Excerpts from CNBC-TV18’s exclusive interview with Narendra Patni:

Q: Take us through the margin picture in the quarter under review and how do you see the margin picture panning out for the next two quarters?

A: The margin picture this quarter went quite well, we were substantially up and it was greatly helped by the rupee. We also had some unexpected other income coming from the maturity of the other investments. So the margin picture was extremely good and going forward we will be able to maintain the margins. However, the other income and the rupee situation may not be as strong. The margin was higher than forecasted and we were 28% above the guidance than last quarter and the PAT this quarter is up by 33%.

Q: You have guided the revenue for the third quarter at 122 million to Rs 183 million, it’s kind of a flat guidance, what kind of pressures are you expecting?

A: It is a flat guidance and there is no denying of it as this year has been under pressure revenue wise and all other parameters of the company and well diversification is on track and non-top ten growth is twice of what we see here. Our GE concentrations are down but our problem remains that we have a dependency on the top-ten customers and the shaky macro environment and we are working internally to work on both areas to increase the sales productivity structure.

Q: What are the various segmental growth patterns you see going forward, namely the BFSI space and any significant slowdown expected there?

A: This quarter growth has been quite good. Compared to the industry we grew about 3.5% which is very much in keeping with all the peer players. This quarter was on telecom and manufacturing and we haven’t seen any major worries in the BFSI sector. I should qualify that because financials are not very big for insurance is but unlike others we are no seeing any cancellations and we are just seeing stretching on orders and in telecom when others went down we were actually ahead. So sector wise we were okay - it was just that overall macro conditions and stretching out of the orders due to the uncertainty in the environment which is what keeping the revenues on the mellow side.

Q: Even the net income guidance has been lower, about 18million to 18.5 million versus the 24 that you have done, what are the pressures? Is it that you are not able to get higher billing rates and had you to settle for lower billing rates, how is the order pipeline looking?

A: As I mentioned the margins this quarter were helped very heavily by other income, and it is very hard to forecast the other income, so when you look at the quarter to remember that the other income factor is not there. So it is hard to tell what it would be.

Also we do not know the rupee situation as this quarter was held by rupee, we are assuming that the rupee might remain very even going forward. So the margin picture is held by these external factors. On going basis, the margins remain under pressure because of the salary increases and we are seeing some price increase. But a more important thing is that we are not seeing any pricing pressure - the customers are not asking for any reduction in prices and we have been able to made our pricing scenario the way we like to see it.

 Q: Could you break up the deal flow and the sort of orders you expect from the US and the non-US space going forward?

A: We couldn’t break the order stream, but I could tell you that US is about 76% and going down, which is what we would like to see. The US portion of our business went down by about close to 1% point.

The growth area for us is EMEA (Europe, Middle East and Africa) - and that grew by almost 10%. So, to put it in perspective, while our revenues grew 3.5%, EMEA has grown 10%. So that is a very strong emerging factor and that is what we want to do.

The three areas that we are working on in helping our revenues to start galloping again are the sales productivity, geographical expansion, and increasing our solutions capability. As you are aware, we have made some changes in the organisation. Mr. Loek van den Boog is an Executive Director. We have realigned our sales force. Although we are worldwide verticalised, we are now putting all the sales through a single channel for consolidation of sales and creating much more emphasis on solutions capability. So by evolving our organisation we are trying to regain the momentum in revenues.

Q: What is the deal flow looking like say for the next 12 months, not just for this quarter or the next quarter, but are you getting a sense that deal flow could be under pressure for the perceivable quarters?

A: We do not see deal pressure. I regard that if our revenues are not growing it is our internal problem. I don’t really see that much of a problem in the marketplace. We are not seeing any cancellation of orders. We are seeing stretching of orders, which is all right. Customers are coming in, we added in Q1 some new customers. I am not seeing anything out of the ordinary here if you ask me.

Q: Could you update us on your buyback process which started I believe on July 10?

A: Yes, the buyback is going on well. The last time I looked at it, which was yesterday, we have purchased close to 600,000 shares and the process is moving well ahead. We were expecting that we would be buying more. But people believe in the long-term in the company and so there are not that many shares available.