Q3 2022 Wipro Ltd Earnings Call
Good day, ladies and gentlemen.
Wish you all a very happy new year.
Welcome to the Wipro Limited Q3, FY 'twenty two quarterly earnings conference call.
As a reminder, all participant lines will be in the listen only mode.
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I now hand, the conference over to Ms.
Vice President and corporate treasurer. Thank.
Thank you I wonder what do you.
Okay.
Thank you John for all the terrific 2022 and a very warm welcome to our Q3 earnings call. You will begin the call with business highlights and overview by T 80 doubled our CEO and managing director followed by financial overview by C. O T. A full jump into not afterwards, you operate them.
And opened the Batesville queuing EBITDA minus BD.
The Fortuity stopped let me draw your attention to the fact that during the call. We may make certain forward looking statements within the meaning of the private Securities Litigation Reform Act 1995.
These statements are based on management's current expectations and are associated with unfortunate these and risks which may cause the actual results to differ materially from those expected.
The uncertainties and risk factors that explain and not be deemed filings with ACC.
<unk> 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 site or what do you do it.
Thank you very much.
Good evening everyone.
For joining us today.
First I'd like to really wish you all.
Happy New year, and we pull we are starting to show we hope.
And a lot of momentum.
And we would like to wish health and.
And success to every one of our friends, Indiana at Eastern Investor community.
Across the globe, the new variance of the COVID-19 virus spreading rapidly.
It wasn't unexpected.
But it's a damper no nonetheless.
Did I say two O to our colleagues that we broke masco. Thank.
Take your vaccine.
Let's help stop the spread of this virus.
Oh.
Despite the pandemic, we have delivered the fifth consecutive quarter of excellent performance.
Gross in revenues.
Acceleration in bookings.
<unk> operating margin.
And so either.
Sure.
I want to start on every one of our employees who helped us achieve this.
These results reflect the passion that they do.
Jason.
And then even though.
I must say I was really glad to see that our.
Colleagues I've taken the time to attend to the health and wellbeing why.
Continuing to serve our clients with integrated and deal.
Looking at all finding chose our revenue growth during the quarter was up 3% in constant currency terms.
27, 5% year on year.
In the first nine months of this year, we have grown at twin creeks.
This is nearly.
Six times faster than average growth rate, we've had in the last 10 years.
It would be in them.
Consistently growing up or over 3% for five quarters now.
And frankly this is because of our improved execution abilities and.
Through on our business strategy that was established in November 2020.
Oh gross <unk>.
It used to be broad based across all key market.
Service offerings and most of all sectors.
We have.
Added about 34000, new employees on a net basis in the past nine months.
To give you a sense of proportion and pace.
We actually have had either in three quarters, what took us 11 quarters in the past.
Not looking for what the demand environment continues to be robust.
Gross rate.
Oh pipeline.
And our order bookings or reflect that.
Our pipeline in fact shows.
The mix of medium and large deals across all business lines.
So.
Continued to see rapid expansion in small and mid size deals, which really we present.
Crossing all existing accounts as well as expansion of our market portfolios.
Yeah.
Photo books, which is.
Frankly, the best measure of the demand environment has grown 27% on a year to date basis in terms of.
Annual contract value in fact.
Our bookings have been the highest ever.
And in Q3, we saw a 50% year on year increase.
In the total contract value bookings for deals in the 10 to 30 million total range.
What I've seen stands out.
Is that all win rate the market improved dramatically for this year our win rate has expanded 300 basis points.
This is clearly a reflection of our strategy the cultural shift would be brushing.
As well as the services, we are now being recognized for.
And I feel social reflection of our impact on our clients.
As expected.
We are seeing the benefit of some sort of cap costs consulting H.
Our large deal pipeline.
We are now winning in cloud transformation in engineering services data did.
Digital transformation and security.
Our clients are continuing to place their trust in us to have them Tony.
Turning to D. G 10 businesses.
Okay.
On the M&A front.
We have continued to push aggressively on our strategy.
We announced two completion of two acquisitions the completion of two acquisitions in Q4.
The first one is a giant.
Transformational cyber security consulting provider.
[noise] focuses on risks and compliance all them information and cloud security and digital identity agile is definitely.
Recognized by security and risk leaders voids.
Very unique business the lines cyber security capability for there.
Deep understanding of the changing regulatory environment.
And enabling couch information that.
Secure the mud down enterprise.
The second acquisition that we completed was lean switch solutions.
