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How Wipro recorded positive growth despite global economic issues
Wipro has posted a better than expected financial performance and says despite global economic uncertainties, it is seeing positive indicators for growth.
T K Kurien, CEO of Wipro's information technology business, talks about the plans the company put in place two quarters earlier and how they are moving in the right direction.
Your strategy seems to have started paying off. Are you satisfied with the performance this quarter?
I would like to look at the directional indicators rather than the indicator itself. To me, it is pretty simple – not to get carried away by the one quarter of good performance and one quarter of bad.
The reality is, don't watch a quarter. We have a lot more work to do and that is what we are focused on.
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How Wipro recorded positive growth despite global economic issues
But your growth has rebounded in the key BFSI vertical, which was a pain area in the past.
We saw the highest growth coming in from BFSI (banking, financial services and insurance) last quarter than any of our competitors. It has grown very well. But the others have also now stepped up their focus on BFSI.
In the long term, we can't rely on one or two verticals for growth, but are looking for all-round growth.
So, consistency in growth is what we are focused on and that will come through a couple of things.
It will come through consistent leadership and consistent execution. We have really focused on consistent execution now.
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How Wipro recorded positive growth despite global economic issues
Does the drop in (staff) attrition reflect a state of stability in the company post the rejig?
We have had the biggest drop in attrition that we have ever had -- 4.7 per cent in a quarter. It's going to be only better next quarter. We have got the employees back aligned to the organisation.
The next step is to make sure we train people better and add skills to them, so that they can become more agile, more accountable and really make a difference for the customers.
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How Wipro recorded positive growth despite global economic issues
Don't you think the attrition could have dropped due to the recent salary hikes?
Salary hike is one factor, but by itself would not change things so dramatically. What has changed is, we have increased our engagement with employees. We have linked everybody's compensation back to four parameters.
The first is customer satisfaction which has gone up by eight percentage points last quarter. We have also changed the mix of business we sell to customers, with more focus on analytics and consulting.
So, from our own perspective, the quality of business is changing.
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How Wipro recorded positive growth despite global economic issues
Is the strong growth in energy and utilities driven by the SAIC acquisition?
What we are going to see in SAIC is that you will see a quarter or two of consolidation and then again see hyper growth.
We don't break-up based on verticals but we have added new clients in the energy and utility vertical.
Your operating margin has come down by 200 basis points. Is it not a cause of concern?
The operating margin got affected by 1.5 percentage points due to a compensation increase and about 0.5 percentage points due to SAIC.
It's because SAIC's operating margin is lower. We are focused on the long-term story than just a one-quarter story.
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How Wipro recorded positive growth despite global economic issues
How is the macroeconomic volatility affecting the business?
We are not seeing the impact of that, except in some specific segments. We are seeing its impact on the investment banking side of the business in Europe, to a certain extent in the US.
We are not seeing any impact on the customers in retail and universal banking. The retail sector has remained largely unaffected. We are winning far more deals in continental Europe.
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How Wipro recorded positive growth despite global economic issues
But your US business has not grown that well?
I am not at all concerned about that. Portfolio-wise, if I am more centred in a particular geography, I tend to get beaten up if that particular geography doesn't do well. I have to diversify the portfolios.
I think we are underweight in Europe and we are underweight in the rest of Asia, to some extent in Africa. Those are the areas we have to really try for growth.
Have you gone slow in China as compared to your bigger rivals?
China has plenty of potential. We already have two centres there, with about 2,000 people. But if you are looking for hyper growth in China, I don't think it will happen.
China is a country where one should not be there for short-term play, but for a long-term one.
