Q3 2024 Wipro Ltd Earnings Call - Press Conference
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Okay.
Yeah.
Yeah.
Hello, Ladies and gentlemen, welcome to Weibo's third quarter fiscal 'twenty four earnings Press Conference. My name is selling the bagger away I'm, the head of global external communications and I'll be your moderator today.
Joining me today on stage is our executive leadership team, who will be presenting our results from your left or right, our chief operating officer, Amit Childrey.
TRA Port: Our Chief Executive Officer, and managing director TRA dollar Port.
Our Chief Financial Officer Upper now ire.
And our chief Human Resources Officer, Sarah goby.
TRA Port: As usual, we'll kick off the conference with remarks from our CEO, followed by an operational update from our C O O.
Our CFO will conclude our formal remarks with an overview of our financials. We will then open the floor for questions right.
TRA Port: Right now please allow me to welcome our CEO Terry della ports to the podium.
Okay.
TRA Port: Yeah.
TRA Port: Hello, everyone and welcome to this for you all.
Speaker Change: Thank you for joining us today.
Speaker Change: We're really glad to have you here.
Oh for sure starting with.
Speaker Change: Wishing you the best wishes.
Speaker Change: For you for that.
Speaker Change: No.
Speaker Change: So I'll begin today's conference with an overview of fourth quarter results.
Speaker Change: Details of our sector or a couple of months.
The environment.
Speaker Change: And direction for the coming quarter.
Speaker Change: Yeah.
Speaker Change: Earlier today.
You've seen we reported all the numbers to the market.
Speaker Change: And to all board I'm pleased to share that we have.
We're starting to see some healthy indicators for girls.
Oh, I see services revenue for the quarter.
Speaker Change: At the top end of our guidance.
Speaker Change: Revenue stands at $2.6 billion to $6 billion in reported currency.
We've continued to book deals at a healthy pace.
Even though Q3 is.
Sure.
Speaker Change: Although bookings in total contract value terms.
Speaker Change: Stand at $3 $8 billion.
Speaker Change: Our large deals D C V for the quarter.
Speaker Change: It was just about $900 million.
Speaker Change: On a year to date basis, that's a 20% gross.
Speaker Change: We booked 14 deals this quarter.
Speaker Change: In the greater than $30 million category.
Speaker Change: By contrast, just for you to keep that in mind, we had booked 11 of such deals.
Speaker Change: Two of last year.
Speaker Change: Net income.
Speaker Change: For the quarter expanded by one 8% sequentially.
Speaker Change: Operating margin stands at 16% despite seasonal were fellows and.
Speaker Change: Yeah, and you'll salary increases for our employees as you know.
Speaker Change: On a year to date basis margin has improved by more than 60 basis points.
Speaker Change: As you know we have consistently invested you know people are you know processes and organizational efficiencies over the last say.
Speaker Change: All quarters.
Speaker Change: These investments are paying off our results demonstrated that I do.
Speaker Change: Fundamental level, we pro is increasingly more streamlined.
Speaker Change: Proactive.
Speaker Change: And efficient.
Speaker Change: It's tough.
Speaker Change: Boosted our client trust you know teams improved.
Speaker Change: Our win rate.
Speaker Change: And also the type of deals we are winning.
Speaker Change: That is.
Speaker Change: More of complex transformation deals, we'd probably is not only benefiting from vendor consolidation, but we also have.
Speaker Change: Adding new logos.
Speaker Change: While growing our business with existing clients.
Speaker Change: In fact.
Speaker Change: Our clients tell me that they are seeing a more confident.
Speaker Change: In the United default from Us.
Why don't we probe, we're leveraging the depth and breadth of expertise and diversity inside of Wipro.
Speaker Change: Contributions from our acquired firms I name a few kept cool rising design needs a more prominent and well received.
Speaker Change: The demand environment overall, let's be clear remains cautious.
Speaker Change: Clients are still making conservative investments.
Still looking for efficiency.
Speaker Change: More returns on investments and.
Speaker Change: Better optimization of existing investments.
Speaker Change: But we.
Speaker Change: We are seeing some indicators for growth.
If you remember we had called out the possible slowdown in the economy has.
As growth in our consulting business slowed.
Speaker Change: We know that when the market turns.
Speaker Change: Consulting will be the first area to bounce back.
Speaker Change: In that context, I'm pleased to share that.
Speaker Change: We've had a good performance from our consulting business with KEPCO reported a double digit sequential growth in order bookings the highest in the last four quarters.
Speaker Change: Turning to our strategic market you need to know.
Speaker Change: We recorded a strong quarter for the Americas, one market you need where.
Speaker Change: Well, we booked half of our 14 large deals this quarter.
Speaker Change: Revenues in the market grew 2% sequentially led by health care, which actually grew 9% sequentially.
Speaker Change: You know our amerigas to market unit.
Speaker Change: We continue to see some softness there is no question largely on the BFS side.
Speaker Change: And then G and utility side of the business.
