We're focusing on quality of revenue in large deals: Wipro's BM Bhanumurthy

While verticals like banking, financial services and insurance and consumer business are doing well, others like energy and technology will pick up from second quarter

Despite some good momentum in the large-deal space in FY19, Wipro’s revenue growth continued to lag its larger peers. The company is hopeful that no legal liability will arise from the latest phishing attack. B M Bhanumurthy, Wipro’s president & chief operating officer, tells Yuvraj Malik & Debasis Mohapatra that the company is making all the right investments for growth. Edited excerpts:

Will Wipro have any legal liability arising out of the phishing attack on the company’s IT systems which came to light today? Had there been any such instance in the past?

I will reiterate what we had said earlier. We have already taken all the right steps. It was a zero-day attack. Consequently, by detecting it, we are also updating the virus security patch. We have a long standing relationship with customers (as far as liability is concerned). We’ll work with customers in solving these issues.

While Wipro has shown some improvement on the operating margin front in FY19, the company still lags peers in terms of revenue growth. Do you think there is now a change in the narrative from revenue growth to quality of revenue?

There is no change in narrative. We have seen our share of large deals and we are also focusing on quality of revenue in such large deals. We compete for deals where we think they fit our revenue profiles. Our emphasis is also on growing existing customer accounts. We added three new customers in the $75 million plus bracket. The third area we are looking at is on the capabilities which we are building. Our digital unit has grown about 34-36 per cent year-on-year and our cloud business is up by 25-26 per cent. We are making all the right investments.

So, you are saying that Wipro is becoming choosy in clinching large deals?

Our stand is that we must be able to structure technical, project and commercial solutions that are interesting to both the parties (client and Wipro). So, we’ll make deals when we can satisfy all of them.

The company management said it has factored in slow start of new deals as one of the reasons for the tepid outlook in Q1 of FY20. Could you please explain?

If you look at our commentary on order book, you will see that it has grown pretty well and that’s a good indication of the kind of orders we are booking for the future. You have to look out for three things in Q1FY20. Firstly, it is seasonally weaker. Secondly, the start to some of the projects we have won are getting delayed. Thirdly, for most of the annual contracts we run, there are certain efficiencies you have to pass back to customers. Some of them bunch up every quarter, and that’s where you see a weaker point.

You are saying that demand is stable with no visible macro headwinds. So, will revenue growth pick up in FY20?

We have already said that while verticals like banking, financial services and insurance or BFSI and consumer business are doing well, others like energy and technology will pick up from Q2. Our deal pipeline is strong and we are not seeing any macro headwinds.