Hexaware Technologies has announced its fourth quarter CY06 results. The company posted a net profit of Rs 33.5 crore (Rs 337.5 million) versus Rs 34.7 crore (Rs 347 million) in the previous quarter, down by 3.4%.

Commenting on the results, the company's Chairman Atul Nishar informs that the cumulative order book for CY07 stands at USD 170 million. He feels that the investments in coming quarters will impact margins.

Nishar further adds that margins have been impacted by 1.3% due to forex losses. He also informs that proportion of onsite business stands at 61% while offshore stands at 39%. Nishar expects new businesses to come in at higher rates.

A: This quarter, we have improved the operating margins; the operating performance was superior except for the impact of the Forex. So if we exclude that, which was beyond our control, then our profit would have been much higher than this.

Further, we added 12 new clients, around 350 in the headcount and the order book has increased by around USD 40 million in this quarter. Now the cumulative order book that we have for current year 07 is USD 170 million, which is very healthy.

A: FocusFrame revenue is added only for one month and not the whole quarter. So the revenue number is in line with the guidance.

A: In the coming quarter, we are making substantial investments, which will impact the future business and the competencies that we provide to clients. So there are some one-time expenses, which we have factored in for the coming quarter.

A: That would be around USD 1 million, which would go into investing for the future. These are being written off during the quarter.

A: The impact on the margin was 1.3% on account of Forex because on a month-to-month basis, it is almost 4% depreciation of rupee. Apart from that, we also had one-time expenses of around USD 250,000, which were pertaining to the FocusFrame acquisition, which was also written off.

A: The offshore percentage is around 39%, while the onsite one is 61%.

A: It is more or less similar at the moment. We, of course aim to improve the offshore percentage, and our aim over the next two months is to improve that into 40s. So certainly, there is a scope to improve that to impact the margin expansion going forward.

A: The onsite rate of USD 66 that we achieved this quarter compares favourably with the industry and the offshore rate was USD 22.92, which of course, has remained more or less the same.

Going forward, we believe that the new business that comes, will be at a higher rate and gradually, we will see improvement in the rates, both onsite and offshore. But the existing business, of course, being a larger percentage, takes much longer to see a change in the rate. So for the purpose of guidance, we have assumed the same rate for the whole year.

A: Currently, we have USD 41 million clients of our 129 and there are four clients worth over USD 10 million and five clients above USD 5-10 million.