Wipro eyes profitable growth, IT services dollar revenue down 7.3% q-o-q
The Bengaluru-based firm posted a 2.8% sequential growth in net profit to ₹2,390 crore for the first quarter-ended JuneWipro said it never stopped hiring even during the nationwide covid-induced lockdown
Information technology (IT) major Wipro Ltd, which has been lagging peers for several years now, is looking at a course correction under its newly-appointed chief executive officer and managing director, Thierry Delaporte, who joined the company just a week ago.
“Profitable growth will be the most important priority on my agenda," Delaporte said. “Despite immediate challenges, we are confident to emerge stronger."
The Bengaluru-based firm posted a 2.8% sequential growth in net profit to ₹2,390 crore for the first quarter-ended June mainly due to effective cost optimisation measures such as reduction of variable workforce and increased utilization. On a year-on-year basis, the net profit was marginally up 0.1%.
The closely-watched IT services revenue in dollar terms declined 7.3% quarter-on-quarter and 5.7% y-o-y to $1.92 billion as the impact of the covid-19 pandemic hit some of the key sectors like banking, financial services & insurance (BFSI).
Delaporte said he will be spending time with senior leaders and teams across units and functions over the next few days to take a “holistic view" of the business and better understand the opportunities and challenges. “I am ready to challenge the status quo," he said.
Delaporte said he will be focusing on the top clients and investing in services and solutions that matter most to them. He said he will also focus on partnerships with other technology companies to build a strong ecosystem.
Wipro’s IT services operating margin improved to 19% in the June quarter from 17.6% in the March quarter. “We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation," said Jatin Dalal, chief financial officer, Wipro.
In a major indication that digital is becoming mainstream, Wipro has ceased the practice of separately sharing revenues from its digital business, said Bhanumurthy BM, chief operating officer, Wipro.
“Digital has become all pervasive today," he said.
Wipro said it never stopped hiring even during the nationwide covid-induced lockdown. It made a gross addition of over 7,000 employees during the June quarter and the voluntary attrition on an LTM (last twelve month) basis has reduced to 13% from 17.6% in the March quarter.
At the company’s 74th annual general meeting (AGM) held virtually on Monday, chairman Rishad Premji said Wipro has not laid off a single employee due to the impact of the covid-19 pandemic. “Also we have no plans to lay off at the moment," Premji said.
On Tuesday, Wipro also said it will acquire Brazil-based IVIA Servicos de Informatica Ltda, a specialized IT services provider to financial services, retail, and manufacturing sectors. Wipro said the acquisition would help it set up delivery centres in Brazil’s northeast regions by leveraging IVIA’s workforce. It will also help the IT major further expand and grow its operations in Latin America.
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