Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Hexaware Technologies Limited (NSE: HEXT) Q4 2026 Earnings Call dated May. 07, 2026
Corporate Participants:
Niraj Khemka — Head of Investor Relations
Srikrishna Ramakarthikeyan — CEO & Executive Director
Vikash Kumar Jain — Chief Financial Officer
Analysts:
Pratik Maheshwari — Analyst
Anmol Garg — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day. Welcome to Hexaware Technology Limited’s conference call for the Q1 CY26 earnings call. We’ll begin today’s session with a presentation from the Hexaware management team followed by a Q and a segment. To ask a question during Q and A, please use the raised hand feature located at the bottom of your Zoom interface. This will place you in the virtual queue. I’ll now hand the conference over to Mr. Niraj Khemka, head of Investor Relations. Thank you. Over to you, Mr.
Neeraj.
Niraj Khemka — Head of Investor Relations
Thank you, Sean. Hello everyone. Welcome to Xavier Technologies CY26Q1 earnings call. In the call today we have with us Mr. Ashri Krishna, CEO and Mr. Vikash CFO. In the course of this call we will make certain statements which are forward looking and may involve a number of risks and uncertainties. All forward looking statements made herein are based on information presently available to the management and the company does not undertake to update any forward looking statements that may be made in the course of this call.
In this regard, there is a full disclosure which has been included in the investor presentation and the press release. We consider that as read. With this, I’ll hand over the call to Keech. Over to you, Keech.
Srikrishna Ramakarthikeyan — CEO & Executive Director
Thank you, Dheeraj. Good morning or good evening everyone. Thank you for joining. I want to start by continuing our conversation on AI. If you could actually move to slide four and then we were going to come back to slide three. So first let me say that at the end of Q2 results, shortly after our Q2 results, we will hold an AI day. We will do it in Chennai. So I’m hoping all of you will find time to get there. And in that we will walk you through our strategy in detail. But more importantly, the reason for Chennai is that for each element of what we talk about, we will present multiple proof points and platforms.
So that’s shortly after we announced Q2 results and we will announce a day soon for all of you. Now our objective is to become a trusted partner for our customers. AI Journey in everything they do. And for that, the first thing is that we have a comprehensive range of services. Anything and everything that a customer will want to do. And we think of that in three buckets. AI for it, AI for business. And both of these are often enabled by a common foundational layer. Now we are undergoing rapid pivot.
And the pivot is in the services we deliver, the talent, our business model and how we charge for our services. Now we’ve identified across this page about a Dozen areas of new revenue opportunities for us. And this is something we will detail out when we talk about this in the aid in detail. But let me give some examples now. If you go to the next slide, please on AI for it, we have a fairly comprehensive set of services that both address our current core and protecting and growing our core, but also addresses several new opportunity areas.
Let me give a couple of client examples. We renewed in a competitive bid a large ITO customer. What our platform enabled us to do is to renew the contract at. That became larger. So we were able to address 50% more volume at about 10% more revenue. We give an example on software engineering. This is an airline client for which they have their core systems on legacy and in this case legacy is like 10 years old, 15 years old legacy return. On Java, what we’re doing is to strangulate the core out by keeping just the core.
But everything else we are moving to agentic. And this improves the velocity of the product. IT reduces the cost and improves the maintainability substantially. The two most exciting services we launched in this space in this quarter, one and we spoke briefly about IT last time, was what we call a zero license offering which we announced in jam. SaaS is a $400 billion market. I think the last decade people have gone from, you know, building custom software to building the same functionality on SaaS.
I think you’re going to see a significant reversal of that. We are the first and probably still the only IT service provider to have a focused offering around getting customers to zero license and independence from SaaS. And this is not just a concept. IT is based on a module we built in RapidX that allows us to do what most customers or most of our competition cannot. The second most interesting service we launched is a new generation of our IT operations platform, Tenza. And what we built is reasoning ops capability in this.
So this platform actually has three differences. First, historic automation in the IT space has focused on task level automation and you keep automating tasks and there is a ceiling. What IT did not do is edge cases, complex edge cases, because that requires reasoning. And so we’ve changed the fundamental approach gone away from task level automation to complex reasoning that looks at the whole of our customers it. The second difference is that we’ve done this with an SLM for enterprise IT and we built a custom ontology model that enables us to onboard any clients onto a standard ontology model.
