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Birlasoft taking steps to address attrition; confident of delivering 15% margin

earnings | Oct 27, 2021 11:06 AM IST

Birlasoft taking steps to address attrition; confident of delivering 15% margin


Birlasoft posted strong Q2 earnings. Revenue growth has accelerated 18 percent year-on-year and deal wins also look robust. There is however a 100 basis points margin decline for the company this time around owing to wage hike pressure. In an interview with CNBC-TV18, Dharmender Kapoor, Managing Director and CEO, discussed the company's performance and attrition woes plaguing the industry.

IT firm Birlasoft on Tuesday reported a 49.2 percent rise in consolidated net profit to Rs 103.1 crore for the September 2021 quarter. The company had posted a profit of Rs 69.1 crore in the July-September 2020 period. Revenue from operations grew 18 percent to Rs 1,011.7 crore in the period under review from Rs 857.5 crore a year ago. "Our laser-sharp focus on operational rigour and disciplined execution has led to the highest utilisation till date at 85.8 percent. With an increased demand for key skill sets spurred by business growth, our headcount has grown by 20 percent year-on-year," Dharmender Kapoor, Managing Director and CEO,  told PTI.

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In an interview with CNBC-TV18, while discussing the company’s Q2 performance, he said, “Most of the impact that is coming in is because of the wage hike and some part of it I can blame on the attrition that is there in the industry. When we have good momentum in the industry, attrition is bound to go higher. We are addressing attrition in multiple ways so that the cost of resources does not go higher.”
Kapoor added, “It is already working positively for the last one month and I definitely see that in this quarter, it should give us some benefit."
“We will continue to deliver more than 15 percent margin,” he mentioned.
On deal pipeline, Kapoor said, “In this year, there is a lot of pent-up demand that is coming from the previous year and the pent-up demand is always in the form of projects. However, the projects are not going to show you a long-term revenue. Hence the revenue may look smaller but for the annual contract value (ACV) or the annual revenue perspective, it will always be higher than the total contracted value. So from that perspective, I believe it is positive. I don't think that I should be too worried about variation in the number that happened quarter-on-quarter.”
For the full interview, watch the accompanying video.
(With inputs from PTI)
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