ET Now: Walk us through the various tailwinds and various headwinds when you reach your margin at this point.
Aparna Iyer: Obviously, revenue was weak and we also continue to invest in our talent. We have issued long-term incentive stock grants to certain of our employees. Therefore, we continue to invest in our talent.
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Operational rigor has actually helped margins sustain and improve slightly quarter-on-quarter and improve them by 40 basis points year-on-year.
The levers that are in play are fixed price productivity improvements, optimization that we’re doing on overheads in terms of G&A, and you can see that our utilization is now at recent highs. So, all these livers have helped. Some of these levers will continue as we will see in the future.
ET Now: But do you have more scope when it comes to improving utilization? And also, I ask you, would it be fair to expect at least 17% margin by the end of the year?
Aparna Iyer: So, you are right that usage has improved and is probably at a reasonable height. Every time we have said that we have improved quarter-on-quarter, but right now it is safe to say that we are where we want it to be. There are other factors that I have talked about, such as improving fixed cost productivity, optimizing our overheads, and inducting freshers into the workforce that help improve the pyramid. So, yes, there are more levers to look forward to and we will continue to flex them.
As to whether we can reach 17%, we do not provide guidance. This time we have said that we are going to keep it in a narrow band with an upward bias. So, as Srini said, one step at a time.
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