Wipro Limited

Hello, ladies and gentlemen. Welcome to Wipro's third quarter fiscal 24 earnings press conference. My name is Sanubar Grohe. I'm the head of global external communications and I'll be your moderator today. Joining me today on stage is our executive leadership team who will be presenting our results. From your left to right, our chief operating officer, Amit Choudhry, our chief executive officer and managing director, Thierry Delaporte, our Chief Financial Officer, Aparna Iyer, and our Chief Human Resources Officer, Saurabh Govil. As usual, we'll kick off the conference with remarks from our CEO, followed by an operational update from our COO. Our CFO will conclude our formal remarks with an overview of our financials. We will then open the floor for questions. Right now, please allow me to welcome our CEO, Thierry Delaporte, to the podium.

Hello, everyone. Welcome to this new facility. Thank you for joining us today. We're really glad to have you here, and for sure, starting with wishing you the best wishes to you for the new year. So I'll begin today's conference with an overview of our third quarter results, details of our sectoral performance, the demand environment, and direction for the coming quarter, as always. Earlier today, you've seen we reported our numbers to the market and to our board. I'm pleased to share that we're starting to see some healthy indicators for growth. Our IT services revenue for the quarter is at the top end of our guidance. Revenue stands at 2.6%. $66 billion in reported currency. We've continued to book deals at a healthy pace. Even though Q3 is a short quarter due to the year-end holidays, other bookings in total contract value terms stand at $3.8 billion. Our large deals, TCV, for the quarter was just over $900 million. On a year to date basis, that's a 20% growth. We booked 14 deals this quarter in the greater than $30 million category. By contrast, just for you to keep that in mind, we had booked 11 of such deals in the third quarter of last year. Net income for the quarter expanded by 1.8% sequentially. Operating margin stands at 16% despite seasonal furloughs and the annual salary increases for our employees, as you know. On a year-to-date basis, margins has improved by more than 60 basis points. As you know, we have consistently invested in our people, in our processes and organizational efficiencies over the last several quarters these investments are paying off. Our results demonstrate that at the fundamental level, Wipro is increasingly more streamlined, proactive, and efficient. This has boosted our client trust in our teams, improved our win rate, and also the type of deals we are winning. That is more of complex transformation deals. Wipro is not only benefiting from vendor consolidation, but we are also adding new logos while growing our business with existing clients. In fact, our clients tell me that they are seeing a more confident and a united effort from us. One Wipro, we're leveraging the depths and breadth of expertise and diversity inside Wipro. Contributions from our acquired firms, I name a few, Capco, Rising, Design It, are more prominent and well received. The demand environment overall, let's be clear, remains cautious. Clients are still making conservative investments. Still looking for efficiency, more returns on investments, and better optimization of existing investments. But we are seeing some indicators for growth. If you remember, we had called out a possible slowdown in the economy as growth in our consulting business slowed. We know that when the market turns, consulting will be the first area to bounce back. In that context, I'm pleased to share that we've had a good performance from our consulting business, with Capco reporting a double-digit sequential growth in order booking, the highest in the last four quarters. Turning to our strategic market units now, we recorded a strong quarter for the America's one market unit, where we booked half of our 14 large deals this quarter. Revenues in the market grew 2% sequentially, led by health care, which actually grew 9% sequentially. In our America's two market units, we continue to see some softness. There is no question. Largely on the BFSI and the energy and utility side of the business, hence resulting in a 1.3% drop in revenue quarter over quarter. That said, There's strong momentum in other bookings, which in total contract value terms increased 46% sequentially. In Europe, we won four large deals in the third quarter despite the continuing economic weakness. These four new transformative deals add up to nearly $300 million in bookings. These deals underscore the success of our strategy in this market. There's no doubt. Revenue from Europe, however, decreased 4.3% sequentially in Q3. Across the board, I want to say, across the board, but especially in our APMEA strategic market unit, we have worked on reducing low margin accounts while slowly moving towards higher value transformation projects. Revenues in this region declined 5.4% quarter on quarter. However, this strategy of pivoting towards higher value business reflects in the margins we delivered in the region. Margin rose 240 basis points sequentially, to 13.8%. That's the highest in the last six quarters. And once again, we are seeing consulting, especially Capco and Rising, play a big role in the complex deals we are winning in the market. To continue this rigor, we made some changes to our gross offices recently, and we've communicated on that. With the foundational pillars for sales excellence set out by the growth office over the last two years, we moved some of the growth office functions inside the strategic market units, creating an even tighter integration with the SMUs. With this, we reinforced how we nurture large deals in each geography, and we respond faster to changing market needs. Simultaneously, we continued to streamline our operations as per the plan, leverage artificial intelligence and automation for efficiency across all functions and business areas. Add to that the learning and development and reskilling of our existing talent base, besides optimizing our talent pyramid to better serve client needs. Multiple initiatives are in place. I request Amit to share highlights of some of those programs with you today. What I can say though, with confidence, is that Wipro is a better partner for our clients today. We are more agile, one that is responding to and evolving with our clients and their needs. Amit will also share with you highlights of the work done around account delivery and service excellence. This really is the centerpiece of our efficiency play and increased agility. We continue to invest in areas that we know are going to remain fundamental for our long-term success. People, our most valuable asset. We awarded our colleagues their performance based annual salary increases recently. The promotion cycle just closed and we'll be making the announcement soon. We've continued to stress on and offer training and development options and grow opportunities to our employees. This is critical to why people continue to choose to work with and give their best to Wipro. Of course. Returning to work once again more regularly after a few years of fully remote work has absolutely helped energize the culture and the atmosphere in our offices. You can feel it today. Then there is AI. Would be amiss not to share how we are using AI ourselves as an organization and of course for our clients. AI is now moving from I would say the curiosity and experimentation stage to becoming vital to business strategy. In fact, we can confidentially say that every long-term large deal now has an AI component. A substantial portion of our clients are looking for us to develop use cases tied to their business goals. They want us to use AI models to drive tangible results. AI is now embedded across most of our existing solutions and offerings. In addition, every business line is working to launch new offerings that use AI. For example, in our full-stripe cloud business, an area that's Particularly hot when it comes to the use of JNI is digital workplace services. Leveraging JNI to lighten the load on service desks, deliver faster and better client service is now part of every RFP in this space. One of our largest deals in Europe this quarter is to transform digital workplace services of a multinational telecommunications company. This will help improve client satisfaction, reduce operating expenses. We will build an AI-powered platform for them that provides service desk, onsite, and remote support services for 100,000 users and 80,000 managed services across 240 locations worldwide. In engineering, we are seeing strong interest for AI in the automotive and manufacturing industries. Clients in these industries want AI to increase productivity in the R&D process and accelerate new product development. With Wipro Enterprise featuring, we are helping clients accelerate adoption. We are leveraging Wipro's GenAI framework and studio to develop key assets at all levels of the AI stack, including models, platforms, and solutions. We will help clients with model development, performance, privacy, and compliance. We're also building governance frameworks around responsible, sustainable, and ethical AI development. because we are Wipro. In fact, we are working with a global healthcare insurer to develop a GNI-powered knowledge research solution to transform their contract center. The goal is to improve patient experience and operational efficiency by cutting the time it takes to analyze healthcare plan documents and response time. We have developed a GNI powered assistant for a Fortune 500 investment and insurance firms. This assistant improves quality and reduces the time spent in crafting personalized email campaigns. Early results showed tangible growth in click-through conversion rate. Additionally, Expanding our relationships with strategic partners is definitely a critical part of our AI 360 strategy. During the past quarter, we collaborated with NVIDIA to help healthcare companies build AI-driven strategies, products, and services. This partnership with NVIDIA is a great differentiator for us. Given our domain expertise in the healthcare sector, We're also expanding our partnership with IBM to invest in new joint solutions built on IBM Watson X. That makes it easier to deploy reliable, responsible, and sustainable AI solutions. To do all this in a consistent, in an innovative, scalable fashion, we are preparing our workforce. Today, 210,000 Wiproites around the world have trained on AI 101 skills. We have now rolled out personal-based learning pathways for different roles and functions. Our goal is to ensure that everyone at Wipro has the skills to fully leverage AI in their everyday work and for AI related client projects. And it started with me. We are accelerating GenAI adoption internally by integrating the technology across our entire portfolio platforms. This is resulting in quality and productivity improvements across HR. marketing, sales, operations, as well as software development and quality engineering and testing. Our investments in our AI360 ecosystem combined with the strategic value our consulting business brings to client is the reason we are increasingly the preferred partner for our clients. We are confident that we have the right vision, the right strategy, and the right leadership to continue to grow and keep us competitive, resilient, and ambitious. On to our guidance now for the next quarter. We are guiding for a sequential growth of minus 1.5% to plus 0.5% in constant currency terms. We expect margins to stay range-bound, like in the last few quarters. As the market starts to turn around, on the back of our transformation and efficiency plays, we expect to see improvements in the coming quarters, absolutely. With that, I'll turn it over to Amit for his comment. Thank you, everyone. Amit, over to you.

