Wipro Limited (WIT)
Q2 2009 Earnings Call Transcript
October 27, 2009 4:30 a.m. ET

Executives

Rajendra Shreemal - Head Investor Relations & Treasury
Azim Premji - Chairman & Managing Director
Suresh Senapaty - Chief Financial Officer and Executive Director
Sambuddha Deb - Chief Global Delivery Officer
Pratik Kumar- Executive Vice President HR, Brand & Corporate Communication
Suresh Vaswani - Joint Chief Executive Officer, IT Business
Girish Paranjpe - Joint Chief Executive Officer, IT Business
Manish Dugar - Chief Financial Officer
Vineet Agarwal - President, Wipro Consumer Care & Lighting

Analysts

Ashwin Mehta - Motilal Oswal Securities
Vihang Naik - Motilal Oswal Securities
Priya Rohira - Enam
Sandeep Muthangi - IIFL Capital
Srivatsan Ramachandran - Spark Capital
Balaji Prasad - Goldman Sachs
Nitin Padmanabhan - Centrum Broking
Pranav Bhardwaj - Mata Securities
Anil Kumar - HSBC Securities
Dipesh Mehta - Khandwala Securities
Viju George - Edelweiss Securities
Sandeep Shah - ICICI Securities
Jugal Joshi - Destimoney
Shekhar Singh - Goldman Sachs
Pinku Pappan of Nomura
Ritesh Rathod - UTI Mutual Fund

Presentation

Operator

Ladies and gentlemen, good afternoon, and welcome to the Wipro Technologies earnings conference call. This is Rochelle, the Chorus Call conference operator. Please note that for the duration of this presentation, all participants'' lines will be in the listen-only mode and conference is being recorded. After the presentation, there will be an opportunity to ask question. Is there anyone needs assistance during this conference call they may signal an operator by pressing star and then zero on their telephone. At this time, I would like to turn the conference over to Mr. Rajendra Shreemal. Thank you, and over to you, Mr. Shreemal.

Rajendra Shreemal

Thank you Rochelle. And thanks everyone for joining us today. Good afternoon and good morning from the Team Wipro to all people joining in from different parts of the world. As Rochelle just mentioned, I''m Rajendra Shreemal, Head of Investor Relations. Along with Sridhar in U.S., Rishad, Arvind and Lalit in Bangalore, we handle the investor interface for Wipro.

We thank you for your interest in Wipro. It is with great pleasure I welcome you to Wipro''s teleconference to post our results for the fiscal quarter ended September 30th, 2009.

We will begin with a short address by Mr. Azim Premji, Chairman, followed by the financial highlights from Suresh Senapaty, CFO, and follow it up with a Q&A session with the management team. We have Girish Paranjpe and Suresh Vaswani, Joint CEOs, and other senior leadership team of Wipro.

Before Mr. Premji starts his address, let me draw your attention to the fact that during the call we might make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the management''s current expectations, and are associated with uncertainty and risk which could cause the actual results to differ materially from those expected. These uncertainties and risk factors have been explained in detail in our filings with the Securities Exchange Commission of the U.S. Wipro does not undertake any obligation to update forward-looking statements or to reflect events or circumstances after the date of filing thereof.

Mr. Azim Premji, Chairman, Wipro.

Azim Premji

Good day to all of you. Thank you for joining us. The macro environment is stabilizing and the improving business landscape that we had talked about last quarter is playing out in reality. The stimulus packages of governments are having their intended effect, arresting asset price decline and bringing back confidence into the system. Corporations are more active in the capital markets and there is a surge in M&A activity. As I talk to CEOs across the globe, the general sentiment is more upbeat than ever before.

At Wipro, we are also starting to see this improving environment play out in better demand visibility and more stability in volumes and pricing. While there is a good dose of positive news, the macro picture remains fragile and our clients continue to focus their spend on cost takeouts and capital conservation.

In this context, Wipro Limited posted a 19% year-on-year growth in profits and a 6% year-on-year growth in revenues for Q2. Our IT Services business was at the top end of our guidance in constant currency, and exceeded guidance by 1.2% on reported currency basis. Our pipeline is at the highest that we have seen and our order booking is strong. We continue our momentum of winning larger, more complex end-to-end integrated deals.

Our deep domain expertise across verticals and our broad set of services continue to position us, as a partner of choice with customers. We have seen strong growth across our service provider, energy and utilities, healthcare and services, manufacturing and retail segments. We are starting to see acceleration of volumes in BFSI. Across service lines, BPO continues to benefit as customers drive down costs. End-to-end capability in infrastructure space, supported by the Infocrossing capability, is seeing strong demand.

Our commitment to drive operational efficiency remains as strong as ever. We continue to execute on this and have shown improvement in productivity, fixed price product mix and utilization which has resulted in operating margin expansion. Our margin this quarter has further benefited from the gains in forex.