Premji bets on large deals from U.S, Europe and India
Monday, 26 April 2010, 14:57 IST   |    1 Comments
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Premji bets on large deals from U.S, Europe and India
Bangalore: With tech spend reviving on signs of global economic recovery, Indian IT bellwethers like Wipro see large deals coming back to the table for aggressive business growth in the new fiscal (2010-11). "Our experience over the past three months is that large deals are very much back on the table. We are finding these large deals coming from the U.S, Europe and India," Wipro chairman Azim Premji told IANS Friday. Admitting that one had to be selective in choosing large deals as it involved huge amount of pre-sales work, Premji said Wipro was engaged in bidding for such deals as IT budgets were expected to be more this fiscal than in last fiscal during the downturn. "We expect IT budgets to be not only more, but also to be spent. Last year one of the key problems was though budgets were sanctioned, they were not spent for one reason or other, primarily because of brakes put by chief executives and chief financial officers," said Premji on the margins of a news conference here. Wipro joint chief executive Girish Paranajpe said the global IT services business had signed four-five large multi-year deals during the last quarter (Jan-March) of fiscal 2010, which cumulatively amount to nearly $1 billion. "The deals are in the range of $250-300 million. They are from Europe, the U.S. and other countries," Paranjape said. With recovery taking place across geographies, various business units and vertical lines, Premji said the IT services business was returning to normal. "Though Europe is trailing behind the U.S. by four-to-six months, conversations with multiple chief executives of Fortune 250-500 companies confirm that they are willing to take decisions on the way to go forward unlike in the past 18 months when most of them were fence sitting," Premji recalled. On the pricing front, the Wipro chairman said the billing situation was reasonably well, as evident from onsite rates declining and offshore rates going up. "There is no immediate serious concern on price depreciation. Our onsite rates have marginally come down in spite of pressure on spending," Premji noted. Wipro chief financial officer Suresh Senapaty said billed headcounts were among the strongest the company had seen ever since the meltdown, resulting in 4.1 percent volume growth in the third quarter and 4.7 percent in the fourth quarter. The $6-billion global firm had seen strong growth in healthcare, utilities and energy, banking and financial services and business process outsourcing (BPO) and testing. "Telecom and technology have also shown robust recovery and we believe that they are on the way for stronger growth in this fiscal (FY 2011) despite the headwinds of cross currency," Premji said. Similarly, the company improved its margins by 246 basis points (2.46 percent) for the entire fiscal and by 60 basis points in the last quarter despite 1.1 percent impact from wage hike and cross currency fluctuation. "We continue to invest in industry solutions that are driving offerings through our technology themes like green energy," he said. On the hiring front, Premji said the IT services division was aiming at about 50 percent of local workforce in the next two years as against 39 percent last fiscal. "We are finding good talent available both at the entry and lateral levels. As part of our commitment to globalization, we will continue to hire as many locals across geographies. Around 39 percent of our employees were locals as against 29 percent last fiscal," Premji added.
Source: IANS
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