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spk00: We believe in a future that belongs to everyone, a future built on the promise of technology and the progress of all where we can accelerate digital transformation while transforming the ways we create meaningful impact. At Wipro, we're helping organizations around the world harness the power of emerging technology to transform their companies and local communities into engines of growth and opportunity With more than 190,000 employees across 63 countries, we're advancing innovation, changing the way businesses are run, and empowering leaders to stay competitive. We're reimagining the role of sustainability, making it more than just a daily business practice, but a part of a company's enduring purpose. At Wipro, we're committed to creating a more resilient world for business and for all. Because in a future that belongs to everyone, the future must work for everyone. Wipro.
spk08: Good evening, ladies and gentlemen. We thank you for participating in today's conference. I am Neha Rao, and I will be the moderator for the session today. I request all of you to be on mute and turn off your camera until the question and answer session. If you have any questions, please choose the raise hand option in the toolbar. To view the conference, please pin the participant name preview on your devices. I will now hand over the floor to Mr. Vipin Nair and request him to take it further.
spk05: Hello, everybody. We'll now begin the press conference with opening remarks by our CEO, Thierry. Over to you, Thierry.
spk01: Thank you, Vipin. Hello, everyone. It's wonderful to be able to speak to you again this quarter, especially as you joined us today during the festive time. I know that in many parts of India are celebrating Navratri and Durga Puja. So thank you for joining us. We'll make sure not to keep you here for too long, okay? For me personally, this is a special press conference to be able to speak to you from Bangalore. This is my first official visit to the India offices since I took charge in July last year. In the last three days, I met with our senior leaders and teams in India, And it's been absolutely incredibly energizing. The openness and the hospitality I've experienced in India has always been very welcoming. But you can imagine my eagerness and anticipation to meet our teams and see our compasses here. And they did not disappoint. It's been great so far. Of course, I've only just started to travel, essential travel, of course. I was in the US last week, meeting with our regional CEOs and GBL leaders, our chief growth officer, and other key leaders of our business. Each of them has steered Wipro through a very difficult time during the pandemic. And I want to thank every one of our 220,000 colleagues across the world. for their commitment, their trust, their dedication to our customer success, and this despite the challenges of the pandemic. It's, I must say, very encouraging that over 85% of our employees globally are now vaccinated with the first of the COVID-19 vaccines, and over 50% are fully vaccinated with the recommended two doses. In many parts of the world, we are starting to return to our offices in a staggered manner. For example, in India, our fully vaccinated senior colleagues can now come to office twice a week. The return to work will be a careful and gradual process. We are keeping the safety of our employees and the needs of our customers in mind as we plan this. In the second quarter, I'm really happy to share with you that our annual revenue run rate has surpassed the 10 billion mark. It will be interesting for you to know that $2.4 billion of this was added just in the last 12 months. This revenue milestone assumes greater significance because we achieved this while undergoing our largest ever internal transformation. Our revenue growth during the quarter was 8.1% in constant currency terms. You may recall this as being well ahead of the top end of our guidance range of 7%. Even if we exclude our two recent acquisitions, that is, Capco and Ampion, we grew over 4.6% in constant currency terms. This marks the second consecutive quarter over 4.5% growth. It signals the underlying demand and the execution momentum we have generated. And majority of our growth was volume led. We've experienced secular growth across all markets, across all sectors and global business lines. Our recent acquisitions too have performed ahead of expectations. The demand environment continues to be very strong, and our pipeline is a clear reflection of that. In fact, our pipeline is among the highest in recent quarters. We have a good mix of large and medium-sized deals. There are, in fact, many mid-sized deals and slightly smaller-sized transformation deals in the market right now. This is all good news for us. Our order book in terms of Annual contract value has jumped 28% in each one. And in terms of total contract value, the order book is up 19% year-on-year. We've also strengthened our large deal team and brought in specialized expertise there. So I'm really confident our participation and win rate of deals will accelerate. Let me now come to the operating margins. I'm pleased to share that in Q2, we have sustained Q1 operating margins, adjusted for the one-time gains we had in the last quarter. And this, despite absorbing the full impact of our recent acquisitions of Capco and Ampion, and in spite of investing heavily in our business across sales, capabilities, and talent. An additional point to note here is that We have offered a salary increase covering 80% of our colleagues in September 2021, marking a second