And finally, because IT is an slm, it captures a lot of the inferencing in the SLM rather than going to slms and it saves on token costs for customers. But it’s also a new revenue and profit opportunity for us to capture a part of the savings in token costs that customers would have otherwise. Go to the next slide please. Now while AI for it is interesting, it is still smaller in aggregate. Everything in AI for it is still smaller in aggregate than AI for business. In the last few weeks there are two of our clients in different industries that announced agentic AI platforms.
In both these cases, one more and one less, we have been involved in helping the customer launch this platform. In both these cases, these platforms are meant to change fundamentally how our customers do business. So let me give a few examples from different industries. For a client in pharma, we are going to redo their entire clinical data management systems with Agent Aki. Now apart from reducing cost of how they do this, one of the outcomes will also be a zero license because eventually the platform they use for clinical data, which is a cops third party platform, will become irrelevant.
To give you an example, in airlines for client we brought the power of multimodal AI and VR together to help engineers that are repairing complex aircraft parts. Each airline spends about $5 million per aircraft per year. And this not only reduces the cost and time, but also substantially improves compliance while doing that. Now. Do is to show multiple examples for each of our strategies. If you go back to slide three please. In terms of a quarter, we had a better quarter than what we expected.
I think the last time we spoke we said we will have a soft quarter, you know, in general we said it’ll be a quarter with contraction. There wasn’t much. We had a decent quarter on revenue, but we had a good quarter on profitability. If you recall, we cut it for quite a bit lower. We said there’ll be improvement in the outer quarters. That part is still true. But we started off better than what we expected. We will be as always, our cash management is very strong and we closed with a strong cash balance of 220 million.
Our IT headcount continued to increase. We continue to hire. We had a net headcount reduction that was on account of BPS and in it we had a net headcount addition which is actually 11th straight quarter of it headcount addition. Our attrition remains amongst the lowest in the industry and our utilization is range bumped. Now we added two clients at a 10 million pyramid. So this is good growth because these are the clients that help us now get into higher layers of the pyramids. We now have 34 clients that give us over $10 million.
You go to slide seven, please. I want to talk about some of the wins. I think we had numerous wins at the highest level. You know, I spoke a bit about last quarter that one of the more fundamental changes we’ve made is to substantially improve our hunting and we won an enormous number of deals in the quarter. So I put out eight kill first. This is a. And as always, the deals are a mix of outsourcing, consolidation and transformation deals. So this is a large speaker manufacturer. We have a full scale ITO plus some BPO and eventually more of both.
This will be delivered globally. This is a nice large deal that will start giving us growth from late Q2 and suddenly to H2. The biggest positive surprise for us in Q1 was a large global bank that went through a consolidation deal last year. They had spoken about a phase two, but we were not sure if that will happen or not. Not only did they proceed on phase two, we wound up on the winning side. This is a very large bank with a very large spend and they are aggressively consolidating and we expect to see material increases in volume from that in the second half of the year.
A third one, again, a European bank consolidation deal. This is an existing client, but there’s a full work outside of what we currently do, which is one large program which they were consolidating down to two vendors and we are one of the two. This is a global professional services firm, not the one that we won in last year. There’s another one that initiated consolidation of a book of work within the quarter and we closed it in the quarter. We are now sole provider for a service for this client.
We will become the sole provider after we complete transition. One of the really interesting deals is on AI for business. This is a fab based manufacturer which is going through a significant boom due to air. What instead of client expanding and investing in more fabs, one of the efforts is how can you improve productivity in each fab and how can you produce more SKUs per fab? And they’ve instrumented their plants with any number of sensors. But what we’re doing is to help build custom models that will improve fab performance.
Now that’s how it started. We’re also doing other normal IT work for them. But the key basis of why we want is our capabilities in being able to build custom models. The large brand name workspace company for which there’s an AMS deal that we won on a. Also quick two examples from recent acquisitions. The next one here a data center company and that in of itself is good because they’re growing quite a bit, as are all data center companies. This came from our cybersol acquisition. We won a deal here on guarantee led cybersecurity and the last one is a large asset manager for whom we will set up gcc.
