BANGALORE: Thanks to operational improvements in supply chain and lowered SG&A costs, better margins from its BPO business and string of acquisitions, Wipro Limited today said that it has managed to offset the pressure on its profitability arising from wage increases and rupee appreciation.

“During the quarter, we effected salary hikes in November for offshore employees that impacted our margins by 180 basis points. Operating margins of our acquisitions portfolio improved by more than 330 basis points sequentially,” said Suresh Senapaty, CFO, Wipro.

The company’s chairman Azim Premji, said that the company had set aside a hedge fund of $180 million to counter any foreign exchange pressures in the forthcoming quarter.

“The customers are still in the decision making cycle. We will see a better momentum in the next quarter,” said Senapaty.

The company expects to see a change in its mix of Application Development and Maintenance (ADM) and new services revenues in the coming years. ADM business makes up for 60 per cent of the company’s services revenues while new services form 40 per cent of the business. Three years on, the company expects this mix to be 55-45.

Acquisitions pay off

Wipro’s string of mid-sized acquisitions last year including the $23 million purchase of 3D Networks and Planet PSG; the $31 million deal for Sweden's Hydrauto Group, Finland-based wireless design service company Saraware Oy for $32 million; and the $52.3 million purchase of Enabler, seem to have paid off.

“Our acquisitions made in the last 12 months have grown far ahead of our organic growth,” said Senapaty.

Sudip Nandy, chief strategy officer, Wipro said that the company would be looking at bigger acquisitions, given the successful run of its recent buy-outs.