IT services major Wipro booked $725 million in large deals for the second quarter of FY22, down from 18 large deals of $1.1 billion recorded during the first quarter. On a year-on-year basis, its overall order book for the quarter grew by 24 percent.
According to Wipro, large deal bookings grew by 42 percent on a YoY basis in the first half of this fiscal year.
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Speaking on the demand environment, Wipro Chief Executive Officer Thierry Delaporte said that in the last quarter, macroeconomic conditions across almost all markets and sectors have changed.
“In speaking to our clients every day, we are seeing a change in the level of optimism as businesses around the world are dealing with inflationary pressures, geopolitical turmoil, energy crisis and rising interest rates. Almost every major economy is experiencing today economic deceleration, it's a fact,” he said.
There is a “certain level of uncertainty”, he cautioned.
He said that while clients are not saying that they are cutting spends on technology, they are talking about a level of uncertainty. However, Delaporte affirmed that he believes there is currently no slowdown in demand.
“Our pipeline is not lower, projection of bookings for the coming quarter are actually strong,” Delaporte added.
He added that it is difficult to quantify if there if the decision-making of clients has slowed. “Are we seeing it sometimes? Yes. I believe large technology companies are slowing down. It's a reality. We see that in some pockets. Is it widespread? Too early to tell, honestly. We stay vigilant. Hence, maybe this caution,” he said.
“As we are looking at Q3, we reflect on this level of uncertainty. You might feel that we are slightly cautious but I think we are acknowledging the fact that we are in a time of more uncertainty, that the market has changed compared to a year ago,” he added.
For the next quarter, Wipro’s revenue growth guidance on a sequential basis is at 0.5-2 percent.
On the issue of discretionary spending by clients, Delaporte said several clients are making two budgets, one more cautious than the other, but they do not know what the outcome for the 2023 calendar year will be.
“It's too early to tell. For now, we possibly see in our pipeline more deals that focus on productivity, on cost rationalisation, vendor consolidation, and so on. We possibly see that more than we would have seen it a year ago,” he added.
Delaporte added that the nature of deals is shifting, but not in the number of bookings.
Commenting on the present pricing environment, the CEO said they have been able to discuss a price increase with a “relatively significant amount of clients”.
Wipro on Wednesday, when it announced its results for the quarter, said that its American markets registered 15.1 percent and 11.1 percent year-on-year growth, respectively. The Europe market, which is seeing significant headwinds, registered a growth of 0.6 percent on a year-on-year basis.
Consumer and manufacturing saw the most growth amid sectors on a year-on-year basis — at 18.3 percent and 11.3 percent, respectively. Technology grew by 3.1 percent, while energy, natural resources and utilities saw a decline of 1.5 percent.
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