Wipro to invest in newer markets to drive growth

Friday, 20 July 2007, 07:00 Hrs
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Bangalore: Wipro Ltd, India's third biggest IT bellwether, is investing in growth markets worldwide this fiscal to compete with global peers, sustain growth and ride over a surging rupee, a top company official said here Thursday.

"We are investing in newer markets and service lines to drive growth and achieve global leadership in IT services and products. Besides eyeing strategic acquisitions in Germany and Canada, we are expanding our presence in the Middle East (Gulf region) and eastern Europe," Wipro chairman Azim H. Premji told IANS.

Admitting the relentless rise in rupee and peer pressure from Indian and multinational firms were the twin challenges in fiscal 2007-08, Premji said the company would continue to focus on both organic and inorganic investments to stay ahead of the industry in terms of growth, market share and service offerings.

"The road ahead is to invest in people, infrastructure, marketing and training in India and multiple countries to avoid depending in one or two geographies and broaden our revenue stream.

"Though global economy remains strong due to robust demand in traditional markets such as the US, Europe and Japan, the ability to manage growth in the face of competition for a greater share of the global outsourcing pie will be critical," Premji noted.

On the continuing appreciation of the rupee against major currencies in recent months, especially the US dollar, Premji advocated curb on external commercial borrowings (ECBs) to check capital inflows and moderate liquidity in the market.

"S. Rangarajan (chairman of the economic advisory council to the prime minister) has already favoured a cap on ECBs to prevent raising funds at three percent overseas, lending in the domestic market at eight percent and raking a five percent profit.

"We are not against raising funds for acquisitions or investing in trading instruments but against volatility in the forex market resulting in hardening of the rupee," Premji said.

A record nine percent appreciation of the rupee during the first quarter (April-June) of this fiscal eroded Wipro's operating margin to 21.6 percent from 24 percent in the previous quarter of January-March.

"We cannot have a scenario where only exporters keep hedging throughout the year while importers stay away. There is a need for a better management of the forex market," Wipro chief financial officer Suresh Senapaty affirmed.
Source: IANS
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