Sonata Software Ltd (NSE:SONATSOFTW) Q4 FY22 Earnings Concall dated Apr. 29, 2022
Corporate Participants:
Srikar Reddy — Managing Director
Jagannathan Chakravarthi — Chief Financial Officer
P.V.S.N Raju — Chief Delivery Officer
Samir Dhir — Chief Executive Officer
R. Sathyanarayana — Vice President – Finance and Accounts
Analysts:
Baidik Sarkar — Unifi Capital — Analyst
Mohit — Anand Rathi — Analyst
Sanjay Awatramani — Envision Capital — Analyst
Vinod Makharia — Mohanlal Investment — Analyst
Jay Daniel — Entropy Advisors — Analyst
Amit Chandra — HDFC Securities — Analyst
Aditi Patil — Prabhudas Liladher — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 FY ’22 Earnings Conference Call of Sonata Software Limited. [Operator Instructions] I now hand the conference over to Mr. Srikar Reddy, Managing Director. Thank you, and over to you, sir.
Srikar Reddy — Managing Director
Yeah. Thank you, Stephen, and good evening, everybody, and welcome to the analyst call post the announcement of our financial results for the quarter for FY — fourth quarter for FY ’22 in our Board meeting today in the morning. The results and the analysis are already posted on our website. And hopefully, all of you had a chance to chat look at them. So I’ll do a quick summary of the year first and maybe a little bit on the quarter that’s gone past. So I think if you look at the year, I think it’ll be very satisfying definitely on the quantitative terms.
So if you see all the numbers, I think there has been tremendous growth, both in terms of topline and bottom line. Across both our two important businesses, the international business and the India business, I think this is, I would say, a reflection of what we have been talking about all the while of executing a very focused strategy of being digital partners for our clients based on what we call our platination methodology — using our IP as a differentiator, continuing to invest in the Microsoft alliance, which we have been doing over the last 10 years.
I think and more importantly, last year also has been, I think, in the kind of the new clients we have acquired, I think the quality of clients acquired last year are far superior in terms of their potential to grow as compared to what we had in the previous year. So we also had an acquisition last year on core systems. We are pleased to announce that integration is done well. And you can see, I think the numbers are adding very well across all the metrics of the organization apart from the fact that they’re also bringing some expertise in cloud and an access to the healthcare vertical.
We continued to invest last year in building our core capabilities, digital capabilities across the various technology stacks. I think last year, as we said, we also start focusing on the non-Microsoft technology stack and started feeding on the Amazon and Google tech stack. Of course, we continue to invest on the Microsoft tech stack. We also, I think, investing very heavily on the cloud and data on the Microsoft tech stack apart from this app platform and the dynamics platform where we have a good leadership position based on a strategy which we have been executing over the last seven, eight years.
We have — I say, we launched our two global general centers, one in Canada, one in Ireland, I think they’ve been a little slow because of the pandemic, but we’ll see these now being utilized greatly as we go forward will definitely help us serve our clients better. So overall, as I said, and if we see our India business, I think it’s on a tremendous growth, again, on the margin, absolute margin at the margin, again, driven by a huge focus on some key accounts, a huge focus on cloud, expanding our cloud offering into Amazon and Google and also adding to new services like security and SI into the mix.
So the India business has done extremely well. Looking at the last quarter, I think the overall results are satisfactory. The margin and is a little low as we had announced, we have done a fairly significant compensation increase in the month of Jan. So that has a bit of a dampener on the margin. But overall, only other metrics look good for the quarter. Coming to the future, as you know, we have announced Mr. Samir Dhir joining us as the CEO of the company. Samir Dhir is based out of US. Samir has a huge track record of scaling organizations, and we do believe that his addition to Sonata, at this stage in our journey will be a tremendous boost to the overall growth agenda of Sonata.
As we go forward, Samir also U.S. We believe that’s going to make a big difference to the way we will serve our clients in our major market. We are looking to continue to invest a lot more in senior talent. We will be announcing the onboarding of our global sales officer based out of London, would be coming on board. And this year, we are looking at it we’ve been making investments continuously in the past. But I think this year, we will take it to another level of investment in — across the board, whether it’s talent, capability, marketing and really use this platform for achieving, I would say extraordinary growth in the future.
