‘Growth low due to legacy business shrinking’

Wipro CEO Abidali Neemuchwala Wipro CEO Abidali Neemuchwala
BENGALURU: Wipro CEO Abidali Neemuchwala had an interaction with TOI after the company announced its fourth quarter and full-year 2018-19 results. Excerpts:

Your June quarter revenue guidance is disappointing, and pales before your peers’ commentary….

Where are the challenges?

There’s nothing new. We are working on each of them one by one. We feel good about the verticals and the US market that we prioritised, making the best out of the market opportunity. There are some areas where we must do some work, including in Europe. In India, we are changing the mix of services. We are moving to digital and cloud. We used to do desktop installations, data centres. We don’t want to be in the lower end stuff. Whenever we do this kind of transformation, we are not taking new work of the same order. A few quarters back, we divested our data centre business. We are no longer getting renewals work out of it. There is a part of the business that is growing very fast, like digital, which is 35% of our revenue. Digital has grown 32% year-on-year. Cloud is $1.4 billion and has grown 25% yearon-year. Those are the choices we have made and we are executing on it.

Why do we see a sharp decline in Europe?

Historically, we haven’t been present in Europe. If you look at the intersection of manufacturing in Europe, more work is required. And we are not present in BFSI in Europe except for a couple of large banks. We are now winning large deals there.

There is a sharp differentiation emerging in IT services among value and volume players. How do you see yourself?

There is a degrowth in the legacy business and high growth in areas like digital. In legacy, we are decreasing our exposure. If I had not got out of the data centre business, I would have renewed some deals. We would have added $100-200 million to our base and quickly the (growth) number would have moved from 5.5% to around 9%. Those are choices you make for the long term. Sometimes you shrink your legacy business and focus on the quality of revenue to create long-term sustainable growth.


Author: Ayaan