Hence, resulting in a one 3% draw.
Speaker Change: Drop in revenue quarter over quarter, that's it.
The strong momentum in order bookings.
In total contract value terms increased 46% sequentially.
Speaker Change: In Europe.
Speaker Change: We were on the four large deals in the third quarter. Despite the continuing it couldn't make weakness.
Just for you.
Speaker Change: Transforming transformative deals.
Add up to nearly 300 million daughters in bookings.
Speaker Change: These deals underscore the success of our strategy in this market there's no doubt.
Speaker Change: Revenue from Europe, However decreased four 3% sequentially in Q3.
Speaker Change: Across the board I want to say across the board, but especially in our App MEO strategic market you need to we have worked on reducing our <unk>.
Speaker Change: Low margin accounts.
Speaker Change: Why is slowly moving towards higher value transformation projects.
Speaker Change: Revenues in this region declined five 4% quarter on quarter. However.
This strategy of pivoting towards higher value business.
Reflecting the margins we delivered in the region margin rose.
Speaker Change: 240 basis points sequentially.
Speaker Change: 213.8, Boston.
Speaker Change: That's the highest in the last six quarters.
And once again, we are seeing consulting, especially KEPCO and rising player.
Speaker Change: Play a big role in the complex deals we are winning in the market.
Speaker Change: To continue this Riga, we made some changes to our gross offices recently and we've communicated.
Speaker Change: On that with the foundational pillars for self excellence set out by the gross office over the last two years.
Speaker Change: We moved it.
Speaker Change: Some of the growth of his functions inside the strategic market units.
Speaker Change: Greeting and even tighter.
Speaker Change: Gration with D S abuse.
With this we reinforced how we nurture large deals in each geography and.
Speaker Change: And we respond faster to changing market needs.
Speaker Change: Simultaneously, we continued to streamline our operations after the plan.
Speaker Change: Leverage artificial intelligence and automation for efficiency.
Speaker Change: Across all.
Speaker Change: All functions and business areas.
Add to that.
Speaker Change: The learning and development and Reskilling of our existing tenant base.
Speaker Change: Besides optimizing our talent pyramid to better serve clients needs.
Speaker Change: Multiple initiatives are in place our request to share highlights of some of those program with you today.
Speaker Change: What I can say, though with confidence.
Speaker Change: Is that we probably has a better partner for our clients today, we are more agile.
Speaker Change: Why did he is responding to and evolving with our clients.
Speaker Change: And their needs.
Speaker Change: I mean, it will also share with you highlights of the work done around the.
Town delivery and service excellence.
This really is the centerpiece of our efficiency play and increase their G. D D.
Speaker Change: We continue to invest in areas that we know.
Speaker Change: Are going to remain fundamental for our long term success.
Speaker Change: People.
Speaker Change: Our most valuable assets.
Speaker Change: We are already at our colleagues their performance based annual salary increases recently you know.
Speaker Change: The prohibition cycle, just closed and we'll be making the announcements sued.
Speaker Change: We've continued to.
Speaker Change: Stress on and off for training and development options and grow opportunities to our employees.
Speaker Change: This is critical to why people continue to choose to work with and give their best to Wipro.
Of course.
Returning to work once again more regularly after a few years a fully remote work.
Speaker Change: Has absolutely helped energize the culture and yet most of them in our offices you can feel it today.
Speaker Change: Then there is a high.
It would be a missed not too sure.
Speaker Change: How we are using AI ourselves as an organization and of course for our clients.
And I use now moving from I.
Speaker Change: The curiosity.
Speaker Change: And experimentation stage.
Speaker Change: To be coming vital to business strategy.
In fact.
Speaker Change: We can't compete initially say that every long term large deals now as an AI component.
Speaker Change: A substantial portion of our clients are looking for us to develop use cases.
Speaker Change: Turning to their business goals.
Speaker Change: They want us to use AI models.
Speaker Change: To drive tangible reasons AI is now embedded across most of our existing solutions and offerings.
Speaker Change: In addition.
Speaker Change: Every business line.
Speaker Change: Is working to launch new offerings.
Use.
Speaker Change: For example.
Speaker Change: You know full stride cloud business.
Speaker Change: That's.
Speaker Change: Particularly hot when it comes to the use of January is did.
Digital workplace services.
Speaker Change: Leveraging Jennie O I to lighten the load on service desks de lever faster and better client services.
He's not part of every RFP in this space.
One of our largest deals in Europe. This quarter I used to transform digital workplace services off of.
Speaker Change: The National Telecommunications company.
Speaker Change: This will help improve client satisfaction reduce.
Speaker Change: Operating expenses.
Speaker Change: We will build an AI powered platform for them, but provides service desk.
Speaker Change: Onside.
Speaker Change: And remote support services for hundreds of thousands of users and 80000 managed services across 240 locations.
Speaker Change: Locations worldwide.
Speaker Change: In engineering.
Speaker Change: We are seeing strong interest for AI.
Speaker Change: In the automotive and manufacturing industries.
