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Wipro to maintain margins, expand in China

Wipro to maintain margins, expand in China
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First Published: Wed, Sep 14 2011. 02 57 PM IST
Updated: Wed, Sep 14 2011. 02 56 PM IST
Dalian, China: Wipro Ltd aims to maintain its operating margins at more than 20% even as US and European markets are mired in a debt crisis, a senior executive said on Wednesday.
Even though western markets were embroiled in economic problems, Wipro was expanding in fast-growing markets such as China, where it plans to double staff numbers from about 800 now, chief marketing officer Rajan Kohli told Reuters in an interview.
“We haven’t seen immediate signs of a reduction in IT services spending, but of course next year’s budgets are normally decided in the October/November timeframe, so we will have a better idea around November,” Kohli said.
Kohli said Wipro’s operating margin was between 22-25%.
“From what we see in the market and how we run our operations, we will continue to remain in the band that we defined,” he said.
Bangalore-based Wipro has been trying to keep up with Tata Consultancy Services and Infosys in winning large outsourcing contracts and reorganised its management earlier this year to boost growth.
Growth in India’s $76 billion software services sector has slowed in recent quarters amid global economic uncertainty, intense competition, rising wages, high staff turnover and management shakeups at Infosys and Wipro.
The company, which expects IT services revenue to rise 2.1-3.5% quarterly to $1.44-1.46 billion in the fiscal second quarter ended September, relies on the United States and Europe for 80% of its business. But it is expanding into other markets, such as the Middle East and China.
“China is a big part of our plans. We do not have a number, but I feel confident that we should be able to double our presence in China in two to three years,” Kohli said. “When I say double, it’s based on the number of people we have in China delivering services to our customers.”
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First Published: Wed, Sep 14 2011. 02 57 PM IST
More Topics: WEF | Wipro | China | Dalian | Expansion |