Despite the headwinds of wage inflation and decline in price realization, Wipro Technologies has seen a margin expansion of 30 basis points sequentially to 24.5% during the June quarter. In an interview with FE?s Debojyoti Ghosh, Wipro?s executive director & CFO Suresh C Senapaty talks about the firm?s lever margins and other factors that will have an impact in the company’s performance in coming quarters. Excerpts:

What helped you offset the impact from high wage bills?

There are a few factors. First, effective foreign exchange management saw a 60 basis points upside. Secondly, we had improvement in the bench. We had done a lot of hiring from the campus, which are low-cost. There has been an improvement in the bulge management, which means the average experience profile of people has come down. We are working on it quarter on quarter. Combination of these factors offset the negatives.

Are your current operating margins sustainable in the coming quarters?

In the medium to longer term, these margins are sustainable while quarter to quarter, there could be aberrations. There are multiple levers to work on this like utilisation, bulge mix, price realisation. Combination of all these will have something good or bad. There could be a good or an adverse affect quarter on quarter but over a period of time it will normalise.

How will you rate the June quarter?

We delivered ahead of the top end of our guidance in constant currency revenue at $1,218 million with a sequential growth of 4.4% and reported revenue at $1,204 million, with a sequential growth of 3.2%. During the June quarter we also added 100 accounts with revenue greater than $10 million. We have also given restricted stock units (RSU) and progressions effective July 1, 2010.

What are your expectation this quarter?

For the quarter ended September 30, 2010, we expect revenue from the IT services business in the range of $1,253 million to $1,277 million, a sequential increase of 4.1% to 6.1%. In the coming quarter, the demand outlook looks good. We think more of the growth will happen through volume. Regarding margins we have to look at it in the medium to longer term and not quarter to quarter. The two main challenges in the current quarter will be attrition management and hiring people to meet requirements.