Cautiously optimistic as deal pipeline remains strong

Written by Anand J | P P Thimmaya | Updated: Jan 19 2013, 07:51am hrs
Wipro, Indias third largest IT services exporter, has been running a tight ship in terms of managing internal costs and driving productivity but not at the cost of making investments for future business opportunities. Suresh Senapaty, chief financial officer, Wipro says the company is cautiously optimistic about the immediate future in an interview with FEs Anand J and PP Thimmaya.

How do you rate the third-quarter performance

We have met our guidance and delivered a 2.5% growth sequentially in dollar terms. We now have 10 customers with more than $100 million from nine in the previous quarter making progress on the customer satisfaction. The demand environment has not changed though we see lot of momentum in few verticals and challenges in few other verticals. We continue to see uncertainties in the market. The key driver would be actually how the customers are going to use the 2013 budget in terms of spending. We are cautiously optimistic as the deal pipeline continues to be strong.

Why has the volume growth declined this quarter

We are talking in terms of overall growth. The moment you are driving more productivity and price realisation goes up dramatically, the flip side is volume goes down. We should not worry about that as long as we are delivering on our sustainable model. And we are enhancing competencies to deliver over tighter cost lines which help both of the partners to be competitive. This helps us optimise the cost structure much better. Cost of getting that incremental business is far lower.

Going into 2013, what is the sense Wipro is getting from your customer base

Customers are clearly in a challenged environment but much more in terms of what they want to do. If you look at the budgets they have done rationalisation in the area. So customers want to save costs and adapt a lot in areas like analytics, machine to machine, their cost structure, consumerisation of technology, more and more deployment of applications. In that context they want to save money here and spend in new areas. This creates the sweet spot for us to go with lot of productivity tools and solutions to cut their costs. That is where we have global transformation inside and driving productivity, automation, use of tools, creating more and more process assets, so that helps us in delivering the customer faster with a shorter cycle time and being more relevant to the customer.

Is Wipro now prepared to latch on to the new opportunities that is sure to come its way in 2013

Yes, clearly. We have been winning deals, perhaps enhancing our win ratios. Clearly we are spending lot of money in terms of enhancing our sales team and enhancing the quality of the sales team by churning, getting supplementation by external hiring, investing in domain expertise and practice assets and solutions.

In the last six quarters the number of customer accounts in the $100-million category has doubled.How do you explain this

In December 2010, it was two. The quality of the client engagement is better. The workforce is much more empowered. Their variable incentives are much more aligned to the growth of the revenue in the account and driving some quality training whereby the engagement is creating more opportunities to addressing an opportunity that already exists. And more and more support from consulting and advanced technologies to be able to come out with more solutions for the customers.

So will you have a new category of $200-million accounts in the coming quarters

That is our expectation. This will be largely from the current $75 million or $100-million accounts. There are many others who are capable of getting to $200 million.