Wipro Management Discusses F3Q 2012 Results (Asian Call) - Earnings Call Transcript

Wipro Limited (WIT)

F3Q 2012 Earnings Conference Call

January 20, 2012 3:30 AM ET


Rajendra Shreemal – Treasurer, VP, Head-Investor Relations

Azim Premji – Chairman

TK Kurien – CEO, IT Business and Executive Director

Suresh Senapaty – CFO

Jatin Dalal – CFO, IT Business

Ayan Mukerji – SVP and Global Head, Media & Telecom

Manish Dugar – SVP and Global Head, Wipro BPO

Soumitro Ghosh – SVP, Finance Solutions


Vihang Naik – MF Global Sify Securities

Ankur Rudra – Ambit Capital

Mitali Ghosh – DSP Merrill Lynch Securities

Priya Sunder – Avenda Securities

Srivathsan Ramachandran – Spark Capital Advisors

Nitin Padmanabhan – Motilal Oswal Securities

Abhishek Shindadkar – ICICI Securities

Sandip Agarwal – Antique Stock Broking

Pradat Tandurkar – Katanarobico Asset Management

Pankaj Kapoor – Standard Chartered Securities

Pinku Pappan – Nomura Financial Advisory & Securities

Dipesh Mehta – SBICAP Securities

Ashwin Mehta – Nomura Financial Advisory & Securities



Ladies and gentlemen, good day and welcome to the Wipro Limited Earnings Conference Call. As a reminder, for the duration of this conference, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today’s presentation. (Operator Instructions) Please note that this conference is being recorded.

At this time, I would like to hand the conference over to Mr. Rajendra Shreemal. Thank you and over to you, sir.

Rajendra Shreemal

Melissa, thank you, and thanks everyone for joining us today. New Year greetings from Wipro Limited, and a very warm afternoon to all of you. As the operator just mentioned, my name is Rajendra Shreemal. I head the Investor Relation here along with Aravind in Bangalore and Sridhar in U.S., we handle the Investor interface for Wipro.

I welcome you all to the conference call for our results for the fiscal quarter ended December 31, 2011. We will begin with a short address from Mr. Azim Premji, Chairman, followed by IT business highlights by T. K. Kurien, CEO of IT business; and Suresh Senapaty, CFO Wipro Limited who will present the financial highlights. The operator will then open the bridge for the Q&A with the management team, and we have the entire senior management here to take on the Q&A from the analysts and investors.

Before Mr. Premji starts the address, let me just draw your attention to the fact that during the call we might make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the 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 the SEC of the U.S.A.

Wipro does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of filing thereof. This conference call will be archived, and the transcript will be available in our website www.wipro.com.

Ladies and gentlemen, let me now hand over the floor to Mr. Azim Premji, Chairman, Wipro.

Azim Premji

Good afternoon to all of you. Let me just basically summarize at the Wipro Corporation level, the Wipro Limited level. Wipro Limited reported revenues in quarter three financial year of ‘12 of INR100 billion, a year-on-year growth of 28%. Net income for the quarter at INR14.6 billion showed a 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 investments and delivery, as well as in the sales engine. We have seen positive movement both in employee satisfaction as well as customer satisfaction.

A quick summary on the macro environment. There’s a lot of uncertainty in the overall macro environment, particularly in Europe, but there are signs of growth returning in U.S. with unemployment levels heading south. It’s expected that this will head further south. In our view, customers are prepared for slow growth in the western world, and IT strategies are designed keeping this variable in mind. There is increased focus on emerging markets, which is leading to superior growth for us.

We continue to see a lot more stability and clarity in customer organizations as compared to 2008. Organizations are focused on adapting the business model to meet the changing growth outlook in their business both on the revenue side as well as on the cost side.

Let me talk more specifically about our Consumer Care business. In Consumer Care and Lighting business, we have seen very strong growth of year-on-year 26% in quarter three. Business had shown consistent growth of about 20% throughout the year. Santoor continues to grow well through a healthy mix of both volumes and value-led exports. We continue to see all around growth across products and segments. Our 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 strong growth in India. We are beginning to see customer sentiment reflect a lower order intake in Europe in some segments.

Continuing our vision to expand the hydraulic portfolio, we have formally 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 local relationship with the OEMs and market presences. It is an important strategic joint venture.

Wipro Eco Energy: We continue to see a demand for intelligent, sustainable alternative energy generation. We won the mandate to implement and manage an energy management system for 1,100 store locations of a large retailer in the United States.

We have successfully delivered a cumulative capacity of about 40 megawatts of utility-scale solar PV plants, which have been connected to the national grid. Overall, we continue to be very positive about this business.

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