth of 1.9% in constant currency and 3.5% in INR.
That we delivered this growth despite a continued fluidity in the macroeconomic environment and the fact that Q3 is a seasonally challenging quarter for us due to furloughs we believe is a comparison indicator for the quarters ahead. Also, this QOQ growth was driven by healthy performance of our core segments as Sukmal explained previously and a significant positive movement in contribution from our top 3, top 5 and top 5 and top 10 clients which grew by about 5% quarter on quarter On EBIT front, the normalized det EBIT for Q3 came in at 12.4% which is a 25bps expansion quarter on quarter.
The headwinds we had in this quarter include the third branch of wage hikes for the year and we are happy to report that we were able to fully mitigate this impact with the ongoing cost optimization program and the recovering revenue momentum which is very clearly visible. We also had one exceptional item in this quarter. As you all know, the Government of India has published new labor codes applicable to all our employees in India geography. We are fully committed to compliance with these codes and towards this we have taken a one time provision of INR 40 crores in Q3 towards truing up our past period provision for liabilities such as gratuity resulting from this regulatory change.
We have presented this one time provision as an exceptional item in our results and we have normalized the Q3 DET, EBIT and PAT to that extent. The DET normalized PAT for the quarter is at rupees 150 crores representing a healthy 9% growth quarter on quarter and a 40% growth year on year this year on year. Positive movement in PAT is significant since in Q3 of last year we had a currency driven headwind in our other income for that period. Our cash conversion for DET continues to remain very Strong and for Q3 the SCF to normalize PAT conversion was at 158% and we remained focused on cash generation as a key business goal.
Our net cash position for DET at The end of Q3 stood at Indian Rupees 1434 crores which is the highest net cash position we’ve had for the last nine quarters. As regards group performance which now includes all the four segments of DETs, SEMICON, DLM and others, the group revenue grew by 3.8% QoQ and rupee terms while the normalized PAT increased by 0.7% quarter on quarter on a YYY basis, the inr revenue degree by 4% owing to quarterly revenue movements in our DLM business while the normalized PAT remained steady year on year. In summary, with two sequential quarters of revenue and margin expansion for DET business.
With the visual progress we are making in DET along the transformation initiatives including GTM acceleration, technology adoption and leadership addition, with the strengthening leading metrics of our business including key account growth and with the very strong financial fundamentals including our strong cash position which enables us to actively invest in future growth opportunities, we remain very confident of our immediate and medium term prospects of DET business. Very importantly, under the differentiated theme of intelligent engineering which Sukumar spoke of earlier and we are fully committed to execute the growth plans we set out for ourselves. And with this thank you again for your time and I will hand over the call back to the moderator for Q and A.
Thank you.
Questions and Answers:
operator
Thank you very much sir. We will now begin with a question and answer session. Anyone who wishes to ask questions may press Star and one on the Touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press Star and one to ask questions. The first question is from the line of Sandeep Shah from Equiris Securities. Please go ahead.
Sandeep Shah
Thanks for the opportunity and congratulations on a good execution as well as good growth in the det. The first question is just wanted to understand there is a consistent growth in the aerospace. So what is driving? What are the sub segment which is driving and in a furlough quarter if we have delivered 1.9% cc growth there could be a possibility of recoup of furloughs in the fourth quarter. So is it fair to assume the growth in the fourth quarter would be higher than the third quarter? And what is the impact of furlough? It would not have been there.
What could have been the growth in 3Q.
Sukamal Banerjee
Yeah, thanks for your question. This is Sukumal here. Let me address your three parts to the questions. Firstly on aerospace I think we are seeing traction across multiple areas of work across the product life cycle. Of course with no major designs which are going on at this point in time, a large part of it is driven by MRO and aftermarket services. Many of our customers are experiencing significant volume ramp up that they have to deliver with the growth in commercial aviation and that is driving a large part of the growth. We are also seeing new designs coming from various parts of the world in terms of new aircrafts, more the midsize aircrafts and we are seeing traction in terms of doing design work over there.
And of course we given the expertise we have now built up in the technology front with digital and AI, many of our customers have leveraged our domain understanding across the product life cycle and awarded us several digital programs that we are executing across manufacturing, supply chain documentation, aftermarket support and so on. So it’s a very broad set of areas that is helping us drive the growth in aerospace. In terms of the growth expectations for Q4 as we have maintained, we do not share guidance. We have obviously the recovery of furlough, but also the number of billing days in Q4 is lesser.
