Half Year 2022 Wipro Ltd Earnings Call
Ladies and gentlemen.
Good day and welcome to the throne Limited Q2, FY 'twenty earnings Conference call.
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I now hand, the conference over to Mr. Paranoia, Vicepresident uncalled for it today.
Thank you Andrew.
Thank you John for a very warm welcome to our Q2 FY 'twenty two earnings calls, we will begin the call with business highlights and overview by Judy.
Chief Executive Officer, and managing director, followed by financial overview by our CFO jump in there or not.
Afterwards, the operator and open the bridge for Q&A, the Dow management team before charity starts let me draw your attention to the fact that during this call. We may make certain forward looking statements within the meaning of private Securities Litigations Reform Act 1995. These statements are based on management's current expectations and I would say.
So you did with the unfortunate even risk which may cause the actual results could differ materially from those expected the uncertainty and risk factors are explained in our detailed filings with ACC.
Does not undertake any obligation to update the forward looking statements to reflect events and circumstances. After the date of filing the conference call will be archived and a transcript will be made available on our website.
Well, what do you tea.
Thank you.
Hello, everyone.
Really good to be able to speak to you again this quarter, especially.
As you join US today during the safety study I know that in many parts of India, all celebrating not rocky and Uh huh.
We'll go to Joe <unk>.
Thank you for joining us.
We'll make sure to keep you here for too long okay.
Joining us today on this announcement as my leadership team, So our chief Human Resource Officer, So hot Goody.
Financial Officer, Jetting, Dale Ando, our chief growth Officer Stefanie treatment.
Yeah.
For me personally this is a special learning schools to be able to speak to you from Bangalore.
Is my first official visit to the India offices since I took charge in July last year.
In the last three years three days.
I've met with senior leaders and teams in India, It's absolutely been incredibly energizing.
Your penis and USP <unk> <unk>.
It's been very welcoming, but you can imagine my eagerness in anticipation to meet all teams and see off campus easier.
And they did not disappoint, it's been great so far.
That's cool.
I've only just starting to travel to essential travel of course.
In the U S last week meeting with our regional Ceos in GB of leaders, our chief growth Officer, and those are key leaders of our business.
Each of them I must say.
<unk> drilled is through a very difficult time during the pandemic and I'd like to.
Thank every one of our 220000 colleagues across the world.
For their commitment their trust.
The dedication to our customers' success.
Despite the challenges of dependent.
It is very encouraging.
Although it was 85% of our employees globally are now vaccinated with the first of the COVID-19 vaccines in over 50% are fully vaccinated with the recommended two doses.
Many parts of the world.
We're starting to return to our offices in a staggered manner.
For example.
It means you're all free vaccinated senior colleagues can now come to office twice a week.
Turning to work will be a guess.
And gradual process as you can imagine.
Yeah, really keeping the safety of our employees and the needs of our customers in mind as we plan this right.
In the second quarter.
I'm happy to share with you that Oh annual revenue run rate.
So the.
The 10 billion Mark the billion dollar Mark.
So it would be interesting for you to know that $6.0 billion in another case.
Was added just in the last 12 months.
This revenue milestone assumes great that's significant because.
We achieved this while undergoing our largest ever internal transformation.
Yeah.
Our revenue growth during the quarter was eight 1% in constant currency terms.
You may recall this.
Being well ahead of the top end of our guidance range of 7%.
And even if we exclude our two recent acquisitions that he's KEPCO and Amgen.
We grew about four 6% constant currency terms.
Linda.
This marks the second consecutive quarter of a four 5% plus yes.
It <unk>.
Cigna is the underlying demand and the execution momentum we have generated.
And Maggiore deal for growth was volume related.
Yeah.
Experienced secular growth across all markets.
All sectors.
And global used nationally all recent acquisitions too.
I must say performed ahead of expectations.
The demand environment continues to be very strong.
The pipeline is a clear reflection of that.
In fact.
Our pipeline is among the highest in recent quarters.
A good mix of large and medium size deals.
They are in fact.
Many mid sized deals and slightly smaller sized transformation deals in the market right. Now. This is all good news for us.
Yeah.
[noise] Oh auto book in terms of annual contract value.
Jumped 28% in H, one and in terms of PCB.
Yoga book is up 19%.
We have strengthened our lodging team.
And protein specialized expertise there and so on.
Really country didn't our participation in win rate of deals will accelerate.
Let me come to the operating margins now.
I'm pleased to share that in Q2, we have sustained Q1 operating margin adjusted for the onetime gains we had in the last quarter.
And frankly.
We have maintained them all packaging margin despite a bit.