U S headquarter system integrate girls in full product.
Who service capabilities include ERP E Commerce digital transformation supply chain.
Warehouse management system business intelligence and of course integrations.
This acquisition will expand the capabilities of leap Roseville stride cloud services.
So we are very excited about this acquisition.
And we've welcomed.
Many new colleagues from a giant need Swift do we probably said.
Operating margins at 17, 6% in Q3, we are ahead of our stated range of 17 17, 5% as margins were delivered after.
An incremental two months impact of salary increases in September .
That's cool, but 80% of all colleagues globally.
And then equity grants for us.
Yeah.
And we continue frankly to invest.
Heavy.
In our business across.
Shell's transformation capabilities and talent.
Yeah.
I will now provide some final details on market on Saturday suffering sectors right, that's a little ways.
The Americas and Europe .
Our top two markets grew 28% and 38% respectively for the quarter and year on year terms.
In the Americas what.
We agree.
23% year on year, and five 2% sequentially.
All sectors showing some good communication made yet.
Information services grew 30%.
Consumer goods and life Science grew 25% health care and medical device grew 16% year on year.
Now looking at Amerigas too.
We grew <unk>, 3%, John Yeah, we just strong growth across <unk> and manufacturing.
Do your order book.
In terms of annual contract value grew over 47% year on year.
Rockies was led by good overall bookings in the bucket of $10 million to $30 million.
Our European business is good he built and the outstanding year on year growth of 68%.
Germany.
The largest market in.
And Europe has almost doubled.
Benelux grew 24%.
And our U K business grew 40%.
The momentum on deliveries have accelerated this quarter.
Our pipeline of several large deals above the $100 million range.
We are.
Frankly confidence about how old they are shaping up as well.
I'm sure.
You know where we were.
With our European business, a year ago. So it's a great turnaround story.
Finally, our apnea market grew at 13% Joe on them yet.
All right.
Our major markets are growing sequentially.
Of all the order booking in GCB terms are looking healthy.
With 37% year on year growth, excluding acquisitions of course.
And in my mind this should definitely support the growth agenda in this market.
<unk>.
But a lot of all key pilot of our strategy.
Is to grow our existing large accounts and deepen their relationship.
So let's look at that I'll stop.
Five customers grew 36% year on year.
Our top 10 customers grew 37% year on year.
In the last 12 months we've added.
Seven customers in the more than $100 million bracket.
And nine new customers in the more than 15 million bracket. This is.
I believe a significant one that we believe will continue.
Yeah.
From a service offering standpoint.
We have.
Two big Global business line, our <unk>.
<unk> Global business line grew 37% year on year.
Most of the sub practices showed a healthy growth Oh engineering business.
Google about 26% year on year in Q3 and grew at a compounded quarterly growth rate of four 6% in the last four quarters.
Our <unk> global business line grew by 17%, Georgia.
Again, most sub practices grew in double digits on the year.
On the old basis too.
Digital operations and platform led the growth with.
18%.
We also continued to invest in and strengthen our partnership with Hyperscale is an industry leading platform players.
We're in fact expanded.
Our go to market approach with cloud and with application partners now, resulting in us driving leading edge solutions in the market.
We'd probably is.
Therefore, more visible in the market because of this.
We are driving.
Proactive solution development and campaigns with our partners on both horizontally and vertical solutions.
All of this resulting in an increasing number of multi partner wins.
Order bookings that were a result of going to market together with our partners grew 40% year on year. This is the highest ever.
Oh Claude ecosystem revenues.
So group.
And grew at an accelerated pace of 30% on the year to date basis.
No.
Let me give you a sense of the kind of deals were winning.
One we want our strategy service now implementation engagement from a large Brazil based oil and gas company.
<unk> from Dai Ichi processes increase that GDP and quality of services to business areas.
Leveraging wipro full stride cloud services. This is a significant service implementation.
The Latin American market.
Second.
U S headquartered financial services institution.
But what he does a contract to transform the KOL banking functionality of their retail portfolio.
We pro he at will.
Right Jesus domain and technology transformation Capex.
To bringing design thinking methodology improvement.
And obviously increased business value for the client.
No more examples worth sharing but I'd like to now focus on our biggest success factor talent.
Our focus on.
Building World class talent remains more than ever we've work.
Very hard to ensure that scale is never constrained for gross well of course.
We are on course to onboard a vote, 7% more fresh talent from the campus in FY 'twenty two versus the previous year.