So it will be a mixed bag in terms of ups and downs. But we obviously will strive to ensure that we continue our growth momentum.
Sandeep Shah
Okay. Okay, thanks. Can you quantify the impact of furlough in the third quarter, Sandeep?
Prabhakar Atla
Since we haven’t experienced that, we’re not quantifying it anymore. All we are trying to say to Sukumal’s point is the underlying business momentum is so strong that we’re not seeing these impacts anymore and we think this momentum will continue into Q4 and going forward also is all I would say for the aerospace business. And there’s also broad based growth across various subsegments of aerospace, not just in one sub vertical or the other.
Sandeep Shah
Okay. And just a follow up in the fourth quarter, is it fair to assume even strategic growth units and sustainability will also drive the growth?
Sukamal Banerjee
So that is definitely our intention is to make sure that we drive growth in a broad based manner and that is what the team is busy working on. And in terms of setting expectations, all I can say is if it is a possibility, the answer is yes.
Sandeep Shah
Okay. And this last two question, Prabharkar sir, your target of achieving the EBIT margin at closure to mid teen or 16% by Q4 of next year continues to remain intact. And second, on the semiconductor, one can assume at least in the fourth quarter there won’t be any support from the inorganic and the large deal win. So in that scenario loss may continue to remain between 2 to 3 million dollars which we have guided earlier.
Krishna Bodanapu
On the semiconductor. I will answer first. That is correct. We will not see any upside from the deals that we won or from the inorganic. So yes, there will be a loss in Q4 along those lines, like I said, our goal is to break even in FY27 and we are on track for that.
Prabhakar Atla
And Sandeep, on the medium term goal we set for rss for a 15% debit for the current business we have, we very much remain on track to that.
Sandeep Shah
Okay, okay. Just to follow up, Krishna sir, when you say breakeven in the semiconductors in FY27 excludes the large deal and the inorganic, right? On an organic basis.
Krishna Bodanapu
Absolutely on an organic basis. The large deal obviously is a part of that because I mean that’s ongoing business. So the profit from it help break even, but not from any inorganic.
Sandeep Shah
Okay, I will come in the follow up. Thanks and all the best.
Sukamal Banerjee
Thank you.
operator
Thank you. The next question is from the line of Jyoti Singh from arihant Capital Markets Ltd. Please go ahead.
Jyoti Singh
Yeah, thank you for the opportunity in the conversation. On the good show on the DT side. So I just wanted to know that in DT our EBITDA margin expanded to 12.4% despite wage hike. So what portion of this improvement is structural versus cyclical or forex related and another on the fair assume like high single digit to low double digit revenue growth trajectory for the 1827. So what’s your take on that side?
Prabhakar Atla
So on the margin expansion. Thank you for the question. All of it is fundamental to our business, structural to our business. And secondly, at this point in time we’re not giving any visibility for FY27. As we complete the exercise that we will do for planning for FY27, we’ll come back and update this forum on what we see next in the medium term view of the business.
Jyoti Singh
Okay, sorry that I missed on the margin side.
Prabhakar Atla
Talking about margin for FY27.
Jyoti Singh
No, on the explanation on the margin side I just missed.
Prabhakar Atla
Okay, on the first part of your question, the current EBIT margin that we reported, the significant improvement are actually the the improvement we’ve been showing quarter on quarter since Q1, Q2 and Q3 is all fundamental and structural to our business in the sense that it is all driven by operational efficiency, scale, cost optimization, etc. And not much of ethics related headwinds or tailwinds in that. And for FY27, like I commented, we will take a position on the next year as we complete the current exercise we are currently in for planning for FY27.
Jyoti Singh
Okay, on the DSO side that has improved Q on Q. So what is the normalized DSO range that we are targeting especially as a semiconductor and large program scale up?
Prabhakar Atla
The numbers that we have shown in this deck are primarily for det. The current number is a fairly healthy number compared to our previous track record, so to speak and we aim to stay at the same or similar numbers going forward and for semicon as the business evolves. We will report that metric separately because currently it’s in an early stage in terms of the pipeline, the Nature of deals, the type of deals and the compression, etc. And those we will report as they evolve separately.