So that’s the overall, I would say, outlook for the future and an analysis of the quarter. I’ll hand it over to Jagan to take you through some of the key financial metrics, and we’re very happy to answer any questions you may have at the end of the call. I forgot to introduce my team on the call. We have Samir, the CEO of the company on the call; Jagan, our CFO; Raju, our Chief Delivery Officer; Sujit Mohanty, who heads our India business; and Sathyanarayana, who heads our finance function.
So they’re all on the call. Over to you, Jagan.
Jagannathan Chakravarthi — Chief Financial Officer
Yeah. Thank you, Srikar. Good evening all, take you through the financial performance presentation for this earnings call. Yeah, this is — this talks about the consolidated financial performance of the company period. We are happy to share a couple of three months from which we have crossed during this quarter. This quarter, in dollar terms, we have crossed $100 million mark in the international business. India business has locked in a revenue of about INR4,000 crores — it’s not the INR4,000 crores mark.
And we have bought India business across the profitability PAT of more than INR100 crores. And for the year, and our cash and cash equivalent has about INR1,000 crores of March. So this is an important key achievement for us in this quarter. On this basis, if you see the consolidated revenue, we can’t compare the revenue on the profitability of growth is 4.8 percentage. EBITDA for the last 12 quarters, growth is about 3.9% and PAT quarter we — our growth is about 3.7%.
And International Services, the revenue growth has been — the quarter-on-quarter revenue growth in revenue at 2.6% and EBITDA or 2.7% for the last 12 quarters. Domestic business has been very, very solid. The revenue growth has been a quarterly EBITDA at 5.3 percentage 4.1 percentage and PAT has been — we are up 6.8% for the last 12 quarters. We think this is the financial summary, broadly covering the revenue, both for international and domestic business in the consolidate. Till date is the EBITDA under PAT numbers. I have filter you this — if you see here, we have a solid revenue growth in rupee terms of [70.1%] percentage year-on-year growth has been there.
In terms of EBITDA performance and the PAT performance also has been very, very wonderful for this. And operational metric for this — before this, our quarterly dollar revenue growth has been on a constant currency basis, it is 4.7%. And the broad operational metric, US has improved by two percentage for this quarter. And since Europe and rest of the world has come down by a percentage, the revenue by industry has been given as we know that ISE has been doing very well, it is holding strongly at 32 percentage. And our distribution and manufacturing continues to do well at the same levels in the last quarter. Travel remains the same level at last quarter. Retail S&P has gone up in this quarter.
Broadly, I’m covering the major industry verticals where we have got the contribution from. And for the revenue by competences, as usual dynamics services have done well, it’s about 31% is contribution. Microsoft digital platforms have been continuously increasing their contribution to 21% now. And broadly, all the digital services, cloud and data services also have been done well.
It is holding on the same levels of the previous quarter, but has been continuously doing well. The on-site offshore mix has changed, our offshore has increased by two percentage, which has also helped us improve the operational efficiency and be able to compensate the margins which are interest in this quarter through some — through the majority expense on this.
And revenue by fixed price and T&M, slight changes is there. There is like a collaboration, but it may be differing for the coming days. This is the broad outlook on the operation metrics and few more operation metrics like and new clients have been mentioned. And also the metrics are remaining in the same level, major changes are there in the — percentage in the quarterly moment will not be there. We have got about 150 — 130 employees added to this during this. The details are also given to us.
With this, I conclude my update for the financials and any further questions, you can take that. Thank you.
Questions and Answers:
Operator
[Operator Instructions] The first question is from the line of Baidik Sarkar from Unifi Capital. Please go ahead.
Baidik Sarkar — Unifi Capital — Analyst
Hi, good evening. So this is a relative question. Just given the strong trend that you guys posted in Q3 and the momentum that we continue to feel Microsoft. The sequential growth numbers this quarter seeing the on the lower side, again, just a relative comparison. How should we read this number? Were there any large one-off project closures? And how do you imagine the quantum of growth for the coming year?
Srikar Reddy — Managing Director
Hello. The only way to read it, it’s not a demand issue but as we’ve been taking a bit of a supply issue here, if we could have got the supply lined up, we would have a better quarter-on-quarter on the revenue — on the revenue front. So it’s not a factor of lower demand or tapering of demand or tapering of projects.
