Wipro CEO Thierry Delaporte expects a rebound in the next few quarters after the company reported a sequential revenue fall for the third consecutive quarter. The company’s upcoming quarter’s constant currency revenues could fall between 1.5-3% after Q2 revenues fell 2%. Delaporte expressed that the industry is experiencing a dichotomy between volumes and revenues, not just Wipro. In the company’s Q2 earnings press conference, he stated, “For several years, we have seen growth and in the last few quarters what we are seeing is reflective of the industry.” Wipro, like its peers, faced rampdowns, furloughs, and reductions, leading to revenue leakage. The company has a larger exposure to consulting business in the BFSI segment, causing it to be hit harder than its competitors. While Wipro’s strategic business unit Americas 1 experienced a growth of 0.9% QoQ, Americas 2 fell 2.6%, and Europe saw a steep fall of 5.4% sequentially. Delaporte, however, expressed confidence in a swift rebound in Europe due to strong order bookings.
Wipro’s total bookings for the quarter amounted to $3.8 billion, with a large deal total contract value (TCV) of $1.3 billion – the highest in the last nine quarters. Delaporte emphasized that their large deals will drive quality revenue for the next year, despite the decrease in the number of new customers. The company observed a significant reduction in new customer numbers, falling over a half from 128 YoY to 49 for the current quarter. The total number of active customers also declined both sequentially and annually to 1,393. Delaporte explained that the company’s strategy has shifted from a pyramid of large and small deals to focusing on fewer small clients and growing large accounts.
Wipro has been working on improving its margins for the past three years. Despite a difficult quarter, the company managed to deliver a 10 basis point improvement in operating margin to 16.1%. It remains confident that discretionary spending will return to the system, helping them get back on track. Delaporte emphasized the importance of focusing on key elements of transformation for Wipro’s success. The company did not provide any specific guidance for the upcoming quarters but is committed to remaining range-bound.