'I believe digital technologies will drive growth faster'

Realising the importance of digital in its future growth trajectory, Wipro Chief Executive Officer Abidali Z Neemuchwala is bringing on a paradigm shift in the company by giving due importance to retraining.

During the first quarter results conference, Neemuchwala explained how the company is banking on the automation and going ahead with local hiring at its centres across the globe. Edited excerpts:

How do you view the company’s performance during the first quarter of FY18?

Overall, we find the demand environment to be stable with IT budgets not significantly increased by our customers. But we see a transfer of the run budgets into the change. Wipro is well placed to capture this shift in its positioning in digital especially by emphasising on consultative selling and we're seeing some good traction with both existing clients and new customers in our key markets.

The first quarter revenue growth is in line with our guidance. Revenues grew 2.6% sequentially and our year-on-year growth has been 7.6%.

Can you elaborate on the impact of business restructuring?

We have completed the restructuring of our consulting business and we're now working on looking into the India and Middle East business model. We expect the trajectory of growth to build gradually over the course of the year. We will drive operational improvements in Q2 with respect to our operating margins. We may not see the full benefit of all the operational improvements given the impact of two additional months of wage revision, but I expect that it will be reflected much strongly in Q3 and beyond.

Can you comment on your hiring strategy?

We continue to hire as we added 1,309 more people in Q1, taking the total headcount to 1,66,790 people. There are new opportunities that we provide to our people and redeployment opportunities that come in after the reskilling of our people we continue to provide them. Wipro is also going ahead with the strategy of local hiring at our overseas centres and it is achieving greater momentum as we are reaching 50% in these geographies. We have over 40 facilities across 23 states in the US. We have over 1,000 employees each in the states of Florida, California, Georgia and Texas where we have established next-generation local delivery centres.

What is your retraining initiative?

We are scaling the deployment of Wipro Holmes, which is essentially artificial intelligence and cognitive technologies, across clients. As automation programmes mature it is increasingly easier to automate L1 tasks. We are going ahead with the internal goal of automating L2 and above tasks. I am happy to report that in Q1 we generated productivity of 2,100 people in the L2 and above the bucket.

For the entire last year, we have redeployed 12,000 people. We redeployed people because of automation. Now the senior people will be released and they will be retrained in more complex technologies. Wipro has 1,60,000 people, of which 75,000 have been retrained within the digital part of the business. About 20,000 to 22,000 people have actually migrated into the digital side of the business already. Our utilisation rate has moved from 66% to 70% in the 4th quarter last year.

Can you elaborate on the next-gen technologies where Wipro would like to play an important role?

The company continues with its next-gen technologies which then matured into hyper automation. We are aggressively acquiring firms in digital technology areas. Our initiatives on this front have worked very well. I believe digital technologies will drive the growth faster compared with the traditional services. Wipro will implement process digitisation, drive process efficiencies and improve customer experience for the client.

When will you complete share buyback?

The buyback price will be Rs 320 ($4.95) per equity share payable in cash for an aggregate amount not exceeding Rs 11,000 crore in accordance with the provisions of Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, 1998 (Buyback Regulations). The Board of Directors has approved a buyback proposal and I think it is fair to assume that we will be able to complete it (all the regulatory formalities) somewhere between mid-October and early November.