Wipro posted tepid results for the fourth quarter of FY15, hit by cross-currency movements. It also provided muted revenue growth guidance for the first quarter of FY16. Jatin Dalal, appointed CFO in April, says the company will remain focused on driving growth and not let go of its market share despite the volatile environment, in an interview with PP Thimmaya & Vidya Ram. Excerpts
How is Wipro dealing with currency volatility?
We cannot estimate where the currency will be, but we can estimate the impact it can have in FY16 if the current rates prevail. Anywhere between 3% and 4% could impact growth. We don’t make a hedging decision based on one event. Our strategy is to protect profits from the quarterly volatility of the exchange rate, and we occasionally tweak our hedging policy.
To that extent, I would say we have a sound hedging policy that suits the current environment. However, it does not impact our reported and constant currency growth.
What are your priorities as the new CFO?
Challenges in the BFSI and energy verticals. If we are able to manage these well, we would do well. Sometimes, there are headwinds that you cannot control, such as in energy, where you hope that nothing disruptive occurs in the environment.
In such situations, the management’s ability to handle the shocks while remaining focused on customers and not letting go of its share counts. When it comes to BFSI, we do not see any secular or environmental challenges. In our finance function, we work with a very clear mandate that we have to adapt. If the business succeeds, the shareholders are rewarded. So functional priorities are closely aligned to business priorities.
How do you see Wipro growing in FY16?
For us, growth is always a priority and we will make investments for it. We will not try and chase margins at the expense of growth. Annual salary increases will have an impact on margins in the first quarter. We will remain committed to growth and invest in getting the best people and rewarding them. Employees finally deliver to customers and only when customers are happy can one expect growth. So, that equation is of prime importance to us.
How does the deal pipeline look?
The deal pipeline continues to look good and we are quite excited as we enter the first quarter.
Please share your capex plans.
We remain quite bullish on overall growth for the Indian and global IT services market, and for that, whatever capacity expansion is required will be done. And here we don’t look at quarters — we purchase land at least 5-8 years in advance and we have been reasonably okay with that planning. Business is about remaining relevant to the customer. You have to invest in areas that will benefit the customer.
PP Thimmaya & Vidya Ram