Amid leadership churn, Wipro Q3 net profit falls 12% to Rs 2,694 crore- The New Indian Express

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Express News Service

BENGALURU: For the fourth consecutive quarter, IT major Wipro has reported a fall in its consolidated net profit. On Friday, the company met Street estimates and posted a 12% y-o-y drop in net profit for the December quarter at Rs 2,694 crore compared to Rs 3,053 crore it posted in the same quarter last year. Its revenues for the quarter dropped 4.4% y-o-y to Rs 22,205 crore.

For Q4, the company expects revenue from its IT services business segment in the range of -1.5% to +0.5% in constant currency terms.

Addressing the media after declaring Q3 results, Wipro CEO and MD Thierry Delaporte said the demand environment overall remains cautious. “Clients are still making conservative investments, looking for efficiency, more returns on investment, and better optimisation of existing investments. But we are seeing some indicators for growth.”

He added that the company saw good performance in its consulting business, with Capco reporting a double-digit sequential growth in order bookings, which is the highest in the last three quarters. Wipro acquired global management and technology consultancy firm Capco in 2021 for $1.45 billion.

The company’s IT services operating margin for the quarter stood at 16.0%, down by 11 bps sequentially. Its total bookings stood at $3.8 billion, up by 0.2% Q-o-Q and large deal bookings were at $0.9 billion. Delaporte said the company is likely to see an improvement in the margin once the market turns around.

Its voluntary attrition came in at a 10-quarter low of 12.3% in the third quarter. Its headcount continues to drop as it ended the third quarter with 4,473 fewer employees. In Q2, it saw a decline of 5,051 employees.

Wipro Chief Human Resources Officer Saurabh Govil said, “We believe that we have enough capacity to grow and for specific skills and technologies we continue to hire.”

Talking about Artificial Intelligence, the CEO said that AI is now moving from the curiosity and experimentation stage, to becoming vital to business strategy. “We can confidently say that every long-term, large deal now has an AI component. A substantial portion of our clients are looking for us to develop use-cases tied to their business goals. They want us to use AI-models to drive tangible results. AI is now embedded across most of our existing solutions and offerings. In addition, every business line is working to launch new offerings that use AI,” he added.

We have strong pipeline of leadership: Wipro CEO

Wipro has seen at least 10 top-level exits in 2023 alone. Speaking about the leadership churn, Wipro CEO and MD Thierry Delaporte said, “If you go back to our strategy that we elaborated in October 2020, this was precisely part of the strategy to acquire, enhance, grow, build and invest in talent, in particular leadership talent. We have a strong leadership team today and a strong pipeline of leadership.”

Recently, CFO Jatin Dalal exited the firm and joined rival Cognizant. The company has initiated legal proceedings against him and demanded Rs 25 crore in damages. Wipro has also filed a complaint against Mohd Haque, a former senior vice president and head of healthcare and medical devices- Americas, alleging a violation of the non-compete clause in his employment contract.  He also joined Cognizant recently.

“We are not against any individuals going anywhere, it is about contractual obligations,” Saurabh Govil, Chief Human Resources Officer (CHRO), Wipro, said.

The Wipro CEO added, “We realize that when you are bringing talent, we have been also promoting a lot of talent, it triggers a little bit of a churn and you must be prepared for that. If you are acquiring talent from the industry… and if you’re providing as much talent in the organisation, you have to be prepared for the fact that some people will decide to go and frankly speaking, I wish them the best.” He added that, “We have the pipeline”.

Recently there were reports that Wipro has been nurturing internal talent for the CEO role and talking about succession planning. Delaporte said, “It is my responsibility to make sure that we are building proper succession planning.”

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