There has been higher than expected Q2 guidance and that led to a strong performance besides the Capco acquisition. Which are the verticals and the geographies that have contributed the maximum?
It is not a sudden growth trajectory. Over the last three quarters, we have been keeping pace in terms of growth and we have delivered strong performance in bookings and gradually have been able to accelerate the growth and deliver the performance in Q1. Given the level of the current wins we have with the pipeline we have and the order book we have built, we are confident that we could continue to generate a good level of growth. Therefore this guidance at 5-7% growth for Q2 is coming from across all sectors in America.
Americas one and Americas two are showing double digit growth and in Europe also, it is growing very strongly. In Q1, we are seeing very modest growth in APMEA (Asia Pacific, Middle East and Africa) and we should start to see a little more growth in the second quarter. All sectors are growing well but we have two sectors that are really driving a lot of the growth at the moment. One is BFSI, augmented by Capco. But before Capco also, we were growing well and we also have the retail and consumer business that is getting a lot of momentum both in America and in Europe.
In terms of offerings, I would say the growth is coming primarily from our strategic offerings around cloud, data, engineering services and cyber security.
Given that in Q1, we saw a growth of nearly 12.2%, how much of that would you attribute to organic growth? Can we expect this sort of strong double digit growth in FY22? How have you looked at the contribution from Capco and Ampion?
Two points. One, of the 12% growth in Q1, 4.9% is organic. Given our guidance for Q2, we will be able to be well ahead of double digit growth for the full year and this is excluding Capco. In terms of important milestones in Q2, we will hit the $10-billion mark revenue run rate for the quarter and that is going to be quite a significant milestone for Wipro, which is gearing up for the next stage of growth from $10 billion to $20 billion.
In the first quarter, you had managed to close about eight large deals resulting in a TCV of over $715 million. How strong is the deal momentum and which verticals and sectors are you seeing higher traction coming in from?
I do not know better indication of the market demand than the evolution of the pipeline. Our pipeline has been growing significantly over the last quarters and so from that standpoint, it is clear that we are seeing demand growth. Given the transformation journey that all of our clients are going through, I think this demand will continue to remain for a while. We have several quarters ahead of us. It is also across sectors and across geographies.
Last quarter you stated that the Capco acquisition is in line with the bold Wipro you envisage. What further M&A action can we see over the next one year? Also, tell us a little bit more about the Capco integration being completed what kind of client feedback have you received?
Let me start with the Capco integration question and then I will speak about the M&A strategy. Capco integration was completed two months ago and t is in early stages. We have really focussed on the market as opposed to integrating back offices and things like that. We are absolutely market focussed and working together as one team to reconsider the way we are positioned in ourselves as a partner for our clients in the BFSI sector. We have identified key accounts and have started to get a line of strategy. The feedback has been positive.
We have always been clear on the fact that M&A is part of our growth strategy, in particular in a buoyant market like this. We have a strategic focus on M&A. It is not to gain scale but more to reinforce position and tech leadership positions in some strategic areas. We have been clear on the fact that regular acquisitions will represent 1-2% of our revenue. If there are opportunities that make sense from a strategic standpoint, we will consider these opportunities.
Industry players suggest that India as well as Japan markets have been a concern in the first quarter. What about Wipro?
Certainly in Q1, our performance in India has been a very modest growth. It will accelerate in Q2. Our business is getting better and the pipeline is promising as well.
