Tata Consultancy Services (TCS) was looking to end the 2022-2023 fiscal with a 25 percent margin but it came in lower at 24.5 percent for the last quarter of the fiscal. However, the tech behemoth aims to get closer to 26 percent margin at the earliest.

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When asked how soon the company is likely to clock 25 percent margin, Chief Financial Officer (CFO) Samir Seksaria told CNBC-TV18 that he won't get into it at this time given the uncertainties that are currently visible.

“What started at the beginning of the year, in the last couple of months has significantly changed. So our focus will be to take the headwinds and structurally move towards it like we do in any financial year,” he told CNBC-TV18 on April 13 post-earnings. He added that the tech giant’s aspiration is to get closer to 26 percent as soon as possible.

Reflecting on a likely turnaround in margin since attrition is coming down and labour is unlikely to get more expensive in the US because of the tightening measures, Seksaria said the firm has structurally worked towards it through the last year and that should continue.

Also Read: TCS sees 'disciplined' net addition of 821 employees in Q4, attrition eases to lowest in three quarters

“In the peak of supply side challenges, we invested in a capacity at scale, and we brought in fresh talent, trained them on newer technologies and built a talent pool…In the recent months, we have ensured that the attrition doesn't get backfilled and reduce on our lateral hiring intake,” he said.

Highlighting quarterly results, Seksaria said high cost and subcontractor costs have been replaced and these would be the cost levers the firm will continue to focus on.

Meanwhile, Milind Lakkad, CHRO, TCS, said he believes wage inflation is behind on-site. “Overall in general, though, in UK, in Europe, we are still seeing significant wage inflation. Not in the US as much because of various other reasons but I think in general, we are okay with this. But things will stabilise even further.”

Also Read | TCS campus placements: Tech giant plans to hire 40,000 freshers in FY24

On actual hiring numbers, Lakkad said, the company had a significant intake last year and did a lot of investment in training this year for people and some of those are still getting deployed. So, that investment is playing up right now and that is what is reflecting in the hiring numbers.

On when the cost of delivery would normalise to pre-COVID levels, Seksaria said, it's a year of transition. Post pandemic coupled with the supply side challenges, manpower BE expenses increased and the firm is now working towards getting aligned to the pre-pandemic cost structures.

On the other side of non-manpower expenses like travel and marketing facilities, to an extent were all subdued. “So, we see convergence happening on both sides and increasingly we would expect it. If you have to get back to the cost structures, it has to converge to the cost structures when we operated in that 26 to 28 percent band.”

Also Read | TCS Q4 Results: Constant currency revenue growth slowest in 11 quarters

Watch the accompanying video for the entire interview