salary hike in this calendar year. There is significant traction across all our markets, leading to broad-based growth. Americas and Europe, our top two markets, grew at 15% and 29% year-on-year respectively, even without the recent acquisitions. In Americas I, we grew 20% year-on-year, with most of the sectors showing strong growth. Consumer, tech, communications, health have all grown at 5% plus sequentially. In Americas II, we grew 31% year-on-year, led by growth in our organic business, as well as benefits from our acquisition of Capco. Most sectors registered healthy growth of 4% plus sequentially. Our European business has delivered a year-on-year growth of 48% on the back of several large deals and thanks to the boost of our acquisition, Capco. UK, Benelux, Germany-led organic growth growing at 12%, 10% and 10% respectively in sequential terms. Our apnea market grew moderately at 8% year-on-year. We are now seeing improved traction in ANZ, India, Japan, and the Southeast Asian markets. The pipeline addition in these markets have been very healthy. Middle East and Africa were weak in Q2, but we are encouraged by the pipeline that is shaping up. Our teams have redoubled their focus on our existing clients, and that is leading to strong growth in our top customers. Our top customer grew 29% year-on-year, our top five customers grew 33% year-on-year, and the top 10 grew 32%. The last 12 months, we have added four new customers in the more than 100 million bracket and added five more customers in the more than 50 million bracket. This, we feel, is the start of a significant shift, one that I believe will continue. When I meet our customers, they tell me they see a change in how our teams approach their business and, frankly, the value we bring to them. This recognition reflects Wipro's changing mindset and our bold and more confident approach to business. Customer satisfaction scores, as measured by an independent survey, has risen considerably. From a service offering standpoint, our IDEs global business line grew 11% sequentially and 37% year on year. Most of the sub-practices showed a healthy growth. Our engineering business grew over 25% year-on-year in Q2 and had a compounded quarterly growth rate of over 5% in the last four quarters. Our ICO global business line grew by 5% sequentially and 18% year-on-year. All of the sub-practices grew in double digits on a year-on-year basis. We launched Wipro's full-stride cloud services recently, which integrates our current consulting and technology capabilities along with our cloud studio-based assets. This integrated ecosystem positions us as an orchestrator that delivers transformational solutions together with our partners to address our clients' business challenges. The cloud ecosystem, which is about 30% of our revenue, grew 27% in the first half. And for the first time ever, our cloud pipeline has crossed $8 billion. And that's reflected in the deals we are winning. I'll do a quick update on our recent acquisitions. With Capco, we continue to build good momentum on our joint go-to market. The pipeline is building well, and we've started to see some early wins. We have won 10 deals during the first 100 days of transaction closure, and these are just the initial days still. I have congratulated the Capco team for leading this from the front. We are also pleased to have completed the acquisition of Ampion, an Australia-based provider of cybersecurity, DevOps, and quality engineering services, This will definitely help us expand our footprint in one of our priority markets. Let me now give you a quick glimpse of how we have transformed ourselves. Apart from moving to a simpler and more customer-centric operating model on the back of an organizational restructuring, we have made substantial progress on leadership transformation. I had said in our previous interaction that talent will be a critical success factor. So, we have worked on two key aspects of leadership overall. By building a contemporary and diverse senior leadership, including our client-facing global account executives, and by moving the leadership closer to clients. 58% of our leadership are in the regional markets with increased proximity to our customers. Consequently, we have reconstructed our leadership with a good mix of internally promoted talent and lateral hires. Naturally, we will continue to change and hold our momentum, but I can say that I'm happy with the pace and the quality of change we have achieved so far. But one of the issues that we must cope with as we build talent at scale is attrition. Our customers too are grappling with increased attrition. Wipro acknowledges this new talent landscape and has adapted quickly to the new world of work. The hybrid work environment is definitely a part of this mix. We have doubled down on our fresher intake with about 100 young colleagues joining us from campus in Q2. We will continue to aggressively build on this. And I'm happy to share that we are well positioned to add over 25,000 freshers in the next financial year. And finally, onto our outlook for the next quarter, we have guided for revenue growth 2% to 4%, which will translate into a year-on-year growth of 27% to 30% in constant currency terms. To summarize, the demand environment continues to be strong and our growth chart over the last few quarters reflects this. It also reflects our improved execution engine Together with the investment we've made in capabilities and talent over the last nine months, I am confident we will be able to participate and win at a greater pace. On that note, let me hand over to Jatin for his comments on the financials.
