Financial Daily from THE HINDU group of publications
Thursday, Jan 22, 2004
'Billing rates improving, margins to get better' Robust growth in all segments, says Premji
Mr Azim Premji, Chairman, Wipro, and Mr Vivek Paul, Vice-Chairman, at a press conference in Bangalore on Wednesday. - G. R. N. Somashekar
Bangalore , Jan. 21
WIPRO Ltd, which recorded a 37 per cent revenue growth in the third quarter, was confident that with broad-based nature of its growth - 13 per cent sequential quarter growth in technology and 10 per cent in its IT business a strong business momentum will continue into the next quarter.
According to its Chairman Mr Premji, robust growth was evident across all verticals, all service lines and across all geographies.
Wipro said it had learnt to leverage its acquisitions for consulting and architecting services across verticals but that the Nervewire acquisition consolidated with global IT services business had not contributed to revenues as had been expected.
"However, the losses from Nervewire are down and we expect to leverage the advantages,'' said Mr Vivek Paul, Vice-Chairman, Wipro.
The AMS acquisition had proved beneficial and the division was adding a customer a month, he said.
New customers were coming in at better billing rates, Mr Vivek Paul said, adding that large late adopters of the offshoring model especially in the telecom sector would choose India and Wipro to outsource. Wipro would continue to add value to ensure better onsite and offshore billing rates, Mr Paul said while also preferring to enter into more fixed-price contracts.
"Customers will not give dumb price increases, we have to demonstrate productivity to them.''
There was no wage pressure on onsite salaries, Mr Paul said, adding that the company expected margins to stay stable or improve, subject to the rupee rising. The rupee appreciation affected operating margins by 50 basis points, said Mr Suresh Senapaty, Executive Vice-President.
"There is customer confidence in our ability to provide comprehensive solutions and our deepening domain strength," said Mr Paul.
Sequentially, service lines too grew, with Wipro's BPO outfit clocking 29 per cent, technology infrastructure services 17 per cent and package implementation by 14 per cent. R&D services contributed 32 per cent to revenues of global IT services while enterprise business contributed 53 per cent and 11 per cent came from the ITES business.
"The Lehman brothers-Wipro relationship continues to be strong and we expect to get a significant share of their outsourcing business initiative," Mr Paul said in relation to the recent withdrawal of technical helpdesk work by Lehman Bros from Wipro's ITES business.
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