Speaker Change: Clients in these industries.
Speaker Change: While they are to increase productivity in the R&D process.
Speaker Change: And accelerate new product development.
Which we brought enterprise featuring.
Speaker Change: We are helping clients accelerate adoption.
Speaker Change: We are leveraging wipro as Jenny I framework and studio.
Speaker Change: To develop key assets.
Speaker Change: At all levels.
Speaker Change: A I stack, including models.
Speaker Change: Platforms and solutions.
We will help clients with morale development performance privacy.
Speaker Change: Compliance.
Speaker Change: We're also building governance frameworks around responsible.
Speaker Change: Sustainable.
Speaker Change: And then he got it.
Speaker Change: AI development.
Speaker Change: Because we all we broke.
Speaker Change: In fact, we are working with a global healthcare insurer to develop a gen. AI powered knowledge research solution to transform the contact center.
Speaker Change: The goal is to improve patient experience.
Speaker Change: Operational efficiency by.
Speaker Change: Cutting the time it takes to analyze health care plan documents and response time.
Speaker Change: We have developed a Jan AI powered assistant for a fortune 500 investment and insurance firms.
Speaker Change: This assistant improves.
Speaker Change: Improved quality and reduces the time.
Speaker Change: And in crafting.
Speaker Change: Personalized email campaigns.
Speaker Change: Early results showed tangible gross.
Speaker Change: And click through conversion rates.
Yeah.
Speaker Change: Additionally.
Speaker Change: Expanding our relationships with strategic partners.
Speaker Change: It's definitely a critical part of our AI is 360 strategy.
Speaker Change: During the past quarter.
We collaborated with Nvidia to help health care companies built AI driven strategies.
Speaker Change: <unk>.
Speaker Change: And services.
Speaker Change: This partnership with Nvidia is a great differentiator for us given our domain expertise in the health care sector.
We're also expanding our partnership with IBM to investing new joint solutions built on I B M. What's onyx.
Speaker Change: That makes it easy.
Speaker Change: Z or to deploy reliable responsible and.
Speaker Change: Sustainable AI solutions.
Speaker Change: To do all this in a consistent and even Nov 80 scalable fast fashion.
Speaker Change: We are preparing off workforce.
Today 210000, we provided around the world have trained on AI Wanda one skills.
Speaker Change: We have now rolled out personnel based learning pathways.
Speaker Change: For different roles and functions.
Speaker Change: Our goal is to ensure that every one at wipro has the skills.
Speaker Change: To fully leverage AI in their everyday work and for AI related client projects and it started with me.
Speaker Change: We are accelerating gen AI adoption internally by.
Integrating the technology across our entire portfolio of platforms.
Speaker Change: This is resulting in quality and productivity improvements across a job.
Speaker Change: Marketing.
Self.
Speaker Change: Operations.
Speaker Change: As well as software development and quality engineering and testing.
Speaker Change: Our investments in our 360 ecosystem combined.
Speaker Change: With the strategic value of our consulting business brings to clients.
Speaker Change: Is the reason we are increasingly the preferred partner for our clients.
Yes.
Speaker Change: We are confident that we have the right vision.
Speaker Change: The right strategy.
Speaker Change: And the right leadership to continue to grow and keep us competitive resilient.
Speaker Change: And ambitious.
Speaker Change: On to our guidance now for the next quarter.
Speaker Change: We are guiding for sequential growth of minus one 5% to plus 0.5% in constant currency terms.
Speaker Change: We expect margins to stay range bound like in the last few quarters.
Speaker Change: As the market starts to turn around on the back of our transformation and efficiency plays.
Speaker Change: We expect to see improvements in the coming quarters.
Speaker Change: Absolutely.
Speaker Change: That.
I'll turn it over to a made for his comments. Thank you everyone.
Yeah.
Over to you.
Speaker Change: Okay.
Speaker Change: Thank you Teri Hello, everyone today.
Speaker Change: Today I'll be talking about some updates on our business transformation as well as focused initiatives that have helped us to maintain our margin in the current demand environment.
Speaker Change: Our focus on the delivery excellent site continues to be excellent client experience and getting them best in class solutions.
Speaker Change: This is based on our now consistently leveraging our four global business line model to create the best possible ecosystem to build talent as well as deliver the best in class solutions for our clients.
Speaker Change: This is being supplemented by strong delivery governance to an IND.
Speaker Change: <unk> in a better program management by building the delivery leadership cadre through focused training interventions.
I based assessments and scaling for emerging technology trends.
Speaker Change: We have a dedicated AI delivery council to identify opportunities to infuse AI into delivery activities.
Account delivery executives are at the core of our client experience via enabling and empowering them to make decisions that are client centric and with our client Centricity and there Mike.
Speaker Change: They are driving initiatives and solution offerings with AI first and one wipro approach.
Speaker Change: Yeah.
Another area of work has been the restructuring low margin accounts.
Speaker Change: He had he talked about it briefly especially in the context of our improved performance in the apnea region.
