Margin expansion, effective tax rate, and revenue increase are the three factors that boosted

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the net profit in the first quarter, said Suresh Senapathy, director and chief financial officer of Wipro Technologies.

Wipro’s margins during the first quarter expanded 30 bps QoQ to 24.5 per cent. The margin was 22.2 per cent in the first quarter last year.

As there was some amount of write backs of the past periods, the effective tax rate during the quarter reduced by 1.8 per cent to 15 per cent and revenue for the quarter increased 16 per cent.

Referring to pricing environment, Senapathy said there is significant impact in onsite due to cross currency, and said the pricing is stable to positive presently.

Wipro had a benefit of 60 bps during Q1, compared to fourth quarter last year, on account of foreign exchange.

“Currency volatility will continue. Our overall hedge book remains the same at $1.6 billion. The price realization at which we have hedged for the second quarter is not as attractive as it is for first quarter. So, there will be some headwind on account of forex. Also, some of the people-related action in terms of wages and promotions will increase the cost and will have an adverse impact of less than 1 per cent. So, there will be some headwinds in the second quarter,” Senapathy said.

The company added 22 clients in the quarter, 9 from US, 9 from India and Middle East, and 4 from Europe and APAC.

“For us, Europe is flattish. Adjusting for the cross currency, we have grown about 3 per cent. Overall, the European markets, particularly Germany, France and UK, look stable,” he said.

Referring to the regulation articulated by SEBI where the promoters should decrease their stake to 75 per cent, Senapathy said the central government has come out with regulation and adequate changes has to happen as far as SEBI is concerned. Definitely, when the law comes, we will comply with it.