Wipro Ltd. ADR Earnings Call Nuggets: Discretionary Spending and Pricing Benefits

Wipro, Ltd. ADR (NYSE:WIT) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.

Discretionary Spending

Joseph Foresi – Janney Montgomery Scott LLC: My first question here is that it seems like we are getting some feedback that perhaps the demand environment has improved a little bit or could improve heading into 2013 but it’s coming after a very soft December. I wondered, if you could talk about what you are seeing in the pipeline, why you feel a little bit better about this here and commentary about discretionary spending?

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

T. K. Kurien – CEO, IT Business and Executive Director: Joseph this is T. K. Kurien. I’d just like to give you a sense of what we are seeing in our customers. In terms of just the environment and I will break up the question into environment, industry and if you would like to have, I will give you a geographic flavor it. But if I look at the environment, what we are seeing is we are seeing the environment kind of improve a little bit from a sentiment perspective. U.S. clearly what we are seeing is if we were sitting in the same place last year and we were 5 on 10 in terms of environment, right now I think we’ve gone up to 7. I guess from the U.S. perspective, the worry there would be the fiscal cliff issue will that (solve), which increasingly we hope it works. But if it doesn’t, then it means that you will end up with a shutdown in which case what the impact would be in terms of sentiment. I think that’s the whole issue. There’s a little bit of uncertainty there in that context. As far as Europe is concerned, we see Germany actually quite strong in terms of manufacturing. To an extent we see demand coming back; it is always there in Germany, but not necessary in the kind of demand that we could easily access, being opening up for us primarily because of skilled shortages. If you look at France, we think it’s a different game altogether. We think it’s going to take some more time. The U.K. continues to be fairly positive. I think it’s kind of tracking the U.S. As far as Asia is concerned, Asian economies which are dependent upon national resources will continue to do well primarily because of – the prices have recently kind of shot up. So, we see Australia doing well. We see the rest of Asia, Indonesia, those kind of countries doing fairly well. If you look at India, I think sentiment is positive in terms of steps that the government has taken, it has not yet been translated into buying that (these things). I think folks haven’t really opened up their purse strings. I think that’s the issue. Overall, if you look at demand itself, if I could break up demand into run and change, the run part of the business we see it under pressure. Discretionary spending we see it in pockets in specific industry. For example, in oil and gas, we see it. In parts of manufacturing, especially industrial manufacturing we see it. In the silicon part, which is a high tech part, I think it’s pretty stressed for us right now. I think in retail banking too we see demand especially discretionary demand, so it’s a little bit of mix effect. I think for us, our performance last quarter and the quarters to come is going to be reflective of, A, the market that we play, B, the portfolio that we have and C, our ability to win against competition. I think that’s a combination of all three.

Joseph Foresi – Janney Montgomery Scott LLC: Just looking at the guidance for next quarter, is that volume based guidance and what drove pricing this quarter and why don’t you expect it to continue just depending on what your answer is on the guidance side.