Thank you, Theory. Hello, everyone. Today, I'll be talking about some updates on our business transformation, as well as focused initiatives that have helped us to maintain our margin in the current demand environment. Our focus on the delivery excellence side continues to be excellent client experience and getting them best-in-class solutions. This is based on our now consistently leveraging our four global business line models, to create the best possible ecosystem to build talent as well as deliver the best-in-class solutions for our clients. This is being supplemented by strong delivery governance through an investment in our better program management, by building the delivery leadership cadre through focused training interventions, AI-based assessments, and skilling for emerging technology trends. We have a dedicated AI delivery council to identify opportunities to infuse AI into delivery activities. Our account delivery executives are at the core of our client experience. We are enabling and empowering them to make decisions that are client centric and with a client centricity in their mind. They are driving initiatives and solution offerings with AI first and one Wipro approach. Another area of work has been the restructuring of low margin accounts. Thierry talked about it briefly, especially in the context of our improved performance in the APMEA region. Low margin businesses are being reduced steadily through a multi-pronged approach. Moving to our operational excellence side, Thierry has spoken about how skill is our biggest currency. We are working on end to end processes to provide right skill at the right time, at the right cost, at the right location. This we are doing through multiple initiatives that span across an improved forecasting process, proactively skilling through account academies, pyramid optimization, improving our talent supply chain through an AI-powered talent marketplace, effort optimization, automation, and strong change management. We are reducing our operating costs and optimizing our organizational design across all units and geographies. This is enabling us to build an agile Wipro better suited in this dynamic market. We are heading towards more and more AI based automation internally, resulting in productivity and better efficiency. Thierry talked about how we are taking AI-led solutions to our clients. We have a similar rigor for our internal-facing AI applications, like the AI-powered talent marketplace, persona-based learning pathways for our sales and business teams, our developers, our engineers, and our architects. We are using AI for simplification of our employee user experience as well. We are aligning our operational structure, skilling academies, and gen AI capabilities to market demand, client expectations, and ever evolving internal Wipro processes. We are in fact the biggest customers or one of the biggest customers of our own AI internal ecosystem, AI 360 ecosystem. These transformation programs and margin enhancing initiatives are delivering results. Our top priorities continue to be profitable growth, delivery excellence, and internal capability development, all leading to sustainable success. And now I hand over to Aparna.