IT major Wipro, India?s third largest software exporter, has seen volume driven growth in revenues in Q3, which compensated for margin impacts from a rising rupee in the quarter. A recovering market would see the company drive more fixed price projects and non- linear growth, according to Wipro Limited joint ceo of IT business Suresh Vaswani. Wipro was looking at implementing more transformation deals and planned to continue its focus on the Indian market, he told FE?s Reema Jose. Excerpts:

You have guided for IT revenues of $1,161 million to $1,183 million for Q4. What market indications have you got in Q3 to give this kind of an estimate?

We rolled it up (the guidance) based on what are the new deals in the pipeline, how much of that we can bill this quarter. It is a reasonable estimate really of the past. We won good orders in Q3 and we have a good possibility of billing it in Q4. We have closed orders in Q3, our estimate is based on a high degree of confidence on what we have closed in Q3 and Q2.

The company has indicated that IT budgets were likely to be marginally positive or flat. As you look at a recovering market place, what concerns you the most at this point?

We are confident that we can sustain the margins. We are roughly 23.8%, in a little bit of a narrow range here and there. There are so many parameters, such as the rupee appreciation. It could go up, it could go down and then you have the salary hikes that we are giving. But broadly, we look at the possibility of the tailwinds, which are the rupee appreciation and the salary increases. It could be the margin pressures and then we look at what levers we have on hedging, utilisation, our fixed price projects and the levers we have on better pricing.

We think of margins everyday, and don?t give operating margin guidance. But we will maintain margins within a narrow range.

If the rupee swings here and there, it does put a lot of pressure, but not withstanding that, the key challenge is how well we execute our deals, as we are winning some large transformation contracts. We are no longer a supplier to customers, we are a partner now. What worries us most is: there is a market opportunity, we are in an enviable position in the market in terms of the services that we provide and the strengths that we build up.

We should be able to capitalise on that. We are making substantial investments in sales and marketing and strengthening the client engagements. Moreover, high transformation projects are also high risk ones. If we do a poor job, it can hit us badly.

Can you throw some light on the kind of transformation deals? Are these the discretionary spends that you said customers were holding back earlier?

Now, customers want to use their budgets more sensibly. They want to derive more business impact from programmes. There are traditional deals which Indian service providers offered. They were based on offshore benefits, low cost resources and onsite offshore delivery model. All that is gone, thanks to this economic crisis.

How will you implement your non-linear growth plans? How will this benefit the company, apart from reflecting in fixed price projects in the long term?

Through fixed price projects, the customer gets cost benefit, we drive more productivity, make more margins and also at the end of the day there is a limitation to how much we can manage to hire. More fixed price projects give you the potential to drive more productivity.

You recently won a 10-year contract with Delhi International airport. What are your plans for the domestic market?

India is our favourite hunting ground. We have done extremely well in this market. About 18% of our business is in India and the Middle East. If past is any indication, we have grown 15% sequentially last quarter. I am sure we will continue to grow. Typically, our growth has been 1.5 to 2 times the market growth in India. We look at all verticals including BFSI, healthcare, defence, government, telecom, which are strong.