The company focus to maintain operating margins in 11.5-12 percent range. The operating margins are higher due to one-time sale proceeds. Santoor brand continues to power market share. The bottomline growth got major boost by Yardley & Santoor.
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Below is the edited transcript of his interview to CNBC-TV18.
Q: A very good performance this quarter. Do investors get advantage of this or is this already a demerged and delisted entity?
A: The demerger process is already in process. Hopefully, the demerger should get announced in next six months odd. An Extraordinary General Meeting (EGM) has been held in end of December and now it will depend the court ruling. Broadly, it should happen in next six months. So to that extent it is still a part of Wipro Limited.
Q: Your margins have seen a strong improvement sequentially as well as on y-o-y basis. What lead to this margin expansion and what would be your run-rate which we could see going into the next couple of quarters?
A: Our focus has been to keep our operating margins between 11.5-12 percent and grow top-line significantly higher than the industry. In this quarter there is a higher jump in operating margin largely due to one-time entry that we announced that we had sold off our Vanaspati business last quarter so we are seeing a one-time increase, but broadly it had remains between 11.5-12 percent range. It has been in line with our top-line growth that we have shown of about 17 percent this quarter.
Q: What helped you get this kind of a margin improvement? Is that a sustainable margin?
A: In whole business, Santoor continues to power growth. When we look at our market share in December, it shows that we are No. 1 in west and south, Andhra Pradesh, Maharashtra, Karnataka and No. 2 in Gujarat. So with Santoor our margins do tend to improve. Yardley continues to do well. In international business, China, Vietnam, Indonesia and the Middle East have done well.
The acquisition that we announced last quarter of LD Waxson which was close to adding about USD 68 million to our revenue should start kicking in this quarter. That did not impact our last quarter's revenue run rate or the margin rate. The margin has shown a positive blip largely because of one-time entry of the Vanaspati sale that we did, but broadly it is in line with the operating margin of 11.5-12 percent.
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