Jyoti Singh
Okay, thank you, sir. Thank you.
operator
We’ll take the next question from the line of Shraddha Agarwal from Asian Market Securities. Please go ahead.
Shradha Agarwal
Yeah. Hi. Congratulations to the team on a good quarter despite seasonality furloughs. So two questions. In our network and infrastructure division, would it be possible to split the growth between connectivity and utilities?
Sukamal Banerjee
So Shardab, we are not disclosing that number as we have talked about, but to give you some color, the growth was led by connectivity and utilities also had a solid performance. Performance.
Shradha Agarwal
Okay. And because I suspect that there was some project rundown that is expected in utility, in utilities in this quarter. So are we behind that? Yeah, so despite that we had a.
Sukamal Banerjee
Sorry, please go ahead.
Shradha Agarwal
Yeah, so despite that rundown, we had a good growth in utilities.
Sukamal Banerjee
Yes, it definitely contributed to the results that you see.
Shradha Agarwal
Okay. And in terms of our sustainability portfolio, many other peers have been sounding very positive on this portfolio given power companies which are seeing good growth because of the need for power consumption because of data centers that has gone up. So how do we look at outlook for our sustainability portfolio going ahead?
Sukamal Banerjee
So in terms of potential and pipeline that we see, we are definitely very confident. Confident. This may not be immediate term results for us, but midterm in the next two, three quarters, we feel very confident that we will see robust growth.
Shradha Agarwal
Right. And so of all the three segments, on which segment are we the most positive upon as we get into FY27?
Sukamal Banerjee
I think it is something which is an evolving topic as you can imagine at this point in time based on order book and immediate term funnel, it will remain transportation and mobility. And some of this also has to do with some of our other businesses being a little more project centric. So when it comes to project centric business, there’s always a churn that we have to earn our business back that causes less of a visibility. So I’ll probably say it is transportation mode. But in terms of funnel, it is pretty robust across the board, including in some of our smaller verticals.
Shradha Agarwal
Right. And would it be, I mean, can we assume that from here on starting the units will get to positive sequential growth because you have three, four consistent quarters of sequential decline in this vertical.
Sukamal Banerjee
Sorry, which vertical? It was strategic units. Strategic units. So we are, I mean, more or less there in terms of making sure that we get to growth and that definitely is our intention for next quarter.
Shradha Agarwal
Got it. Thank you. All the best.
Sukamal Banerjee
Thank you.
operator
Thank you a reminder to all the participants that you may please press star and one to ask questions at this time. We’ll take the next question from the line of Dipesh Mehta from MK Global. Please go ahead.
Dipesh Mehta
Yeah, thanks for the opportunity. Question. I think first question you partly answered but just want to get more detail outlook and growth driver across vertical and sub segment. If you can provide particularly strategic unit sub segment. If you can use strength and transport rates and mobility arrow you touch upon but if you can touch upon rail and other segments there second question is about the 15 percentage EBIT margin which you indicated medium term. I am not very clear whether we give any timeline to achieve that part. Thank you.
Sukamal Banerjee
So I’ll address the second question first on the EBIT part. We had talked about Q4 of FY27 with our current business mix that we have is what our target is for the first part of the question in terms of different segments we touched upon aerospace. From an overall funnel perspective, I would say almost all of our industries have very strong funnel. Certain industries are leading with regards to large deals, which means two things. One, possibilities of significant growth in the future but also a question mark on timing because large deals as you know can slip a little more than regular deals do tend to do.
So I think to say a quarter over quarter for each of these verticals will be a little difficult given that we don’t talk about guidance in general. But our overall approach remains that as a portfolio we’ll continue to drive the quarter over quarter growth momentum that we have built up for Q4 and beyond in terms of some of the segments like rail. And the only point I’ll make is the growth driver will come back with substantial deal wins which we are working on. But without those deals the business will probably remain in the current trajectory.
Without those transformation deals that we have been we have developed, only when we convert will we be able to change the trajectory.
Dipesh Mehta
So just on the that’s a deal intake you said large deal intake. We have a healthy momentum and everything. Can you tell some numbers and if you can give context also let’s say compared to prior period, four quarter, three, nine months, whichever, you can give some sense about how this deal closer is changing and how pipeline is changing.
Sukamal Banerjee
Was your question on order intake. Sorry, you were not very clear.