They're all being the full impact of our recent acquisitions of KEPCO and M. P M.
And in spite of investing heavily in our business our cross sell capabilities in Canada.
An additional point to note here.
We've also showed a salary increase covering 80% of our colleagues in September 2021, marking a second salary hike in this calendar year.
There is significant traction across all of our market. So as I said, leading to broad based growth.
Americas and Europe, all top two markets grew at 15% and 29% year on year, respectively.
Even without the recent acquisitions.
And America is one we grew 20% year on year.
Most of the sectors showing strong growth consumer.
Communications channels would've grown at 5% plus sequentially.
In America too.
We grew 31% John you led by gross you know do you need the business as well as.
Benefits from.
<unk> of capital.
Most sectors registered healthy growth of 4% plus sequentially.
Our European business has delivered a year on year growth of 48%.
Tobacco lodging.
Thanks to the boost of our acquisition capital.
U K.
It looks Germany led all Guinea gross drilling at 12, 10, and 10% respectively in sequential terms.
Our market.
Market grew modality.
At 8%, Georgia.
We're now seeing improved traction in Australia, and New Zealand in India in Japan, and Southeast Asian markets.
Pipeline addition, in these markets have been very healthy.
Middle East and Africa.
In Q2, but we are.
Encouraged by the pipeline that is shipping up.
All teams.
I have redoubled their focus on our existing clients and that is leading to strong growth in all top customers.
Top customers grew 29% year on year.
All top five customers grew 33% year on year.
And I'll stop there and grew 32%.
In the last 12 months.
You bet.
For new customers, even more than 100 million bracket.
And we have added five more customers in more than 50 million bracket.
This we feel is the startup of a significant shift.
When I meet all customers.
They actually telling me to see a change in how our teams approached the business and the value we bring to them.
This recognition reflects the proposed change in mindset.
Our board and confident approach to business.
Customer satisfaction scores as measured by an independent survey.
Oh sure.
We even consider it.
From a service offering standpoint, our ideas global business line.
1% sequentially and 37% year on year.
Most of the sub practices showed a healthy gross or engineering engineering business grew over 25% year on year in Q2.
And that's a compounded quarterly growth rate of almost 5% in the last four quarters.
Oh.
I called Global business line grew by 5% sequentially and 18% join you.
All of the sub practices grew in double digits on a year on year basis.
We launched we plough full stride cloud services, which integrates all consulting and technology capabilities, along with our cloud studio based assets.
This integrated ecosystem positions us as an orchestrated that believers.
Transformation or solutions together with our partners to address our clients' business challenges.
The cloud ecosystem, which is about.
About 30% of our revenue.
27% plus in the first half.
And for the first time ever our cloud pipeline is crossed 8 billion.
And that's.
Reflected in the deals we are winning two let me give you a few example.
One a global software products and cloud services company has awarded a multimillion dollar contract for product innovation spanning AI cloud and cognitive business products.
We will leverage our engineering next product, but solutions to rapidly scale and migrate the clients' products to cloud.
Second.
A multinational oil and gas company has selected wipro to build a cloud not these subsurface data platform, which enables consistent a P. I stand out connecting with cloud and software vendors micro services and proprietary solutions.
Working with with grocery strike cloud. So this is the solution significantly reduces sub surface data analytics timelines.
I'll do a quick update of our recent acquisitions with KEPCO.
We continue to build good momentum on our joint go to market.
Pipeline is building well.
Started seeing some early wins, we have won 10.
10 deals during the first 100 days of transaction closure initial days, yes sure.
But I have congratulated the KEPCO team for leading this from different.
We're also pleased to have completed the acquisition of NPS and Australian based provider of cybersecurity Dev ops and quality engineering services.
This will definitely help us expand our footprint in one of our priority markets.
Let me now give you a quick glimpse.
How we have transformed ourselves.
Apart from.
Moving to a simpler and more customer centric operating model.
And.
<unk> restructuring.
We have made substantial progress on leadership transformation.
I have said that you know of previous interaction that talent will be a critical success factor.
So we have worked on two keys aspects of fleet. She pulled over one by building a contemporary and diverse senior leadership, including our client facing global account executives and two by moving the leadership closer to clients.
Consequently, we have.
We constructed our leadership with a good mix of internally promoted talent and lateral hires.
58% of our leadership are in the regional markets.
Increased proximity to our customers.
Naturally we will continue to change and hold our momentum, but I'm happy with the pace and the quality of change we have achieved so far.
It's one of the issues that we must cope with and we build talent at scale. It is attrition.
Oh customers too are grappling with increased accretion.
We pro acknowledges this changed Thailand landscaping.
How's the deputy quickly to the new world of work.
