Wipro has reported earnings performance for Q2FY22 with in-line revenue and a beat on margin. Thierry Delaporte, MD and CEO, Jatin Dalal, CFO and Saurabh Govil, Chief HR Officer at Wipro discussed the numbers.
“We had a very strong Q2 and the guidance of 2-4 percent for Q3 is a good prolongation of this performance. So we continue to drive solid growth, which means that for Wipro, we will be over 25 percent year on year (YoY) for the entire fiscal year. It’s quite a remarkable performance for the organization,” said Delaporte.
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“I don't think it is reasonable to assume that we can necessarily sustain growth at the level we delivered in Q2, but there is very high demand for sure. And it's very solid across the sector, across geographies and so, we are comfortable with the trend we have right now,” he added.
In terms of attrition, Govil said, “We had called out last quarter that attrition will go up. The demand and the skill gap are big. So, that is a challenge for the industry and for us.”
“We have ensured that supply-side constraints will not impact our demand. We are very clearly driving this agenda of growth. And if you look at the last two quarters, we have been able to add more than 10,000 people every quarter. We spoke about adding 6,000 freshers in Q2, we have been able to add 8,000 fissures in this quarter, which is the highest ever for Wipro. So if I look at the supply side, we will maintain the demand momentum,” he further mentioned.
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This is an area which the company needs to keep a close watch on as we don’t see it coming down in the next couple of quarters, Govil noted.
“It will not impact our growth story,” he stated.
“We are looking at onboarding around 2 times of what we have done in FY21, around 16,000-17,000 freshers in FY22. We are looking at upwards of 25,000 people onboarded in FY23, so that's the plan for freshers - significant and increased for us,” he said.
When asked about how the company managed to report flat adjusted costs sequentially despite wage cost pressure, Dalal said, “We had pressure in the Q2 because we need to invest in the talent. This is a time where talent is your differentiator. But we have been able to execute very well. We have got a reasonable uptake in our realizations. We have done very well on utilization. We have continued to improve our offshore mix, if you see it was 54 percent, it is 55.6 percent, it is a good solid moment. So operationally, we have been able to mitigate some of the investments in the talent that we had to do to remain competitive and continue to grow at the pace at which we are growing. So I would say excellent in quarter execution on operational parameters.”
“On margins, I would stay with the commentary, which we made last year, which is that the sustainable margin for us is between 17 percent and 17.5 percent, and that is the medium-term range that we have continued to guide. There will be some sort of investments, some sort of upsides that will flow through every quarter in the margin line but that's the medium-term range that we are looking at,” he added.
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