Wipro CEO Abidali Neemuchwala: The pace of turnaround, from our perspective, is neither slow nor fast
Bengaluru: Abidali Neemuchwala, since taking over as chief executive officer (CEO) of Wipro Ltd on 1 February last year, has completed six full quarters.
A former Tata Consultancy Services Ltd veteran who joined Wipro as chief operating officer in April 2015, Neemuchwala remains confident that by the end of March 2018, Wipro will be able to come back to industry-matching growth. Edited excerpts of an interview:
How would you view the performance in this quarter?
We came within our guidance range. We crossed $2 billion in revenue in our IT services. Our execution was pretty good. Four of our six business units have grown. Telecoms has bottomed out. The only area of uncertainty is healthcare. Overall, I’m satisfied.
You have already said that Wipro will come back to industry-matching growth by March 2018. Do you agree this turnaround at Wipro is taking longer than earlier expected?
Look, we did well on our revenue guidance, five of the six business units are looking good, and operating margin also saw improvement. What more can you ask for?
So I’m quite happy with our performance. Now on the question of turnaround, from our perspective, the pace of turnaround is not slow or fast. We first had set out a strategy and we outlined the timetable. A year back we said by Q4 of 2018. And we are moving towards it. If you look at literature of turnaround, it takes about three years. So, 18 months is certainly not slow.
Looking at the incremental revenue added in the first six months of the current fiscal, compared with the first half of last fiscal, your growth engine seems to be slowing. Is that a fair interpretation?
You are not comparing apples to apples. It is because growth in the first half of last year had a larger share from acquisitions while this year we have not made any (acquisitions). All this growth is organic, which we can certainly say is much higher than last year. And so we are happy.
Your digital revenue has grown significantly higher since you first started disclosing digital revenue in the first quarter of last year. Overall revenue has just grown 4% in this period. This is primarily because of a decline in traditional business during this time. What explains this decline in traditional revenue and can this decline be arrested say by March 2018?
Eventually, for the entire industry, the traditional business is going to go away. In the next 3-5 years, Wipro will be 100% digital.
No customer will give you legacy work or renew legacy work. So, once we are done with the decline or slowdown in legacy or traditional business, I believe we will again be able to grow in double digits. Remember, the opportunities digital business presents are more than what traditional business ever presented.