Wipro seeks to triple rev­enue ex­pan­sion to 12-14 per­cent in FY17

The Pak Banker - - COMPANIES/BOSS -

Wipro Ltd's chief ex­ec­u­tive of­fi­cer (CEO) Abidali Neemuch­wala has set an am­bi­tious rev­enue growth tar­get of 12-14% for fis­cal 2017, ac­cord­ing to two ex­ec­u­tives fa­mil­iar with the mat­ter. That is more than three times the growth at In­dia's third largest soft­ware ser­vices ex­porter in the cur­rent year.

Wipro, which will grow at 4.2% at best in the cur­rent year end­ing 31 March, will have 5% in­cre­men­tal growth in the next fis­cal, thanks to the $371 mil­lion in rev­enue it got from the four buy­outs it made over the last 12 months. Wipro ex­pects its an­a­lyt­ics unit, which ac­counted for $503 mil­lion of its $7.08 bil­lion in rev­enue last year, to grow at 10% in the com­ing year even as it looks to gen­er­ate more busi­ness from its 1,105 clients, the two ex­ec­u­tives said on con­di­tion of anonymity as they are not au­tho­rized to speak to the me­dia.

A Wipro spokesman de­clined com­ment. Al­though the in­ter­nal growth tar­get of up to 14% is not the com­pany's of­fi­cial guid­ance (the Ben­galuru-based com­pany only gives a quar­terly growth out­look), this am­bi­tious plan is sig­nif­i­cant for three rea­sons. Firstly, if Wipro man­ages to even grow at the lower end of the range (12%), this will mark the com­pany's high­est an­nual growth in eight years. The in­for­ma­tion tech­nol­ogy (IT) busi­ness, along with its now-sep­a­rated con­sumer care and light­ing busi­ness, recorded a 29% rev­enue growth in 2008-09. Se­condly, if the com­pany lives up to Neemuch­wala's hopes, Wipro's rev­enue growth will beat Nasscom's pro­jec­tions of 10-12% growth for the over­all in­dus­try in 2016-17. Fi­nally, this will sug­gest that Wipro un­der Neemuch­wala, who took over as boss in Fe­bru­ary, starts on a re­spectable note to achieve its longterm goal of be­com­ing a $15 bil­lion firm in the next four years by 2020.

"Our first key fo­cus area is on cus­tomer cen­tric­ity," Neemuch­wala wrote in an in­ter­nal memo dated 11 Fe­bru­ary, ask­ing em­ploy­ees to fo­cus on "proac­tive and con­sul­ta­tive de­mand cre­ation mea­sured through early re­newals and or­der book­ing with­out RFP (re­quest for pro­pos­als)."

The strat­egy is an old ap­proach with a twist, some said. "It's the old pen­e­trate and ra­di­ate strat­egy with a con­sul­ta­tive twist," said Bill Hu­ber, man­ag­ing di­rec­tor at US-based out­sourc­ing ad­vi­sory firm Als­bridge. "Once work­ing with a client, the com- pany uses in­side in­sight to iden­tify other busi­ness prob­lems where it can help the client, and pro­vide a uni­lat­eral pro­posal to pro­vide those ser­vices."

"(This can be also done if we) mine ac­counts, (which will be) mea­sured through num­ber of cus­tomer move­ment across rev­enue bands," wrote Neemuch­wala, as Wipro as­signed ag­gres­sive growth tar­gets for its se­nior ex­ec­u­tives to gen­er­ate more busi­ness from ex­ist­ing ac­counts.

Wipro's ag­gres­sive growth tar­get comes less than a month af­ter se­nior ex­ec­u­tives at cross-city ri­val In­fosys Ltd were told by its boss, Vishal Sikka, to aim for a 16% growth in the com­ing year. The re­newed op­ti­mism comes amid global eco­nomic un­cer­tainty and is bound to cheer in­vestors, an­a­lysts said. "Even if Wipro man­ages to grow at 10%, it will be a huge morale booster for em­ploy­ees and should cheer share­hold­ers," said a Mum­bai-based head of re­search at a do­mes­tic bro­ker­age. "Can Wipro grow at this pace? Dif­fi­cult. But, if the man­age­ment has set this tar­get, then they per­haps know some­thing which makes them set such am­bi­tious goals. If they do it, then for sure it's the best start for Wipro un­der a new CEO." Since Neemuch­wala joined Wipro as chief op­er­at­ing of­fi­cer in April last year, the for­mer Tata Con­sul­tancy Ser­vices Ltd ex­ec­u­tive has un­der­taken many steps to re­vive growth.

He made each of Wipro's six busi­ness unit heads re­spon­si­ble for the de­liv­ery of soft­ware, in ad­di­tion to man­ag­ing sales, a move aimed at cross-sell­ing ser­vices and ar­rest­ing any fall in prof­itabil­ity as clients seek lower prices from soft­ware ser­vices firms.

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