Speaker Change: Low margin businesses are being reduced steadily to a multi pronged approach.
Moving to our operational excellence side theory has spoken about how scale is our biggest currency.
We are working on end to end processes to provide right skill at the right time.
Speaker Change: <unk> cost at the right location.
Speaker Change: This we are doing through multiple initiatives that span across an improved forecasting process.
Speaker Change: So activity is killing through account academies.
Speaker Change: I met optimization.
Speaker Change: Proving our talent supply chain through an AI powered talent marketplace.
Speaker Change: What optimization automation and strong change management.
Speaker Change: We are reducing our operating costs and optimizing our organizational design across all units and geographies.
Speaker Change: This is enabling us to build an agile wipro better suited in this dynamic market.
Speaker Change: We are heading towards more and more AI based automation internally.
The resulting productivity and better efficiency.
Speaker Change: Jerry you talked about how we are taking a I led solutions to our clients.
Speaker Change: We have a similar rigor for our internal facing AI applications.
Speaker Change: Like the AI powered talent marketplace persona based learning pathways for our sales and business teams are developers are engineers and architects.
Speaker Change: We are using AI for simplification of our employee user experience as well.
Yeah.
Speaker Change: We are aligning our operational structure, skilling academies, and Jenny I capabilities to market demand client expectations and ever evolving internal wipro processes.
We are in fact, the biggest customers. So one of the biggest customers of our own AI internal ecosystem yeah.
Speaker Change: 60 ecosystem.
Speaker Change: These transformation programs and margin enhancing initiatives are delivering results.
Our top priorities continue to be profitable growth delivery excellence and internal capability development, all leading to sustainable success.
Speaker Change: Now I hand over to a partner.
Speaker Change: Yeah.
Speaker Change: Hello, everybody and wish you all a very very happy new year.
Speaker Change: Let me highlight to you our financial performance for the quarter ended December 31st 2022.
Speaker Change: We had a strong execution during the quarter, which has led to a heavy news being at the top end of our guidance in constant currency terms, our revenue declined one 7% sequentially.
Speaker Change: As we had called out last quarter, we started the quarter with just challenges.
Speaker Change: One that a weaker demand seasonal furloughs and salary increases for employees affected first December 'twenty 'twenty cheap.
I'm pleased to share with you that our margins have remained resilient.
Speaker Change: As we executed on three columns, one maximizing our revenue performance.
Speaker Change: Realizing savings from Oh, you know pyramid improvements and deal.
Speaker Change: The leading FPP productivity and three reducing discretionary spend on a year to date basis, we've improved our margins by nearly 62 basis points.
Speaker Change: We work on rationalizing on all aspects of working capital.
And have generated about close to $600 million of operating cash flows during the quarter. This is 177% of net income and highest in the last few quarters.
Speaker Change: Gross cash was at $4 $6 billion and our net cash was at $2.7 billion. Both have increased year on year. Despite completing a large buyback in July of last year.
Speaker Change: Speaking of capital allocation, you would have read in the press release that our board of directors have declared an interim dividend of rupees one by equity share.
Our net income for the quarter is at INR 26 by 9 billion rupees, which is a 1.8% increase quarter on quarter.
Speaker Change: EPS has increased by 2% on a quarter on quarter basis.
Speaker Change: In a weak revenue environment. It is heartening to note that I E. P. S has improved 2% on a year to date basis.
Speaker Change: Our E P S E.
Speaker Change: Includes a charge that you've taken in our P&L on account of the restructuring exercise that we've undergone this year I'd like to confirm.
Speaker Change: That we've completed the restructuring that you wanted to do and we do not anticipate any further charges him soon.
In terms of other important metrics aren't effective tax rate remained flat at 24% and our hedges continue to be in line with our policy and what's it about cheap on $4 billion.
Speaker Change: Finally, I would like to reiterate the guidance for Q4 24 stated my theory.
Speaker Change: Expect revenue from IP services business segment to be in the range.
Speaker Change: Right.
Speaker Change: To begin the <unk>.
Speaker Change: To be in the range of 2615 to 2669, which translates to a sequential guidance of negative one and a half pertain to a positive half percent in constant currency terms.
Speaker Change: And with that we'd be happy to take any questions.
Speaker Change: Ladies and gentlemen, if you have a question. Please raise your hand and wait for the microphone. Please introduce yourself before asking the question.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Okay, Hi, Yeah, I'm redo from CNBC.
Speaker Change: You know a few questions in your numbers starting with the revenue fourth.
Speaker Change: Fourth quarter decline.
Speaker Change: You've now reported despite all that our positive outlook that you're telling us about.
You know even vertical advised barring a couple like healthcare et cetera, you've seen a decline across the board sequentially Europe has de grown by almost 43% I wanted to understand going forward. We have the Q4 guidance of course.
But what are the conversations with clients like what are they telling you about spend what are the areas of concern that you see what are the areas that you're optimistic about a number two also a consulting since you have repeatedly highlighted is starting to see your turnaround. If you could give us more details on our capital and raising of doing them and you know how significant.
