Wipro Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from Wipro Ltd (WIPRO) Q1 FY23 Earnings Concall

Q&A Highlights:

• Moshe Katri from Wedbush Securities asked that on the Capco acquisition, if WIPRO can sustain the growth it has seen until now. Thierry Delaporte CEO said that the company can sustain the growth.

• Mukul Garg of Motilal Oswal asked about the growth in the consulting business from a cost aspect for the next one year. Thierry Delaporte CEO said that at WIPRO, the consulting business is very much connected with the technology business. Consulting is an integral part of WIPRO’s go-to-market strategy.

• Mukul Garg of Motilal Oswal also enquired about how the wage cycle play out after the shift to the quarterly promotion cycle. Jatin Dalal CFO said the company is not making any shift. WIPRO has said it will give wage increases on September 1 and given the promotions from July 1. And these are the areas of investment for Q2.

• Kumar Rakesh from BNP Paribas asked when does the company expect its business to get back to the 17% to 17.5% margin. Jatin Dalal CFO replied that the company had said that it will be away from the range of 17% to 17.5% for a few quarters. However, the endeavor would be to come back to the guided range.

• Kumar Rakesh from BNP Paribas asked that on the Copco acquisition if the company is still seeing the benefit yet to accrue from that acquisition in the BFSI space. Thierry Delaporte CEO replied that the BFSI business is growing 24% YonY. So after a year, WIPRO can say it’s a success giving a decent growth.

• Sandeep Shah with Equirus Securities asked about the reason the revenue per employee on a YoY basis, going down by 8% in the IT services. Jatin Dalal CFO replied that the overall offshoring trend continues to be favorable to WIPRO and the realization is one-third in India which has played out in terms of IT Services.

• Nitin Padmanabhan from Investec asked about the reason for weakness in organic growth in 1Q23. Thierry Delaporte CEO answered that for six quarters, WIPRO has guided every quarter between 2% and 4% of growth. And delivered north of the guidance or above it. In 1Q23 it was a bit less of 1-3% due to new deals starting or the due to the very nature of the deals.

• Gaurav Rateria from Morgan Stanley enquired that of the 18 large deals, how much of that was led by improved win ratio and overall market being strong. Stephanie Trautman Chief Growth Officer replied that WIPRO’s win rates are up and its seeing a lot of momentum in the market.

• Gaurav Rateria from Morgan Stanley also asked about contractual profitability, if something has changed due to margins coming down. Stephanie Trautman Chief Growth Officer said that on margins, WIPRO is seeing margin pressure on more commoditized type services. But as WIPRO continues to position itself better as an orchestrator for its clients, margin improvements are anticipated.

• Gaurav Rateria from Morgan Stanley asked about factors driving Europe growth declining. Jatin Dalal CFO said that the reason for a slightly muted growth is because Europe had great growth in 1Q22, but WIPRO remains confident with deal wins seen in 1Q23 as how Europe will pan out in 2Q23.