Wipro - Earnings Call - Q3 23/24 (Media)

Transcript

Moderator (participant)

Good evening, ladies and gentlemen. We thank you for participating in today's conference. I am Neha Rao, and I will be the moderator for the session today. I request everyone to be on mute and turn off your camera until the question-answer session. If you want to ask any question, please choose the raise hand option in the toolbar. Please pin the participant name preview on your devices to view the conference. I will now hand over the floor to Purnima and request her to take it further.

Hello, everyone. Wish you all a very happy New Year. Thank you for joining Wipro's Q3 earnings press conference. We have with us Thierry Delaporte, our CEO and MD, Stephanie Trautman, our Chief Growth Officer, Jatin Dalal, our President and CFO, and Saurabh Govil, President and CHRO. I'd now like to hand it over to Thierry for his opening remarks.

Thierry Delaporte (CEO)

Thank you very much. And good evening, everyone. Thank you for joining us today. First, I'd like to wish you all a happy New Year. At Wipro, we are starting the year with hope and a lot of momentum and purpose. And we'd like to wish health and success to every one of our friends in the media. Across the globe, the new variants of the COVID-19 virus are spreading rapidly. I can't say this was unexpected, but it's a damper. Nonetheless, as I said to all our colleagues at Wipro, mask up, take your vaccine, and let's help stop the spread of this virus. Now, despite the pandemic, we have delivered a fifth consecutive quarter of excellent performance, strong growth in revenues, accelerations in bookings, sustained operating margins, solid operating cash flows. I thank every one of our employees who helped us achieve this.

These results, they reflect the passion, their dedication, and inventiveness. I must say, I was really glad to see that our colleagues have taken the time to attend to their health and well-being while continuing to serve our clients with integrity and zeal. Our revenue growth during the quarter was at 3% in constant currency terms and 27.5% year-over-year. In the first nine months of this year, we have grown at 28% year-over-year. This is nearly six times faster than the average growth rate we've had in the last 10 years. We've been consistently growing at or over 3% for five quarters now. This is because of our improved execution abilities and follow-through on our business strategy that was established, if you remember, in November 2020. Our growth continues to be broad-based across all our key markets, service offerings, and most of our sectors.

We have added also about 34,000 new employees on a net basis in the past nine months. To give you a sense of proportion and pace, we have added in three quarters what took us 11 quarters in the past. Now, looking at the demand environment, the demand environment continues to be robust. Our growth, our pipeline, our order booking, all reflect that. In fact, our pipeline shows a healthy mix of medium and large deals across all our business lines. We also continue to see rapid expansion on small and mid-sized deals, which represents growth in our existing accounts as well as expansion of our market portfolios. Order book, which is, as you know, the best measure of the demand environment, has grown 27% on a year-to-date basis in terms of annual contract value. In fact, our bookings have been the highest ever.

In Q3, we saw a 50% year-on-year increase in the total contract value order booking for deals in the $10 million-$30 million range. What stands out is that our win rate in the market has improved dramatically. For this year, our win rate has expanded 300 basis points. This is, I believe, a reflection of our strategy, the cultural shift we've been pursuing, as well as the services we are now being recognized for. It's also a reflection of our impact on our clients' business. As expected, we are seeing the benefit of Capco's consulting edge in our large deal pipeline. We are now winning in cloud transformation, engineering services, data, digital transformation, and security. Our clients are continuing to place their trust in us to help them turn into digital businesses. On the M&A front, you've seen it.

We have continued to pursue aggressively on our strategy fits. We announced the completion of two acquisitions in Q3. The first one is Edgile, a transformational cybersecurity consulting provider that focuses on risk and compliance, information and cloud security, and digital identity. Edgile is truly recognized by security and risk leaders for its unique business-aligned cybersecurity capability for their deep understanding of the changing regulatory environment and enabling cloud transformation that helps secure the modern enterprise. The second acquisition that we completed was LeanSwift Solutions, a U.S. headquartered system integrator of Infor products whose service capabilities include ERP, e-commerce, digital transformation, supply chain, warehouse management system, business intelligence, and integrations. To be clear, this acquisition will expand the capabilities of Wipro's full-strength cloud services. We're very excited about these acquisitions, and we've welcomed so many new colleagues from Edgile and LeanSwift into Wipro recently.

On operating margin, at 17.6% in Q3, we are ahead of our stated range of 17%-17.5%. These margins were delivered after an incremental two-month impact of salary increases in September 2021 that covered 80% of our colleagues globally and an equity grant for our senior colleagues. We continue to invest heavily in our business across sales transformation, capabilities, and talent. I will now provide some finer details on markets, on service offerings, and sectors. Americas and Europe, our top two markets, grew at 28% and 38% respectively for the quarter in year-on-year terms. In Americas 1, we grew 23% year-on-year, 5.2% sequentially, with all sectors showing strong growth. Communications, media, information services grew 30%. Consumer goods, life sciences grew 25%. Healthcare and medical devices grew 16% year-on-year. Now, in Americas 2, we grew 33% year-on-year with strong growth across BFSI and manufacturing.

