Rishi Jhunjhunwala

Rishi Jhunjhunwala asked about the sharp increase in overall headcount this quarter, given the outlook for the next couple of quarters, and what is driving it. He also inquired if the restructuring cost booked this quarter is similar to Q1's and sought color on it, and asked about the spike in depreciation and amortization (D&A) and if it's a normalized level.

Answer

Saurabh Govil (CHRO, Wipro) explained that the headcount increase was primarily due to the DTS acquisition, ramp-up of a large deal, and rebadging of people. He noted that attrition was low at 2% and the supply side is confident in managing demand. Srinivas Pallia (CEO, Wipro) stated that the restructuring pivoted on obsolete skill sets, primarily in Europe due to tough labor laws and in Capco, similar to Q1's actions. Aparna Iyer (CFO, Wipro) explained that Wipro assesses intangibles annually and sometimes accelerates amortization, which happened this quarter for an earlier acquisition, but it should normalize. She added that there will be an increased amortization charge from Harman DTS, so the next quarter will show the normalized level.

Rishi Jhunjhunwala from IIFL inquired about the sharp increase in headcount this quarter, given the outlook for Harman DTS revenue and potential weak seasonality, asking for the drivers behind this growth. He also sought clarification on the nature of the restructuring costs booked, comparing them to Q1, and asked about the reason for a spike in depreciation and amortization (D&A) and its expected normalization.

Answer

Srinivas Pallia, CEO, attributed the headcount increase primarily to the Harman DTS acquisition, a large deal ramp-up, and rebadging, expressing confidence in the supply side. He explained that restructuring costs were similar to Q1, focused on obsolete skill sets in Europe and Capco. Aparna Iyer, CFO, clarified that the D&A spike was due to accelerated amortization for an earlier acquisition, which will normalize, though increased amortization from Harman DTS will be ongoing.

Rishi Jhunjhunwala of IIFL Securities Limited asked about the rationale behind the significant wage hike impact and if another hike was planned for FY26. He also questioned if recent vendor consolidation and GCC deals require different upfront investments.

Answer

CFO Jayesh Sanghrajka explained the 100 bps margin impact was a combination of phased wage hikes and higher variable pay, and that it's too early to decide on future hikes. He stated that the new deals do not significantly differ in structure and are not expected to negatively impact cash flow conversion, which remains guided above 100% of net profit.

Rishi Jhunjhunwala pointed out the apparent contradiction between strong, broad-based growth in H1 and a guidance that implies a significant H2 slowdown. He also asked if future hiring will now closely track revenue growth given high utilization.

Answer

CFO Jayesh Sanghrajka reiterated that the company has consistently guided for a stronger H1 than H2 due to seasonality like furloughs and fewer working days, and that this is fully baked into the current guidance. He confirmed that with utilization at the comfort level of 84-85%, there is no significant headroom left, and future volume growth will need to come from net hiring.