Wipro CEO (IT business), TK Kurien, has defended the company’s performance in Q3 stating that the over all numbers were satifactory despite the analyst community pointing to the declining volume growth. During its analysts’ call on Friday, Wipro had a tough time in convincing the community that volume was not the key benchmark for performance, stating that one had to focus more on the topline growth.
In an interaction with FE, Kurien said it was a satisfactory quarter in terms of the execution of company strategy, before admitting that more needed to be done. “Getting the right set of portfolio of services is critical for us to grow,” he said.
Wipro has found itself slackening in its traditionally strong areas such as product engineering services (PES), BPO and infrastructure management services (IMS). In fact, during the quarter, the PES segment’s sequential growth declined by 6.1% while in BPO and IMS they are not outperforming the market. Kurien admitted that the growth rate in three service lines had shown some lag. “There are some changes in the offing which will put them back on track of hyper growth,” he said.
On the positive side, segments such as infrastructure services, application services recorded healthy growth rates. From a vertical perspective, the healthcare and life sciences, and retail and transportation were able to grow higher than the company’s overall average. The 2.4% sequential growth reported by Wipro’s IT business, though meeting its guidance target, left much to be desired as the volume growth has declined and many of its key verticals failing to grow higher than industry leading rates.
Kurien said Wipro will continue to invest in newer technology areas anticipating future demand while at the same time grow their maketshare in existing line of businesses. As part of their plans to get higher wallet share, Wipro had recently formed an advanced technologies group bringing all the expertise together under one roof to provide a single-point solution window for clients.
Wipro, under the leadership of Kurien, has been undergoing major set of changes which has led them to focus on select newer technology areas such as mobility, cloud and analytics while maintaining its hold in traditionally strong segments such as application development and maintenance (ADM), infrastructure and BPO. In the third quarter though, the revenue from ADM was literally flat, though it is generally considered as the bread and butter business of the Indian IT industry.