Wipro Management Discusses F3Q 2012 Results - Earnings Call Transcript

Wipro Limited (WIT)

F3Q 2012 Earnings Conference Call

January 20, 2012 8:15 AM ET


Sridhar Ramasubbu – IR

Azim Premji – Chairman

TK Kurien – CEO, IT Business and Executive Director

Suresh Senapaty – CFO

Manish Dugar – SVP and Global Head, Wipro BPO

Jatin Dalal – CFO, IT Business

Bhanumurthy BM – SVP and Chief Business Operations Officer


Joseph Foresi – Janney Montgomery Scott

Cliff Chaudhry – Global Equities Research

Rick Eskildsen – Wells Fargo

Nabil Elsheshai – Crest Securities

Swami Sunmugasundaram – Morningstar

Keith Bachman – Bank of Montreal

Avishai Kantor – Cowen & Company



Ladies and gentlemen, good day, and welcome to the Wipro Limited Earnings Conference Call for the quarter ended December 31, 2011. As a reminder, for the duration of this conference, all participant lines will be in the listen-only mode, and this conference is being recorded. After the presentation, there will be an opportunity for participants to ask questions. (Operator Instructions)

At this time, I would like to turn the conference over to Mr. Sridhar Ramasubbu. Thank you, and over to you, sir.

Sridhar Ramasubbu

Thanks Melissa. Good day, and wishing you all the very best in 2012. This is Sridhar, and I’m joined by Rajendra, Manoj who is taking over from Raj, and Aravind from IR team in Bangalore, and on behalf of the entire Wipro team, a very warm welcome to all. We are pleased to host Wipro’s 3Q FY’12 earnings call. Regarding the materials for this call, we issued the press release yesterday late night EST, and we’ll have time for the Q&A at the end.

The format for today’s earnings call is as follows. Azim Premji, Chairman will give us a overview of Wipro business, TK Kurien, CEO of Wipro IT Business and T.K. will share his perspectives on the IT Business side. Suresh Senapaty, CFO, will comment on the IFRS financial results for the quarter ended December 31, 2011. They have joined by BU heads and other senior members of the Wipro management team who will be happy to answer your questions.

As always, elements of this call and the management’s view may be characterized by forward looking statements under the Private Securities Litigation Reform Act of 1995 and are based on management’s current expectations and are associated with uncertainty and risks, which could cause the actual results to differ materially from those expected. These uncertainties and risk factors have been explained in detail in our filings with Securities and Exchange Commission in the U.S. We do not undertake any obligations to update forward-looking statements to reflect events or circumstances after the date of filing thereof.

The call is scheduled for an hour. The presentation of the 3Q FY ‘12 results will be followed by Q&A. The operator will walk you through the Q&A process. The entire earnings call proceedings are being archived and transcripts will be made available after the call at our company’s website. Replay of today’s earnings call proceedings will also be available via telephone post the call.

During this call, I’m also available on email and through mobile as well to take any questions and turn it to the Wipro team in case you are unable to ask questions for any technical reasons.

Ladies and gentlemen, over to Mr. Azim Premji, Chairman of Wipro.

Azim Premji

Good morning and good evening to you all. Let me talk a little bit about Wipro Limited and Wipro Corporation. We recorded revenues at Wipro Corporation that is for Q3 of INR100 billion, a year-on-year growth of 28%. Net income for the quarter at INR14.6 billion for the year-on-year growth of 10%. IT services business delivered a robust constant currency sequential growth and we continue to build on the momentum by incremental investment in delivery as well as the sales engine. We have seen positive movement both in employee satisfaction as well as customer satisfaction.

A little bit about the macro environment, there is a lot of uncertainty in the overall macroeconomic environment, particularly in Europe with signs of growth returning in U.S. with unemployment levels getting solved. In our view customers are prepared for slow growth in the Western world and IT strategies are designed keeping this variable at very much in mind. There is an increase focus on emerging markets, which is leading to superior growth for us. We’ve continue to see a lot more stability and clarity in customer organizations compared to dual rate. Organizations are focused on adopting the business module to meet the changing growth outlook in the business both on the revenue side as well as on the cost side.

A little bit about Wipro Consumer Care and Lighting, in Consumer Care and Lighting business, we have seen very strong growth of 26% year-on-year for quarter 3. Business has shown consistent growth upwards of 20% year-on-year throughout the year. Santoor continues to grow well through a healthy mix of both volumes and value led growths. We continue to see all around growth across product segments.

Unza business, which represents our Middle East and represents our Fareast business, continues to do well and growth was driven by China, by Indonesia, Vietnam and Malaysia. Wipro infrastructure engineering, despite market softness, we continue to see growth in India. We’re beginning to see Europe customer’s sentiment reflects in boards order intake in some segments.

Continuing our vision to expand the hydraulic portfolio, we formerly signed a JV agreement with Kawasaki Precision Machines Limited in December. The JV will focus on manufacturing of hydraulic pumps, which is considered the heart of the cylinder. Kawasaki brings in technology and Wipro brings in the local relationship with OEMs, and extremely strong market presence.

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