The hybrid work environment is definitely a part of this mix.
We have.
Although down on a fresher intake with.
8000 agents 150 young colleagues joining us from campus in Q2.
We will continue to aggressively build on this and I'm happy to share that we are well positioned to add over 25000 tracers in the next financial year.
And finally onto our outlook for the next quarter, we have guided for a revenue grows to two 4%, which will translate into a year on year growth of 27% to 30% in constant currency.
To summarize.
I would say that the demand environment continues to be strong and outgrows child over the last few quarters reflects this.
It also reflects our improved execution and gene.
Together with the investments we've made in capabilities and talent over the last nine months.
I'm confident we will be able to participate and win at a greater pace.
On that note.
Let me now hand over to Jacky Felice governments on defined the choice shifting over to you.
Thank you very much theory and good evening, good morning to all participants.
I would share some financial details smell it.
As Katie mentioned for the first half hour D C V Ben.
It's been quite healthy at 18% and our Oh, what if you've been have been 29%.
We have we have signed in quarter two nine deals with the D. C V O $580 million.
Our quarter two revenue growth was 8.1 person, which as you know is significantly ahead of our guidance range of five to seven per se and that's reflected in constant currency 28.8 person who's the yard on yogurt.
Operating margin for the quarter were 17.8% and it was a good sustained and considering the one month thing.
That would be to see U S benefit one timer in quarter, one on sale, all Friday and solar business.
Our tax rate improved compared to last year, where we closed at 22% versus 22, 5% of last year.
Therefore, our net income increased by 18, 9% in quarter, two and not EPS increased <unk> 20.
23, 8% year on year.
The if you'll see our cash flow performance operating cash flow was 81% of our net income we had $9.0 billion of net cash on the balance sheet and $7.0 billion gross cash on the balance sheet.
We had a good realization of 75.11 at the end of the quarter.
And we had $3.3 billion all Forex hedges.
We have guided F E already articulated to two 4% sequentially in the constant currency exchange rates I had mentioned in our press release and will be very happy to take your questions from here.
Shall we open up for Q&A.
Absolutely. Thank.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session.
Anyone who wishes to ask a question. Please press Star then one on the touch tone telephone.
If you wish to remove yourself from the question queue.
Yeah.
Participants are requested to use handsets, while asking a question.
Anyone who wishes to ask questions. Please press Star then one.
Yeah.
The first question is from the line of.
From UBS. Please go ahead.
Oh, hi, congrats on the strong quarter and Bob and Michael.
Awesome.
Just a couple of things I think about.
What's the kind of way.
Okay. So cyclical.
So Martin.
From a bottom up strategy.
Okay.
I'm on for Alex.
Right now that we're here for conservation all I got.
Paul.
That's pretty good.
Bob.
I'd like to talk how far do you think alcohol personal thoughts on what's left to be done.
So.
So can you be a this is Justin you know if you don't mind can you repeat your question you know your language slightly blurred, we couldnt follow up question.
Okay.
All I my question basically was that how much of the.
The Colts like now would you attribute to your bottom up strategic initiatives and the results that they are producing and how much would you basically say, it's the demand looks like you're getting because of what's happened over on a visit to them and the second part of that question is that from a from a strategy point of view.
It's actually the program.
And in terms of the milestones that they've been tracking and one last one.
Okay.
Okay, I'll give you I'll try to respond to the two the two points. The first one is a difficult one obviously.
He came to two a disconnect you know the the the impact of a market and and you know what's more specific to repeat itself I think they're either near field or the equation between a.
Good market.
And then organization that he is very aligned to the priorities of our clients and so the bottom line is that.
Yes, we are benefiting from a good market. We are seeing that the market continues to be good if not continue to get better.
But we're also seeing that we are having a better impact with all claims that we are having a better impact and that we are actually performing better on the deals we are going after them and so I think at the end of the day I cannot sleep.
Scientifically, but there's no question that you know this stuff for a man sees the results of the first four months of we brought in a good market.
The second point around the.
Impact of our strategy.
The strategy that we had laid out with D. Var about 15 months ago now was one a strategy of obsessive focus on girls.
And that's what we've done by you know.
Allowing our teams to focus at a time.
For the clients in the market we've simplified the model we've simplified the organization we have reinforced our you don't know processes. So that people can have more time for the market spend more time with the clients we have adjusted our ambition.
And and really redefine where we felt we wanted to choose to play with our.
Clients.
And really be their partner in that transformation and this is what we've been doing you know day after day and then.
Two more things on three more things we have been very clear on the fact that you know we wanted to focus our investments around our top accounts. That's what we've done and the result is that you know what you're seeing today is that we've increased significantly the number of deals over 100 count to over 100 million daughter.
