Wipro Q4 results and outlook
April 18, 2008 – 4:29 pmWipro, India’s third-largest software services exporter, reported a slightly smaller-than-expected 1.7 percent rise in quarterly net profit, and forecast muted growth amid fears a weak U.S. economy will hit outsourcing demand. Here is what is happening according to CFO of Wipro.
ON THE U.S. SLOWDOWN:
“we have seen some form softened in the last few weeks. We are saying we are a little cautiously optimistic.
“We think, by talking to various customers, that offshoring will continue to be the main driver for them, particularly to deal with the lower or flattish budgets that they have.”
ON CLIENTS’ IT BUDGETS:
“In the dipstick we have done, customers are talking about flattish, to maybe slightly lower budgets, but they are all wanting to do more offshoring. And we are expecting that more and more offshoring will happen soon after this so-called uncertain situation disappears.”
ON MARGIN OUTLOOK FOR FY2008/09:
“What we are saying is that we will be able to hold, to expand margins.”
ON PRICING:
“The blended (average) price declined by 0.9 percent in Q4, quarter on quarter. However, so far, as far as we continue to get 4-5 percent higher rates from new customers. Overall, pricing looks to be stable, with a positive bias.”
ON GROWTH:
“We would expect more of the growth back-ended, and the deal pipeline looks good. But since the decision-making could get delayed, given the uncertain situation, we think most of the fructification would happen after 3-6 months, and therefore the growth will be more back-ended.”
