No sign of US slowdown impacting Wipro's growth

BANGALORE: Wipro Technologies' global IT services and products business is yet to feel the impact of slowdown in the US economy or the fallout of sub-prime crisis gripping global financial markets, a top company official said here Friday.

"We have not seen any impact on our business so far though a few segments such as application, development and maintenance are a cause for concern in terms of continuity," Wipro Chairman Azim H. Premji told reporters at a briefing on the company's performance in the third quarter (October-December) of fiscal 2007-08.  

"There is no sign of pressure as of now on our quarterly or annual growth due to some uncertainty over IT spending this year," he said.

In view of good demand for its services and the enduring value of its global delivery model, the IT bellwether is taking multiple initiatives to de-risk its business model from the impact of such negative factors.

"We look at challenges and opportunities that unfold and evolve strategies to help us maximise growth and enhance value creation. We are increasing investments and accelerating momentum in strategic initiatives such as acquisitions made recently," Premji pointed out.

Wipro finance solutions president Girish S. Paranjpe, however, admitted new projects or contracts were likely to be affected in case of slowdown impacting IT budgets.

"We focus on specialised segments and ensure growth momentum is sustained. No sign of slowdown yet on IT services. We are yet to see the impact. A clear picture will emerge by the end of this quarter (Jan-March 2008). We have to see which of the IT spending - discretionary or non-discretionary - will be affected by recession."

"As non-discretionary or basic spending on IT services is unlikely to be affected since clients have to maintain and run their business, we do not see drastic cuts in it. And about 90 percent of our work comes from non-discretionary spending," Paranjape noted.

On acquisitions, Premji said though the company was scouting for buyouts to meet its specific or strategic requirements, he was saddened by reports in a section of the media that its flagship IT division was bidding to take over the Paris-based Capgemini.

"We are looking at specific requirements for our organic as well as inorganic growth. But there is a whole nonsense of Capgemini being acquired by us going on, which is getting repetitive in the media."

As a result, we had to reply to the stock exchanges, which we normally don't do, clarifying our stand that there was no such move to buy out Capgemini," Premji said.