With that, over to you Vikash.
Vikash Kumar Jain — Chief Financial Officer
Thanks H. Let’s move to the next slide. So revenue for the Portal came in at 389 million. In absolute dollar terms. Revenue was largely flat driven by volume growth of close to $3 million and we had an impact associated with calendar and furloughs which we had called out, which was a headwind of close to 3 million. Now calendar and furlough impacts are seasonal and we expect this to reverse materially in Q2. That’s what we had called out in the last earnings call too. The volume growth of 3 million is also reflected in the net headcount additions that we did during the quarter and also has a full quarter impact of the highest that we made in last quarter.
License revenue for the quarter was at 11 million flat sequentially and was tied below our historical quarterly average which is close to 13 million on margins. We have aligned our margin reporting to EBIT. EBIT excludes other income and forex impacts related to hedging and translation, which is consistent with the market practice. Reported EBIT for the quarter was 13 percentage up 570bps sequentially normalize for 1:1 timers that we had last quarter if it was flat sequentially. Now even though the EBIT was flat sequentially there were a few puts and takes.
We did get a bit of a tailwind from forex of close to 90 bips. There were operational improvements associated with what we’re driving in the business that added close to another 50bps. The 140bps that we had from forex and operational improvements were offset by lower calendar of 90 pips large deal ramp ups which we had spoken about. The new deals that we are signing in the initial phase are going to have a bit of a margin headwind and in the later part of the year will start improving and the impact of Labor Code of 20bps.
The Labor Code impact is the continuing impact of the new wage code and it will be a recurring item every quarter. There are no one offs inhibit in the current quarter. I’d also like to make a specific call out during the quarter there was an earnout reversal associated with SMC acquisition. The earnout payable towards the CY25 achievement was close to 23 million of the same the performance achievement actually is leading to payable of close to 20 million. So a large part of what we thought that the asset that we are acquiring is expected to deliver is happening and close to $3 million was reversed out.
Now, consistent with the accounting practice, the reversal is recorded in other income and does not impact the reported EBIT numbers. Let’s move to the next page. Some color on the unit level performance. Starting this quarter HTTPs has been split into Professional Services and TPP technology products and platforms and this this split was done to sharpen the strategic focus. Tpp, the business unit led by Ira V, while currently the smallest vertical, represents a meaningful growth opportunity for us in the quarter.
Four of the seven verticals delivered year on year growth led by banking, HNI and mnc. Sequential growth was primarily driven by HNI and ps. Now sequential softness in select units is primarily a result of the seasonality and a little bit of GSC client headwind. Teacher is going to touch on that later during the presentation but we did call out a bit of a headwind in the last quarter so it’s an impact associated with it. Few units to be called out. HNI very strong sequential and year on year growth.
It’s driven by large till ramp ups and the broad based growth across Europe and that is reflected even in terms of the strong year on year growth. You see from a Europe perspective. In our last earnings we had called out HNI to grow at a pace faster than the company and we see that play out from this quarter itself. MNC was a drag in the because of the tariff and other macros. In H1 of last year we see that coming back to the growth. So there’s been a healthy year on year growth supported by traction both in existing accounts and new logos and it has delivered strong year on year growth.
Starting H2 of last year we expect MNC to be a full year growth contributor. The sequential decline what you see in MNC is driven by seasonality. Q4 demand is a bit higher on account of festive reasons. For some of the client, retail clients and also calendar banking the sequential decline is due to seasonality. However a very strong year on year growth in line with the last few quarters trend and we expect the vertical to have a strong CY26 on GEOS. All GEOS delivered year on year growth. North America performance is after including the headwind from the GSC client which we had called out in Q1 and Q4 of last year.
So it’s a impact of that which is getting reflected in the year on year growth Europe returns to strong growth and is expected to lead the full year growth driven by account ramp ups and new logos. APAC sequential softness reflects the Q1 seasonality. Now more commentary on CY26 Outlook by unit will be covered later during the call by Cage to the next page. We continue to add meaningful clients to our client base. One of the ways we measure broad based growth is to track the number of clients delivering greater than $10 million revenue.