We've increased the number of the count of over 75 median over $50 million. So.
We've increased the size of our large account door count I've been.
Growth engine for us.
We have.
We have been clear on the fact that we wanted to.
Further invest and bet big on that.
The power of developing partnership with technology companies.
Like AWS, Microsoft Google or our ACP and this is what we'd be or service. No. This is what we've been doing in New York. So we've been getting.
Ah well basketball rose over the last quarters and finally.
We have a strategy to.
Go after a big deal as well and that's you know with that in mind that we have.
You know <unk> organized our big deal team around our chief growth Officer Stephanie.
And so I would say that when you look at.
The way we have.
Hum.
Bill if I can say if we the way we have produced this grows it's fully aligned to this it's the absolute.
Result of this strategy, we've been driving over the last 15 months.
Uh huh.
Oh no.
Any further questions.
Well, it's just a follow up to that well how long he has spoken about kaufhof and solving the lives.
How long will it come through.
Given that the habit of every bit of a slowdown.
Slow down in the last couple of quarters I appreciate the.
Hum.
That's the total value are you happy what brought it feels like now and what should we expect.
Uh huh.
It's going to fall off.
A lot of them are simple.
I'll I'll take it a little bit and then I'll I'll ask Stephanie to build on it.
For sure we are happy with the performance in bookings I mean, the quality of the deals we've closed this quarter.
We saw client resolve top clients are a good mix of large and mid size deals. There's a good volume of activity that is shooting. This these girls.
We didn't have a mega deal this quarter.
And you know.
We knew it so you know it's not like you're turning.
What you need to do no possibility into immediate do you mean, a few months' time those deals typically take more time.
What we've done is get geared up the engine the engine the PDL team to start to produce more opportunities in our pipeline.
For the foreseeable future for the for the next quarters and that's absolutely what if any has been doing with you know, bringing in a lot of top talent.
Recently, Stephanie you want to to build on it.
Yeah, Thanks, Jerry I for me.
Large scale team perspective, you know in the first few months of building out that team. We've been focused on the current pipeline. So everyone on the team is actively involved in deal.
You've seen some client.
I bet in their decision, making and others, who have perhaps broken the opportunities in the smaller opportunities, but we're still engaged.
And then we've also pivoted towards more proactive origination of large opportunities.
Working closely with our existing client base and also our partners to.
To create opportunities as well as respond to opportunities. So I think that is what is informing our pipeline moving forward.
Absolutely Thanks, Tiffany and just to conclude on your point just facts.
If you you mentioned a C V N D C V M D.
Yeah. So a C V S jumped 28% year on year in H, One T. C V has jumped 19% year on year. So.
From those two aspects you know Oh, we are growing well as well.
Got it.
Praful I spoke about just a fine Oh wow come back into the queue. Thank so much longer.
Thank you.
Thank you.
Well take our next question from the line of smoking gun.
Please go ahead.
Yeah.
Yeah, Hi, also taking my questions well go ahead, just wanted to focus a bit on the supply side of equation.
Well the demand environment that we're going to look very very favorable then you guys have been doing.
Your own expectation, but.
Some point of time.
Did he hired you shouldn't and I you know additional ratios would have some drag on the incremental growth opportunities one of which is there in the market. Do you think you would just talk I've seen some of that right now or is.
Is there something which can which can lead to delays in our business. The loss recorded on the line and I've got to be some demand anyway.
Well I think what we said.
Got it.
Nicole I will I will start by answering the following the.
The guidance given for Q3 does not assume an improvement of attrition okay.
Suddenly different terms Ive attrition would go down we could potentially do a little better now I frankly don't believe that attrition will.
Hum.
Improved I can sense a reduced.
Oh in the next quarters I actually believe that you know given the environment.
We will continue to face you know the high level of penetration at least in the next two three quarters.
Hi.
Yes, we have abuse the acted.
Acted.
On it.
In many ways, you've you've heard I've mentioned, the fact that we are.
We initiated a new cycle of compensation increase for 80% of all people in September.
But besides that we've also.
Ramped up our you know our Freshers strategy.
And you know going for a lot more you know we've revised frankly, the level of ambition of off ratios intake Ah.
With that I'd like to ask you so hub to maybe jumping and tell US also from Frasier standpoint.
I'll need to come up with numbers, but also in terms of you know strategy, what we've decided to do.
Thanks, Gary.
Have you called out.
Demand environment is very strong.
Supply side, we have to work on.
The interventions, which we are looking at.
More long term and there's more in depth. So its not only adding numbers of adding more people. It's also making sure that how do we make.
