Following the announcement of its Q1 FY 2023–24 earnings, the management of the Indian IT services business Wipro intimated that it will concentrate mostly on large agreements in the ensuing quarters.
Details on Wipro’s top management has stated that the company will solely focus on huge projects
In a post-earnings conference call with investors, the CEO of the IT company, Theirry Delaprote, stated, “In terms of total contract value, we closed significant deals to the tune of $1.2 billion, which is a 9% year-over-year rise and actually the highest bookings in eight quarters. We completed 10 deals with a Total Contract Value (TCV) of more than $30 million during the current quarter. TCV-wise, total bookings are currently at $3.7 billion.
The number of companies contributing more than $100 million in sales has increased to 21 thanks to the addition of two new accounts. The CEO said, “As a result, the number of $100 million accounts has more than doubled from 10 to 21.
To trim the long tail and focus on transactions with high operating margins, Wipro intends to intentionally reduce the number of clients under this plan.
Jatin Dalal, the chief financial officer of the IT company, stated in a post-earnings news conference that the company had cut the number of clients by 100 while concentrating on those with annual revenues between $20 million and $100 million.
“We downsized the clientele by about 100. However, we have recruited six additional customers with annual sales of $20 million or more and two more with annual sales of $100 million or more. The CFO explained the company’s new strategy: “Strategically, we are shifting our business to conduct more value-added work for more strategic (big) customers.
According to the company’s financial records, they have 1,444 active clients as of the end of June 2024. Despite a decline in deal volume, the Total Contract Value (TCV) has grown in comparison to earlier quarters. Delaporte went on to say that he believes this is increasing the company’s influence in the IT industry.
“I think we’re having a bigger impact on the market every day. It is seen in the significant transactions we have completed. It is also evident in how our huge account is expanding, which demonstrates that our account approach has been profitable each and every quarter for the past 10 quarters. In the past two and a half years, we have doubled the number of $100 million accounts, according to Delaporte.
Delaporte noted that by using this strategy, the IT services provider would be able to utilize the talent to its fullest potential.
“The temptation for the team is to not deploy the best players for this project when you assign a low margin agreement with the client. My top players will be on significant deals, of course. The CEO told Economic Times that it was a totally different strategy.