Baidik Sarkar — Unifi Capital — Analyst
Sure. So how do you reckon, we address this? Because I think in Q1 of this year also, I think we had a supply side issue. And I think I understand the…
Srikar Reddy — Managing Director
See the whole industry has a supply side issue. I mean, you’ve not just asked. So as I said, I think a few quarters back, I think we have put in a fairly robust plan of creating capacity. It is working, but it can work better. So I think we’re going to do more on that front of more aggressively creating this capacity and making that capacity functional quickly so that we could deploy them meaningfully in projects.
So like we are — now we are doing a lot of, I mean a lot of things about sourcing talent and cross-training and going to tier two centers. That’s how I think given the natural centers, we are looking at them as a strategy to meet some of this — to meet some of the demand. And of course, apart from doing the routine things about increasing the talent hiring capacity, partnering all that other kind of stuff.
Baidik Sarkar — Unifi Capital — Analyst
So on the domestic front, I mean, how far do you think we are from fixing this? Do you think this will again split into H2 of next year? Or do you think this is something that can be trusted in Q1 itself?
Srikar Reddy — Managing Director
Sorry, the question of the domestic front.
Baidik Sarkar — Unifi Capital — Analyst
The supply side challenges, I mean.
Srikar Reddy — Managing Director
Supply side in India.
Baidik Sarkar — Unifi Capital — Analyst
That’s right, yeah.
Srikar Reddy — Managing Director
I think by Q2 next year, we should get this fixed.
Baidik Sarkar — Unifi Capital — Analyst
Right. So on the margin side, given the wage hikes, again, starting Jan, do you think margins have plateaued? Or should we expect further softness coming into H1 of this fiscal? How should we…
Srikar Reddy — Managing Director
We want to invest a lot more. I think disproportionately this year, as I said, Samir coming on board and our chief revenue officer coming on board, investments in global delivery centers, more on-site sales, retail, marketing, more offshore capability building competency and other kind of stuff. That would — I would say, possibly temper margins a bit as we go forward, because I think the wage hike my feeling is at least the dollar depreciation has taken care of a bit of that.
Baidik Sarkar — Unifi Capital — Analyst
Sure. So can we quantify the software, if that’s all right because we’ve come out — we’ve come off a very pool. So when we say that margins will moderate, what’s the rails that we’re really looking at.
Srikar Reddy — Managing Director
Yeah, we’ve always said that net of ForEx and other income, 20% to 22% is a good range.
Baidik Sarkar — Unifi Capital — Analyst
Sure. Thanks. I’ll come back to the queue.
Srikar Reddy — Managing Director
All right. Thank you, Baidik.
Operator
Thank you. The next question is from the line of Mohit [Phonetic] from Anand Rathi. Please go ahead.
Mohit — Anand Rathi — Analyst
Sir, first is on the headcount front. Like it seems like we have moderated a bit in the last two quarters. The following up on your credit left. What is the outlook that you guys have for FY ’22. Second was this thing was also reflected in this million dollar accounts, which I think have shrunk a bit in Q4 versus Q3, while the remainder have still grown. So what could be the reason there? And just from the existing setup which…
Srikar Reddy — Managing Director
Sorry, what was the first question, Mohit?
Mohit — Anand Rathi — Analyst
On the headcount. So if I look at international IT headcount addition, we started on a very strong note, but then during the year, we have moderated.
Srikar Reddy — Managing Director
We need to ask possibilities — so not that, just that we need to add them fast enough but not like…
Mohit — Anand Rathi — Analyst
So what is the plan for ’23 like, what kind of addition are you…
Srikar Reddy — Managing Director
That’s what I just told them, we will get this fixed by Q2 of this year.
Mohit — Anand Rathi — Analyst
And also we’re looking for a number, like what is the plan, like fixing is one thing, but how much do you think for ’23, what should be the hiring numbers of fresher valuate numbers for ’23?
Srikar Reddy — Managing Director
Okay. I will hopefully ask Raju to answer this question, Raju?
P.V.S.N Raju — Chief Delivery Officer
Yeah, Mohit, we are increasing our — we increased our graduate hiring by 45…
Mohit — Anand Rathi — Analyst
By 45?
P.V.S.N Raju — Chief Delivery Officer
100 people last year, hiring 145 people now. So 45% more than last year.
