digibyte - no 'Happy Holidays!' for Wipro

Following on from rivals TCS and Infosys, Wipro yesterday posted a net profit of $341 million on revenue of $1.83 billion in the three months ended September, with that profit number falling just short of analysts consensus expectations of $345 million. That’s 2.1% year-on-year revenue growth, behind TCS which last week reported 3% growth and Infosys on 6%.

CEO T K Kurien says it’s getting tougher out there in contract land:

We continue to see strong competition around large deals, and there's clearly pressure on pricing with respect to new deals. The deal sizes are getting smaller and the number of multi-hundred million dollar deals have clearly reduced in the marketplace.

He adds that the approaching holiday season isn’t helping matters when it comes to decision-making:

Every year when October comes along, we do a poll of our customers to get a sense of what the furloughs will look like as they go towards the end of the quarter. We've seen some guidance from some of our manufacturing customers, some of our banking and financial services customers, and also some of our retail customers they may have a furlough.

It's very difficult for us to go out there and collect revenue especially when they're in holidays.

Inevitably there’s talk about the transition to digital services away from traditional outsourcing. Kurien says:

Our digital business showed strong traction with seven deals in this quarter. Designers have integrated in the current quarter and we have had two wins by taking an integrated proposition of the current digital in designing.

Our industry-leading combination of design build capability, along with experience is unique and offers clients new and more effective way of working. For example, Chelsea Football Club and a tier-1 bank will leverage our combined capability to design and deliver remarkable experience for our financial customers.

We've launched a focus program to train around 10,000 employees of digital technologies during the year. As Wipro digital training gains traction, it will drive greater impact through reshaping the performance scale of customer engagement.

My take

Solid enough numbers, if somewhat lacking in 'oomph'.

Disclosure - at time of writing Infosys is a premier partner of diginomica.