I would not surprise you if I said that that accretion is a reality across almost all industries, it's been no different for us.
I had shared with you last quarter that we expect attrition to slowdown only after a few more quarters.
However, we now feel more confident.
Of having stabilized our attrition rate in Q3 and expect it to moderate next quarter.
When we embarked on our transformation in 2020, we are committed to creating a vibrant divest anymore. Local leadership, we've made progress on every count our leadership has moved closer to clients.
The presence of senior leadership in locations outside the U S grew by 13 percentage points.
It's also relevant to note that nearly 50% of our leadership hires.
<unk> been in the growing southeast and customer facing.
Global account executive roles, which are trained in our frontline and sell.
Over the last 18 months, we have.
Improve the sneak diagnostic Dino senior leadership by 20 percentage points and gender diversity in the leadership has nearly doubled.
Without a doubt with more work to do here, but.
I'm pretty proud of this change we are seeing and we pulled thus far.
Now we're committed to being a company that's been specced diversity walks the talk on conclusion and he's a beacon for change within our industry is very clear.
On.
And even more sure than urgent topic I'd like to reaffirm that the health and safety of all our employees remain healthy.
Most probably.
With the rapidly spreading I'll be crawled Byron of the COVID-19 virus we.
We remain.
Very vigilant as a proactive measure we have decided to close our own.
She says globally.
The next four weeks.
It's off some relief to us that 90% of our employees globally now vaccinated with one dose of the vaccine.
And over 65% are fully vaccinated with the recommended two doses.
Our plans.
The return to office, even in a hybrid model for all fully vaccinated employees will be.
Calibrated in the context of the evolving situation, keeping both our employees' safety and calling and preferences in mind that said.
Oh of course, we're continuing to service our clients.
This dedication and agility as always.
Staying with Doe Pixar, great urgency all sustainability of Forza continues with great momentum.
You May know, we brought being included in the Dow Jones sustainability index again for the 12 timing thereof.
A testament to our consistent.
I'm going at fault in this area.
Climate change and our ecological and call. It should trend is something we take very.
So yes.
Finally onto our outlook for the next quarter, we have guided for.
Revenue growth of two 4%, which will translate into a full year growth of 27% to 28%.
To summarize.
The demand environment continues to be robust.
And grows faster, but the last few quarters reflects this.
We will stay on course with our strategy priorities I had shared with you in November .
And I'm confident of sustaining the growth momentum we have so far the slate.
Right.
That note.
Let me welcome Jackie in place comments on defining shows.
<unk> over to you.
Thank you very much theory, and thank you all for joining our earnings call.
I will quickly summarize the financial detail.
As you know we have grown 28, 5% only year on year basis on a rupee revenue on it.
It'll be done.
Although margins have remained constant, though stephen between quarter, two and quarter three in a narrow range.
Our effective tax rate or ETR has actually improved throne.
Drove 22% to 21, 3% in quarter three.
Overall.
Our earnings per share has grown at four 2% on a year on year basis.
Yeah.
We have had a strong performance in cash collection.
As well as a strong performance in billing and as a result, both our unbilled revenue as opposed to in danger of revenues have improved.
And our DSO days have also improved.
Our operating cash flows of about 101 potent.
Of our net income.
At the end of quarter three we.
We had $4 $6 billion.
Gross cash.
And two $8 billion off net cash.
We had $3 $4 billion.
Our forex hedges as of 31st December .
And we realized an exchange rate of 76.1 too.
For quarter three.
The board of directors has that come in.
Indeed.
An interim dividend of one will be by shed as you would have read in the press.
In our press release.
And our guidance for quarters 42, 4% in constant currency at the exchange rates, which are mentioned.
In the press release.
We'll be very happy to take your questions. Thank you.
Thank you very much Tom.
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.
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Participants are requested to use handsets, while asking a question.
Anyone who wishes to ask questions. Please press Star then one.
We take our first question from the line of Moshe <unk> from Wedbush Securities. Please go ahead.
Well she could see your line is on mute. Please UN mute the line from your segment proceed.
Moshe <unk> from Wedbush Securities. Your line is on mute. Please UN mute from your side and proceed with your question.
Okay.
I just noticed once we move to the next question from the line of Sandeep Shah from <unk> Securities. Please go ahead.
Yeah. Thanks for the opportunity just a question in terms of last two quarters, we have actually exceeded the upper end of debate.
Do agree that's a high base line this quarter.
Point of the guidance as a whole so is it fair to say.
