#4 Wage hike will offset rupee gains

The company has implemented 8 percent offshore hike and 3 percent onsite hikes for the employees. This is expected to impact operating margins by 300 basis points in the next quarter.  Subcontractors, Visa and travelling costs are also increased sharply impacting the margins. And then the company also spends money on sales and marketing. Also, an increase in onsite revenues impacted the margin. As a result, benefit arising out of rupee depreciation was completely offset by an increase in these expenses.

#3 Attrition rate up

Lately the company is facing work force problems. Infosys saw attrition rate of 16.9 percent for the first quarter compared to 16.3 in previous quarter and it was 14.9 percent in the comparable year-ago period. It is now the time to see if Infosys can retain its talent pool and increase it by adding more.

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