As you heard Keith say that in terms of the greater than 10 million dollar revenues we have had two clients. What we have added on a sequential basis that number is four on a year on year basis. Next shot. A bit of a highlight on the operational parameters. Offshore mix continues to improve on the headcount as Keech called out. Even though the overall headcount is a decline of 46 we continue to add in it and BPS was declined. This marks the 11th consecutive quarter of ID8 contribution. Utilization closed at 82.6.
180 pips up sequentially and this reflects the reversal of the seasonal Q4 impacts both with respect to the furloughs and the leaves that we had called out. Next page. Closing cash balance of 220 million and the company continues to remain debt free. DSO for the quarter came in at 75 days which is within the level we would expect. Last quarter we had called out that the DS of 67 days was a high watermark at the at the year end on the cash flow. We have changed our cash flow metric reporting in line with the margin metrics.
The OCF to pat on LTM basis was 125 percentage and will continue to be and it’s one of the industry leading and we expect it to be continues to be high in the coming quarters too. ETR for the quarter came in at 25.5% and we continue to reiterate our full year ETF was CY26 to be between 25 and 26%. With that I’ll pass it over back to you Keech. You’re on mute.
Srikrishna Ramakarthikeyan — CEO & Executive Director
Thank you Vikash. And if you go to the next slide please. So we’re gonna talk a little bit about our outlook for rest of the year. You know at the highest level we feel very good about where our business is. We are hitting a phase of sustained growth. You know last quarter we said, you know we’ve been running faster for a while but it’s gonna show up time to. It’s gonna take time to show up a number numbers been running faster but we had to Outrun some of the headwinds. Booking takes time to translate to revenues and those calendar issues.
So we said the results would start showing from Q2. We are in Q2 and the next quarter you will see the outcome of it. And when you see the outcome, it will not just be a one off. We think it’d be a sustained momentum of growth from this point from us, for us at a minimum we are reaffirming what we said last time. As you know, the floor of growth of 7.6%. I’ve spoken about these already, I spoke about some of them, but I want to tell you that actually there are quite a number more. So real estate, we decided we will do eight deals.
There’s quite a bit more that we won. I would say right now AI in SDLC is the biggest source of differentiation and the biggest source of deal activity. There’s a sudden and extreme urgency with clients to demonstrate serious value in SDLC using AI and that’s driving a lot of conversations and that is driving a lot of deals. Even prior to a decision. There are more headwinds in the year. So at this point we feel like, you know, so they get designed. We’re down to three vendors, they’re consolidating a large number of vendors down to three.
So right now we expect stability. We’ve had, I don’t know, 40, 45% down over the last four quarters. That’s not going to happen. So we expect stability, not necessarily growth immediately, but we could see growth coming back over a period of time and, and we spoke about other deals. So essentially what all these deals and a continued strong pipeline means that we are reiterating our growth. We, you know, the current growth is underpinned by these already won. And much like we said the last time, there are pathways and opportunities for us to improve this but we want to first show QDO results before talking about what more we could do.
Every year there are some changes in verticals. You know, H and I will lead growth banking will do well. We’ve been speaking about MMC turning the corner. I think MNC is going to wind up in a pack that will be along growth leaders to, you know, lead company growth for the year. I think it’s a bit of macros and some of periphery specific issues that we’ve solved for and it is back to decent growth. On the other hand, TNT will lack due to micros, primarily due to fuel price issues that impact the airline industry.
We’ve started better on margins than we planned for. But again like in revenue. Right now, we are sticking to our guidance of the range of 13 to 14% for EBIT. However, we also want to reiterate what we said last time, that margins will improve through the year, especially in H2, and our exit rate will be higher than what it is for the full year. With that, we will stop for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer segment. To ask a question, please click on the raised hand button at the bottom of your Zoom interface to enter the queue. Once announced, kindly unmute yourself, state your name and organization, and proceed with your question. If your query is addressed before your turn, you may press the lower hand button to exit the queue. We’ll pause briefly to allow the team to assemble the list of participants. Our first question is from Pratik Mayharshwari.
Please unmute and ask your question.
