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Informist, Friday, Jan. 17, 2025

AHMEDABAD/MUMBAI – Wipro Ltd.'s Chief Executive Officer and Managing Director Srini Pallia said Friday that a visible return in discretionary spends by customers across the globe made him more hopeful for 2025, if one considered 2024 the year of caution. While describing the company's clients as 'cautiously optimistic', Pallia stuck to the growth guidance of -1% to 1% for Jan-Mar in a post-earnings press conference Friday. In Oct-Dec, Wipro had clocked an operating margin of 17.5% for information technology services, up from 16.8% a quarter ago and 16% a year ago.

"...we are also seeing a demand coming back on discretionary spend, especially in some sectors specific to banking, financial services, and insurance, or BFSI, which is reflected in Capco's growth (Wipro's global technology and management consultancy business). So net-net, with a strong pipeline, I think our focus will be to execute in Jan-Mar and the year beyond," Pallia said.

Aparna Iyer, Wipro's chief financial officer, said that weak discretionary spending in the past four quarters and a strong dollar had had an impact on revenue from the UK and Europe. The company's large deal wins for the December quarter were $961 million, up 6% on year in constant currency terms. Iyer said that despite the usual "volatility" in booking of large-sized deals, the company's overall booking was "strong".

Iyer said Wipro was seeing momentum in the smaller and medium-sized deals. "There are parts of the business that are doing better. Certainly, Americas…and Capco, where we are seeing momentum," she said. On whether the rising usage of artificial intelligence was having an impact on lower large-sized deals, Pallia said AI is part and parcel of large deals and had no impact whatsoever.

Talking of the change in administration in the US, Wipro's management said the new regime would be business-friendly and the company sees good spending on generative AI, or GenAI, in the Americas this year. The management further said it had invested in and hired a good number of local employees in the US and also had a "good" inventory of H-1B visas.

The management also said it would continue to invest in AI education for Wipro employees and nearly 50,000 employees hold AI certification as of today, from 44,000 a quarter ago. The company has also been able to clear the backlog of freshers to whom it had made offers in the past. It said it was gearing up to onboard 10,000 to 12,000 freshers every financial year. However, it would onboard a little less than 10,000 people in the financial year 2024-25 (Apr-Mar). The company said it was also seeing a fall in the number of net resignations.

Wipro's total employee headcount fell by 1,157 during the December quarter to 232,732. Its last 12-month attrition rate was 15.3%, compared with 14.5% a quarter ago. The company attributed the fall in headcount to demand and productivity and said it would "get ironed out" in the coming quarter.

Wipro reported a consolidated net profit of INR 33.5 billion for the December quarter, up 4.5% sequentially. Its consolidated revenue for the quarter was INR 223.2 billion, up 0.1% from a quarter ago in constant currency terms. On Friday, shares of the company ended 2.1% lower at INR 281.95 on the National Stock Exchange.  End

Reported by Sunil Raghu & Noopur Bhandiwad

Edited by Rajeev Pai

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