Is it a hybrid.
Some deceleration in a small small daniela faster conversion D league's deal wins.
Big decelerating that the hole, which is impacting the growth and even if I look at the current quarter guidance on organic basis. It looks like 1000 people deep when people are saying.
Sure.
Right.
No.
Sandeep. This is Jerry hi, so so you know I I really do not see any deceleration of fall grew or sorry six.
What we've done for the last few quarters is we've guided between two and four and we've been consistent in guiding that sometimes you go a little up you go a little down but theres no real trend you know that would go down by any by any means.
We haven't lost clients. We haven't you know tell them you need to you know abruptly any deal or so on we continue to grow we've done fabulously in bookings frankly with the best performance ever.
And you know that gives us the confidence that we can continue to you.
No guide them to two 4% for the next quarter you know keep in mind also because you know obviously, we are tracking performance on a quarterly basis. This is 28% growth over the last year. So imagine the company the transformation of the company in four quarters.
You know if you go back five quarters, we actually have added sooner.
After we pro revenue a bad time.
Two two to the overall base. So the company has increased by 30 by yourselves in five quarters, and I think you know us.
It is.
The kind of growth that we that we've had and we continue to see the same train going going forward frankly.
Yeah. This is helpful and we also acknowledge that the broader Nielsen has really turned around just a question further to that in this at all when the pool has successfully turned around the organic growth why are we depending on too much of inorganic growth as a whole so because in one of your media interviews theory, you also mentioned.
You may be open for another large sized acquisitions and in terms of smaller acquisition, we are keep doing.
Why not focus in terms of improving the margins improving the return ratios. When the time has come that organic growth is easy to come rather than if we got it with their efforts, which already being taken by you in terms of turning around the organic growth. That's what we see yes sandeep. It's two different things we are now mixing our organic.
<unk> strategy with the inorganic.
Strategy those are two different tracks. All you know and then it will never be seen as a way to compensate for growth organic growth. The focus on the market on the business is to drive organic growth and every of our business units are driving growth and focusing on that.
And then our strategy is to help us accelerate and you know gain and accelerate speed to you know to make jumping some strategy carry outs when we do an acquisition like a giant okay.
Jai brings expertise consulting expertise in cyber security, we have a strong cyber.
Cyber security practice, we have you know a good business that is growing very well led by you know a very strong leader Tony before mounting up where do you feel that you know by adding this consulting.
You know business it will allow us to have you know and be able to to have a bigger impact in this market and so that's really how we are seeing our M&A strategy is to reinforce end and bring you know expect these we don't have any.
And compressed time, but it is not to compensate for organic.
Gross.
Yeah, Thanks, and just the last question to that in terms of margin I think even in this quarter. If we look at EBITDA margin. The decline has been 45 50 bps versus last quarter being close to 70 bps. So the question is in terms of the margin outlook.
Are we continuing the band of 17, 17, and a half which may continue.
Next for six quarters, which we call out as a medium them or we believe now there could be a tailwind because of growth as the less pressure on audition, which make doing the binding has upside potential rather than a downside potential.
So sandeep just didn't help you.
We have maintained that we will be then.
You know there could be quarterly variation, but this is the range that we think our margins are sustainable for our business.
And there is no change to it.
This year is going to be like previous two years is going to be a yard or if its one better than and pressure points and excitement and we should remain.
Pigment ink and dynamic with.
With the changing scenarios under groan.
So there is no change.
Fundamentally be ill always stayed there.
It's a priority for us is growth.
And.
Alongside very clearly.
Sterling.
And as we walk through these two we also try and maintain that might've been in in the band that we have spoken about.
And we have done a decent job around it.
Current quarter, despite two months impact of wages.
And that we have invested a little bit in at each node.
Our flexibility and utilization as you can see it's about two 5% changed from previous quarter.
It gives us some additional headroom for growth in quarter, four and beyond despite this too as sort of investments on on cost side, we have been able to remain in a narrow range on operating margin. So I would say, though.
It's going to be a young dynamic and we need to manage every quarter as it comes but our meet them.
Sort of range remains.
Okay, Thanks, and all the best.
Thank you.
The next question is from the lineup for both single from Phillip Capital. Please go ahead.
Yeah, Hi, good evening, Sir Thanks for taking my question.
So it's about getting my question was on the deal flow and the overall demand environment that you see.
We're hearing a lot of news and I think the anecdotal evidence also suggests that the large deals that we have seen in the last calendar year 'twenty.
