Managing a 12 percent growth in profit for Wipro even in these trying times, India's billionaire tech czar Azim Premji on Wednesday said he was now more upbeat about the future than before and was confident that the business environment would stablise.
"We are seeing signs of stability in the macro environment as a result of measures taken by governments and businesses the world over to reverse the downturn," Premji told reporters in Bangalore.
Noting that there was more liquidity in the system and stock markets were off their lows, he said consumer confidence was increasing and companies have been more hopeful in their commentary and results.
"Though these are baby steps on the path to recovery, there is a growing confidence that the environment is stabilising. We are starting to see the first signs of this stability as ramp downs start to taper off and volumes start to stabilise," the Wipro chief said.
On the company's performance in the first quarter this fiscal, with revenues growing five percent to Rs.62.74 billion, and net profit rising 12 percent to Rs.10.16 billion, Premji said the IT services business was in line with the guidance on a constant currency basis.
"The currency tailwind enabled us to exceed our guidance on reported basis. Our focus on operational excellence continues to set industry leading benchmarks," Premji said.
Wipro's flagship global IT services business registered $1.03 billion in the quarter under review, which a sequential decline of 1.3 percent and year-on-year decline of 3.3 percent.
For the second quarter, the company has projected a revenue of $1.03-$1.05 billion from IT services, indicating flat to marginal sequential growth.
"It is important to appreciate that the world around us has changed. What we are now experiencing is a fundamental reset of the economy and the financial systems. The return will be to a new reality," Premji said.
Adapting to the new reality, the company is focusing on a "go-to-market" strategy and its operational excellence drive.
Elaborating on the twin strategy, Premji said the IT services business was becoming more strategic to its customers with increasing participation in large and complex transformation deals to deliver end-to-end, integrated solutions across the differentiated service lines.
"We believe our investments in go-to-market put us in good stead to gain wallet share and increase our proximity with our customers and capitalise on emerging opportunities," Premji said.
The company's operational excellence drive has resulted in improving utilisation, bulge and offshore mix, leading to operating margin expansion, he added.
"The gains on account of forex has mitigated the drop in realization during the quarter."
As part of its future and business expansion strategy, the company will now invest in cloud computing and green IT.