Though its growth has been nothing to shout about in recent times, what management at Bangalore-based offshore services firm Wipro can take satisfaction from is margin stability, something that archrival Infosys has been struggling with of late (see The future starts again for Infosys).
Wipro’s Q1 headline revenues (to 30th June) were essentially flat qoq at $1.59bn, though some 5% higher yoy. Operating margins at 20.0% were a tad down qoq and one point lower yoy, but have been keeping within the 20-21% range for the past 8 quarters, which is a result given volatile market conditions and currencies. Wipro chairman (and majority shareholder) Azim Premji seems very upbeat about the company's prospects, touting 15% revenue growth "in coming years". It's been a good couple of years since Wipro has grown that fast, and I'd have to say a return to that rate of growth appears, shall we say, 'ambitious'.
Management alluded to “a large multiyear engagement” with a major UK insurer, extending Wipro’s application development and maintenance contract on the company’s Life & Pensions processing platforms. Whether this means Wipro will eventually make a play to run the platform too is not yet clear; if so this would be an ‘interesting’ move, putting it head to head against Life & Pension BPO market leaders TCS and Capita.
Subscribers to the TechMarketView BusinessProcessViews research service have access to extensive analysis of the UK business process services market including special focus on the insurance sector. And as usual, we'll have much more to write about the India-centric IT services players – including their UK performance – in the next edition of OffshoreViews.