Mohit — Anand Rathi — Analyst
45% more. Can you repeat the numbers? The line was not clear.
P.V.S.N Raju — Chief Delivery Officer
45% more than last year.
Mohit — Anand Rathi — Analyst
And how much was this last year?
P.V.S.N Raju — Chief Delivery Officer
Last year — last year, we hired 405 people more.
Mohit — Anand Rathi — Analyst
Okay.
P.V.S.N Raju — Chief Delivery Officer
We’ll be hiring 45% more this year? Or we hired, would come in [post-July].
Mohit — Anand Rathi — Analyst
Understood. And the second one is related to the existing million dollar accounts. So there was some drop Q-on-Q in international IT.
Srikar Reddy — Managing Director
Maybe Jagan can answer that question. Jagan can take this question.
Jagannathan Chakravarthi — Chief Financial Officer
Yeah, yeah, this was like one contract that come to — one or two customers, the contracts have come to a close. The total run rate of the — although the TCV is more than one million there for the year because of two quarters, we couldn’t make it like $1 million, they will become $1 million in this quarter.
Mohit — Anand Rathi — Analyst
So it is not a loss. It is just that they delayed it, so to say, to FY ’23
Srikar Reddy — Managing Director
What we are saying is that they’re not using potential basis, they’re using a multiplier basis. They’re just taking that revenue in the quarter and I think annualizing it what they are seeing.
Mohit — Anand Rathi — Analyst
Correct, correct.
Srikar Reddy — Managing Director
It’s not that the customer has gone away or the revenue has gone away. So maybe, if we should just look at the way they report these things, Jagan.
Mohit — Anand Rathi — Analyst
Sure. Okay. I understood, sir. And the last one is for Samir sir. So now that there is a change, and it is after a long time at Sonata. So should we expect — or what should we expect going forward? There are the gap for any areas that we have identified where you guys could invest more or something like that?
Samir Dhir — Chief Executive Officer
In the company, Mohit. The next call, we’ll answer this.
Mohit — Anand Rathi — Analyst
Okay. So we’ll wait for three months.
Samir Dhir — Chief Executive Officer
I do think it’s great for the company and in fact…
Mohit — Anand Rathi — Analyst
Understand. Understand, really will ask the same thing next quarter then.
Samir Dhir — Chief Executive Officer
Yes, please.
Mohit — Anand Rathi — Analyst
All right. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Sanjay Awatramani from Envision Capital. Please go ahead.
Sanjay Awatramani — Envision Capital — Analyst
Yes. Good evening, sir. And thank you for giving me this opportunity. You have given this guidance of 20% to 22% of margins. So this is just to confirm that it is EBITDA margin, right?
Srikar Reddy — Managing Director
That’s right. Yes.
Sanjay Awatramani — Envision Capital — Analyst
Okay. And what was the revenue guidance, sir, if you can help you with that?
Srikar Reddy — Managing Director
We don’t give a quantitative revenue guidance. We can’t give a state guidance, we do expect growth to be on the better side the next year. We don’t give a quantitative…
Sanjay Awatramani — Envision Capital — Analyst
Okay. Okay. And sir can you mention the accretion retiming, if you can highlight for this for the full year and quarter…
Srikar Reddy — Managing Director
About 27%.
Sanjay Awatramani — Envision Capital — Analyst
This is for a full year event.
Srikar Reddy — Managing Director
Sorry.
Sanjay Awatramani — Envision Capital — Analyst
This is for full year FY ’22.
Srikar Reddy — Managing Director
Full year FY ’22. That’s correct.
Sanjay Awatramani — Envision Capital — Analyst
And what will be for Q4?
Srikar Reddy — Managing Director
Q4 was about 30%.
Sanjay Awatramani — Envision Capital — Analyst
30% Okay. Okay. And another one for me is that are we looking at any expansions or any capex plans in the new future, sir?
Srikar Reddy — Managing Director
What do you mean by that?
Sanjay Awatramani — Envision Capital — Analyst
No. I mean if you’re investing — I mean you said that you will be hiring 45% more talent. So any location for investment I know, it’s an IT…
Srikar Reddy — Managing Director
New space where we are today. So that’s being built out. We said we have opened some delivery centers in Ireland and Westins so you’ll expand those.