Speaker Change: Do you expect them to play when you see the market turns around.
Speaker Change: Again, you know I think just from January to December of last year, you can eat cigna.
Speaker Change: Significant exit.
Speaker Change: In your senior management, you've sued to a few pharma executives are joining the ranks of foam as well you know how is that impacting the business here with you know senior leaders are leaving the company in a you know if you could tell us a bit about what's your Oh, you know what.
Speaker Change: Cognizant, we've seen one of your other peers also send.
Speaker Change: Send a legal notice you know what the conversation has been like and finally any lever for the margin to then you'll get to that aspiration, 17% 11.
Speaker Change: Okay I'll try to remember every every questions.
Speaker Change: So the first one so oh.
Speaker Change: Revenue.
Speaker Change: So let's talk about the market first I think what do we see.
Speaker Change: The market hasn't changed dramatically right the market continues to be.
Speaker Change: The market, we have seen for the last quarters, which was a market where you know there was a significant reduction of the discretionary spend.
Speaker Change: So we had on the one hand.
Speaker Change: Oh, the certain volume of activity going on to actually showing up you know booking number and yet you know the lack of discretionary spend was rooting them on.
Speaker Change: Topline grows in particular in the consulting business, but across the.
Speaker Change: The board you bucket tequila are in sectors like banking and financial services technology Communications and so on.
Speaker Change: What we are seeing now are green shoots we are seeing.
So a little bit to beginning of.
Speaker Change: Uh huh.
Speaker Change: And evolution of the market.
Speaker Change: And that is allowing us to you know too we are seeing a positive trend.
Speaker Change: Intermodal revenue from a deceleration to almost stabilization in.
Speaker Change: Going back to gross so that's the first point I see and I frankly speaking I believe the moist reflect on that.
Speaker Change: When you look back.
Speaker Change: You know we have grown I believe 27% year on year in FY 'twenty two we've grown.
Speaker Change: 12% year on year in FY, 'twenty, 11, or 12% in FY2023.
Speaker Change: This year, we are decelerating and I see it might just be a little bit after a hangover so often exceptional period during COVID-19.
Speaker Change: Yes, you are correct about what youre seeing in terms of gross healthcare is doing well.
And there's a very significant demand we are seeing.
Speaker Change: Some demand in some other industries like automotive.
Speaker Change: Mike you know energy right.
Speaker Change: Possibly.
Speaker Change: Hey.
Speaker Change: The improvement of the banking sector.
Speaker Change: Certainly.
Speaker Change: What we are observing at the moment, we kept cool.
Speaker Change: Leads us to be a little more optimistic.
Speaker Change: So indeed the performance in bookings of KEPCO has been very solid.
Speaker Change: This quarter and you know rising as well and we should you know we are observing we are cautiously observing the evolution, but I think.
Speaker Change: I don't think this is something we would have said it was a quarter or two or three ago.
Speaker Change: The point number two was on I don't know if I take them in order, but I.
Do it.
Speaker Change: So on the leadership.
Speaker Change: True.
Speaker Change: It is part of our strategy.
Speaker Change: And we've if you go back to our you know the strategy that we.
Elaborated and shared with you back in October 2020, this was precisely.
Speaker Change: Part of the strategy around talent to.
Meyer to earnings to grow to build two you know.
Speaker Change: Oh, you know invest in tenant and in particularly in leadership tenants. So.
Speaker Change: So we are.
Fully aware of the fact that this obviously is possibly triggering some people to leave and this is part of the strategy.
Speaker Change: Today.
Speaker Change: What I can say is that.
Speaker Change: One we.
Speaker Change: We have indeed tremendously invested into leadership over the last years.
Speaker Change: Second.
Speaker Change: We have a very strong leadership team today should we.
We have now a strong pipeline of leadership as well.
Speaker Change: And so you know that's that's where we are.
Speaker Change: Regarding you know specifically.
Speaker Change:
Speaker Change: You know Keith Youre, referring to.
Speaker Change: Wood.
Speaker Change: Ask you too to cover it and then I'll take the next point.
Speaker Change: So simply put when all of us joining the organization.
Some contractual obligations and.
Speaker Change: And we are as an organization across the industry are similarly across the industry I.
Speaker Change: So you could please.
Speaker Change: Compared to the obligations, we are not against any individuals spotting and growing in the.
Speaker Change: Meeting the Korea, once youre not against any individual going anywhere because there's a vote contractual obligations going forward.
Speaker Change: In particular Q since sub judice, we would not like to specifications.
Speaker Change: Yeah.
Yeah.
Speaker Change: I tried to respond to this question.
Speaker Change: You know each.
We do not feel that way, what you're saying, but we realize that when you are bringing in talent. We've been also promoting a lot of tenant at.
Speaker Change: It triggers a little bit of as shown in this you must be prepared to that if you're acquiring talent from you know from the industry Orison industries.
