The business process outsourcing division of Wipro Ltd. is chasing 25 to 30 outsourcing deals, worth about $100 million each, underscoring the industry’s upbeat mood as it emerges from the global economic slowdown.
We are chasing deals primarily in telecom, banking, financial services and insurance and utilities,” Ashutosh Vaidya, head of the BPO division, told Dow Jones Newswires in an interview Tuesday.
Mr. Vaidya said the company, India’s third-largest software exporter by revenue, expects the BPO division’s revenue to grow more than 15% in the current financial year ending March 31.
The division contributed 9% of Wipro’s IT services revenue of 191.66 billion rupees ($4 billion) for the financial year ended March 31, 2009.
The company, along with the rest of India’s IT sector, came under severe pressure during the global economic slowdown as clients, based mostly in the U.S. and Europe, cut outsourced projects and demanded lower rates.
The mood in the sector is now becoming upbeat, with companies saying they are luring new orders and extensions of existing contracts.
Wipro, along with its peers Tata Consultancy Services Ltd. and Infosys Technologies Ltd., reported strong quarterly results last month, indicating the improving fortunes of a sector that is more exposed to economic developments overseas than at home.
At that time, Wipro had forecast IT-services revenue of $1.16 billion to $1.18 billion in the fiscal fourth quarter, which it said was based on hopes of strong business volume growth.
Mr. Vaidya said the BPO division is not seeing pressure on billing rates as it provides “more work for the same penny” so has been able to meet customers’ demands for an overall reduction of costs.
Mr. Vaidya said that going forward there is enough scope to improve the division’s operating margin, which is currently in line with Wipro’s IT-services operating margin.
The IT-services operating margin stood at 23.6% for the third fiscal quarter ended Dec. 31, according to international financial reporting standards.
Mr. Vaidya said the company is looking globally for an acquisition that will help it expand its domain expertise, although he didn’t elaborate.
He added that the company is hiring at all levels, at both entry and senior management levels, as it expects more business and growth opportunities.