spk07: Thank you. Thank you, Thierry. And good evening, ladies and gentlemen. Great to speak with you all. Let me start with bookings. As Thierry mentioned, for H1, we had a very strong bookings performance. We have grown our ACV numbers 28% and TCV numbers 19%. We had nine deals which were of the size of $580 million that we signed in current quarter. Our revenues were 8.1% sequential and 28.8% on a YOY basis. We have seen a strong margin performance of 17.8%. Our ETR was better than last year of 22.5%. This year it was 22%. Therefore, our net income grew at 18.9% on a year-on-year basis. And our EPS grew 23.8%. If you see cash flows, we have done well. Our operating cash flows were 81% of our net income. We had $2.7 billion of cash net of debt and $4.3 billion of cash at a gross level. Our realization rate for Forex was 75.11 for quarter two, and we had, as of the end of the quarter, $3.3 billion of hedges, which is in line with our previous quarters. We have guided sequentially for two to 4% growth in the exchange rate, which is mentioned in our press release, which translates to 27 to 30% on rounded off basis on a YUI basis. Overall, we had a great quarter and we'll be happy to take your questions.
spk08: We'll now begin the Q&A session. Participants are requested to switch on your video and unmute yourself at your turn. In the interest of time, request participants to ask a maximum of two questions. The journalist from CNBC, please identify yourself and go ahead with your question. You can switch on your video and unmute yourself to proceed. I would request Swati to unmute yourself and proceed with the question.
spk02: Hello guys, I hope I'm audible.
spk01: Yes, you are.
spk02: Just a couple of questions. So the hiring numbers for this year is 25,000. Last year when we spoke, you mentioned about how we are hiring 12,000 for FI22. So are you increasing your hiring numbers this year from 12,000?
spk06: So Swati, what Terry mentioned, 25,000 is for FI23, where we will be going and making offers this year. We are planning to, we have had the highest number of ads in this quarter ever in a history of 8,000. We had called out 6,000 but we ended up adding 8,000 freshers in Q2. There we can move ahead.
spk08: I would request Sajid to unmute yourself, turn on your video and Ask your question, please.
spk10: Hi, gentlemen. If you can give us an idea of how the demand situation is going around in the industry, even as everything is opening up now. Also, a breakup of the margins. They have fallen by over 100 bps quarter to quarter. So if you can give some idea about where the pressure is coming from Is it wage inflation which is there or is there any other supply side issues which you're facing with respect to the margin impact?
spk01: Sure. Okay. So what I'll do is I'll take the first one and Jatin, you'll take the second one. Okay. So the first one is on the demand. What I can tell you is that, you know, there is a continuous strong demand. across sectors, across geographies. What we've observed for the last quarters continue to remain a reality. Our clients are in high demand of working with companies like ours. And the evolution of our pipeline is a support of this trend, frankly. We have a bigger than ever pipeline. And that is supporting this trend that we are observing in all sectors. Jatin, you want to?
spk07: Sure. So, if you recall our performance for quarter one, we had 1% gain on which was classified as other operating income in our financials, which was on sale of a couple of investments that we had done in our prior years. So, if you back that 1% out, From 18.8%, 17.8%, that's what has been the delivery for quarter two. What has happened? Your question is valid. There is pressure on talent. We need to invest in talent. Talent is a big differentiator today. So we have invested in the talent. But what has happened operationally through three levers, biggest has been realization. Second is utilization. And third is offshoring. All three levers, if you see our data sheet, you will see there is an improved trend in all three. And with that, we have been able to mitigate this wage inflation impact for quarter two and therefore able to deliver and sustain what we had in quarter one, except the one-time gain that we had in quarter one. So therefore, we delivered 17.8% as the final largest.
spk08: Swati, please unmute your line and proceed with your question.
spk02: Thank you. The second question I had was about... Are you looking at a different strategy when it comes to managing the supply side challenges? Because there is a gap between deploying the talent, the fresher talent and the demand. So how are you managing the supply side challenges? My second question is about the return to work. So Vipro had started return to work for senior colleagues for two days a week. So could you share more on how are you further facing it and what is your work from the hybrid working strategy is going to be?
spk06: So yeah, so first of all, let me share that supply side constraints will not impact demand. You know our growth is a priority for us and as if you have seen this is the second quarter where at a company level we've added more than 10,000 people as a net headcount. You know in a higher attrition environment we will continue to look at both freshers and laterals as our strategy. nearly gone up 2x in FY22 against FY21 on our freshers, and we're going to further increase it by another 3x in the FY23. So we'll continue to focus on freshers, and we'll continue to hire skilled people across the globe wherever it is required. So we'll do both build and buy strategy on the supply side. And I again want to reassure everyone that supply-side constraints, which is genuine right now in the demand environment, will not impact and we are geared up to make sure that we are managing the demand in the coming quarters. Second, on the work form, we have made a start. I think it's a very welcome change. People are very keen to come at the senior leadership level, meeting people. We are going to further accelerate this in the coming quarter where we are going to ask people who are keen to come across bands to start joining coming us we are making sure that people who are coming to the offices are only people who are doubly vaccinated and from january onwards hoping the pandemic is settling on well we will gradually increase the participation of people in on premises. We believe it will really strengthen the engagement, strengthen the teamwork as we get people back into offices. It will be a gradual process with employee health and safety being of the primary concern.