Upskill them and also retain them longer.
A longer period of time.
So for example, say shows as we go on.
For the campuses the theater and we just completed a national Darlington.
A.
Look for India.
Where we had more than 400000 people applying for it.
We are having a communication of the plan that I think is unique with not only shared with them what.
The compensation and they join but also our plan for them in terms of the carrier and compensation for the next five years.
It's buried in their contracts so it's very clearly driving the.
The line that we increase the retention of these.
All these people because we are seeing a higher attrition in this three to six year category and if you're able to retain these fishes.
Bill Great culture, and Doug mentioned, they tend to be Lumpier thing.
We do long term.
And help us move supply side.
These different shifted suddenly about adding numbers, it's very strategic.
That's a very good.
The increase the retention of Christmas sort of a longer period of time and look at both cost and attrition is a long term player.
Oh I'm sorry.
Oh I'm sorry, the second part of your question was on how we should look at Bob.
And then in the pricing.
But oh.
So how do you spell on legacy part of the business that's what it is.
Oh, no cloud in a new part of the business well.
Historically, if you like.
A portion as you know obviously being more stable.
Although corporate is not there.
But you know with the <unk>.
And on your technologies, though that'd be redeveloped missing by Oh.
And Ohio.
Yeah, that's it.
Okay.
Yes.
Yes.
Although definitely we are getting a significant growth.
From those are areas that you are referring to it's true today, we are you know.
Significant part of our growth is coming from cloud area from a downtime from you know did you transformation from.
Engineering services from cyber security and again. This is based on this revenue mix that we have you know based on our assumptions for the government for the guidance for Q3.
But luckily that's two outdoor activities see yes. These are hearts good sturdy.
There is a higher attrition so if I see this is one area that we are working towards with the Upskilling Park will help.
It is an area, where we have huge demand and there is a supply and there are still a deficit. So it's not about.
So if the demand is much more what we requested in the industry, it's an industry issue.
Two this is Justin just to just to add even more conceptually if the demand is high it sort of as mentioned.
And that is constrained supply debate if more people get trained and that they are in fact, it will reduce the pressure on the attrition in that they deal with a period of time does that basically we can do as you know maybe most of them are critical in them.
We didn't use it.
Okay fair enough.
I think that's what taking my question I'm I'm going back to school.
Thank you.
The next question is from the line of Sandy bucket.
Please go ahead.
Yeah, Hi, good evening, Thanks for taking my question and great.
Okay.
One question here is that when you see your current clients Oh.
Oh, great execution and the way our technology is getting adopted across horizon. What gives you a sense at what stage of implementation. We are is it video.
Exactly yeah.
In the middle of it.
So that was one and second Oh I wanted to understand that right you said that they shouldn't be not cool off in the next quarter or will it be fair to say that the corporate solution is behind us.
Thank you.
Well on the first point, which is you know you want to understand at which stage of transformation. You know if you want to think about you know.
The potential that technology can Ah represents for an organization for the company in terms of you know transformation of each ways of working I think we are you know the.
The best of the transformation is ahead of US I mean, the potential off you know if you look at the cloud. So first of all if you look at cloud transformation.
What I'm reading and you know he's quite consistent here.
We probably have to touch say, 20%.
The cloud transformation wave and so the biggest part of it and the largest part of it is ahead of us.
If youre looking at you know security.
There is no question that security will continue to represent you know budget increase.
For all clients E. In the next years, if you look at data.
I mean data the way, we are leveraging data to drive insights for better decision, making.
Is you know it.
The men's but they hopefully isn't an immense potential for you know a lot of industries and you'll again.
The best is ahead of US finally, if you look at engineering services and those are all areas, where we are investing significantly in getting nice girls.
We know that this is an area, where you know in many and across many industries companies will have to invest in their R&D and will need she bought from companies like us to support and you know.
And there are R&D are you know investments and so.
Across all these different areas.
The bulk of the transformation is ahead of us.
On the attrition, which is your second point.
I actually don't believe that the worst of attrition needs behind us I think it will as I said it will continue.
To to possibly increase into next quarters before a cooling down.
Again, that's that's at least our assumptions as of today.
Okay. Thank you.
That's really helpful.
Youre welcome.
Thank you.
The next question is from the line of upward.
Please go ahead.
Thanks for taking my question Oh jetty are.
That's it from my side, so how durable is the demand environment and.
Is the conversation around sculpin Kreis with.
<unk> customers, giving you that confidence of durability of demand and the continuity of I didn't go to momentum and I ask this in context of a higher ACB growth, whereas you seem to be called.
