Will have a higher wage bill in FY11: Hexaware

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In an interview with CNBC-TV18, Atul Nishar, Chairman of Hexaware , spoke about his outlook for the company.

Here is a verbatim transcript of an exclusive interview with Atul Nishar on CNBC-TV18. Also watch the accompanying video.

Q: Are you seeing a heightened attrition? Do you think in FY11 you will have a higher wage bill?

A: Yes of course. The wages have to go up. It is not just the fear of attrition, however, since the slowdown phase last year, there have been no increments given in the industry. This year we can expect normal increments to return. Therefore, the wage bill will go up.

Q: If you could tell us that your peers have hiked the wages by about 8-12%, how much do you think Hexware would do and when you would initiate that process?

A: We would be giving increment effective from April 1. We believe that we would be in the higher end of the range that you described. What is more important is not just the percentage, but the higher increase will be in junior grades and lower increase for the senior grades.

Q: Where does the attrition rate stand currently?

A: We are seeing currently 17-18% attrition which is not yet higher. This is still normal.

Q: What will this do to your margins? Do you think you will be able to absorb these rate hikes in terms of higher wage bills or simply more volume of work done?

A: In the short run it will have an impact. There will be a negative impact in the margin for quarter or so. Now that the demand scene is improving, we expect the growth to return from the quarter of April to June. Once the growth takes place the increase will get absorb in a quarter or quarter and a half.

Q: Do you expect the April-June quarter to probably suffer from some sliming of margins?

A: Yes.