Infotech Ent's margin guidance at 19-20% on track

Here is a verbatim transcript of the exclusive interview with BVR Mohan Reddy on CNBC-TV18. Also see the accompanying video.

Q: What happened this time around on the currency front? In constant currency terms, what kind of revenue and net profit growth it was?

A: There are two parts of business. One is operations and the other is the non-operating part of it.

Coming to the operating part of the company, we certainly believe that we have posted good results in troubled times that we are in. We grew our revenue by 5.1%. We were at about Rs 232.7 crore. If you look at it year-on-year, we also grew by about 31.6%. In rupee terms, it grew well.

Q: But the dollar term it is down nearly 6%?

A: We have businesses which come from UK, from Europe, from Australia and these currencies have definitely become dramatically weaker in this particular quarter compared to the dollar.

I cannot say I can get my money only in dollars because clients are spread all around. That is the de-risking strategy we have adopted. That impact was negative 7.1%. So in the real dollar terms, we still grew by about 2.1%.

Q: What are you guiding for the next quarter and how have you hedged yourself?

A: We have hedged ourself not only for the next quarter but for the next several quarters thereafter. We made a disclosure on that too yesterday. For the next quarter, we are saying that we will probably have a slightly better than Q3.

If you look at our revenues at this point of time, for the current quarter we were at about Rs 233 crore and probably it will move more towards Rs 250 crore. Rs 223-233 to Rs 250 crore is the band in which we operate.

Q: there was one large customer on whom you saw substantial de-growth this time?

A: It is a fact and its one of our engineering customers. We did see a de-growth in that particular customer account. It is primarily because he also had poor order position with him and he had some order cancellations on himself. That is the reason why de-growth happened, but the client continues to be very pleased with the work that we are performing. It is not that it has come to a standstill.

There is about 30-35% reductions on our business with them. But as soon as their business comes back, it is almost now certain that we will also get back our revenue profile from them.

But in spite of that, we still grew our engineering business last quarter. The engineering business last quarter, in rupee terms, grew 7.6%. If you look at it from corresponding period last year, we grew it by 41.5%.