Dipesh Mehta
Yeah, order intake.
Sukamal Banerjee
So we stopped sharing order intake numbers as you are aware. But to give you some color, our Q3 order intake was robust. It was better than what we experienced in Q3 of last year. What is the second part of your question again?
Dipesh Mehta
The pipeline also because you said pipeline is at all time high, if you can use some context, let’s say whether it is growing 10, 20, 30 percentage or 1, 2, 3 percentage or something of that sort, it gives some sense.
Sukamal Banerjee
Okay. Pipeline growth is in double digits. I think what matters more is the qualified pipeline and the large deal contained in the pipeline which has seen definitely robust growth, which is what makes us feel confident. But we will be able to guide those into revenue only once we start converting them into converting them as deals.
Dipesh Mehta
Okay.
operator
Mr. Mehta, any further questions?
Dipesh Mehta
No, thank you.
operator
Thank you. We’ll take the next question from the line of Vikas Ahuja from Antique Stock Broking. Please go ahead.
Vikas Ahuja
Hi. Thank you for the opportunity, sir. I mean coming to your opening remarks. So it seems like the outlook has turned a little bit more constructive. You talked about trending order intake record funnel, rising contribution from top top slides. But you know, in the past we have seen, you know, the growth has been dragged because of the portfolio churn, muted client spending. So what according to you has changed this time or any risk you want to highlight? Thank you.
Sukamal Banerjee
See, I mean first and foremost, obviously if there are any macro events that always remains a risk like what we experienced in April of last year where we pretty much lost two months of momentum from a business, I mean deal cycle perspective where there was a complete stall. So any such event always remains a risk from leaving those kind of risk aside in terms of the conversations we are having with our customers and the areas we are having conversation with the customers, these are more or less essential investment areas for them. So we may always have some projects which are future ROI related which tend to be from a technology perspective which can get right shifted from one quarter to the other.
But the deal pipeline that we are working with, the part which are qualified, I think we feel pretty confident with the timelines and the deal cycles we’re dealing with in terms of their closures. But again, there may be some industry specific or account specific things which can come up. For example, in Q3 we were impacted by one of our top customers CEO change which happened which put a halt to several of the initiatives that we were expecting to close in the last quarter. So those are very difficult to call out. But leaving those kind of risk aside, I think we don’t see any at this point in time beyond the macro and account specific situations that may come up from time to time.
Krishna Bodanapu
And if I may just add to that from sort of previously what happened to now, I think there’s a lot more focus on not just on pipeline, but quality of pipeline and not just execution, but readiness and execution. So I think a lot of what we’re talking about this time around is really based on some very solid numbers, which is what gives us the confidence that they execute. We won’t have the execution hiccups that we’ve had in the past or the misses that we’ve had in the past. So I think it’s the quality of pipeline and the quality of execution that at least gives me confidence to substantiate what Submallit said at the beginning of the call.
Vikas Ahuja
Thanks.
operator
Thank you. The next question is from the line of Pratik Kulkarni from Kosh Wealth Management. Please go ahead.
Pratik Kulkarni
Hello sir, thank you for the opportunity. I have two questions on the semiconductor part of our business, so. I would.
operator
Request to move to the quieter place, please.
Pratik Kulkarni
Hello, Is it fine now?
operator
Yes, sir, please proceed.
Pratik Kulkarni
So I just wanted, I had two questions regarding part of our business. So we have, you know, created a bit of holistic ecosystem regarding partnerships and acquisitions in the semiconductor part. But, and when and if the deals come through, which part of the business are we most positive about?
Krishna Bodanapu
We’re positive about the whole semiconductor business. I mean, like you said, it’s a holistic business that goes from design to sourcing the chips, which includes many other things in the middle, including testing, packaging, etc. So we are quite confident about the whole value chain of the semiconductor business. We’ve also clearly identified where we want to focus on more mature nodes, power related applications, et cetera. So I think we have a good, very, very strong and well defined focus and we feel quite confident that we’ll be successful across the semiconductor value chain in the areas that we focused on.
Pratik Kulkarni
Okay. And another question is, what I’ve seen is we are more focused towards power based semiconductors, creating a more niche for us. So any reason to focus on this segment rather than going for, you know, general semiconductors manufactured by Nvidia or amd?