In fact.
There've been very few went public with those kinds of deals in the last six to nine months.
And what we're hearing is that our clients are taking those deals into smaller size deals.
Small I'm sorry Centennial has been so far at least also creams and what kind of.
A packed in the Haynesville and how does that impact our ability I mean is there more competition more difficult to win those deals how does that basically backed away.
Overall, our strategy to grow over the next couple of years.
And I forgot that I have a follow up on that.
Okay.
Okay. So I'll take that one on the overall structure of the large deals. So what one year's obviously you know the clients you know R.
Every industry clients at the moment are driving very actively execution of large transformation program. Okay. So.
So it's not they're not in the design phase of Naughty building Roadmaps. They are getting it done so there are progressing and they want to see the results.
And so it's not uncommon indeed that you know clients feel that rather than going for Lang C. A legal negotiation or you know building a three years roadmap of five years roadmap. Let's go ahead with six months 12 months and see how things are going and we let just alone.
Along the line and so on.
Sometimes we see clients indeed to having a large transformation program in mind, but willing to contract july's true chunks as opposed to having a big one it doesn't mean, it's not going to happen.
It's we all deserving that at times.
<unk> like to be pragmatic and go with you know phase one the phased approach as opposed to a big Bang. That's all fine for us It doesn't really change as long as we are able to you know.
Structure of the way, we are developing and driving out.
Our solution.
You know the same way, but it's it's okay. It's okay frankly.
At the end of the day.
If you if you signed five times $100 million deal with a client or a <unk>.
The median deal with this client it it's about the same.
Got it so in terms of.
But.
You don't believe that maybe something smaller.
More of a number of these would be let's say a higher.
Let's see I'm going to say I don't know sales and marketing cost and it could be a more.
More difficult to compete with the smaller companies, which probably aren't present there in loving anyhow.
No I don't think so frankly I believe that you know when when we are going for a deal over a five or seven year or is it just keeps you a little bit more perspective.
With respect to even they'll be tough time to really a define.
We define the way you're looking at a project your your investments, but frankly speaking our clients are very mature and they know that well as well and so when we are building in structuring the phase one of phase two.
Of a larger transformation program.
We are able to structure it in a way that is.
In the context of a bigger and larger plants. So at the end of the day I think it's not dramatically changing the way we work and from a sales standpoint, I think you know it hasn't ups and downs it housing upside and downside. If you signed one deal for five years. Then you know you may be doing.
I'll have to come back to the negotiation table you know Youre later, but when you do we trigger early you are able to adjust to the needs that are possibly changing over time, a little bit on social drives even more flexibility that can play for the client like Florida.
So are you think you know I'm not I'm not too concerned at all about that I tend to look at those deals whether they are solely nuance are in chunks, as big deals and and and I'm expecting our teams to work on it with the same mindset.
Got it got it well thanks for the answers that question in detail. It doesn't just one oh, sorry, So quick question.
Mentioned, we have $4 $6 billion of cash on the balance sheet.
Basically outlook on.
Basically enhancing shareholder return either by a buyback or increase in dividend.
In future calls.
Yeah.
Sure. So you won't be able articulated that order of local peers. You know we will continue to.
For sure you've done 50% of our net income.
To the shareholders.
You know that over the last two years, we have returned even higher demand.
Uh huh.
For the current quarter. The board of directors have gone ahead with the recommendation of dividend one burchette as I spoke about it.
Our approach to any other action or decision on cash distribution easier lead.
Based on these don't do us baked.
The quantum of cash on the balance sheet and.
Indeed, the need that we see over the next few quarters from a strategic or use the and investment standpoint, and whenever we feel that we don't need Oh and additional cash.
Beyond 50% of the net income.
Gone are we open to you all with the purpose then for buyback, but right now there is no such.
The proposal under active consideration otherwise you would have heard about that right now we have announced the dividend interim dividend of one two per share.
Okay got it thanks, a lot guys. Thanks for taking my question I'm trying to show all of it.
Thank you.
Thank you.
The next question is from the line of more shakeout from Wedbush Securities. Please go ahead.
Hey, Thanks for taking my question happy New year end two theory.
Thank you.
A couple of things first you mentioned, a 27% increase in <unk> is there a way to slice it by new logos versus renewals that's number one and obviously this is in Portland.
We wanted the renewal cusco to be higher because it will drive growth and then the other part of my question is focusing more on cap call. So maybe you can talk a bit about where are we in terms of integrating copco oh, focusing on the cross selling initiatives, that's going to be a big deal.
