Suresh Senapaty, Executive Director and Chief Financial Officer, Wipro, is confident that investments in human resources and establishing presence in certain parts of the world will pay off.
In an interview with Business Line , he said that at the end of the fourth quarter, Wipro will get back to industry leading growth as it sees IT spending picking up in the second half of the year.
Wipro’s guidance has been a surprise. What are the takeaways from the first quarter for the company?
We have made a lot of investments in the front-end – setting up hunting and consulting teams for existing and new outsourcing orders. Besides, we have splurged on the back-end, in automation (that helps in diagnosing software-related problems by itself instead of human intervention). A combination of both of these helped us.
This is reflected in the fact that our revenues from this hunting team has doubled on a year-on-year basis. On mining of existing clients, we won some marquee orders this quarter, particularly led by the advanced tech practice (which includes analytics) and Global Infrastructure Services (GIS). However, India continues to be drag in the Original Equipment Manufacturers (OEM) and semiconductor segment, showing limited and negative growth. Therefore, we were able to maintain the high-end and not beat revenues. We have got some momentum in GIS, BPO and analytics and will give us momentum in the second quarter.
Therefore, what we had expected in the first quarter high-end to be 1.6, we delivered at 1.2 after adjusting for cross currency momentum which impacted us by 1 per cent. Healthcare and lifesciences grew by 3.8 per cent, if you exclude the India part of the business.
Will this momentum sustain?
Part of it is due to our own efforts starting to fire and it is also a reflection of companies in the US, which is starting to look up and this is indicative of the fact that spends will go up 1-2 per cent. There is a lot more decisions now and companies are opening up their purchases. It will sustain for the rest of the year and it will be better than the first half and as we exit the fourth quarter, we will endeavour to grow at industry leading rates
How has the rupee fluctuation impacted margins?
We expect the rupee volatility to continue. Interest rates are changing in the US and India. The rupee going beyond 60 will be damaging for the Indian economy. We do not know how it will stabilise but at this point in time we will stay on course on hedging strategies. We got gains of 0.5 per cent advantage in this quarter. At a macro level currencies should be stable as it would help both exports and imports.
Europe has not done well, while the US seems to present a better picture going ahead.
The US is looking better than Europe. We are well entrenched in UK but are working on ways to deepen our presence in areas like Germany and other continental regions. I can’t say Europe will be more positive than US. IT spends and decision-making spends are good news but we have to keep on remodelling around technologies and ways of delivering our services around that.