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In the second quarter ended September, Wipro, the country’s third largest information technology services company, has posted its strongest growth in seven quarters. It has also given a better than expected revenue forecast, triggering the belief that it might have returned to the growth path. T K Kurien, chief executive officer of the Bangalore-based company, tells Bibhu Ranjan Mishra the first milestone’s been achieved and a complete turnaround would happen when there is consistency in growth. Edited excerpts:
Why do you say it is not a turnaround quarter?
I think it’s a journey; it is one milestone that we have crossed. It does not mean the journey is complete.
What is that milestone?
The big thing we looked for is secular growth across verticals; we have got that. It’s still not completely stable because one or two verticals might not have that consistency. But really for us, the ambition is at least 80 per cent of our portfolio should be able to fire.
The next milestone?
We have to perform consistently over the next couple of quarters. For us, turnaround means consistency in performance. This will drive a lot of the actions in the downstream. The second thing is that the market is also changing on a daily basis. So, we have to think about how we have to perform consistently in our core business, while looking for new opportunities in newer areas.
The challenge we have is not about technology; it is about people. And, when I say people, I mean leadership. My objectives over the next couple of years will be to make sure the leadership pipeline we have is really among the best in the world.
Are you saying this in the context of Wipro?
Yeah but I think it is true for the industry as well. Any industry that grows very fast without getting maturity of leadership in place will always run into a crisis when growth slows. We faced that reality because our growth had slowed. So, over the past couple of years, we have been rebuilding our leadership layers.
Had Wipro’s growth slowed because of leadership issues or anything else?
It’s no use looking back and asking why did growth slow down. It does not make sense. You can analyse the past but it is never going to give you an indication on what the future is going to look like.
What are the objectives behind the recent management changes? Is it not a sign of instability?
We had already planned for these. The people who were part of the change were informed earlier; it was a very planned one. It is a little bit of a misnomer to say Wipro is seeing frequent organisational changes. The last change that happened in the company was almost two years ago.
So does it mean Anand Sankaran’s (former Head of Wipro Infotech and Global Infrastructure Services) exit happened because of these ‘planned changes’?
I don’t want to comment on that. All I can say that Anand was a terrific employee. He made a choice of his own. We wish him all the best. What is more relevant is that we have now a team in place which is a very experienced one.
While almost all your business verticals are back on growth, there are still some concerns in the geography front, especially your India & Middle East business which saw a decline in growth?
There is little bit of concern in our India and Middle East business. In India, our growth is slowing because the Indian government is not exactly buying things in a hurry. But we clearly see opportunity. Middle East has been a little bit of slow down over the past couple of quarters primarily because business spends in those countries are related to the movement of oil price.
You have seen a reduction in overall headcount in the Q2 over the previous quarter. Is it a healthy sign?
Look at our utilization. We have enough headspace there. As we are going to bring in freshers (people fresh from colleges) there will be lumpiness the way headcount moves. We will continue to hire freshers. We have predictability over that.
Now your product engineering services business has starting to pick up after many quarters of sluggishness. What is driving the growth there?
Luckily for us, the semiconductor segment has started doing better. We have also diversified our base. We need to diversify our base much more into areas like mechanical and electrical engineering.
