Wipro(US:WIT)2020-10-13 17:46Financial Data and Key Metrics Changes - The company reported a revenue growth of 3.7% in reported terms and 2% in constant currency terms, driven by a robust pickup in volumes [13][20] - Operating margins expanded by 20 basis points to 19.2%, aided by operational improvements and a higher offshore mix [16][20] - Operating cash flow was strong, with 127% of operating cash flow as a percentage of EBITDA and free cash flow at 164% of net income, resulting in a net cash position of $4.6 billion [21][22] Business Line Data and Key Metrics Changes - The consumer sector is expected to grow faster due to solid deal wins, while financial services may be impacted by furloughs [14] - Energy, utilities, and technology sectors are anticipated to return to growth in Q3, with moderate growth in communications, manufacturing, healthcare, and life sciences [14] Market Data and Key Metrics Changes - The demand environment has improved from Q1, with increased sales activity and a robust pipeline, although decision-making for larger deals remains slower [15] Company Strategy and Development Direction - The company aims to focus on absolute growth, prioritizing relevant markets and sectors, expanding offerings beyond IT, investing in talent, and simplifying the operating model [11][12] - The strategic focus includes enhancing partnerships and driving digital transformation for clients, particularly in cloud, automation, and AI [7][10] Management's Comments on Operating Environment and Future Outlook - Management noted that the pandemic has accelerated the need for digital transformation among clients, with a strong emphasis on cloud and modernization [6][8] - The company is optimistic about sustaining growth momentum and is focused on executing its strategic priorities to bridge the growth gap with competitors [73] Other Important Information - The company announced a buyback of INR 9,500 crores, subject to shareholder approval, as a return of cash to shareholders [22] - An acquisition of Eximius Design, a player in VLSI and system design, was also announced [23] Q&A Session Summary Question: Insights on potential leadership sectors and market focus - Management emphasized the importance of focusing on sectors like banking, insurance, consumer, and retail for leadership positions, particularly in the U.S. and German markets [28][29] Question: Growth driven by demand vs. supply resumption - Management clarified that the growth observed was primarily market-led and not just a resumption of supply [33] Question: Application services outlook - Management expressed confidence in growth for application services, driven by cloud migration and data management needs [44] Question: Changes required for strategic priorities - Management acknowledged that changes are necessary but emphasized that the focus remains on market execution rather than internal restructuring [60][61] Question: Balancing internal changes with market focus - Management reiterated that the changes are enablers for market focus and not a distraction from client engagement [62] Question: Concerns about internal bureaucracy with fewer P&Ls - Management argued that reducing P&Ls would enhance agility by empowering client-facing teams to make decisions more effectively [53][84] Question: Timeline for achieving sustainable growth - Management did not provide a specific timeline but expressed confidence in closing the growth gap with competitors over time [73]