Pratik Maheshwari
Thank you for the opportunity, Keech, and congrats on the good set of results. I think this quarter went by much better than what you guys expected. At the end of the December quarter, I had two questions. First, I would like you to kind of expand on the comment that you’ve made on the agent AI being implemented in the SDLC life cycle and you’re seeing strong momentum on that. Also, you commented that you guys are now seeing a phase of very strong phase of sustained growth now. So if we look at your larger peers, they have commented for higher AI deflation in 2026 versus 2025.
Right. And you guys are talking about better on this front. Plus also, also I’ve seen your mid tier peers also saying very similar comments. They have a better growth expectation than larger peers. So just wanted to understand first of all, on the industry level, how do you guys see the AI deflation? Do you guys also see that mid tiers are better placed in this front? So that’s my first question.
Srikrishna Ramakarthikeyan
Sure. You know, on AI deflation, we called it out last quarter. There was mixed commentary last quarter from our peers that people are saying the, you know, opportunities will kind of outrun the deflation. Right now we covered even last quarter, there will be deflation. Okay. We simply budgeted for the deflation in our numbers. I do think the opportunities are significant. And you know, there are new opportunities. You know, I, I gave an example on zero license, $400 million SAS that will get. 12 opportunities we’ve identified.
Sorry, I
Niraj Khemka
Think we lost for a few seconds. I just might have to repeat the last two lines. Velocity for.
Srikrishna Ramakarthikeyan
Okay, thank you. Is it better now?
Pratik Maheshwari
Yes. Yes.
Srikrishna Ramakarthikeyan
Okay. So, so sorry, I don’t Know when you lost me. So I’m going to repeat a bit. I was saying we called out the air deflation last quarter. While there was big commentary from our peers, we did say there will be deflation and we budgeted for it in the numbers. Second, I do think the opportunities are real and we’ve identified 12 opportunities. One example I gave on zero license. And in our AI day, we will talk through what those 12 opportunities are and show you what we’re doing and proof points for platforms and customers in each of those AI sdlc.
You know, Agent Aki, right now what is happening is I would say over 90 plank percent of clients, maybe 95% of clients have bought some tool but they don’t know what to do with it. Their, their teams have, they are experimenting with it, but there’s a pretty hard ceiling of, I don’t know, 10, 15% that they’re getting from that. What we are showing is, hey, you don’t, you know, don’t go chasing the next best tool. Don’t go chasing, you know, whatever is announced last week, this is what you already have.
We are able to demonstrate to clients how they can materially up the productivity by better use of tools, changing the SDLC process and reconfiguring what squads should look like. And we are not doing this in isolation. We’re doing this at scale. And let me give you an example. In our FS vertical, we have 75 delivery AI champions that work across all of our clients to continuously deliver new projects using AI. Now the impact this has on us is that we certainly reducing the, you know, volume of work in our existing lens.
But because we’re doing this proactively, because we’re able to demonstrate better outcomes than our peers, it places in a great spot to gain market share in sdlc.
Pratik Maheshwari
Thanks, Keech. I had another question on your GSC client consolidation program. So congratulations on getting selected in the top three. And I know you said for some stabilization there. I just want to understand what is your confidence level that probably this client could also start growing in this year itself. If you could expand on that, please.
Srikrishna Ramakarthikeyan
I don’t think they’ll grow this year. I think it’ll be next year. Okay. They could be moderate, you know, plus or minus, but that’s normal course of business. We don’t expect anything significant this year.
Pratik Maheshwari
And last question is for Vikash. So because I know you guys expect a bit of improvement in the margins for the full year. And there’s also, I think earlier on there were some transformation costs that would have gone away. But you guys need to invest on that. So just want to understand. So right now, as Keith said, right, you guys have quads, we’ve got 75 champions. Right. We are seeing similar kind of setups happening with other. It’s as well. Right. So do you think the margin expansion that you’re getting from the automation or AI implementation is that going into investments in such as these things where you’re probably getting much higher caliber team to probably go and disrupt some of your existing business to win new ones?
