On Friday, Mid-sized information technology firm Persistent Systems reported that its June quarter net profit rose 40% to Rs 211.6 crore.

The Pune-based company reported a 52.7% rise in its core revenue to Rs 1,878 crore.

Its chief executive, Sandeep Kalra, said the company was less concerned about macro conditions, including the threat of a recession in its largest market, the US, where the central bank has sharply raised interest rates due to record inflation.

The company, which reported a total contract value of $394 million in the reported quarter, is watching developments with caution but is confident in the momentum of the business.

He said that even in a recessionary environment, the services provided by IT offshore companies are relevant, which will lead to better business performance.

Its operating margin widened to 17.7% from 17.2% in the previous quarter, mainly benefiting from currency headwinds. Declining IP-related revenue and hiring more than 3,000 people were headwinds to profits. Its chief financial officer Sunil Sapre said average wages for employees in India and overseas have risen by more than 10% and 5% since July 1 and will face up to 3% in the second quarter.

He said the company will rely on increased utilisation and less on subcontracted staff, as its employees can now travel to customer locations.

Another 1,350 fresh graduates the company has provided for it will join the company between July and September and will continue to recruit based on service demand, Kalra said.

Kalra said it hopes to open development centres in smaller centres such as Ahmedabad and Kochi soon. Shares of the company rose 1.88% to close at Rs 3,631.30 per share on the BSE on Friday, while the benchmark index rose 0.7%.