We will remain pragmatic about margins, says Wipro CFO Jatin Dalal

We have invested close to $80 million dollar in our big bets in the recent quarters, he said

Despite a marked improvement in margins during the last one year, Wipro’s revenue growth still lags its peers. Company chief financial officer Jatin Dalal told Debasis Mohapatra that though margin improvement remained a key objective, growth is of absolute priority for the Bengaluru-headquartered firm.  

Taking into account the Q4 guidance, Wipro is likely to end the financial year with a growth rate of around 6 per cent. When will Wipro match its peers in terms of growth?

In the first nine months, the company has grown close to 4.3 per cent, in constant currency terms. So, the number may be in that range. But that is not an insignificant growth on a base of around $8.3 billion revenue. Though certain part of our business was not performing, we have seen improvement of late. For example, our health care business has grown more than 3 per cent, sequentially, this quarter. So, our portfolio strength is improving. 

Most global IT firms are now following cost optimisation measures to overcome pricing pressure. Is there any such plan which Wipro is currently pursuing?     

Though we may not tom-tom about cost control, we remain very focussed on this count. That is the reason why our margins remain more than 18 per cent despite revenues not growing at industry levels. We have not let the cost impact us materially. So, cost optimisation is a habit, it is not a project.

Wipro’s operating margin has improved in the last six quarters. Is this sustainable? What is your outlook on the margin, going ahead? 

Our priority remains growth. While we are able to maintain our margins in a narrow band this year, in the medium-term, growth gives a lot of leverage for improving margin. We can’t deny that. Hence, we have made huge investments into our priority growth areas. Our organisation’s stated ambition remains to improve margin. But that comes after improving revenue trajectory. We have to constantly find dollars and invest dollars to improve growth. We have invested close to $80 million dollar in our big bets in the recent quarters. So, we will remain pragmatic about margins.

Wipro has added four new $100 million-plus clients in the last nine months and bagged some large deals. Was there any change in strategy after Rishad Premji took over the chairmanship?

Rishad Premji has played a very active role as the chief strategy officer in his previous stint. I would not say that we are more aggressive when he became chairman. I would say these are the strategies which Abidali (Neemuchwala) and Rishad had laid when he (Rishad) was the chief strategy officer.

Wipro is trading at a discount compared to its larger peers. What is your take?  

We provide the highest amount of transparency and take pride in our corporate governance standards. While we can work to improve earnings, price is something which can’t be influenced by us. All I can say is that we are all out to improve our earnings.