'Have enough headroom to improve margins going ahead,' says Wipro CFO

Wipro’s operating margin in the June quarter tightened to 15 per cent, but Chief Financial Officer Jatin Dalal stressed that from Q2 onwards, the margin would improve.
 

The margin for India’s fourth-largest IT services firm declined 200 basis points over the previous quarter.
 

But Dalal said that the company has enough headroom to improve its margin performance. This includes increasing utilisation, better pricing, and managing operating levers like controlling expenses.


 

“Our utilisation is at an all-time low. We have hired a lot of freshers -- the highest ever. We still have a reasonable pricing ability to improve it further. Also, there are operating levers. Not all expenses have to go up as revenue grows. We can also reduce the subcontractor cost as more people now join the company,” said Dalal.
 

For Q1, Wipro’s net utilisation came in at 83.8 per cent, down from 85.2 per cent in Q4 of FY22.
 

Dalal said the company had guided that the margin would be under pressure at the beginning of last quarter on account of investments that were made. These include a bigger bench, internal transformation and restructuring, and also expenses like travel.
 

Meanwhile, the company added 15,446 employees during the June quarter. Of them, more than 10,000 were freshers. The company also managed to bring its attrition down marginally, though it remained in the 20 per cent range.
 

For Q1, attrition was 23.3 per cent, down from 23.8 per cent reported in Q4FY22 and but sharply up from 15.5 per cent in Q1FY22.