We are investing to get growth back: Jatin Dalal

Interview with CFO, Wipro

Wipro chief financial officer Jatin Dalal tells Bibhu Ranjan Mishra & Raghu Krishnan why the company is hopeful of showing consistence performance over the next three quarters. Edited excerpts:

Is this (Q1) a good start for the rest of the year?

I won't say that. But it is a very good bounce back from what we were. If we had remained in the same trajectory, we wouldn't have shown these numbers. But from a (IT services revenue growth) guidance of 0.5 per cent to one per cent for Q1 to now, we have moved to (giving guidance of) 1.5 per cent to three per cent; that is a positive trajectory. It's good to move to Q2 with that kind of acceleration.

What gives you the confidence to give strong growth guidance?

We feel we have put in certain measures in place that will yield good results. We have a pipeline of business that gives us more confidence in the second half than the first.

Can you give us a sense of the pipeline?

It is stable. It's not something that is growing in leaps and bounds. We see some deal wins on the horizon. And, therefore, we feel we should be able to demonstrate and execute.

In Q1, you faced quite a few bumps, may it be energy and utilities sector, which is largely due to external factor, to a sequential decline in the healthcare business. What steps have you taken to insulate Wipro?

I agree. It is equally worrying for us when you get on one piece right, the other piece goes wrong. But I am confident that we would reach a point where we would be able to hold all the balls in air and not let anything drop. Some of the factors that are resulting in this volatility are completely outside our control. Nobody had expected energy price to go down. We have lost a lot of revenue because of that. Nobody had thought about such cross currencies movements that would batter all. What is in our control, we put in the right people to ensure we were up and running.

One thing Wipro has been lacking is consistency. Do you think it is coming back with your strong outlook for next quarter and for the second half of the financial year?

It is our hope. Next three quarters…it's a matter of getting it right. It is not like that you are not trying hard enough or you are not putting effort, bit sometimes it just doesn't happen. But one fine morning, it happens. So, I am happy we are in the right direction from Q1 to Q2 in terms of guidance. And, Q2 to Q3 will be equally critical. Then we will see where we go in Q4. Consistence performance would be a three-quarter good performance.

Is the declining margin a cause of worry?

No. We are operating in a band, in the range of 21-22 per cent. We are not in the band of some of our large competitors. Last full financial year, our profit margin was 22.2 per cent and a year before that it was 22.6 per cent. We are operating in our comfort zone. Why we are not coming out and guiding on margins? It's for the simple reason that we want to drive our growth and to drive that, we need to make investments. It gives someone a budget to do digital or develop IP, etc. When growth comes back then it is like aspirin, it will solve hundreds of problems. It gives operating leverage, ability to deploy staff, utilisation goes up, give the ability to rotate staff because experienced staff move into new projects. Therefore, our priority is to get growth back and for that we will invest where we need to.