By Srinath Srinivasan
Wipro on Tuesday posted a 7.3% drop in dollar revenues at $1.92 billion during the first quarter of FY21, while the operating margin sequentially improved by 1.4%. The company did not give any revenue guidance for the full year due to the uncertainty arising from the Covid-19 pandemic. Wipro also reported a 2.3% increase in net profit at $316 million amid the ongoing economic slowdown across the globe.
“We were able to increase our margins using three levers. We focused on reducing variable workforce and improved utilisation. Next lever came from 1% benefit from rupee value while the third lever was operational improvement of 1% which was offset by expected credit loss,” Wipro CFO Jatin Dalal said.
Thierry Delaporte, who took over as the company’s CEO just a week ago, said the coming quarters will be met cautiously and the focus will be on specific investments, improvement in customer relations, partnerships with big companies and getting bold on grabbing tough deals. “It is too early to talk about recovery. We will simplify processes internally to give more to market and customers. I will be driving this agenda.”
The growth across business units and geographies were flat. BFSI saw a 0.9% decline compared with the same period last year and the technology business unit saw a 0.5% increase. “Our delivery teams have done well and our employee utilisation stood at 75%. We are also looking at any incremental costs carefully and aim to keep the revenue momentum going,” Dalal said.
The company has not stopped hiring and has added 7,000 employees. “Business continuity and staff safety are the priorities today. We will continue to honour all the offers we made. Due to the lockdown, the graduation in engineering schools have delayed and so we will begin onboarding of freshers by the end of this quarter and early next quarter,” Wipro CHRO Saurabh Govil said.
Currently, less than 5% of the workforce are working from the offices. “It is highly unlikely that 100% of the workforce will return to offices after this period. Our focus will be to continue seamless services to our customers and increase the collaboration times of our employees. It has gone up 5x during the lockdown period,” Wipro COO Bhanu Murthy said.
The company signed an agreement to acquire IVIA servicos, a Brazillian software company, during Q1FY21. “This will serve as an entry point to north eastern brazil and be an important part of our delivery network,” Dalal added.
Further, Dalal said cloud, VDI, SDWAN, Infrasrvices, cybersecurity, EOP and digital were some areas in which business improved as the dependency on technology increased during the worldwide lockdown.
The executive team said total contract value improved during the quarter compared with the same period last year. “There was a good flow of high quality large deals during the quarter. There was no big strain on pricing as well,” Dalal said. “The BFSI sector may see greater opportunities but economic data are still volatile and subdued. Hence there may be fluctuations,” he added.