Well, not really, this is Srinivas here. We would like to continue with our strategy of hedging only 50% of our expected dollars in flows over the next one year. It has held us in good stead over the years. It has also helped us in achieving the mandate given towards by our boards, that we should be able to protect the company from the vagaries of FOREX moments, not so much to make money out of it. So, if you look at our last three years performance on the hedging, I think we have achieved that objective and cumulative gain or loss because of this, it is almost zero. So, that way it is very close to the objective in effect for our results. So, we want to continue with that strategy even going forward.
Arvind Ramnani – Bank of America Securities
Sure, can you please go through the margin trade, various factors such as currency, wage hikes, pricing and I know you have mentioned them earlier, but can you just go through them in detail?
V. Srinivas
Yeah, I mean as I was mentioning this quarter Q2, rupee depreciation, the rupee depreciated the US dollar by around 3.6%. So which will have an impact of around 100 basis points and there are various other…they won''t explain full story we will have the loading factor improving and also we have the offshore mix going up, the offshore going up almost 1% and we have the SG&A coming down. So, these are the various things, which will work on the margins.
Arvind Ramnani – Bank of America Securities
Sir, thank you.
V. Srinivas
Welcome.
Operator
Thank you, Mr. Ramnani. The next question is from the line of Vikas Jadhav from Motilal Oswal Securities, please go ahead.
Vihang Naik – Motilal Oswal Securities
Hi this is Vihang. I just had a couple of questions. We have seen some pressure on the retail and transportation vertical. I was just wondering whether these clients come from the geographies, where cross currency effect is higher. Any reason for that?
Ram Mynampati
Some of those trends come from those geographies yes, but that’s what I was saying earlier that the numbers can sometimes be misleading. We have a good set of customers in transportation sector, geographies that continue to grow. We see volume growth in those customers but that growth doesn’t translate into percentage growth in dollar terms. While that is the case, there are customers in the US market for example in transportation sector that are not growing for obvious reasons. So the transportation is a market segment that is significantly challenged in the US, not the least because of the high oil prices. So, all in all what you see is a combination of a growth that doesn’t find its way to the dollar growth numbers and markets where there isn’t growth.
Vihang Naik – Motilal Oswal Securities
Okay and another question, regarding the fixed price contracts I mean, we have seen them going down QOQ actually. The percentage of total sales has gone down, so any color on that?
Ram Mynampati
Not really. I think it is just a result of some fixed priced projects coming to fruition closer and new project starts relating to deals that we have won. There is nothing specific as I said our continued focus is to do as many projects in the fixed price in a creditable fashion as we can. There is no change in the strategy and always just a combination of factor that would give you those numbers.
Vihang Naik – Motilal Oswal Securities |
