Business environment good, demand for IT services is strong: Wipro

IT major Wipro on Friday said that it is "pleased" with the current business momentum as revenues surpassed the $10 billion mark in FY22. "Crossing $10 billion in revenue is a significant landmark for us. We are now aiming higher. Revenue growth has been our fastest ever in absolute terms. We added 1/4th of our revenue just this year," Thierry Delaporte, CEO and managing director, says during the company's post earnings media briefing.

The firm's order booking in annual contract value terms grew 30% on a year-on-year basis in FY22 and the company claims that it closed the year with the "highest ever" pipeline of deals. Wipro continues to see a healthy mix of large and mid-sized deals; while the flow of large, transformational deals remains intact, the company is also witnessing a rapid expansion in small and mid-sized deals. "This clearly represents growth in our existing accounts as well as expansion of our market portfolio," Delaporte says. "Our cloud ecosystem from a revenue standpoint grew at an accelerated pace of over 31% in FY22," the CEO says.

Wipro's consolidated net profit saw a 3.8% year-on-year growth of ₹3,087 crore during the January-March quarter, largely in line with analyst estimates. Net income in FY22 increased to ₹12,219 crore against ₹10,794.6 crore reported in FY21. The company's Q4FY22 revenues stood at ₹20,860 crore, translating into a decent 28% year-on-year growth. Revenues for the full fiscal year recorded a 26.9% growth on a constant currency basis at ₹79,090 crore.

"The business environment is very good...the demand for IT services is strong. ….This is reflected in the state of our pipeline, order bookings and our overall growth rate," Delaporte says. "We have guided for revenue growth of 1%-3% (for Q1FY23) which will translate into a growth of 16%-18% on a year-on-year basis in constant currency. We expect to grow in double digits for FY23 as well. We are very optimistic of further strengthening this business going into the new financial year," Delaporte says.

Client spends continues to be healthy and the company has not seen any significant impact stemming from the instability of the macro environment. "I think the clients are still on the trajectory of 2021. I don't think I have seen a lot of clients that are suddenly slowing down investments or postponing them. In our set of accounts, I don't have in mind one client who would tell us that we are no more investing for the foreseeable future," Delaporte says.

The company, though continues to be vigilant and look at the evolution of the market, it is quite "positive about 2023." "We tend to be more on the solutions side for the clients. We are more an option for them or a way to improve the productivity and therefore we are not necessarily the first budget to cut," Delaporte explained.

Wipro claimed that its quarterly annualised attrition rate has moderated by some 500 basis points. President and chief Human Resources officer Saurabh Govil acknowledged that the "pressure" on the attrition front still continues but said that the company has enough inventory to manage all its demand requirements. The firm plans to double its intake of freshers in FY23.

To retain employees in a competitive market, the company "has decided to increase the frequency of promotion cycles for 70% of our colleagues in junior bands to a quarterly basis," says Delaporte.

Shares of Wipro ended at ₹509 apiece on BSE on Friday, down 2.59%.