FY14 margins expected to be flat: Infotech Ent

Operating margins for Infotech Enterprises slipped by 120 bps this quarter, says Krishna Bodanapu, Infotech Enterprises, the reason being a shift in the company's business from onshore to offshore . Talking to CNBC-TV18, he says he expects operating margins to be flat for FY14, assuming that the rupee holds where it is. The company has witnessed a slowdown in its customer base.

Here is the edited transcript of the interview with CNBC-TV18

Q: What kind of a trajectory are you hoping to see for your operating profit margins through the course of this calendar year?

A: For the course of the year we believe that operating margins will at least be flat assuming that the rupee holds where it is. Obviously there will be changes if the rupee changes. So we closed FY13 at 18.2 percent, and we believe FY14 will be in the same range.

Q: Can you first take us through how exactly the margin picture panned out for Infotech Enterprises this quarter, because we do understand there was a bit of a deceleration in the EBIT margins on a sequential basis?

A: The margins went down this quarter by about 120 bps or so. The reason for that is we had a little bit of shift in our business from on-shore to off-shore. What that meant is while the number of hours, which is the true measure of volume, was higher than what it was last quarter. Revenue was lower by about 2.2 percent, which was because of this shift. That translated into lower margins. So margins were lower by about 120 bps this quarter compared to Q3.

_MORETOCOME_

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