Jan 23, 2013, 06.29 PM IST
Problems of the US fiscal cliff, uncertainty over the eurozone and policy issues in India have all played spoilsport for the global economy. Azim Premji, Chairman of Wipro expects 2013 to be a year of stabilisation as the US looks a lot better than last year and Europe is firmer than before.
Premji further added that their third quarter results could have been better if not for order closures that were carried on to Q4 along with some of the billing. However, he is satisfied with results and going forward, sees revenues anywhere between 0.3 to 3 percent.
Languishing at number four amongst the top IT companies, Wipro is trying to set its fundamentals right over the past 18 to 20 months, informed Premji. He also reiterated the fact that despite improvement in fundamentals, there has been a delay in its growth pick up and that is certainly disappointing.
Here is the edited transcript of the interview on CNBC-TV18.
Q: Let me start with the global economy, do you expect based on all the conversations you have with your team, with clients that this will be a year of recovery, probably of stabilisation or maybe even further deterioration?
A: I would say it’s a year of stabilisation; the US is looking a little better. I know there is a fiscal cliff coming up again in February but, I think it will get resolved. Hopefully, it will not get kicked around too much into the future. We think for our business in IT, US should be better.
Europe is more or less stable. It’s like a Hindi movie, one week it is good, one week it is not so good. The euro is a little firmer and that is some indication of the strength of the economy. I think it will be stable and we don’t expect any catharsis to take place in Europe. Far East is reasonably good. Due to the high oil prices Middle East continues to be good, Australia is good, Latin America is okay and India has seen a spat of reforms taking place over the past two months, all of which are positive. If that momentum keeps up, it is good for the economy.
Q: I want to get into the India reform aspect in little more detail but, before that I will persist with the global questioning, you seem a little more optimistic about the global scenario this year and yet when I look at the guidance that your company has put out, it is a fairly broad range, 0.5 to 3 percent. Why is it then that your guidance speaks of expected volatility and uncertainty whereas you sound a little more optimistic?
A: We like to be conservative in our guidance.
Q: But, 0.3 to 3 percent is a very wide range?
A: We normally give 2 percent. This time we have given 2.5 percent range. It is neither here nor there.
Q: What is the worst case scenario you are building into when it comes to 0.5 percent?
A: Sometimes the billing carries into the New Year and we just have to keep those contingencies in terms of what we communicate. I do not think we should read too much into it in terms of the 2.5 percentage span versus the 2 percent span.
Q: This global picture that you just described, is that what you will deliver, 3 percent is that what will deliver 0.5 percent?
A: I think you should wait for what guidance we give in Q1 of next year.
Q: But does that global picture fit into 0.5 percent and hence we should expect that if the global economy stabilises, as you mentioned, you would probably meet the higher end of the target?
A: I think you should expect that we will have a result between 0.5 percent and 3 percent. Let’s not try to be more specific, otherwise we would have given it in our guidance.
Q: What did you make of your numbers this quarter because two of your other competitors, both TCS and Infosys outdid expectations by market analysts and they were more delighted with Infosys and TCS numbers than Wipro?
A: We could have done better. Some of our order closures carried over, some of our billing carried over. It was okay. What was expected from the analysts, we did that. Our standards are higher, so we would be less satisfied with those kinds of numbers than we would have been otherwise.
Q: If there was a carryover, you expect to outdo expectations in Q4?
A: We expect to also have carryovers from the Q4 into the Q1.
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