Sanjay Awatramani — Envision Capital — Analyst
Okay. Okay. So this would be only overseas not in domestic, anything?
Srikar Reddy — Managing Director
Domestic, I said, we have taken a new place where we are currently located. A new facility, we are actually getting it out as we speak.
Sanjay Awatramani — Envision Capital — Analyst
Okay. Okay. That’s all on my end. Thank you so much.
Operator
Thank you. [Operator Instructions] The next question is from the line of Vinod Makharia from Mohanlal Investment. Please go ahead.
Vinod Makharia — Mohanlal Investment — Analyst
Good evening, sir. I need to know what is the other income. I think it’s time to refer to the note 10, so what’s the other income addition that has happened this…
Srikar Reddy — Managing Director
The finance team can answer that question.
Jagannathan Chakravarthi — Chief Financial Officer
Yeah. Other you can — pertains to the amount payments taken to Sopris, wire no longer tale about INR26 crores.
Vinod Makharia — Mohanlal Investment — Analyst
Okay. And, sir, just one more question. I mean…
Srikar Reddy — Managing Director
Yeah. I should get add on to that. In contrast is that — there has also been — we’ve taken a write-down on the value of the asset of a similar value. So — so while there’s other income has gone up, I don’t know some expenses. Where does it fit Sathya, the…
R. Sathyanarayana — Vice President – Finance and Accounts
It’s in the impairment of goodwill, basically in terms of other expenses.
Srikar Reddy — Managing Director
No, no. No, not… other expenses. Okay. So yes… Please read both in the EBITDA…
R. Sathyanarayana — Vice President – Finance and Accounts
Both in coming years.
Srikar Reddy — Managing Director
Not at the least, but there has been upfront on one side, and there’s been a downside on the other side.
Vinod Makharia — Mohanlal Investment — Analyst
Okay, okay. Got you. And the next question is, I mean, the entire industry is facing high attrition rates and Srikar mentioned that we also face something like 30% in Q4. So you said you intend to hire more. But any other strategy that you are going to deploy? I mean, are you going to go for another round of wage hike in Q1, Q2? Or what’s your plan in terms of retaining people or ensuring that the supply side issue subsides?
Srikar Reddy — Managing Director
No. Good question. I think the wage hikes, we will do as and when we think they are needed. So I think we almost did three or four Raju in the last five quarters, some very formal and some very tactical. So if need be, we will do that. So that’s given. I mean I don’t think that — we believe that the instrument for retention, I think better employee I mean whether employee engagement and all the other things one needs to do, I think, should go a long way and in having a better retention, wait hike is just one instrument. We will do that, and we’ve done it in the past, and we’ll do it the 2. But as I said, I think to be prudent, we’ll be good to build capacity in advance.
Vinod Makharia — Mohanlal Investment — Analyst
Okay. Okay. But you see no demand side issue at all. I mean given that let’s assume that the supply side issue is controlled as you estimate by Q2 in this fiscal. So what kind of demand — maybe not a number or a percentage, but what would your comment then be on the demand scenario?
Srikar Reddy — Managing Director
Right now, the demand looks healthy. We are not seeing any signals of any of these supply chain or a recession, whatever it is showing up. I mean I will speak today. And with that continues, as I said, we should see a more healthy growth this year.
Vinod Makharia — Mohanlal Investment — Analyst
Okay. Okay. Thank you, sir. I have one more question but I’ll go back in the queue.
Operator
Thank you. [Operator Instructions] The next question is from the line of Jay Daniel from Entropy Advisors.
Jay Daniel — Entropy Advisors — Analyst
Yes, sir. I just wanted to know, can you expand on that focus write-off and milestone right… Back and goodwill write-off?
Srikar Reddy — Managing Director
Yes. So the part of the acquisition of Sopris, there was an earnout which was there as a part of the acquisition cost and they achieve certain goals after three years. That money will be paid. So those goals were not achieved. So that amount, which was whatever taken as paid was reversed, but that became an ask me the logic of accounting entries that became other income. And so then we looked at it and then any scale down the internal goodwill, given the lower revenue growth and now that they will be use scientific metals and then we grow down, a goodwill amount. — it exactly turned out to be around in the same range.
Jay Daniel — Entropy Advisors — Analyst
The goodwill amount is nearly the similar amount of similar.