The order book in terms of annual contract value grew over 47% year-on-year. This was definitely led by good overall bookings in the bucket of $10 million-$30 million. Now, our European business has delivered an outstanding year-on-year growth of 38%. Germany has almost doubled. Benelux grew 24%. Our U.K. business grew 40% year-on-year. The momentum on deal wins has accelerated this quarter all across the region, and our pipeline has several large deals above the $100 million range for the next quarters. So we are very confident about how they are shaping up. I'm sure you know. You remember where we were with our European business a year ago. So it's a great turnaround story here. Our APMEA market grew at 13% year-on-year. All our major markets are growing sequentially.

Overall, the order booking in TCV terms are looking healthy with 37% year-on-year growth, excluding acquisitions. This should definitely support the growth agenda in this market in the coming quarters. If we look at it in detail, one of the key pillars of our strategy is to grow our existing large accounts and deepen the relationships. Well, our top five customers grew 36% year-on-year, and top 10 customers grew 37% year-on-year. In the last 12 months, we have added seven customers in the more than 100 million bucket and nine new customers in the more than 50 million bracket. This is quite a significant shift, one that we believe will continue. From a service offering standpoint, our iDEAS global business line grew 37% year-on-year. Most of the sub-practices showed a healthy growth.

Our engineering business grew over 26% year-on-year in Q3 and grew at a compounded quarterly growth rate of over 6% in the last four quarters. Our iCORE global business line grew by 17% year-on-year. Most sub-practices grew in double digits on a year-on-year basis, too. Digital operations and platform led the growth with 18% year-on-year. We continue to invest and strengthen our partnership with hyperscalers and industry-leading platform players. We have, in fact, expanded our go-to-market approach with cloud and application partners now, resulting in us driving leading-edge solutions in the market. Wipro is therefore more visible in the market because of this. We are driving proactive solution development and campaigns with our partners on both horizontal and vertical solutions, all of this resulting in an increasing number of multi-partner wins.

Our order bookings, if I look at that, that were a result of going to market together with our partners, grew 40% year-on-year. This is the highest ever. Finally, our cloud ecosystem revenues also grew at an accelerated pace of 30% on a year-to-date basis. Now, let me give you a sense of the kind of deals we are winning, right? We won a strategic ServiceNow implementation engagement from a large Brazil-based oil and gas company to transform their IT processes, increase agility and quality of services to business areas, leveraging Wipro full-strength cloud services. This is a significant ServiceNow implementation in the Latin market. A U.S. headquartered financial services institution has also awarded Wipro a contract to transform the core banking functionality of their retail portfolio.

Wipro will leverage its domain and technology transformation capabilities to bring in design thinking methodologies, improve agility, and increase business value for the client. There are more examples worth sharing, but I'd like to now focus on our biggest success factor: talent. Our focus on building world-class talent remains. We have worked very hard to ensure that scale is never a constraint for growth. We are on course to onboard over 70% more fresh talent from the campus in FY 2022 versus the previous year. Attrition is a reality across almost all industry. You know that. It's been no different for us. I had shared, though, with you last quarter that we expect attrition to slow down only after a few more quarters. However, we now feel more confident of having stabilized our attrition rates in Q3, and we expect it to moderate next quarter.

When we embarked on our transformation in 2020, we had committed to creating a vibrant, diverse, and a more local leadership team. We've made progress on every count. Our leadership has moved closer to clients. The presence of senior leadership in locations outside India has improved by 13 percentage points. It's also quite relevant to note that nearly 50% of our leadership hires have been in the growth office and in the customer-facing global account executive roles, which are strengthening our frontline and sales. Over the last 18 months, we have improved ethnic diversity in our senior leadership by 20 percentage points, and gender diversity in the leadership has nearly doubled. Without a doubt, we have more to do here, but I'm proud of the change we're seeing in Wipro thus far, frankly.

We're committed to being a company that respects diversity, walks the talk on inclusion, and is a beacon for change within our industry. On a more current and urgent topic, I'd like to reaffirm that the health and safety of all our employees remain our topmost priority. With the rapidly spreading Omicron variant of the COVID-19 virus, we remain very vigilant, and so, as a proactive measure, we have decided to close our offices globally for the next four weeks. It is of some relief to us that 90% of our employees globally are now vaccinated with one dose of the vaccine, and over 65% are fully vaccinated with the recommended two doses. Our plans to return to office, even in a hybrid model for fully vaccinated employees, will be calibrated in the context of the evolving situation, keeping both our employee safety and client preferences in mind.

That said, we're continuing, obviously, to service our customers with dedication and agility, as always. Staying with topics of great urgency, our sustainability efforts have continued with great momentum. Wipro has been included in the Dow Jones Sustainability Index again for the 12th time in a row, a testament to our consistent ongoing efforts in this area. Climate change and our ecological and carbon footprint is something we take very, very seriously. Finally, onto our outlook for the next quarter, we have guided for a revenue growth of 2%-4%, which will translate into a full-year growth of 27%-28% year-on-year. To summarize, the demand environment continues to be robust, and our growth path over the last few quarters reflects this.