What happens to growth when it normalizes I E fiscal 'twenty three we're analyzing.
Annualizing the contributions from capital so it's.
Is mid teens kind of a good number to kind of focus on sort of a big picture perspective, obviously, when I talk about guidance, but maybe from a long term perspective, thanks for the color.
Sure. Okay, alright, so much so so I'll ask Stephanie to go question, who wants them.
Around you know the type of deals are we've closed I'll take question two on cap cool and question tree on margin projections okay.
If any of you worry I didn't remember wrong.
Yeah sure. Thank you.
So we're really seeing a mix of renewals, but also new logos and also new areas within existing clients. So I am energized by the mix of growth that we're seeing.
We see a lot of them are new new clients, placing their trust in Wipro on major transformation initiatives and as Terry described some of that is and you know initial smaller chance and in some cases, it's large transformation deals. So I think it's a healthy mix of adding new clients as well as.
Renewing existing business. So clients continue to place their trust in us to continue to transform them, but also they are bringing us into new parts of the organization. So.
That's what's driving a lot of our growth in our existing accounts are there.
Also you know, adding adding new logos.
Thank you Stephanie.
Washington D on the.
Onto capital equation.
What I can say is that you know now it's been about eight months.
Since the acquisition of KEPCO.
And frankly.
It's actually been a wonderful first you did.
The teams are working well.
Your line, we have build come on governance on the large accounts we have.
Worked on our opportunities are.
KEPCO and we prove via Kasai together.
We have maybe one.
One some very nice deals and we had we had a nice sorry off of deals shaping up.
In in the previous quarter this quarter or beginning of this quarter, we really want a very significant transformation deal that typically we would have never won.
Without the other so I'm pleased with really.
The attention of the capital team to the market I'm very pleased with the performance of KEPCO team I am pleased with the way the leaders are you know.
Engaging with the.
The larger we grow organization and same thing there's a great.
I would say Oh, there's a warm feeling poor for the for the cap could team on the on the wheat protein to me it is a success or not.
One single day I've been.
You know adopting about.
The decision, we made and I think it will continue to deliver a result, so I would say obviously difficult to reflect eight months.
You will want to have more perspective, but frankly it is very promising.
And again solid performance from KEPCO every months.
You sell point on margins, if I understood well because at some point in time.
At least for me, you'll always broke up but you know these equation about you know you want to know where we go in terms of margin. Hugh you mentioned yourself. The fact that you were not guiding yet for fiscal year 'twenty three what I would say is bad.
Yeah.
You know if you look at the all margins, we have been crazy consistent over the last six quarters.
Guiding about you know we guide either all 19% and then came cap co. We announced cap goes impact on margin was between one six and 2% and we've guided ever seems you know on a.
Our band between 17 and 17, 5%.
And we maintain our focus and our.
You know.
Attention to this level of margin. So you know from that standpoint, Moshe I would not be expecting anything.
Changing from from from where we all know.
But also in that respect.
In fiscal 'twenty three the annual revenue contributions some capital annualize.
No.
Growth rate will normalize and the question here is whether we should use mid teens growth rate. So fiscal 'twenty three and beyond is the right kind of range.
The lowest rate.
Exact growth rate look again, we've been communicating we've been guiding.
Guiding on 2% to 4%.
Growth quarter after quarter for the last four.
The last quarters, obviously KEPCO has already talked about is its not impacting those numbers anymore. Ah I can tell you that we are maintaining this guidance for Q4 as you know we are we have made as a practice to communicate on the you know on a quarter over.
Quarter, so you'll have to be a little patient, but again.
Read us we are saying, we are going for 2% to 4% quarter. This quarter and we are not seeing major change in the market.
Understood.
Very much Youre welcome. Thank you. Thank you good luck.
Thank you.
The next question is from the line of the Vietnam from UBS. Please go ahead.
Oh, Thanks for taking my questions and let's see what happens.
I think you've kind of answered the question in a different class.
From a different angle if you look at that.
Okay.
Reported I think some of your peers have seen.
No.
Charles Alright.
I appreciate a seasonally weak quarter.
Kind of the cycle.
So I was just wondering.
In New York.
The effective live in person classes.
Or a mix issue or is it that you had.
Some brands that are already behind us how should we think about that.
We have seen so far this earnings season.
Yes.
Got it.
Uh huh.