Srikar Reddy — Managing Director
Yeah, similar. But we didn’t copy each other. It just came out to a model of recalibrating the ideal value.
Samir Dhir — Chief Executive Officer
If you look like a valuation based valuation model has followed hero the future revenue growth, profitability, cash flow generation and then discounting cash flow is around dales a separate process completely different from what has happened in the reversal of an…
Jay Daniel — Entropy Advisors — Analyst
So what is the goodwill rate up more?
Samir Dhir — Chief Executive Officer
About #2.5 million will be best. $2.5 million, and the other income is INR26 crores
Srikar Reddy — Managing Director
And that is out of the INR26 crores and INR23 crores…
Jay Daniel — Entropy Advisors — Analyst
Yes. So your view on the acquisition remains — or I mean you have kind of temper down what you expect…
Srikar Reddy — Managing Director
Has not be a revenue potential as we scale down because of the coverage issues. But otherwise, the acquisition…
Jay Daniel — Entropy Advisors — Analyst
Okay. And because of the supply side issues, were there delays in delivery or did you fill the gap through subcontractors and because of that cost went…
Srikar Reddy — Managing Director
One of that only leaves… No, no. That we have done anyway. So that’s not Mitavat to the cost, but more importantly, as we said, could not deliver so could not recognize well.
Jay Daniel — Entropy Advisors — Analyst
Okay. This normally doesn’t result in any unhappy customers, right?
Srikar Reddy — Managing Director
I think customers are also now fully aware of what’s happening there. So it’s a lot more easier now to talk to customers than in the past.
Jay Daniel — Entropy Advisors — Analyst
Okay. Thanks, guys.
Operator
Thank you. [Operator Instructions] The next question is a follow-up from the line of Vinod Makharia from Mohanlal Investment. Please go ahead.
Vinod Makharia — Mohanlal Investment — Analyst
Sir, this is a very generic question. How do we rate ourselves versus competitors in terms of complexity of projects that we execute. Some highlight on that, some flavor on that would be helpful.
Srikar Reddy — Managing Director
Okay. I don’t know any wait out — I mean to rate — but I ask Radio explain something to explain the level of complexity we delivered. So we will get an idea of the depth of what we offer to our clients. I don’t want to put down in very concern better than the — but yes, I mean, we’ve got an appreciation that we do very core work, and we do deep work and very, I would say, strategic work, transformative work. Maybe I’ll ask Adi to give you one or two examples so you get a better guess.
Samir Dhir — Chief Executive Officer
If you look at from a complexity perspective, we have most of our products come around engage. For example, for one of the largest ISP vendor, software product vendor, we are building the old their legacy products on to the cloud with all the latest indicators of the at — so you’re doing very, very core work.
Srikar Reddy — Managing Director
At the same time, they have the customers in existing systems, so we need to ensure that there’s continuity for them in terms of the U.S. Similarly, for a large rental company to a gain, we are doing similar type of projects. Most of them either are — when the companies are going through digital cancellation. They’re looking at either the customer experience facing the customer facing applications or agreement processes, the core impact actually said they’re changing. So most of the call biograms we’re giving the area that size, even on Microsoft Dan.
Vinod Makharia — Mohanlal Investment — Analyst
Okay.
Srikar Reddy — Managing Director
And even the talent, what we the consent is because of that because these people are not available in the market. You have to create them a very, very high cost point. So that’s which I’ll be taking today.
Vinod Makharia — Mohanlal Investment — Analyst
Okay. Got you. Okay. And just one more question, if I may. We have almost INR800 crores net of the dividend that the Board declared and we are generating INR400 crores plus almost every year more than that impact. So any change in the dividend distribution policy going ahead?
Srikar Reddy — Managing Director
Or I mean are you looking at has been initiate If you’d like to… You any highlights on that? Our dividend policy… Right now is fairly aggressive. I think we give up almost 60% of our consolidated net profit. I would say, fairly reset. But have we said, yes, I mean, cash, we want to use it prudently, but we are looking to see, get good quality assets, which meet our requirements in all terms,
Vinod Makharia — Mohanlal Investment — Analyst
Benaderet for nothing bodega. — hepato request has been initiated. If you’d like to… I mean my understanding of the from 2016, I we’ve been investors in Sonata ever since then. And so thank you for this entire journey. Thank you so much.