Speaker Change: If you are you know transforming the organization the way we've done over the last use and if you're promoting as meinie talent in the organization as we've done over the last two three years you have to be prepared to the fact that some people will decide to two two to go and frankly speaking.
Speaker Change: I wish them the best it's okay.
Speaker Change: Not taking it you know we are not destabilized by when they are decisions like this because we have the pipeline may I.
Embarrass my neighbor here a minute.
If you don't mind to say that you know.
Speaker Change: Upon us taken over.
Speaker Change: We knew upon was you know the promising.
Speaker Change: Talent.
Speaker Change: In the finance function the most promising talent in the finance function of senior living.
Speaker Change: Don has taken over the CFO role.
Speaker Change: About a quarter ago.
Speaker Change: And she's doing fantastic.
That is the power of the pipeline of talent that we have built over the years.
Speaker Change: Can I, please ask everyone to limit their questions to two please so we can give everyone a chance.
Speaker Change: Correct.
Speaker Change: The last I don't want to avoid question. So I'll take the question on margin you had a question on margin expansion is it was it your question. So let me speak in total control of my my CFO.
So what I would say use.
Speaker Change: One you know for the last six quarters.
Speaker Change: We've said that we would deliver wisdom.
Speaker Change: At the same band and actually we did.
Speaker Change: Despite this slowdown.
Speaker Change: Despite the revenue decrease.
Speaker Change: How could we do it.
By working on our fundamentals.
Speaker Change: Becoming more agile more efficient by leveraging technology everything we've discussed earlier.
Speaker Change: We are now at the point, where you know we are more confident to deliver this level of margins.
Speaker Change: As growth comes back.
Speaker Change: We are expecting.
Speaker Change: Some expansion.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Hi, ladies and gentlemen to shout here from ATV profit.
Speaker Change: In Forest City.
Speaker Change: It services as we have seen has declined the BSA part of the business physically U S contributes 61% of your business, but routier is flat.
Speaker Change: With that backdrop, how do you see FY 'twenty five banking out for you in your biggest market.
Speaker Change: For a button up a big boss, we know that the ICT services margin is 16.0 from 16.1, but if you just do the pure math a bit from your statement of accounts, we see that the EBIT margin was up zero point as you do a one in five bps to bear is this actual GAAP happening.
Speaker Change: Just wanted to know.
Speaker Change: Mr. Gao will you.
Speaker Change: Your head count is down the attrition is at a 10 quarter low utilization and I think also decreased by four percentage points.
Speaker Change: Will you be undertaking hiring this year Oh, you are you still expecting your numbers to go down and also on the hiring front.
Speaker Change: Anybody have you are you going to get a new chief growth officer.
Speaker Change: Okay. So I'll take point number one and number four if you don't mind and I'll give you a point number two and number three.
Speaker Change: Okay. So for the first one which is you know outlook for FY 'twenty five I'm going to disappoint you. It's a little too early to tell them [laughter] and by the way we are guiding only for the quarter.
Speaker Change: Look January and February are typically months, where we are getting a lot of better visibility on the budgets of our clients. Okay. So I am meeting clients every single day and I will see many other of our clients in Davos next week, where we.
Speaker Change: I'll get a probably a better feel.
But that's that's the most.
Honest answer I can give you on the point number four which is around the gruesome fees, let me explain.
Speaker Change: The rational.
Speaker Change: I'm, the one who built the gruesome fees and and you know the reason for this was that we needed to to fill a gap that was <unk>.
Speaker Change: Visible in the organization on several fronts one.
We didn't have people, we didn't have a team able to go after larger deals.
Speaker Change: So we needed to build this team build people who can go after large deals. So deals that are much more significant in size and what we will typically closing before.
Speaker Change: The results of that has been.
Speaker Change: Last year also over the previous year, plus 70% this year windows of plus 20%. So this is paying off.
Speaker Change: Teams have been built.
Speaker Change: We are working in every regions.
Speaker Change: We feel this is the moment.
Speaker Change: For them to be rolled back now India. Some use in the regions and work more directly with their.
Speaker Change: Regional teams okay.
Second mission for the grocery piece was to build a true.
Speaker Change: Management of the partnerships.
There was a fundamental disconnect at that time way back in 2020 that you know if you look at the six largest partners of wipro their way of generating less than 20%.
Speaker Change: Of the revenue if we brew.
So we've built a team.
And today, you know, it's close to 50% of our revenue, which I remind you it's much bigger than what it was four years ago.
Speaker Change: Which is coming from our relation with partners. This.
Speaker Change: Relationship.
Speaker Change: Team managing partners and ecosystem.
Speaker Change: We remain.
Speaker Change: Now regarding the leadership of the groceries.
Speaker Change: Yeah.
Speaker Change: As you can imagine.
Speaker Change: There's nothing more important for me today that you know, making sure we are back rapidly to gross.
Speaker Change: So I own it.
Speaker Change: Yeah.
