It’s a year of opportunity to capture market: Wipro CFO
IT services major Wipro, which delivered one of its best results in the past 38 quarters, said its primary focus now would be to continue this momentum, instead of focusing on maintaining margins.
“We should see this as a year of opportunity and all go out and capture the market. We have maintained that growth is the priority for the company and we will do everything needed to capture this momentum. Hence, we are investing in the supply side too,” said Jatin Dalal, CFO Wipro.
The company reported margins of 18.8 per cent for the first quarter of FY22, which were impacted by almost 200 basis points due to the ramping up of the supply side, along with the impact of the Capco acquisition.
Earlier, the company had stated that after the acquisition of Capco, it expected margins to be impacted by 2 per cent in the first year, which will be in the range of 17-17.5 per cent. Compared to this, Q1 margins were better.
“We feel that there are enough levers for margin expansion, such as automation, offshoring, trying to get better fixed-priced project, while rotation of staff in a strong demand environment is a possibility. Hence, pyramid improvement and all of this will get played out in the rest of the year, and we will have to balance finely between capturing growth and managing margins,” explained Dalal.
He also cautioned that Q2 will have elements that could act as a pressure on the margins such as salary hikes, which come into effect in September, and the Capco consolidation that still has an additional month.
Though the company had reported a sequential revenue growth rate of 12 per cent on constant currency basis, the TCV for Q1 was much lower at $715 million, when compared to Q4. “We did have a mega deal in the TCV of Q4. Also, we have said earlier that we want to, as a practice, have at least one mega deal every quarter. But it is difficult to time these as they are big decisions for clients. However, we will continue to add some rhythm to it,” he added.
“We have said earlier that we want to have at least one mega deal every quarter. But it’s difficult to time these as they are big decisions for clients”
JATIN DALAL, CFO, Wipro