- Operating margins expand 1.4% sequentially
- Company to provide guidance only when time is right, says CEO Thierry Delaporte
- Wipro acquires IVIA Servicos de Informatica Ltd for $22.4 million
Bengaluru-based tech giant Wipro reported dollar revenue of $1,921.6 million for the first quarter of FY21, a sequential decline of 7.3 per cent (7.5 percent in constant currency). The company's operating margins expanded to 19 per cent, an improvement of 140 basis points from the previous quarter.
Wipro also refrained from providing a guidance range for the upcoming quarter. Thierry Delaporte, CEO and Managing Director of Wipro, said it would be difficult to assess how the pandemic will shape out in the next quarter. "For sure we want to go back to normal course and provide guidance and we will do it, but when the time is right for that," he said.
Further sharing his vision for the company, Delaporte said with the quality of talents and clients all the right ingredients for growth were present. "I want to build on strengths and focus on some specific investments in order to have competitive advantage," he added.
Explaining his vision of profitable growth for Wipro, Delaporte said companies can't choose between growth and profitability. There is no such thing as growth at all costs in our industry, he said. As margins allow companies to reinvest in future, if profitability is compromised, it would affect the ability to invest in ever changing technology capabilities, business and industry expertise, the Wipro CEO further added.
Wipro said that there has been some uptick in order book compared to last year. With deal closures happening even during the first quarter, deals in businesses such as technology, consumer business unit and communication would gain positive momentum.
Breaking down the 1.4 per cent margin improvement, Wipro Chief Financial Officer Jatin Dalal said that while there was a 100 bps benefit from the currency and operational efficiency, improvement of another 1 per cent was offset by provision of large doubtful debt (expected credit loss). "It is not specific to any customer but it is just a reflection of the tougher environment we are dealing with," he said.
Wipro also announced acquisition of Brazil-based IVIA Servicos de Informatica with a workforce of over 750 people for $22.4 million. The acquisition is expected to help the company expand its foot print in Latin America and Mexico.