ET Now: Walk us through the various tailwinds and the various headwinds that have been at play when you arrived at your margins this time.
Aparna Iyer: Obviously, the headwind was the weakness in revenue itself, and we also continue to invest in our talent. We rolled out a long-term incentive stock grant for some of our employees. So, we continue to invest in our talent.
The operational rigor has really helped in sustaining the margins and improving them slightly quarter-on-quarter and improving them by 40 basis points year-on-year. The levers that have been at play are the improvement in fixed price productivity, the optimization that we are doing on the overheads in terms of the G&A, and you can see that our utilization is now at a recent high. So, all these levers have helped. Some of these levers will continue as we look into the future as well.
ET Now: But do you have further scope when it comes to improving utilization? And also, let me ask you, would it be even fair to expect a 17% margin at least by the end of the year?
Aparna Iyer: So, you are right that the utilization has improved and is perhaps at a reasonable high. Every time we have said that we have improved quarter-on-quarter, but right now it is safe to say that it is where we would like it to be. There are other factors I spoke about, such as improvement in fixed price productivity, optimization of our overheads, and inducting freshers into the workforce that help in improving the pyramid. So, yes, there are more levers to look forward to and we will continue to flex them. As for whether we can get to 17%, we do not guide. This time we have said we are going to keep it in the narrow band with an upward bias. So, like Srini said, one step at a time.
