Buoyed by a billion-dollar plus deal from Alight Solutions, Wipro’s headline numbers came in better than what analysts expected. Yet the software major has given a muted outlook for the next quarter. Bhanumurthy Ballapuram,President and COO spoke to BusinessLine on how organisational restructuring in the last two years is falling into place, looking at good order book for the year and is ready to catch up with its peers. Excerpts
In the first quarter of this fiscal, you said that the West Asia business is getting restructured. In this quarter, you are saying that parts of the India business is undergoing restructuring? What is the rationale and is there more restructuring in the offing?
We have clearly stated that as a part of our restructuring exercise, we are focused on profitable and relevant business.
In Q1, we said that the West Asia business is undergoing restructuring. This quarter, we have come out and said that the rhythm in India-specific deals is different. So, as a part of our India business, we decided to carve out our solutions for public sector undertakings (PSU)s and government business.
There will be no change to the rest of our India business.
Do deals take too long in government projects and is that the reason you will be selective in these projects?
No, the deal cycles are different but not necessarily long in government projects.
Let me categorically state that we will focus on “digital citizen” services that the government is looking to provide. So, areas like IoT and smart cities will be in our radar.
In one of the quarters last fiscal there was a client-specific issue in the energy vertical and in this quarter you have settled with a key client. Are more client-specific issues coming up?
There is a positive momentum and given the demand environment, I expect to have continued positive momentum for the rest of the year. Also, the demand environment for modern application services both in terms of the digital transformation as well as the cloud migrations are really picking up for us. Infrastructure services, has been a very strong performer for us.
You walked away from the customer?
No we settled with the customer.
Coming to your next quarter guidance (1-3 per cent), it is not reflective of your bullishness...
If you see, in Q2, we’ve come at the top end of our guidance in terms of revenue.
We’ve been able to execute operationally on our levers therefore we’ve improved our margin.
Going forward, in the third quarter, we are waiting and watching how the enrolments happen in the Affordable Care Act and couple that with lesser working days in the US (holiday season), we are assessing how all these things play out.
Meanwhile, the measures we have taken over the past several years are starting to yield sresults. Our digital revenues now contribute to 31.4 per cent and we have trained 1 lakh employees in this area.
Utilisation has crossed 85 per cent and automation has gone up from 1.1 to 3 per cent. I think the potential is somewhere between 10 to 15 per cent going forward.
In the backdrop of new proposed visa legislations, how are you positioned?
Currently, 60 per cent of employees in the US are locals and we continue to maintain strong localisation initiatives in Continental Europe and other developed markets.