Bengaluru: Abidali Neemuchwala has completed eight full quarters since taking over as chief executive officer (CEO) of Wipro Ltd on 1 February 2016. A former Tata Consultancy Services Ltd veteran who joined Wipro as chief operating officer in April 2015, Neemuchwala expected Wipro to return to industry-matching year-on-year (y-o-y) growth by March. However, Wipro’s 5.5% y-o-y growth in the fourth quarter is far less than peers. This slow growth has prevented Neemuchwala from giving any timeline for returning to industry-matching growth. Edited excerpts from an interview:
How would you evaluate the performance in the quarter and your two-year stint? Is it getting frustrating to see the firm still lag behind its rivals?
No, it is not frustrating. Actually, I feel quite good that our core part of strategy is working and showing very healthy growth, although it gets muted by some of these surprises. Look at digital (26.7% of total revenue). Our digital growth is 9% in this quarter. Even in the last five-to-six quarters, we have done anywhere between 4-6% growth in the quarter. Look at our client mining. All our top clients are doing well. Now, there are parts of business which because of surprises (client bankruptcies) or because of restructuring (Wipro’s restructuring of its business in India and West Asia) which is taking more time, we are seeing a negative impact on margins and revenue.
You earlier said Wipro will come back to industry-matching y-o-y growth by March. Infosys reported a 9.2% dollar revenue y-o-y growth while TCS reported a 11.7% y-o-y growth in January-March. Wipro still lags, as it reported a 5.5% dollar revenue y-o-y growth. Do you agree this turnaround is taking longer than you had anticipated?
Yes, it is taking longer. There are three areas over which we need firm resolutions. First, is the HPS business (HealthPlan Services). Second, is the India and Middle East restructuring, which is taking longer. Our communications business again, in Middle East, Africa and Asia is still taking longer. Now, there are parts of business already industry-matching, but then that is not how we would look at it. We want Wipro to be at industry-matching growth. So right now, we need to tide over this, and so I would not like to give a timeline (by when Wipro expects to get back to industry-matching growth numbers)
Can margins be sacrificed for improving growth?
I don’t really believe in this strategy of sacrificing margins and we have never followed this approach. We acquired a few firms to strengthen our offerings in digital. Now, I believe price discounts can only help in the first one or two years, but then it becomes a vicious cycle.