Wipro has guided for a disappointing flattish growth rate for the first quarter of FY13, citing difficulties in its Indian business and challenges in the telecom vertical. The company has been talking about a turnaround, but the shift in momentum has been slow and laborious. In an interview with Shreya Roy, Wipro chief financial officer Suresh Senapaty says the firm?s increased focus on client mining will ensure that it recovers well during the later half of the year. Excerpts:
Your peers have made contradictory comments on outlook for FY13. Wipro has a negative to flat growth projection for the first quarter, but is positive about the year. What exactly are you expecting?
Our sense is based on the kind of pipeline that we see, which is largely the US, Europe, IT infrastructure and business application. Many of these are proactive deals. From that point of view, we believe we will be able to do a better job for rest of the year, compared with the first quarter. The quarter will also be affected by late decision-making and the market mood. As we move into the second quarter, we should be able to get back in the game.
It has not been a great quarter for Wipro, but there has been an improved performance in some of the verticals. Please elaborate.
The key drivers have been energy and utilities, retail, healthcare, manufacturing and life sciences. They are largely infrastructure services, followed by things like business analytics. The US has given us very good growth, in addition to Europe. And India has also done well for us.
Has intense corporate restructuring helped?
The performance in the verticals and the restructuring process has been interlinked. We have moved from three axis to single axis. We have focused more on client engagement managers, with full empowerment including accountability, to deliver growth and customer satisfaction.
How has the change translated into customers?
Client mining was a major thrust area for us in this quarter. There has been one increase in $100 million category, two increases in $75 million category, one in $50 million, and two in $20 million. The relationships have deepened drastically, often reflected in the fact that our customer satisfaction score has gone up by 20% year-on-year. We also wanted to invest more in the hunting side, for which we got several experienced people laterally. Over 40 customers have been added this quarter, compared with 39 last quarter.
BFSI continues to be a chink in your armour. How are you trying to mend it?
Momentum in capital markets and investment banking is weak and therefore we do not good growth in these verticals. Retail banking, however, is still doing well for us. We plan to look at getting more core banking partners on board, both in India and abroad. We want to pick up solutions around core banking.
Does that mean you are looking at acquisitions in BFSI?
This being one of our momentum areas, there are always opportunities we are looking at. We are looking on the platforms on the insurance side, core banking solutions. There could be multiple ways in which we could be investing.
What would be the size of the acquisition, if you were to make one?
We want to buy something that complements what we have, in an area where we don’t have a huge presence. Typically, these tend to be in the lower range of $50 – $100 million range. But we will not stay away from $200 – $300 million assets, if it is a high quality addition.