Srikrishna Ramakarthikeyan
Because do you mind if I address that at least one dimension of it and then you can add to that? Okay, so first I want to say that 75 we spoke about is for one vertical that’s for our FS vertical that are similar in each vertical. Right. I. I will say two different things as it pertains to structural profitability. And then we go. Can add more specifics here now. Right. One, I think we are seeing from clients a willingness of about 10 to 15% gap between productivity gains and economic gaps. Now that 10 to 15% from Exaware and token costs is outside and AI costs are outside in that 10 to 15%.
I think some of it will be higher cost for us, better talent, higher cost of talent that we deployed. Some of it could result in improved profit pools. But this early views I am seeing, clients are okay conceptually saying, hey, you give me 40% productivity, I’m only expecting 25%. You know, I spoke about three differences differentiations in our new tensile reasoning ops platform. One of them is that it’s a enterprise custom LLM that we built. And what that does is to trap the inferencing at the national.
Not 100% of inferencing, but it will trap maybe 80% of influencing at SLM and 20% or so will still go to LLMs, but that’s a savings for clients. And the model we’re doing is to, you know, charge for a percentage of what customers will save on increasing with LLMs. So that’s a second structural source of potential improved profitability infusion.
Pratik Maheshwari
Thank you. Thank you, Keith. Thank you guys. Yeah, we can.
Vikash Kumar Jain
Yeah. Since I was just rounding up the whole conversation with the fact that hey, from full year perspective, we reiterate our margin guidance of 13 to 14. Even though there are aspects which are leading to improved profitability, we continue to invest in the business because that’s what is important from a growth perspective.
Pratik Maheshwari
Thanks.
Operator
Our next question is from Anmol Garg. Please unmute and ask your Question.
Anmol Garg
Yeah,
Unidentified Participant
Hi, thanks for the opportunity. I have a couple of questions. One more of a broader question for Keech. You know, currently just wanted to understand what kind of AI models are we using in our delivery and currently what is the understanding between us and the clients on who bears the token cost, particularly when it comes down to the outcome based contracts.
Srikrishna Ramakarthikeyan
So first off, I think it depends on what service we’re delivering. And know I will talk about AI for IT and AI for business differently. Let’s start with AI for it. Even within AI for it, I think there is a difference in fundamental approach between SDLC and in IT operations. And I will say SDLC and data are somewhat similar. So if you think of SDLC and data engineering on one pool and IT operations in the second pool in IT operations, I think there is more willingness. This is consistent with what has happened in the past of giving out holes for pieces of operations through firm outsourcing contracts.
That includes, you know, baked in future productivity benefits from air. Now like I explained in our new platform, we are actually providing the inferencing, not 100% of it, but a good chunk of it, which will be lower than inferencing from LLMs. The inferencing that does go out LLMs, the customers still pay for it on SDLC. You know, most large customers for most programs, they’re not for all all. You know, they kind of, it’s mixed themes. It is client and us and they, you know, are a significant part of the large program.
So they kind of decide on tool chains. We help them do it and they own the licenses and they own the token costs.
Unidentified Participant
Understood? Understood. And secondly, more question for this quarter. So sequentially, you know, we have seen our license revenue at $11 million, up from $7 million. And there was some incremental revenue which came in from cybersolve as well. So organically, when it comes down to services, how much decline was there in this particular quarter and how much of that was impact from particular GSE clients?
Vikash Kumar Jain
So
Srikrishna Ramakarthikeyan
License. Sorry, go ahead.
Vikash Kumar Jain
Yeah, so the license sales for the current quarter was flat. So what we had from a sequential basis was the same license sales in the current quarter as in the last quarter. As I highlighted that the volume growth in the current quarter was 3 million with close to 2/3 of that coming from the acquisition. What we did, the balance of it was organic. In fact, on a gross basis, the organic volume growth was significantly higher. But that was after absorbing the headwind from one of the GST client where in the last quarter we had pointed out that there was a bit of a ramp down in the month of March.
It had a full quarter impact from the current quarter.
Unidentified Participant
Right. And and because just continuing on the same so for the for as per our guidance of 7.6% which we are which is a floor right now for us, the requirement or the CQGR requirement is nearly about four and a half percent for the next three quarters. And given that fourth quarter is usually a seasonally weak quarter, the bump up have to happen in second quarter and the third quarter. So what kind of deals do we have which will be ramping up which could give us that kind of growth over the next couple of quarters.