Krishna Bodanapu
Okay, so it’s a, it’s a different scale and a different focus. What we’re talking about. If you look at the chips that we work on, the chips that we work on are typically, like I said, more mature nodes, which means that they are typically in the 130, not even 130, 180 to about 400 nanometers. So the cost of each, the design cost of each chip, for example, will be in the five to $10 million range per chip. Now if you talk about Nvidia or amd, the AI and Those kind of, kind of chips that they make are really the 5 to 12 nanometer chips.
And each chip costs about a billion dollars to design. So our intent is, look, every chip that goes into the world now will need a powered chip next to it. So yes, I mean it’s not as sort of glamorous as being an Nvidia, but we believe that this is a much, much more stabler way for us to break into the semiconductor, into the chip industry, not just the semi chip, meaning the entire chip lifecycle. So I think it’s not going to be easy for anybody to replicate what Nvidia does unless they’re willing to spend tens of billions of dollars even to have a chance of success.
So I don’t think we’re playing that game. We’re playing a more sort of manageable game at a part of the value chain where there is to be significant amount of growth.
Pratik Kulkarni
Okay, thank you. That’s, that’s all from my. Thank you.
operator
The next question is from the line of Hasmukh from Tata Mutual Fund. Please go ahead.
Hasmukh Vishariya
Yeah, hi. Thanks for the opportunity. My question is around quality of business. So in part we have called out that mechanical engineering forms a good chunk of our business. So what we are doing to diversify from that and whether there is any material change over last 912 months because end market for mechanical engineering may not be growing as fast as what we want to grow from overall business perspective.
Sukamal Banerjee
Yeah, just to confirm, Asmukh, you mentioned mechanical engineering, right?
Hasmukh Vishariya
Yes, yes, yes.
Sukamal Banerjee
Okay. Yes. So we have several initiatives going on and some of the wins that I shared with you, if you look at it, none of them were about mechanical engineering. So it’s not that we are not winning mechanical engineering programs, but some of the larger programs we are winning are in the new technology areas. They are about software development, they are about platform software, they are about data engineering, and of course several of them are on AI or at least influenced by AI. So. So I think we have a robust pipeline which is built up for technology, as we call it, which is in significant double digits as a percentage of our pipeline.
So we think that both from the wins that we have talked about, the funnel that we have for near term closure, we are definitely seeing a diversification in our services portfolio. Also as we have talked about in the past, we definitely are also active from an inorganic perspective to shift our service portfolio in a way that moves away from some of the traditional areas which have a slightly higher, lesser, slightly moderated growth, I would say, compared to the new technology areas. Where the growth vectors are more robust.
Hasmukh Vishariya
Understood, Understood. Thanks a lot. Thank you.
operator
Thank you. The next question is from the line of Ankur Panth from iifl. Please go ahead.
Ankur Pant
Hi, good evening and thank you for the opportunity. So my first question is for Sukamal. Sukamal. One of the problems that has impacted science and past is the predictability. Is the predictability in terms of revenue trajectory. Am I audible?
operator
Yes.
Ankur Pant
Yeah. Could you highlight what you’re doing to improve on that front and related to that is the revenue growth cadence that you look at now? So is it that you aim to improve growth with each quarter versus the last quarter or is it to keep it in a band as you move along each quarter? What kind of predictability are you looking at in the business?
Sukamal Banerjee
Sure. So let me first address predictability. I think we have and it was not that it was not there. I think we just had to do some tweaks and changes to ensure that we have a predictable mechanism for our forecasting and more importantly, the governance around tracking on that forecast that we are. What we are doing in terms of executing within the quarter. I think from a predictability perspective of how we feel at the beginning of the quarter and how it ends up at the end of the quarter, I think we have come a long way and probably from my past experience, I can say we are on par with anybody else when it comes to the second part of the question you asked.
Obviously, there are always ups and downs in our growth. It’s not always, not always possible to keep increasing the pace of growth each quarter, even though that is our intent. But the first goal that we have taken for ourselves is that in our immediate peer group, we would like to be the top performer in terms of growth on a consistent, consistent basis in the future. That is our first goal. And obviously we have ambitions beyond that as well. But as the first goal, that’s what we want to achieve.
