Wipro has reported impressive figures during the first quarter despite the euro zone crisis. Suresh Vaswani, joint CEO of the IT Services business, tells FE?s Goutam Das that the deal pipeline looks robust with customers opening up their IT purses. Excerpts:
What is your sense of discretionary spending and the deal pipeline, going ahead?
Our growth over the last three quarters has been led by volume. We have added 15,000 people over the last three quarters. This gives you a sense of the demand. Yes, customers are a bit cautious; they are not splurging. But they are making investments. The fact that package implementation business did well in the June quarter is a sign of that. Customers want to invest for future. Cost re-engineering and re-engineering are the business models for the future. That typically results in investments for enhancing the customer experience, which means strong combination of IT and business process. The global IT services market can be growing at 2-3%, but you have to be innovative in proactively creating opportunity. The pipeline is robust ? there are some complex value-added deals in the pipeline.
Europe has not grown for the company in the June quarter. Will the demand environment remain sluggish?
Europe has been flattish. Once you factor out the cross currency movement in Europe, the geography has grown 3% sequentially. Europe to us looks exciting; the funnel looks good. There are transformational deals in the pipeline. We have invested a lot in Germany and France. The economic challenges and the high unemployment are not translating to any risk for our business. The emerging markets will grow faster, but on a smaller base.
In emerging markets, where are big investments flowing to?
We are making big investments in Africa, outside of South Africa as well ? Kenya and North Africa. We now have a country head in South Africa. We have a development centre in Egypt. We are pushing forward and driving active growth in Africa. So is the case in China and Latin America.
Wipro?s price realisation declined 3.5% onsite and 1% offshore in Q1. Is it because of discounts?
It is a decline not because of pricing pressure or coupon rate pressure. It is because of cross currency and certain investments that we have made as projects kick off. In the initial stages of a project, you invest more; so price realisations come down. Over a period of time, you get the price you contracted for. Customers are not hammering away at discounts now.
Which verticals look good for coming quarters?
If I look at the funnel build up, retail, government and education verticals looks good. BFSI, manufacturing and energy & utilities too are impressive. We are making major investments in terms of upstream capability, smart grid capability, and in terms of domain and consulting capability. Healthcare holds a big promise in the US, given the transformation that has taken place.