Info-tech

Wipro's growth catching up with peers

K. Venkatasubramanian | Updated on October 31, 2011




After a prolonged lull, Wipro has caught up with its peers in terms of revenue expansion as well as broad-based segmental growth in the September quarter.

Healthy large-client additions, continuing traction in BFSI and higher growth in Europe are some of the key highlights .

During the quarter, Wipro's IT services business grew 7 percent sequentially to Rs 6,829 crore, while earnings before interest and taxes fell about three percent, as a result of wage hikes, to Rs 1,364 crore. In dollar terms, the company's revenues grew 4.6 percent, in line with what peers such as TCS and Infosys had reported.

Volume (person-months billed) growth, at 5.9 per cent, too has been quite healthy.

Realisations though have dipped, which the management has attributed to higher efforts put in to close certain projects without proportionate pricing increases. Wipro expects this to a one-off event. However, it expects pricing to be stable going forward.

Balanced growth

The company has added a client in the $100 million-plus and $75 million-plus categories. In the other large buckets of $10 million and $20 million too, there have significant additions. Its top 10 customers too have ramped up revenue contributions.

The BFSI vertical which contributes over 27 per cent of revenues, has grown 6.3 per cent, suggesting that the company's increased focus on this segment is paying off. Energy and utilities continues to expand rapidly and over the last 4-5 quarters has increased contribution from single digits to 13.7 per cent of revenues currently. The company's telecom vertical though continues be in the woods, as with HCL Technologies and TCS, and has fallen 2.5 percent sequentially.

The relatively higher-margin analytics, business applications, product engineering and infrastructure services have grown at 5.1-7.3 percent, while the traditional application services expanded at less than the company's rate. This suggests that there has been no cutback or pressure on discretionary spends of clients.

In terms of geographies, North America, the company's mainstay has grown at a slower pace, while Europe, which accounts for 28.8 per cent of revenues, has grown 5.3 per cent. India & Middle East and Asia-Pacific have grown at a strong 7.9 per cent and 12 per cent, respectively.

Attrition, though still among the highest in relation to peers, has come down to 21.1 per cent from 22.6 per cent.

Published on October 31, 2011

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