Ankur Pant
Thank you. And my second question is in terms of margins, Prabhakar, what kind of growth are we penciling in to get to our margin target in det business? How much are we dependent on growth? Growth, A particular growth number for getting to that target?
Prabhakar Atla
See, I wouldn’t put a. If you look at the margin trajectory and thank you for the question, Ankur. Two things I’ll say one about the past and second about the future. The immediate past. You’ve already seen the revenue momentum is coming back. The margin expansion program is kicking in and showing some tangible results. And we have two sequential quarters of margin expansion. That’s about the immediate, immediate past in the current financial year. The second thing is going forward we have three important levers that we believe will work in our favor. One is the revenue momentum, though we won’t quantify at this point in time what we are going to capture as an assumption for FY27 for a 15% exit for Q4.
But revenue momentum is just one part of it. The tech adoption, both internal and external, is another part of it. And whatever investments we made so far in technology solutions, we have to fully monetize them. And that’s the third lever. These three will be the levers that we will be actively working on in FY27 and beyond to expand the margin. Of course, the other, so to speak, very attractive lever is to work on offshoring, which is a significant lever for Scient where the offshoring percentage currently is less than 50%. But we are comfortable where we are because where the world is today, we are happy to be a global company.
We are proud to be a global company. And the local content of work we do in various geographies acts as a significant buffer for us against the current trends we see of localization. So net off we would have had four levers. We’re focusing on three of them. The fourth one will be one that we will take as we go forward.
Ankur Pant
And any sense of the exit margins for this year, any target on that front?
Prabhakar Atla
We’re not commenting on the full year numbers as you know Ankur, but I’ll say I’ll just repeat what we said in the previous call. Our H2 margins will be better than H1 margins.
Ankur Pant
And just one final data keeping question. So you have quantified new business as a percentage of total deal.
operator
Mr. Pan, I will request you to. Kindly rejoin the queue for follow ups, please. There is a queue, sir. Thank you. We’ll take the next question from the line of Karan Upal from Philip Capital India. Please go ahead.
Karan Uppal
Yeah, thanks for the opportunity. Sukumal you spoke about on the verticals outlook. Just wanted to check on the geography front. There’s a lot of noise around the. Tariff war against restarting between US and Europe. So macro uncertainty remains high. So within that, if you can provide the outlook on various geographies in terms of us, Europe and apac and also related question is in terms of the confidence on the pipeline conversion given this macro backdrop. So are you confident of converting the pipeline in Q4 and beyond? Yeah, that’s the first question.
Sukamal Banerjee
Sure. So firstly, as you are obviously well aware that tariff is not a direct topic for us, but it is a topic for our customers across the board. I think most of our customers, if not all of them, have a far more robust mechanism in place than they had last year or beginning of last year in terms of dealing with tariff. So their ability to take decisions despite some of these, I would say macro discussions that keep coming up once in a while is far more robust and there’s much more confidence they have in that process.
So that’s the first thing I would say. And to answer your question in the second part, if the level of uncertainty is where we are and which are more short term bursts of uncertainty and things settle down very quickly after that, I don’t see that as concerning or challenging. But if it gets extended and drags out for a few weeks or months, obviously it delays some of the deal processes. But if it’s just a one week surge and quietening down, that should not make a huge impact on our deal cycles, so to speak.
Karan Uppal
Sure. Any color in terms of the geography.
Sukamal Banerjee
Front, in terms of the pipeline? No, I think we are from our. I mean Obviously in Q3, our growth in US has been higher or North America has been higher, which is largely US but from a pipeline view perspective, it is quite evenly distributed which is reflective of the current distribution of our revenue across US Europe and Asia Pacific. And from a large deal perspective, it is both across North America and Western Europe.
operator
Thank you, sir. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Krishna Bodnapur for closing comments. Thank you. And over to you, sir.
Krishna Bodanapu
Thank you. And I can confidently say we’re back in the phase of stable growth after the challenges of the last two years. Our stated aspiration is to be an industry leading growth player, which we’re working towards. But I’m proud and pleased to say that we are steadily making progress in the last three quarters and this is an important step of achieving our stated goal of being an industry leading growth player. Thank you for your patience and thank you for your support in this journey and we’ll again speak at the end of next quarter. Thank you.
operator
Thank you members of the management, on behalf of Science Limited that concludes this conference, we thank you for joining us and you may now disconnect your lines. Thank you.