Focus to be on disciplined goal execution, re-skilling
Abidali Neemuchwala, CEO, Wipro
Apr 22, 2016 | Source: CNBC-TV18
According to management, the demand environment is robust overall and large amount of discretionary spend is happening on the digital area although a lot of that spend is moving from run to change and there may not be new technology spend coming in enterprises.
Management is optimistic on financial services and Mr. Neemuchwala thinks spending to start in a quarter or two. The company had some good deal wins which we will be ramping up in coming months, so no need to worry. That is more a one quarter phenomena and at the most two. The energy and utility is the one where there is a higher level of uncertainty.
Margin guidance and strategy for future:
In Q1-FY17, we will give salary increases to our employees and this time the salary increase budget is indeed a little higher than previous years in fact its 30 percent higher budget. So that will have impact on our margins in quarter 1.
We will also the two months consolidation of health plan services in Q1-FY17 that will also have impact on margins, so we do see an investment on margins in Q1-FY17 and therefore we will have to work through rest of the quarters to get the trajectory back as our volumes pick up during the year and that is the overall sort of direction or the pattern of margins that we see panning out and the only thing I want to talk about is that there is a great opportunity in the market place for things like digital and localisation.
There is a lot of onsite demand for newer technologies and we will invest in some of those and we will continue to invest in the these that we spoke about. That could mean that there is a short term compromise on margins but that is for volumes and once volumes come back in our business as you very well know the margins follow shortly because our business is about volumes and scale.