In the first quarter as a pureplay IT services company Wipro has managed to give a positive guidance for the next quarter. In an interview with Business Line , the Chief Executive Officer and Executive Director, T.K. Kurien, talks about how strategy in the long run is more relevant than the performance of stocks in the short-term.
If one looks at valuations, there still seems to be some headroom because Wipro has lagged some of its peers in that respect.
See, the kind of investor we are looking at Wipro are marked up investors, not short-term investors. Therefore, how valuation moves in the short-term is important but not relevant. The hard belief is as long as you stick to your strategy long-term and I don’t mean 20 years, there is going to be value created. We are basically sticking to a long-term strategy. We have articulated within, we have told what it is. We are marching to that beat and how stock does in a short-term basis is of no relevance. Our largest shareholder is also not worried about it.
So, no Monday morning blues….
When it (stocks) goes up, it goes up; and when it comes down, it goes down. At the end of the day, you have to build a great business. Stock markets will reflect the kind of business you have built.
If one looks at the revenue margin which is at 20 per cent, are you comfortable with it?
The industry is going down. We are forecasting flat to an upwards bias. So, it is a complete contradiction to what the industry has seen. I don’t see it changing. We would like to push for higher margins. Look at our portfolio, there is value play and there is traditional business. We are going to have a balance between both. For example, one of our customers recently had huge performance issues in one particular part of their business. We went in, helped them to fix that part of the business using technology: we put four, five really good guys who solved the problem. And two weeks later, we got a $100-million deal which is on the traditional business. The interplay is very important and it is critical. And what it really means is how you add value to the customers and what impact it has.
What have you done in the last quarter which has led to acceleration in revenue growth?
No magic in that. You close deals, you do well in the quarter. You don’t close deals, you sit where you are (laughs). In a way, luck changed last quarter. There is nothing dramatic we did.
So if luck does not change next quarter, you don’t do well…
(laughs). You see, the momentum is slowly back. Is it where it should be, absolutely, the answer is no. Is there headspace to grow, absolutely, yes. But it is getting back. It is positive.
Last year, Wipro as an organisation underwent a lot of changes. Has it started yielding results and is the environment stable now?
See, every organisation takes time to settle down. You can’t run an organisation like the dutchess in Alice in Wonderland. You need an organisation which is stable. Right now, we are hitting stability and we need to keep working at it.
The structure is pretty much what it is. What is an organisation: collection of people. It is an eco system. And the collection of people working in the eco system and you are going to ask yourselves how effective it is and how effective are you making it to be. The role of senior leadership is to make sure that boundaries which work in an enterprise is not blurred. That’s the only way it works.
In the press conference on Friday you said your customers are interested to know what is happening to the US visa bill but are not worried yet. But the US Senate has passed it and it is now with the House and by the end of this year, it will have to take a decision or forget about it because everyone will be busy with the Congressional elections next year. So do you have a plan B in place, in case the Bill becomes a law?
We have a plan B, plan C and plan D. But I don’t think you can wish away a problem. I don’t want to talk about specifics what our Plan B will be. The question is how long it will take to activate the plan B: will it be days or months. My own sense is that it will take three months and in the next few months, we will know the outcome anyway. See, competitors will look at this as an advantage and the only way they can get it as an advantage is increased pricing. If they increase pricing, my own sense is part of what we lose, will get mitigated by the increased pricing. It will take some time to take effect. But it will happen.