Vikash Kumar Jain
So Keech already spoke about the deal wins. Right. We announced close to we spoke about few deal wins in the last quarter which has started wrapping up. Part of those ramp ups actually got reflected from a Q1 results perspective in the volume growth that I spoke about net of the GSC decline and the other deals that we have signed in the current quarter. Both of these added with the seasonality benefit which we’ll get from a Q2 and Q3 perspective are the ones which are going to help us deliver those numbers.
And as Keech called out like in any case is a ramp up of the existing deals, deals which are already won plus the new deals which are in the pipeline. Our pipeline continues to be very strong and the conversion of those pipelines and additional revenues from those deals are the ones which will help us in terms of contributing to the current year growth.
Unidentified Participant
Sure. Thanks. Thanks. That’s it.
Operator
And our last question in the queue right now is from Dipesh Mehta.
Anmol Garg
Thanks for the opportunity. A couple of questions I think continuing on the prior question. Do you think usual seasonality of December quarter can be negated based on the dealing pipeline which you have as well as ramp up plan which you have which will in a way lead to more evenly spread growth across three quarter or how one should expect let’s say growth trajectory this year considering all the seasonal pattern plus the deal ramp up plan or pipeline which you have if you can give some sense on that second question is about the 12 opportunities which you indicated which can provide you confidence about growth acceleration.
On medium term perspective, can you give some sense about TAM? And based on these 12 opportunities what kind of cannibalization or existing business let’s say expected because some of them might have some cannibalization impact. And last question is on vertical perspective. I think you indicated some of the factor affecting or out this quarter vertical wise. But can you give some Sense about some of the puts and take which you are expecting in some of the vertical commentary. Thank you.
Srikrishna Ramakarthikeyan
So there are three questions. On the first one, I just want to say that what we are hoping to demonstrate from Q2 onwards is a sustained kind of growth, right. It’s a result of a number of things that have changed or we’ve changed or in some cases macros improving like a manufacturing. So, you know, no matter kind of what this year looks like, I think you will see growth and accelerating winway growth through the year. Now, in terms of patterns for the quarter, I think there are two different things.
One is no matter what, Q4 will be worse than Q2 and Q3 because of seasonality. But independently, can Q4 kind of be positive in of its own. It could be, but we’re not, you know, we’re not saying that. We’re saying hey, kind of model how you model. I think you will see we will be okay for the baseline we’ve called out in Q2. The second question was on the 12 AI services. Sorry Vikash, keep me honest, was that the second one? Yeah, the 12 that these are not the cannibalization. These are not like let’s say reengineering a NSDFC or reading IT operations.
That’s a cannibalistic part. These are what we think will be new opportunities in SDLC itself. You know, zero license legacy modernization which we spoke a little bit about last time. And again when you, if you come to Chennai, we will show you multiple examples of that. It is things like observability, setting up a foundation and foundry for AI. There are all of this, 12 are new revenue streams. They’re not cannibalization. And you know, I think I have mentioned in the past that the core of our strategy is agility.
And so we are kind of pushing ourselves to launch one new service every month. Either completely launch new or relaunch or redo some of what we’ve done in the past and we thus far been sticking to that. So this doesn’t a piece of will get added to over time. The third question, remind me what it was. There was three
Anmol Garg
Vertical. Vertical commentary. Yes.
Srikrishna Ramakarthikeyan
Yeah. So I, I think, you know, just in terms of what’s changed, I will say from our last comment, I think manufacturing will be better off than what we said last time and travel big worse because of macros and you know, we will kind of make up for the travel downtown macros through improvement elsewhere.
Anmol Garg
Understand. Thank you.
Operator
Thank you ladies and gentlemen. That brings our Q and A session to a close. I will now hand the conference back over to management for closing comments. Over to you.
Srikrishna Ramakarthikeyan
Hey, thank you all again. I just want to, you know, once again extend the invitation. We will probably speak once more, the quarterly call Q2, but it will be shortly or immediately after that, so please make time to visit us in Chennai next quarter.