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  1. Digital deal sizes are now getting bigger

Digital deal sizes are now getting bigger

Wipro reported tepid results for Q3FY18 with flat revenues. However, the IT major remained confident about its prospects for 2018, saying the pipeline of deals remained strong with the digital segment accounting for 25% of its business.

By: | Published: January 20, 2018 4:54 AM
Wipro, IT major, IT major, US business, Abidali Neemuchwala, digital segment, US growth Wipro CEO Abidali Neemuchwala said there is an improving trajectory of growth with verticals like healthcare and energy now showing signs of growth.

Wipro reported tepid results for Q3FY18 with flat revenues. However, the IT major remained confident about its prospects for 2018, saying the pipeline of deals remained strong with the digital segment accounting for 25% of its business. Wipro CEO Abidali Neemuchwala said there is an improving trajectory of growth with verticals like healthcare and energy now showing signs of growth.

Do you see large IT deals coming back to the market?

We are seeing large deals. The size of deals are increasing in the digital segment. The dynamics we are seeing is that, especially if you look at the last calendar year, all customers’ knew that deals are going to happen in digital. But they were going out with smaller size deals and engagements. They were not clear of how much they need to scale in digital and how to go about it. Because it was a new way of working with new technologies, so there was a level of trying and testing. I think that phase has now moved on and they are ready to do digital at scale. And that is why we see the deal size increasing. It is not the old big deals coming back it is now the new deals becoming big. That is the dynamics playing out. We did large digital deals last year and that gives a small advantage of having done digital at scale. So we are able to do more digital deals which are large.

You mentioned that customer-specific challenges exist. Can you elaborate?

What I mentioned is that while we see a lot of spend coming back in calendar year 2018, as we talk to our customers. There are certain specific customers where we see challenges. These customer specific challenges could be because those customers are not doing well in their businesses and that’s why when they spend with us it may be under question.

In which verticals are those clients?

There are a couple of areas where we see customer-specific challenges, primarily in the energy and utilities segment and also in the retail vertical.

How about your BFSI business, and why is the US business slowing down?

I don’t think you should read something specific into the US growth. Q3 seasonally has furloughs and it is primarily in industries were the US gets more impacted against rest of the geographies; that’s the primary reason for the US. Otherwise, we have a robust pipeline and order book and client base in the US. I don’t see that changing. We don’t see any challenges due to the political scenario in the US. Rather, with our localisation we have been able to add more customers, who we were not serving earlier. We see good traction in the market. If we look at BFSI, we have 4.2% growth rate and we do not see any downturn.

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