Yeah to your second point, then we say, 16% it refers to the I T cell as a segment is that what you're seeing in the face of the financials include di D products and the reconciling items that we've taken a restructuring charge, which is also having a play in the EBIT bridge.
Speaker Change: And each which have confirmed that you will not see surcharges in food.
Speaker Change: So on the hiring front.
Speaker Change: He is the head count has come down.
Speaker Change: Like the previous couple of quarters.
And they're gone.
Speaker Change: Demand constrained environment driving productivity using.
Speaker Change: Technology, bringing in AI.
Speaker Change: Improving utilization and they'll come through relation integration has not gone down before it wasn't we believe that we have enough capacity to grow.
Speaker Change: Hasn't been demand comes we will continue to grow even off a certain skill specific technologies, we continue to hire.
On on.
Speaker Change: Utilization, if you see what the last few quarters.
Speaker Change: Now again in a growth environment, we have improve regulation.
Particular quarters, it's a seasonal thing because we are going to leave it in there and being a highly quarterly because of the holidays.
It's showing a marginal decrease but the trend is there and we believe that is capacity for us to hedge space for us to go out for them improve utilization.
Yeah.
Speaker Change: Hi, guys.
Jeff: This is Jeff.
Jeff: Judy could you give us some color on the deal.
Jeff: Can you speak a little louder and going up.
Jeff: Could you give us some color on the deal ramp ups until last quarter, you mentioned about how the conversion is taking time do you see that changing now.
Jeff: And Oh, especially if you think about the pricing.
Jeff: That you said youre going for more complex projects.
Jeff: Angel.
Jeff: He is in a highly competitive market like this.
Speaker Change: Uh huh.
Speaker Change: Sure.
Speaker Change: I know you said that you're still in the process.
Speaker Change: Job offers that Amit is that done now and.
Speaker Change: Is that any specific outlook fluctuation.
Speaker Change: Okay. So I'll take the first two questions I hope I understood well, what you would what would you ask so on the first question, which is really about you know the conversion of deals into revenue.
You know I think if you look back if you look around the.
Speaker Change: The industry is definitely a little bit of a lag between you know the volume of the deals closed in the revenue kicking in and I think you know the lack of discretionary spend which is which are typically deals that are very small deals, but then.
Speaker Change: Large volume a very small deal you know are lesser in number are actually.
Speaker Change: Saying negatively in the gross versus you know the larger deals that obviously take time to kick in but when they kick in to go for good. Okay. So I think you know at the moment.
Speaker Change: You know I would say the trend is positive right.
Speaker Change: If you look at Q4 versus Q3, certainly going into right direction.
Speaker Change: We can see as I said earlier, you know that you know this is clearly you know we are trending towards you know going to gross you.
Speaker Change: You know you know over the next few months.
And and and and regarding the pricing or the margin profile of the deal we are going for yes.
Speaker Change: It's C store.
Speaker Change: Strategic decision on our side to go for.
Speaker Change: More complex deals not because we like complexity, we do actually but because we believe we can bring a lot to our clients. We have outstanding capabilities. We have you know deep knowledge of their priorities and their challenges.
Speaker Change: And we can truly do more than you know.
Speaker Change: Just deliver simple programs.
Speaker Change: [noise] complex programs requires you know investment can get maybe you're using you know in.
Disciplined methods and tools and this is what we've been working on and you know Amit as you know it with his team and they've been working on you know reinforcing.
Speaker Change: Okay, maybe it is around that so that indeed, you know.
Speaker Change: It drives a better margin at the end and indeed.
You know I think you've heard from us several times that we talk about portfolio rotation reduction of low margin accounts in sawn. This is what we've done precisely look at the portfolio and choose where we want to invest.
Speaker Change: For better return on investment.
Yeah.
Speaker Change: On the hiring front you have to do a talent pool available with them as well as we have people who can be offered and as the demand comes in as we have the requirements for different here and then go forward. That's the way we'll approach.
Yeah.
Speaker Change: So I'm going to take one more question before we close this is size religious freedom writers.
Speaker Change: So.
You spoke about a.
Speaker Change: Lack of conversion from revenue to our deals to revenue, but are you seeing any project ramp Downs are project cancellations I wanted to ask on that and also a few weeks back we saw about seeing that data succession planning going on you have identified three internal candidates. So we have just die a year to go. So can you talk about the succession planning has been.
Okay I'll do my best Okay. So on the first on the first point, which is you know the.
Speaker Change:
Speaker Change: The revenue conversion right.
Speaker Change: We haven't seen a significant ramp them so.
Speaker Change: Let's let me correct that I mean, when do we say less discretionary spend basically say a lot of the small discretionary spend that we were getting has reduced.
It reduced and so that resulted into ramp downs not off accounts, but wheezing accounts off stream saw projects okay.
I would say this has largely.
Speaker Change:
Gum now.
Speaker Change: Right, So I think.
Speaker Change: We haven't lost account.
Speaker Change: I'm not aware of any big account, a big project that has been cancelled.
