Price realisation has increased significantly, mainly in fixed price contracts. This is due to higher productivity levels, says T. K. Kurien, Executive Director and CEO, IT Business, Wipro. Better price realisation naturally reflected lower volume growth in business. This could be sustained over next year, but beyond that, the (business) model had to change. “I expect pricing to remain in a narrow band. The way we face competition and the nature of the economic environment will determine how we are able to price,” he said.
On challenges, Mr. Kurien said the company could not continue to run the business based on a linear model in which the variables were people and revenues. Part of the shift would depend on its focus in analytics, cloud and mobility. The bigger issue was that it had to put more technology into the way it did its work. “We have a fair idea of what that is going to look like, but we are not talking about it right now. This repositioning, when we clearly start breaking the linearity, will take at least two more years,” he said.
Explaining the focus areas, he said many of the solutions that would come would happen in the triage of mobility, cloud and analytics. That was why the company was focussed on these areas. This would enable it to better access the market while also enabling the clients to foster business efficiencies, he added.
On currency volatility, he said Wipro had a 70 basis-point uptick in its margins but it had had an adverse impact on its crosses (the cross currency rates between the dollar-euro and the dollar-pound rates). But the company could not do anything about that. It had hedged to the extent of $1.7 billion during the quarter, a little over a quarter of its revenue.