So on the first point, I mean, Oh, I would and so if Frank yes, yes.
Yes, it does.
Demand.
These strong.
And will remain strong.
You know just based on the previous points I. Just covered is so much transformation ahead of us our clients are placing investments in technology as you know among their top priorities to it to a point to prove out where it's not anymore a.
So before the CIO suddenly it's a topic for every CX. So we didnt organization right. The CMO, you're investing more in takes energy head of supply chain, he's investing more into the business.
Expressed strong demand for technology, and obviously, all the different functions HR finance.
Operations.
Are you know are pushing for you know programs to be developed so the demand will continue to remain strong.
Got that and just on this point of view are the strong demand and in context of the current.
A tight supply environment.
What do you think is the propensity for getting nowadays cutting trees, and what part of the portfolio or any other opinion is I'm a number to that increase or is it. The case that this is more stable and the benefits that.
Flowing through more by means of greater off shoring and volumes.
Yeah.
Well I think there's opportunity to take these opportunities to have these discussions with our clients.
In the current context, our clients you know Oh.
All kind of feel the same they are also are exposed to attrition.
That's exactly the same fit them out.
And so you know I think it's a it's a reality that more important for them today is the ability to continue to drive those program.
Without.
I know without a slowing down now from a portfolio standpoint, I would say I would still talk about a certain level of stability in the pricing.
Got it thank you and all the best.
Thank you.
Thank you.
Ladies and gentlemen in order to ensure that the management is able to address questions from all participants in this conference call.
Please limit your questions to one per participant for any further questions you may come back for a follow up.
The next question is from the line of quota.
Now from Morgan Stanley. Please go ahead.
Hi, congratulations on great performance.
First question for beauty.
Right now.
All our organizational restructuring.
There's have you seen any material change in the top 100 top 200, Hertz and as far as the global account executives are concerned and our or is this something which is a hurdle for us and these changes that are happening in the coming quarters.
Gonna have excellent question. Thanks for that one is in terms of operating model and organization changes.
We have implemented the new.
Operating model you organization on January 1st.
And you know we had given ourselves quarter to stabilize these organization model, it's actually been incredibly efficient rapidly.
And frankly, I don't want to be overly Oh optimist, I mean, not positive about it you know every.
New modality requires a certain amount of a progression, but frankly.
Very positively surprised.
Surprised by the level of Metro E of the mud and after a few months we have today a model that you know.
The organization in all of our leaders consider ease the burden that he's working in and actually delivered the upside that we want that we were expecting them off you know.
PCT and come off you know, reducing the number of silos inside your organization the ability to create one wipro mindset and getting actually freeing up time for our people to spend more time with customers.
Second part of your question, which is about.
The rotation or you feel like the evolution of our leadership organization, what I can tell you is.
Oh, we have.
Upgrade easy if I can say about 25% of our account executives.
Around the world.
Okay and just similar aspect is that if you look at our top 200 leaders across the organization.
Two years ago, we had only 1% of them.
We're account executives today, 80% of them are account executive Gerry.
A significant change.
In the mix of leadership towards.
Towards client facing people.
Yeah.
Got it.
Good question.
Two parts one you mentioned a couple of quarters back one of the key job, but you had to do was to build a pipeline actually.
And the last few quarters have been good on the conversion. So just sort of wondering understanding that I read the journey you dump trucks, a broad base of our participation in their disease.
The second part of the question is forgetting with respect to understanding the lever to manage margins in the second half, but is it fair to say given the supply environment being tight margins should be lower in the second half compared to first half. Thank you.
Okay. So I'll take the first one on the on the on the pipeline well you know we've seen the pipeline progression quarter after quarter, it's been a consistent proration the trend has been put Steve but.
More importantly, I would say two things.
The quality of the pipeline has improved.
We have a pipeline now that is more aligned to our.
Strategy priorities come off.
Focusing on offerings, where we want to invest.
And also focused around.
Our key accounts.
So the bus the proportion of our pipeline coming from our top accounts.
Is a lot bigger than what it was.
Several quarters ago. So from that standpoint, you know we took positive finally I would say in terms of deal conversion I think.
We are also seeing a positive trend.
We've.
Improve the way we are quantifying all deals we've improved the way we are.
Mobilizing the one we drove organization to win these deals.
And you know the.
Laser focus.
In line with our strategy around accounts and in specific offerings.
Allowed us to invest in to get talent into capabilities and this is definitely helping us converting those by this pipeline into deals.
On the second question Jeanine.
Yeah thankfully so.
So the answer to the question is yes. There is there is a tremendous.
I.
