No pricing pressure, attrition to decline: Wipro
Software exporter Wipro today said it has not witnessed any pressure on the prices it charges for its services and IT spends by clients continue to be good despite the uncertainty in the US and European economies.business Updated: Oct 31, 2011 14:00 IST
Software exporter Wipro on Monday said it has not witnessed any pressure on the prices it charges for its services and IT spends by clients continue to be good despite the uncertainty in the US and European economies.
We are not seeing any amount of pricing pressure because the customers are looking at total cost to them. We are pretty decently placed there and are not seeing any kind of pressure on coupon price," Wipro Executive Director and CFO Suresh Senapaty said.
Wipro's second quarter net profit rose by 1.2% to Rs 1,300.9 crore, helped by increased spending by clients and a depreciation in the rupee value. Its net income from sales during the quarter was up 18 per cent at Rs 9,094.5 crore.
The Bangalore-based firm has forecast third quarter revenue from its IT services unit in the range of USD 1.5-1.53 billion.
The IT business accounts for 75% of the company's total revenue.
"Overall, our portfolio is in the right direction. We have plenty of work to do, going forward. My own sense is that what you see in phase one of the whole effort that we started off some time ago, we have got phase two and phase three to follow. So there are plenty of opportunities and we have to execute them," Wipro ED and CEO (IT Business) T K Kurien said.
The concern, however, is the lower number of working days, which could impact third quarter volume growth.
The company also expressed confidence that attrition rates will come down.
"Attrition has been a good story, so it is just in terms of rate at which we have been able to bring it down. It has been significant and has been to the extent of 4.7% from the last quarter," Wipro Executive Vice-President (Human Resource) Pratik Kumar said.
He attributed the decline in attrition to salary hikes and promotions during the quarter.
"The salary hikes (of about 12%) and promotion cycle were in the same timeframe. Also, the organisation is more settled and bulk of changes that we have been talking about in the previous two quarters is behind," Kumar said.
The most important reason why attrition rates have come down is the time-intensive focus of leadership and managers at all levels in the organisation, he added.
The company added 5,240 people in the July-September quarter to take its employee strength in the IT services segment to 1,31,730 employees.