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How would you rate your performance in the December quarter?
Dalal: We are happy with the progress we have made. If you see this quarter, our sequential growth of 3.7 per cent in constant currency takes us closer to the upper end of the guidance. And also the fact that we have done better than the competitors this quarter is of course a matter of satisfaction.
But there are few other parameters where you have not done well — for example, margins and utilisation, etc? These are still causes of concern.
Dalal: If you see, our margins have not dipped. It has remained fairly stable. We had a 20 basis point impact on account of cross currency, which is reflected in the number. So, on the large base we operate, 10 or 20 bps decline from our standpoint is a very consistent and stable performance. Besides, for the first nine months of the financial year, our margins are actually better than the same period last financial year. It’s not that we have got growth and have let go on margins. Yes, Q4 of the last year was exceptionally good. Thus I am not quite sure where we (our margins) will be in the Q4 (of this year. Of course, our endeavor will be to do very well though we don’t guide on margins.
Senapaty: Concerns will always be there because most time these are triggered by external factors. For example, we never thought that oil and gas can be an issue. So something or other will keep on happening but we have to operate it as a portfolio and balance the portfolio accordingly. However, I think while oil and gas will remain weak for few more quarters from a pricing stand point, there is little more buoyancy and the confidence of the oil companies in terms of planning for investment on the development side is better. Their focus would be to invest in maintenance and infrastructure side of the business.
One fundamental challenge before Wipro has been, one quarter it does well and then disappoints in the next one. So, there has been no consistency in performance. Do you think we will see this hence on?
Senapaty: That’s our belief. All the business will not grow equally. But we will make up over the quarters. It is a function of deal win and pipeline is strong.
Dalal: We aim for stability. Our ambition is to give consistently good results. The only way to reach that is to continue to try and that’s what we are doing. Hopefully, we will succeed sooner than later.
The guidance of one-three per cent you have given for IT services business is quite a broad range?
Dalal: We always guide a broad range. For the first nine months, our growth has been 8.4 per cent and I think that is a healthy growth.
But at this rate, you are still behind the industry average. When do you think to catch up that?
Dalal: Coming to industry standards on a full year basis is nothing but delivering four quarters of industry leading growth rate. I think this quarter is the first step, and even last quarter also our performance was good.
What is happening in Europe? Your performance there in past two quarters has been weak.
Dalal: We are actually not seeing that much challenge in Europe. If you see our growth in constant currency, Europe grew 5.2 per cent for us sequentially. Traditionally, Europe has never really outsourced in a bigger way and we are seeing some secular movement there.
Revenue from consulting business has also shown decline in Q3. Why?
Dalal: Consulting always has some lumpiness around it because of the very shorter cycle of the projects when compared to our infrastructure management projects, which could be a four-five year contracts. But there are lots of follow-through benefits of consulting. For example, a small consulting engagement can eventually lead to an application deal, an infrastructure or BPO deal. We think that it has influenced far beyond than the number it carries for itself.
What is happening on the acquisition front? There is a buzz that you might announce something soon.
Senapaty: The effort is still on in terms of looking at those blanks paces, basically to supplement to what we are doing organically. Like, previously we did Opus CMC acquisition. So we are constantly looking at such prospects — it could be in the healthcare space, financial services or insurance or even in the digital area.
