For investors looking for sustained growth at Wipro, the March quarter turned out to be a disappointment. Growth continued to be slow and the outlook uninspiring, as it has been for most part of 2012-13. CEO TK Kurien, however, expects sales to improve in the second half of current financial year. The March quarter was hurt by unfavourable currency movements and clients not spending on technology projects as anticipated, he told N Shivapriya in an interview.
Everybody has been expecting growth to pick up but it did not meet expectations...
We have managed to meet our guidance. On a constant currency basis, our numbers are above the bottom end of our guidance range. We expected to see discretionary spend come back in the first month of the quarter but we haven't seen it till the quarter end--that has been a big miss. But the positives are that in segments like manufacturing, energy and utilities we have started doing very well. Today we have moved up from number 12 to number 3 in the world in energy and utilities. When we started healthcare two years ago, we were only working with two of the top 10 pharmaceutical clients. Now we work with all top 10. In some segments like banking we are challenged because of historical reasons. Some of our competitors have added $500 million over the last year in financial services, while we are around one eighth of that.
So what are your plans for financial services?
We don't have many customers in the banking side; we are more overweight on investment banking . If investment banking had grown we would have grown massively .
Where do you stand in the journey of change you undertook?
There is value on one side, and scale and efficiency on the other. On the efficiency side, we continue to be leaders in the infrastructure business, though we don't make a noise about it. We believe a non-linear play is extremely critical for us, so we have been selective about the kind of business we go after in that segment. On the value side, we have invested heavily in social, mobile, analytics and cloud. Next year, we will be disappointed if we don't grow by at least 50%-60 % in this segment.
But deal sizes in this segment are small.
Deal sizes are smaller, but today budgets are moving out of the CIO's office. People who spend money on this segment typically are chief marketing officers, chief operating officers and chief financial officers. So that gives you a different buyer you need to address . If you don't , you can have short-term bouts of growth but in long term you will suffer.
What is the mix of value business and scale and efficiency business and how is that changing through the quarters?
The proportion between the two is shifting significantly. We are moving on the other side of the business or the value side. The annuity part of the business has moved up significantly in the last few quarters as a proportion of revenues. Volumes have gone up and we are applying hyperautomation and analytics to understand customer issues.
Growth is not kicking in and it's been almost been two years since you took over as CEO. Have you exhausted the organic growth possibility?
Growth anyway should return at some point. But for us it is about whether we can get growth that is better than anybody else. That's really the endeavour.
Do you have any plans for inorganic growth in Europe?
We have been one of the early movers in Europe -- we invested in a company that had intellectual property around mobile technology . But going forward, we would look at more broad-based and industry-focussed companies for acquisitions. Ultimately, you are buying a company for client relationships, local strength and front-end . It is easy to provide scale from India.
No comments:
Post a Comment