I would say competition for great talent and that means that we need to remain very invested in our talent, we need to make sure that our supply quote is properly supporting our growth and in fact I heard of outgrowth go. So we are capturing every demand that comes in.
But all of that indulge yourself in back order risk on my didn't yes. There is a risk on margin and I think that's not just we put out but that's the industry effect, having faith that we execute it as you know this quarter Red V.
We would devote able to drive operational improvements in realization utilization and offshoring and colored effectively the impact that we had to take for three months at back to on on Saturday.
I think it's going to be it's going to be a growth.
Oh going forward, which will end and how do we balance.
Therefore that we put on our operating leave us to be able to cover for the margin is a that is going to be a balance that we will we'll have to continue to fight on.
But have you ever done well, which we are proud of in quarter two.
But there are clear investment agenda.
Agenda on talent going forward, which we outgrew remain cognizant and that what we are baking in as we think about second half.
Thank you Jason amplitude.
Thank you.
The next question is from the lineup Sandeep Shah from <unk> Securities. Please go ahead.
Yeah, Thanks for the opportunity.
I understand and acknowledge.
Oh yeah.
49%, but if I look at the first half.
When you say are you close to the same type of thing.
And as you move forward and you're all well.
Actually new business.
Oh first half see them come to around 5%.
So that's that's what do you in terms of the growth profile going forward, what do you believe that.
Yeah.
Yeah you'd have to.
Look beyond the logic there.
Okay.
And there are enough number of blood centers.
Got it.
Oh growing part of our robust second questions at that time.
Nothing at this time I think it will become one of them decline at school students.
Uhm tubing, well has been higher than 2000.
But what is causing this man.
Some will normalize.
Automotive business.
Sure.
Deepa this is Jeff.
We'll try and respond to both questions. If you are okay on the first one.
Yeah. There is the strength of the performance is reflected.
In quarter two numbers.
It is what do we think we can do is reflected in the guidance, which we give it.
Of course, you can look at.
Look at it.
The the likely performance in many ways and you have a point of view that we respect.
But but you must always see that all of the industry runs on onto fields. One is the day to day volumes that we are able to add because we see demand and we fulfill greatly in that extra revenue and second is large deals.
And as you can see the first and you need is really being very very productive in last nine months and it continues to find very bad.
And we did not have a mega deal as a theory spoke about it but yeah.
We have very strong first engine, which is fighting so we feel comfortable as we speak.
We feel comfortable that'd be helpful pipeline for large deals and they will convert at some point. So overall, we are quite okay, and well placed a is the baby Sea sandeep.
And the second question on.
EBITDA, which is a big it'll be as you know we do have certain cycles of amortization related with the specific cause flow to reach that particular item is getting amortize on and as and when those cycles come to an end are in their nature and of course, the amortization see this.
To come in the P&L and that's reflective of that and what you see now.
She is something that can be the basis for your future modeling.
Okay. Okay. Thanks, Thanks, and all of it.
Thanks.
Thank you.
The next question is from the line of single.
From Phillip capital. Please go ahead.
For both single from Phillip.
Please go ahead with your question.
Please.
Yeah.
One of them.
Yes, yes.
Yeah, Yeah, Hi, guys. Thanks for taking my question Oh, Okay, I just talked about one question Oh.
From my side.
My question was what they need to a lot of chatter he and the growth that you'll see in the European geography.
I mean, we know that would be in <unk> and then companies have done really well in the U K, Scandinavia and geography, but the continental Europe have something about the reason, which I think was some of the companies are not able to make so much of hundreds of people, obviously themself language I'm concerned about him he probably will come back over the past year with much else nobody's hiring.
How do you see pandemic changing Daddy question How's it kind of has as it has ever been tidewater how's it kind of lower those entry barriers.
And then I'd be companies and specifically Catherine do you see more of these coming into a.
Geographies like Germany, France, or the local European companies like you'll just gave me a socal Theodore every and all these guys able to ramp up and give us good enough competition, because they have not been over the past decade. So how is the God Bob Gault physically in the European geography, looking like with all these factors at play.
Look at this.
The my response.
What would have.
There's two aspects to it.
The first aspects here, there's no doubt that.
You know.
Companies have.
Learned to work.
With teams that are working remotely.
And when you're working remotely with are you working to mice away or you know 5000 miles away. It doesn't change anything youre working with teams that are not onsite and from that standpoint, there's no doubt that you know a lot of.
In the companies across industries in the.
The European market.
And will it be more comfortable leveraging our global delivery modality, if you like.
But the symbolism aspect for me.
He's equally important.
In Europe more than anywhere else.
Our major cultural specificity that requires deep understanding of the local markets.