Srikar Reddy — Managing Director
My pleasure.
Operator
Thank you. The next question is from the line of Amit Chandra from HDFC Securities.
Amit Chandra — HDFC Securities — Analyst
Hi, sir. Thanks for the opportunity. So my question is on the Microsoft revenue. So in this year, for the full year record the Microsoft-related services has grown at around 28.5% for the full year. So how much of like this would be organic? And also in terms of investments, how do you see the Maxinetments from here on whether will be still investment in Microsoft or will from here on, let’s try invest into other verticals apart from like what we have been doing like around Microsoft.
And also on the travel vertical, if you could give some color how the travel is like recovering and how the help of the top plant is there? And lastly, on the utilization part, we are at 91%… I know there is huge like supplies had come down. So is it like sustainable range? Or do you expect that to come down?
Srikar Reddy — Managing Director
Okay. Let me answer the last question first, easy to answer. So that’s going to come down. I mean so we can’t operate at this level. So we need — then we can’t statbodemand and build capability, capacity and all that. So because of the supply side that keep such a high level. So that’s going to come down. Second question is how is our travel client doing the business is back to more or less normal, and we expect that business to be over us next year. So that’s the statement on the travel plant. Third question was what investments in Microsoft…
Yes. So we have grown 28% Microsoft for this year. So how much of that is organic and the investment in… Sorry. So how much is our investment going to be in my case of technologies? Is that the question? Yes. So investments and whether all the growth that we have done this year, this is all organic or there is some not going to come on also to it. Okay. That’s the second part I can ask Jagan to answer. There will be definitely some inorganic because that would have come from Concur.
So there would be, I don’t know how much percentage, Japan, maybe you can answer that question. But yes, the investments will continue to be there. As said, greater focus on cloud and data. We continue to invest appointees apps, but a bigger focus on cloud and data. And so that’s going to be a big big bet for us to share full up my investment on all fronts. Jagan, I don’t know, maybe if you have a quick answer, you can answer Aixin terms of what percentage of that is coming from on goes and part of growth. Yes. Encore back increase, I would think, out of the 28%.
Amit Chandra — HDFC Securities — Analyst
Okay… And sir, one last question is on the onsite offshore mix. So we have seen more shift offshore and that has been declining. So is it because of a particular client? Or is it more to do with across sites, we are seeing more offshore shift?
Srikar Reddy — Managing Director
Okay. Again, I think I’ll ask Raj to answer this question. Yes, I think the — this is — as what we think we are having the difficulty in people to travel to some of these on-site locations, particularly Australia?
And we are doing that work from offshore. But what we see going forward is I think over time, it gets corrected back to the older numbers. And with now the centers coming in Ireland and Canada, we still get taken back to the on-site. Okay. I think with customers moving or coming back.
And all the centers that were opened in Ireland, Kanaha are the centers. We just started taking it say, but yes, we get sent some people and what all the registrations done as of today. Canada, we have one Mattel people… I didn’t we just started.
Amit Chandra — HDFC Securities — Analyst
Thank you.
Operator
Thank you. The next question is from the line of Aditi Patil from Prabhudas Liladher. Please go ahead.
Aditi Patil — Prabhudas Liladher — Analyst
Hello, sir. So my question is regarding supply side issues, whether the supply side issue will limit growth in FY ’23 as well as especially in first two quarters of FY ’23.
Srikar Reddy — Managing Director
Actually, no, probably the first quarter of FY ’23, we don’t think that it should affect beyond that other team.
Aditi Patil — Prabhudas Liladher — Analyst
Okay. And in this quarter, like can you quantify how much of the revenues were missed because of not able to deliver.
Srikar Reddy — Managing Director
Another at least 2%, 2.5%.
Aditi Patil — Prabhudas Liladher — Analyst
Okay. Thank you. That’s all my question.
Operator
Thank you. [Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Srikar Reddy for closing comments. Over to you, sir.
Srikar Reddy — Managing Director
Right. Okay. Thank you. Thank you all for joining the call today. Thanks for all your support to us over the last years. We look forward to continue your continued support forward to talking to you soon. Thanks again for joining us today. Thank you.
Operator
[Operator Closing Remarks]