Speaker Change: And I'm seeing a little more.
Speaker Change: First Debbie D D and possibly a little bit redirection of the discretionary spend so that is on the revenue.
Speaker Change: On the succession planning.
So I don't know, what which use paper you're reading.
Speaker Change: But but let me tell you one thing.
Speaker Change: It is my responsibility to make sure that we are building the proper succession planning.
For my road like for every other leadership roles in the organization and this is what I've been focusing on for the last years.
Speaker Change: Yeah.
Speaker Change: Alright.
For the rest.
Speaker Change: You know continue to read newspaper, you'll see that's fundamentally good organizations have a very good succession plan for all of them. So there is nothing which is good.
Speaker Change: Hum.
Speaker Change: Ladies and gentlemen, we have to conclude our listen we have a lot of things.
Speaker Change: Yeah.
Alright, well take one more.
Speaker Change: Okay too long.
Speaker Change: Hi, Tim and Jay can we just have one can really want to ask question. Please Oh. Please go ahead.
So the theory are you now just around the lawsuits are you just want to get a sense on you know what is the reason that you know these lawsuits have been filed and does that impact the morale of the company or the culture of the company and as of now what do you think is the impact, especially because of this.
Speaker Change: Focused largely against one another I will.
Speaker Change: Do you see that you know changing mechanics for the company do you see that impacting because you've also given increment is that one of the reasons for incentivizing employees and what is the impact of the <unk>.
Speaker Change: <unk> incentives that you've given the increments are new margins, okay, and what are the levers for the margins is that do you guys come with too many equation. So I'm struggling to remember everything so let me start with what I believe I heard so.
Speaker Change: One.
Speaker Change: Okay.
Speaker Change: Theres nothing personal are targeted in the way we are dealing with contract obligations.
Speaker Change: We are seeking to business practice, we've been in this business for 30 years I know I know how this is working and we only apply.
Speaker Change: Those normal terms and we we are committing committed to our employees, we expect the same from them.
Speaker Change: Would be my first point.
Speaker Change:
Second question was around.
Speaker Change: Margin increment in the margins margin levers.
Besides gross.
Speaker Change: Continue to improve the productivity of our organization.
The average utilization in AI.
And price price power reinforce our position in account.
Speaker Change: Yeah.
Speaker Change: Oh yeah.
Speaker Change: Impact on increments.
Speaker Change: MSA.
Speaker Change: We are not calling out the impact in terms of operating margins, but our job salary increases have been in the range of 6% to 8%.
And it's in line with the industry.
Speaker Change: Okay.
Speaker Change: We're not calling you said independently the impact and I have to do the math.
Thanks.
Speaker Change: Gary This is Rob Maida from torture in India, I guess a lot of people here have been asking you about you know this legal notice that has been sent out to the entire issue around getting the large exit rate. One this because the last quarter. When you spoke very very candid Ami than when you were speaking about Japan exit and.
Rob Maida: Then a few days later, we see this you know our legal case coming up to the market. It seems like two things one it might be acting as it you know, it's a data link where you're trying to tell the other people who spent so much time in the pro that Hey look you can't sort of if you know the goodwill for having worked for two decades and they prove it doesn't matter and too.
Rob Maida: Rabidly the pro is afraid that it won't be able to get the right kind of starting to fill in the people who are putting the organization I want to understand from you that you know these concerns and especially given that the steps taken by the pill will it exasperated existing problem of the senior management senior leadership not have.
Rob Maida: In our faith in perhaps the leaders who count and two the other thing is also about.
Speaker Change: Several questions being raised about you being able to sort of fulfill the term of five years. So I really want to understand what you're thinking on both these night alright. So you said I was candied last time I remain counted okay and there is nothing personal.
Speaker Change: Two.
Speaker Change: Except the fact that we are not commenting on personal on on individual cases.
Speaker Change: Three.
There is absolutely nothing unusual in the way we have dealt.
Speaker Change: With you know every case.
Speaker Change: Of exit over the last quarters.
Speaker Change: He broke in fact, you know.
Speaker Change: We accept that people leave the organization, there's absolutely no issue with that.
Speaker Change: And I've kept you know great connect with many of them.
Speaker Change: There's nothing wrong with that.
Speaker Change: Our legal obligations that need to be fulfilled and it's not specific to we broke it's the same everywhere in the industry.
Speaker Change: Final you ask about you know renewable in terms I'm guessing I'm going to hear a lot about that.
Until you know the end of the term that's the nature of the road.
Speaker Change: Believe bigley off one thing I am focused on doing my job every single day.
I'm enjoying it.
Speaker Change: And I'm committed to it.
Can I ask one more question.
To conclude I am sorry, I think we have to conclude we are way overtime. We really appreciate you being here today and this concludes our third quarter earnings Press conference.
Speaker Change: I know theres a lot of other questions out there. Please reach out to our media relations team with your follow up questions. Then we'll be happy to assist you. Thank you and we'll see you next quarter.