Yeah, and you know D var eat in some ways I feel that you know because you.
You know when you're guiding on a certain level you are giving a bracket right. It's between two and four and we've been guiding on tool between two and 4434 quarters. If you know you're you're hitting the top end of the of the guidance. Then you know the next one the market is expecting that you'll do the same.
Is that when we are managing our business. We are looking at our portfolio and we are looking at you know the trend and we are trying to guide really reflecting what we're seeing at the beginning of a quarter and so you know at the end of the day I cannot be uncertain.
Unsatisfied with the fact that when I got two to four and I do three I cannot be more accurate [laughter].
I think that was coming more from the point of view with I think.
I'm looking at pricing just come from demand in the quarter, Yeah, and I think yeah.
Demand doesn't change.
Anything in the portfolio that.
That's kind of the scope.
Coca Cola FEMSA.
Yeah D. Var. One thing is clear is that typically when you sign a mega deal.
One quarter, it's not uncommon that in one quarter or another you have suddenly a massive.
In your revenue and so if you do not have this mega deal you do not necessarily have this one shot big bump that you know maybe some of the house, but oh that we've added in some quarters. So you know if you look at the.
The difference there.
We've done we've done a strong performance in sales difference with for example, the performance we did exactly a year ago in Q3 of last year. It was.
Lower than what we've done this year, but at a $1 billion deal inside with Mitchell.
Actually it was coming to more or less the same number a little lower but you know it was a comparable number.
On the TCP standpoint, but but but coming from it.
Large deal.
Therefore, the performance outside of this large deal it was very different.
Think we've turned the engine into a way that we have more recurring type of deals.
Every quarter. So that you know the the Mega deal comes on top right.
And what's cool.
Consulting is that if you look at you know the government T cells.
Even without Mega deal with $2 85 billion of ACB, we've done probably we've done 65% more than what we used to do on a given quarter a year ago.
Huh.
Fair enough.
Just a question on that question I think you'll have to close it again.
Do you feel like.
No. That's the point that we will find out that there should have been more manageable.
And eventually that will.
Come on.
Yeah. So first of all on this topic D var.
Uh huh.
I tend to be cautious because.
This decision lies with our employees and with.
Although employees off of the market, but what I, what I believe what we are seeing is that definitely.
The level of penetration with more there it will moderate in Q4.
Which is rather good news again I don't want to claim victory on it and we'll continue to stay very focused on the thing and keep Greeley and IL two.
On the situation of our of our employees in the organization and continue to connect as much as we can with them.
But you know when a quarter ago.
First thing you know I don't I think we'd get to laugh.
That is might actually Oh.
You cannot smelting books, so I'm I'm, even more optimistic than I was of course that would go on that.
Thank you and Michelle on the first part of your.
Thank you.
Thank you.
The next question is from the line of Sandeep Agarwal from Edelweiss. Please go ahead.
Yeah, Hi, good evening everyone.
Thanks for taking my question I would like to start with we're seeing everyone a happy new year and in good health. So theory I have a very very simple question.
When you see that current environment when you engage with your clients, where do you see the transformation journey towards digital product lines have reached and then when we do our channel checks when you speak of Global Technology Conference and on what we understand is that right.
Everyone is very excited too you know what the transformation journey, they want to link more and more of their living is through technology.
Generate more revenue scale technology and platform, but the journey has just started what is your sense in that how do you see that do you think that they've got and he has already.
Been 30% behind our crafty person behind number one number two if the journey has just begun at even if we get that 50% what is your sense that how long before this materials. It was a three years four years five years, how do you think that you know going forward what are the <unk>.
Technology training.
So what is your sense on that front, so I'm asking more of a 510 year fantastic truck brokers on how do you see that technology spend per client will be.
Felipe.
You know, defeating I am is that.
Particularly she surveys and is.
Critical to the transformation of every industry at the moment and there are multiple topics.
That you know that.
No.
See you attention.
To date the <unk>.
Cloud journey is the Best example, because you know I remember, even three four years ago Sunday.
Cloud discussions, we're happy with the CIO the CEO would not.
This much on it because it was considered to be an infrastructure discussion and that was a.
A back office.
Of course, he goes back office issue today cloud is a way for organizations to be agile to be to drive you know to be able to generate more opportunities to be inventive to develop solutions connect with new clients.
And he is.
[noise] across organizations. So you know I don't think I've seen yet a company that can say that he has reached 50% of the cloud transformation I see.
