Wipro Management Discusses Q1 2013 Results - Earnings Call Transcript

Wipro (WIT)

Q1 2013 Earnings Call

July 24, 2012 4:30 am ET


Manoj Jaiswal

Azim Hasham Premji - Founder, Chairman, Managing Director and Chief Executive Officer

Suresh C. Senapaty - Chief Financial Officer, Executive Director and Member of Administrative/Shareholders & Investors Grievance Committee

T. K. Kurien - Chief Executive Officer of Information Technology Business, Executive Director and Member of Administrative/Shareholders & Investors Grievance Committee


Ankur Rudra - Ambit Capital Pvt. Ltd., Research Division

Sandip Agarwal - Edelweiss Capital Ltd., Research Division

Nitin Mohta - Macquarie Research

Viju K. George - JP Morgan Chase & Co, Research Division

Pankaj Kapoor - Standard Chartered plc, Research Division

Nitin Padmanabhan - Espirito Santo Investment Bank, Research Division

Priya P. Rohira - Enam Securities Pvt. Ltd., Research Division

Amar Mourya - IndiaNivesh Securities Pvt Ltd., Research Division

Dipesh Mehta



Ladies and gentlemen, good day, and welcome to the Wipro Limited Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Manoj Jaiswal. Thank you, and over to you, sir.

Manoj Jaiswal

Thank you, Melissa. Good afternoon, everybody. Apologies for the slight delay in the start of the call. A very warm welcome to all of you to our quarter 1 earnings call of fiscal 2012 -- '13. My name is Manoj Jaiswal, and I head the Investor Relations for Wipro, along with Aravind in Bangalore and Sridhar in the U.S. We manage investor interface.

We will begin with a short address by our Chairman, Mr. Azim Premji, followed by IT business highlights by Ms. T.K. Kurien, CEO of IT Business; and Mr. Suresh Senapaty, CFO, Wipro Limited, who will present financial highlights. And the operator will then open the bridge for question-and-answers with the management team. We have the entire senior management here to take question and answer from the analysts and the investors.

Before Mr. Premji starts his address, let me draw your attention to the fact that during this 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 management's current expectations and are associated with uncertainties and risks, which would cause actual results to differ materially from those expected. These uncertainties and risk factors have been explained in a detailed filing with the SEC of U.S.A.

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

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

Azim Hasham Premji

Good day to all of you. I just want to very similarly cover 2 areas: One is trends in the macro environment and IT; and the second one is the Wipro strategy. Overall, macroeconomic environment continues to be volatile. There is a lot of uncertainty due to high levels of sovereign debt and unemployment levels. My plans are cautious, they are sitting on stronger balance sheet and better prepared to face the uncertain environment.

Signs are driving towards a dued [ph] objective of growth and differentiation as they transformed themselves. Technology is going to be the key enabler for this transformation. Wipro investments in key technology teams, coupled with our domain-specific solutions and global footprint, positions us to be their trusted partners. I continue to be optimistic about the structure and growth story of the IT business.

Within this, our Wipro strategy has been fueled by 3 directive: a focused business strategy, higher customer satisfaction and greater employee engagement. Our strategy of creating a higher degree of differentiation in the front-end and standardization in the back-end is critical for us to win. We see higher levels of customer satisfaction in fiscal year gone by with customers, as well as in quarter 1, with customers reacting positively to our efforts in building a simpler, nimbler and leaner Wipro.

We continue to be significantly focused on employee engagement. We have seen the employees settle down into the new structure as reflected by a sharp drop in attrition rates and positive employee perceptions focus. We continue to drive our strategy by maintaining the highest levels of corporate governance, just to repeat to be recognized by the Ethisphere Institute, a leading business ethics think-tank, as one of 2012 World's Most Ethical Companies. We continue to be focused on sustainability. Our sustainability initiative has resulted in Wipro being among the only 2 Indian companies in the Dow Jones Sustainability Index for 2011.

Thank you very much. I'll now hand the mic over to Suresh Senapaty.

Suresh C. Senapaty

Good day, ladies and gentlemen. Before I delve into our financials, please also note that for the convenience of readers, our IFRS financial statement has been translated into dollars at the noon buying rates in New York City on June 9, 2012, of cable transfers in Indian rupees as certified by the Federal Reserve Bank -- Federal Reserve Board of New York, which was $1 equal to INR 55.57. Accordingly, revenue for our IT Services segment that was $1.515 billion or in rupee terms, INR 83 billion, appears in our earnings release as INR 1,496 million based on the convenient translations.

Moving onto the quarter performance, our IT Services revenue for the quarter ending June 30, 2012, was $1,540 million on constant currency, a sequential growth of 0.3% within our guidance range of $1,520 million to $1,550 million. For our vertical perspective, we continued to see strong growth in Energy & Utilities. Financial services were impacted by weakness in investment banking in the current quarter. From a service line perspective, we saw strong growth in analytics with 3.2% sequential growth. We've seen some stabilization in our BPO business, which saw sequential growth of 1.5%.

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