And the local market of Sweden is not the same that the local market in Finland or in Norway, and I think the companies that are you know doing well other ones one understand that and you are able to leverage at the same time.
The power of global organizations and <unk>.
They've locked is shrunk local connect.
And that's the reason why we have you know so significantly invested into.
Local leadership in Europe, and this has been paying off.
Pretty much immediately.
Right. So would you say that we are on track with all of them.
Got the deal done.
Once you've done are you happy with the outcome could have been better at about.
How do you think do you expect them to be even better in terms of growth rates and in terms of big wins going forward.
Well you know.
My My my team would tell you that I'm I always consider that we could have done even better but I seek I'm satisfied broadly satisfied with the progress we've made the consistency the alignment to the plan the execution if you like off the strategy.
And the fact that you know we are doing what we have said, we would do and that you know I like this.
<unk>.
Got it got it okay.
Hey, Thanks for taking my question after the anniversary of Bank of America.
Thank you people.
Thank you.
The next question is from the line of monarch.
From JM financial please go ahead hi.
You put up a bunch of empty and brokerage commissions.
Judy I wanted to pick up.
Our number one thing is that on the Tech bank of.
Why do you see a significant shift in terms of offshore mix ultimately news over the last several quarters.
Bankers also hum along with significant increase in utilization, which is biggest country to what one has seen in the past for being next to.
So I'm going to paint the normally you can see it on utilization really well as more will get to see what else should tax lingo or youre seeing some some some.
Defending engagement models, he imagined machine because of which I'll show you play they shouldn't be kind of holding up quite well that's question number one.
Second question was around the fact that typically second half is much stronger one cisco's topic dumps with sequencing, but we expect something similar to the PDC energy. Thank you.
I mean, so I'll start with the point number two and I'll come back to the <unk> two the first one has to be.
<unk>.
Oh this is or was it a bit of seasonality in it you know industry for sure.
And that's you know that's why you know when we talk about sequential growth we.
We need to take into account seasonality.
The guidance of 2% to 4% Roes in sequentially in Q3 takes into account this seasonality.
Each remains that if we look at how grows 2% to 4%.
Growth in Q3 would actually represent 27% to 30% growth year on year, which is quite.
L C.
On your first point, which is you know trying to identify trends or evolution of onshore and offshore mix.
I would be a little cautious with drawing conclusions I think the reality.
Monique is that.
You know the mix.
He's effect off many thing your evolution of the mix depends on the type of deals that you are.
No.
Selling.
Depending on the level of the cycle of where you stand in you know in the transformation you're gonna need either more you know local presence of more offshore presence and so I think it's not necessarily.
A trend that you systematic I think it's you can see an evolution depending on AR due to the mix of the deals are in no particular sick daily necessity on geography. So that's the point I would make yes.
To be clear of show utilization is lower than the utilization, we have onshore and that will certainly remain true.
You bet.
A market of high demand.
Utilization tend to be higher that's a good you can make any calls.
Sure.
I don't see it.
Okay.
And do you think.
Wei Qing.
King as customers get much more acceptable also global delivery at our facility.
I I believe.
You were breaking out a bit so I hope I understood. Your question, but you know if your question was do you believe that.
Clients are more open to offshore is that what you're saying.
So I think I've been more innovative engaging more of those emerging offshore delivery as clients get much more acceptable, let out or get much more of a.
On a more acceptable all false familiarity.
Right.
Yeah, No no doubt again that you know what we've learned over the last 15 months with through the pandemic as you know will change the way.
The ways of working and there's no doubt.
I would I would leave you with two views one he is.
We know.
That a significant portion of our employees will spend some days per week working from home. So therefore remotely wherever they leave and it's absolutely the same Haley T that applies for our clients employees as well.
We never even from my interactions with clients.
We are talking about it and I think you'd say, it's it's and evolution of the workforce to last and to sell them. The thing again is that you know being more being exposed in having developed the technology that support.
Remote working in a in a secure way opens new opportunities to clients to think about new operating burden of new ways of working with companies like ours.
So yes for those two reason Theres no doubt that you know operating model will continue to trend towards more.
Flexibility between our.
Physical and virtual.
Sure. Thank you and all the best for the future.
Thank you.
Thanks.
Thank you.
Ladies and gentlemen that was the last question.
I now hand, the conference over to Miss.
Closing comments.
Thank you Stan and thank you all for joining US and gave me Couldnt take any ask a question. Please feel free to reach out to the Investor Relations team. They see a lot of any happy festive season ahead and have a nice day. Thank you.
Yeah.
Thank you very much.
Ladies and gentlemen on behalf of Wipro limited.
This conference we thank you all for joining US and you may now disconnect your lines.