You will see Europe picking up, assuming the currency doesn’t go south and oil & gas don’t fall further. Currency is something we can’t control
Even though Wipro posted tepid results for Q4 FY15, the company is hopeful of better numbers in the current fiscal. It expects to overcome challenges in sectors such as energy and BFSI. Wipro CEO TK Kurien says despite the cross-currency challenges, the company is focused on sustainable growth over the medium term. Excerpts:
What will be the role of the new COO Abid Ali Neemuchwala?
Running, expanding and defending our current business is the role Abid will play. We went to market with a line of our services separately. We never really integrated these services in front of customers and created a stack. We believe the future of the market is all going to be about stacks. Integrated deals are becoming more important as we go forward. Abid’s first priority is to create that stack and make sure we attack as much we defend. Next big thing to happen is that digital will become fairly big. As we go for new technology like Artificial Intelligence, my job will be to ensure we are able to build those for the company. We will focus on making sure we are prepared for tomorrow.
Why is there a weak guidance this time?
If you compare last year numbers with this year, our total impact on cross currency is 6.4%. Given the guidance today, the real growth that we see y-o-y is 7.9 to 8.7%. Take out cross-currency, you will see a significant improvement in the y-o-y growth. Three of our businesses are doing well. There is one which is badly hit, by what’s happening in the marketplace. We were always overweight on energy and upstream side of energy. The negative is that a lot of capital projects that we were running, came to a standstill. It affected revenue last quarter and it will affect revenue in the current quarter as well. But the good news is that a lot of consolidation opportunities are coming up and given the expertise we have in this space, we are winning deals. In the last quarter, we won two large deals from oil majors. We continue to see that increasing and those consolidation deals where we have knocked out competition. We see more and more of that coming up in the energy space.
What is Wipro’s pricing strategy?
The value that we provide in terms of technology and delivery determines our pricing power. Last year, y-o-y growth in the constant currency in Q1 was 8.1%, and in cross currency, this year guidance, at the lower end is 7.8% and higher end is 9.4%.
What are the challenges Wipro is facing in Europe?
The roughly $100-million fall which came in the energy sector came from Europe. The hunting wings that we have had towards the fag end of December and early January are that a lot of them haven’t started producing revenue. The revenue for that would come in the next couple of quarters. You will see Europe picking up, assuming the currency doesn’t go south and oil and gas don’t go south further. Currency is something we can’t control.
Do you see any order cancellations or loss of clients?
So far, we have not lost any client. Though, the negative part is that the pricing pressure on oil and gas is massive. The positive side of that is a lot of our competitors are vacating this space. When it goes down, it’s an opportunity to consolidate and when it goes up, we can reap the benefits of that consolidation. We remain bullish on the oil and gas business. Have plenty of more opportunities on the consolidation side. We are confident that we will have significant portion.