spk02: I just have one question for theory theory last time we spoke you said you would grow much faster than anyone else in industry and when we asked about how soon would you be taking over HCL Tech to be the third largest IT services firm I mean you are much closer now than when we spoke last quarter so how soon do you think you will be taking over HCL Tech to become the third largest IT services provider?
spk01: You know, Swati, we continue to accelerate. The feeling is that we are indeed, you know, we are becoming a fast growing business, which we were not. And I think from that standpoint, the trend is positive. I've always been cautious on, you know, when will it happen? But I think we are progressing along the same line and we are
spk08: uh you know actually confirming uh our our expectation when we discussed you and i last time yes okay thank you i request all participants to click on the raise hand option in the toolbar if you have any questions kunal please unmute your line and proceed with your question
spk04: Hi, this is Kunal from Enterprise Story. I have a question for Mr. Delacour. You mentioned the cloud pipeline has $8 billion worth of deals. Did I hear that right? And can you give me some color on how are these deals different from the traditional deals? How do you measure them? And, you know, which are the sectors that are showing a greater affinity to this?
spk01: Hmm. Kunal, the pipeline is about $27 billion. $8 billion is the pipeline we have in the cloud space. And that is a pipeline we are tracking closely because we are growing very fast in the cloud space, over 20% for a few quarters now. And so the evolution of the pipeline is a good indication of our ability to continue to grow in that space. And you know that the cloud transformation for most of our clients across industries is still significantly ahead of us. Studies tell that about 20% of the overall cloud transformation journey, if you like, has been completed so far. So this is really very much ahead of us. and hence the importance of seeing this pipeline growing. It's a broad-based pipeline improvement across sectors and geographies. And more importantly, we see a nice increase of those cloud opportunities in what we call our metal account, therefore our largest account across industries again.
spk04: Thank you.
spk01: Who's next?
spk08: I would request Sajid to please identify yourself and ask your question. Sajid, please unmute your line and proceed with your question.
spk11: Okay. Can you give us an idea of the PCBs and the color of the PCB that has come in in the second quarter, especially with respect to the new orders we have got? You gave a percentage increase in PCB, but if you haven't given me, you know, the total quantum that has come in in the second quarter. And the second thing is with respect to the kind of deals which are coming in. Do you see there is likely this slowdown in the kind of digital deals or transformation deals which are coming in? The pace was much more during the COVID time when everyone was working from home. Now that people are coming back to office, the transition is slowing down a bit.
spk01: Oh, no, I don't think there is any consequence to expect from a business standpoint of having people going back to the office. The programs we are working on are programs that are transforming the way companies are working, whether connecting with their customers or their business environment, if you like, their ecosystem. or regarding their own productivity and the way they run their operations, but goes well beyond the question of working remotely. So that should not have any consequence on the evolution of the deals. Our TCV exceeded $3 billion. It's been a very solid performance. As I said, significant double-digit growth over last year and it is not including any mega deals. So this is actually a very, very strong volume of activities ranging from large to smaller deals. Okay. Thank you.
spk08: Would you like to identify yourself and ask your question, please? Prasoon, please unmute your line and proceed.
spk09: Hi, I am Prasoon from PDI. I would like to know about your pipeline or what period of time it is deliverable, like how many years? The other question is different, like how are you faring in terms of emerging technologies order that is coming up across the world? How are you building up the capacities within the company?
spk01: Prasil, I didn't understand the first part of your question. How many years of what?
spk09: The pipeline that you have for cloud and for the overall 27 billion pipeline that you have. So it is deliverable over what period of time?
spk01: or this is, you know, over the next 18 months, basically. Right? So, you know, we see, so, I mean, it's a good question. The type of deals that we see in our bookings, in our order book, the fastest growth we see from, you know, areas that are that will be in higher demand in the future where are we getting the growth from at the moment cloud we said it from engineering services we get very nice growth this quarter again from digital transformation programs from security very solid performance in our security practice that is really shaping up well And how do we deliver that? I mean, it's, you know, this is where we are hiring expertise and talent at the moment. And so those areas are in high demand, will continue to be in high demand in the future. And that's where we are investing.
spk09: Well,
spk01: We have discussions. We see some activity. I don't think we see any deal, material deal, related to quantum computing. And in my view, it's going to take a little bit of time before you really have material deals in this area. It's more for the day after tomorrow than for tomorrow. Thank you.
spk05: Are there any further questions? And at this point, I don't think there are any further questions. So we close the press conference. Thank you all for joining.
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