Obviously, I'm not going to be able to give a percentage, but my feel is that we are still in the <unk>.
Early stage of the cloud transformation across.
Industries.
And so it is a massive wave are ahead of us to a point that today.
You know when I when I look at the Big Hyperscale as we play a big role in cloud you know the Microsoft the Google AWS service now safety they are.
Coming at Us.
Because they need us to help them develop vertical solutions on their platforms are under cloud and I think it is.
Very clear that the more we do the more opportunities there are beyond that's for the cloud.
And the growth in the cloud will be massive over the next five years at least Okay. Then we have you know the whole world of data.
And we know that you know we are producing many billions of data and and we are very we're leveraging very lethal.
The power of this data turning them into inside to drive faster decisions.
Companies have started to work on me, but it's very complex because.
It requires the linemen soft processes and systems, Inc.
<unk>.
And policies in those companies and you know there's still a lot of level of complexity and so the way we are helping companies to develop.
Data driven organizations.
Yes.
You know a huge.
Peak for Us and the last one is it not.
Nothing the last one, but just say taking a third one because.
The clock is ticking.
But.
I mean, the need for organization to invest more in R&D for them to transform their processes and products.
Developments.
By leveraging technology is humans so.
You know looking forward I think we have a market that will be driven by talent and will.
You know be very very hard in the next years.
Okay. Thanks for that detailed answer and best of luck for the current quarter. Thank you everyone.
Thank you Sandeep.
Thank you.
The next question is from the line of Samad Jen from Goldman Sachs. Please go ahead.
Yeah, Hi, Thanks for taking my question and happy new year to everyone.
One can you just.
Guidance of 4% organic.
Given the recent acquisition what you have already closed.
No. We don't do that to you is usually a weak because you know no. We don't do that because it's very difficult to do that because at the end of the day you know.
These businesses when they join organization they are part of the organization and they're driving.
You know.
And we are driving synergies us from day. One so we are not reporting unless those are very large acquisition, we're not reporting separately, but I think Jesse do you want to add something.
Yeah, Terry it's what we do.
We.
Each share the details about the acquisition. Then then we announce them. So I'm sure. It gives you a good indication from all perspective, both internally and Oh from the VEB manage the the success in the market. We these stupid one.
Number and hence the guidance we've been Oh, we will not break down into the two components, but I'm sure that you can you would be able to.
Have some indication about right.
No that's helpful and secondly, I joined the call a bit late so I do disclose that number for this quarter.
No.
We haven't disclosed that.
The number we did speak about.
The excuse me growth number which is 27% for for the first nine months and we do check the.
Continue to be tenants around it which was about $2 $8 billion on an aggregate basis for quarter three and then we did in the first month.
So basically no no disclosure for this quarter, but in terms of <unk> TV.
Yeah, the number that we that I just shared was full quarter.
The growth number that we had shared was for the first year first nine months of the year.
Got it got it and then lastly, if I look at your EBIT margin.
<unk> expense as a percentage of sales has been coming down for the last two quarters.
Pretty sharply so any reasons why.
What kind of G&A expense as a percentage of sales when you would expect going forward.
So.
So the way to meet your you would appreciate is that even though.
Some of the.
Some of the amortization lines.
<unk>.
I'm coming to an end of their tenor of wood, which we take those amortization then it leads to.
Then it leads to the reduction with the step down reduction in the number of amortization is not uniform as you can.
That has happened over the last two quarters for some of our prior Oh capitalization.
My position is that you should look at Q4 as a base because we have.
Two more acquisitions, which are getting integrated from close of January . So you would see that number stepping up a bit because they will come with that intangible so it's good news or or or.
And as we do the acquisition accounting for that so Q4 should be a good base for you do you are.
You're more digital future.
Got it got it thanks, a lot, but they're not material and all the best for the future.
Thank you thank.
Thank you.
Ladies and gentlemen that was the last question.
Now hand, the conference over to Mr. <unk>.
Closing comments.
Thank you Thompson.
We understand that it's not something that is like many.
Many of you as you'll have to take a simultaneous to that on multiple designs that are being announced today. So thank you all for joining the call.
You have further questions do not hesitate to reach out to me. Mr. Nations do you still see some so hardie and we'll see you next quarter. Thank you.
Thank you very much.
Thank you.
Thank you very much.
Ladies and gentlemen on behalf of Wipro limited that concludes this conference.
Thank you all for joining us and you may now disconnect your lines.
Yeah.