We will stay on course with the strategic priorities I had shared with you in November, and I'm confident of sustaining the growth momentum we have so far displayed. On that note, let me welcome Jatin for his comments on the financials. Jatin, over to you.

Jatin Dalal (CFO)

Thank you very much, Thierry, and thank you very much, everyone, for joining us. I'll be brief. Our group revenue growth is 28.5% year-on-year, which is very strong by any standard. Our operating margin has remained stable. Our ETR has, in fact, improved. We were 22% in quarter two. We are 21.3% in quarter three, which means that our EPS has grown by 4.2%. We have done an excellent job on DSO and working capital management. Our operating cash flow is 101% of our net income.

We have $4.6 billion of gross debt and $2.8 billion gross cash, and we have $2.8 billion of net cash on the balance sheet. We have $3.4 billion of forex hedges as of December end, and our realized rate for quarter three was 76.12. We have declared an INR 1 dividend as an interim dividend for this fiscal as part of our press release. We have guided for 2%-4%, as Thierry spoke about, at the constant currency exchange rates which are mentioned in our press release. We'll be very happy to take your questions.

Moderator (participant)

Thank you. We will now begin the Q&A session. Participants are requested to switch on your video and unmute yourself at your turn. In the interest of time, request participants to ask a maximum of two questions. Varun, please introduce yourself and go ahead with your question. You can switch on your video and unmute yourself to proceed.

Hi. Am I audible?

Thierry Delaporte (CEO)

Yeah, Varun. Yes. Yeah, Varun. Go ahead.

Yeah. Thank you. Thierry, congratulations on a good set of numbers. I have a couple of questions. The first question being 2.3% reported quarter-over-quarter growth. Is it a little soft? Is it something of a worry, or was it, as per the management's earlier expectations, or was there some seasonality over here? That's the first question. The second question was, you'll be growing full year anywhere between 27%-28%. If you could just split what will be the organic growth contribution and the inorganic growth as part of this. A related question, Thierry, with regards to this is, how do we really see growth for FY 2023?

I'm not asking for any numbers here, but with all the initiatives you've undertaken as of now, would it be fair to assume or base our calculations that at least the organic growth in FY 2023 would be at par with what Wipro is doing in this year-end? Saurabh, just one question. The attrition rates have gone high. It's gone up, and attrition continues to be a little bit of an elevated challenge for almost all IT service companies. In the last four quarters, almost 80,000—your company has seen almost 80,000 new employees coming into the company, which translates to almost about a third of your employees with less than 12 months of experience. How much of it is a challenge for a company like Wipro? That new employees coming into the company, do they really understand the Wipro culture?

What measures you are taking, if at all, that Wipro continues to be an employer of choice and employees continue to remain with the company? That's all from my end. Thank you.

Jatin Dalal (CFO)

A number of questions, Varun. Sort of one near four questions. Thierry, please go ahead.

Thierry Delaporte (CEO)

I was going to say, Varun, thank you. I counted a little more than two questions, but we'll try to cover all of them, okay? So the first one is on the growth for the quarter. You ask about 2.3%. It's 3% constant currency term. It's right in the middle of our guidance to 2%-4%. So frankly, you ask if it was a surprise, it's in the middle of our guidance. We could not be more satisfied with this performance for the quarter at 3%.

Frankly, if you reflect on the 2%-4% guidance, this is a reflection of the trend. That's the level we've been guided to for the last several quarters already, and that's the level where we feel comfortable seeing the demand and the performance on the sell side. You asked the impact of M&A. We are not necessarily disclosing M&A impact, but I think you have all the elements of basically Capco and so on on the 27%-28% year-on-year from Wipro. Organic growth for fiscal year 2023, or actually growth for fiscal year 2023. As you know, also, we get this question all the time. We guide for the coming quarter. So I will stick to the rule or to our methodology. But what I can say is that we are not seeing fundamental change in the market. The market continues to be very strong.

Otherwise, we would have not had such a strong quarter in bookings. And so from our standpoint, that's why we continue to communicate and guide on 2%-4% growth for the next quarter. That's our current pace.

Saurabh Govil (President and Chief Human Resources Officer)

I'll take it forward, Thierry. Yeah. The last question. So Varun, you're right. It's heightened attrition across industry. There is a big gap between supply and demand. There's a supply deficit, as you know. And as Thierry alluded to in his speech, that we had anticipated that it'll take a few quarters more for us to bring it under control. We seem to be looking at things stabilizing, and the rate of growth has come down significantly of attrition, and we believe in Q4 it'll get moderated. So that's one. Having said that, it is at heightened levels, and it is an area of concern.

We would have loved, as we had started in the beginning of Q3, to open our offices and have our hybrid work, and people could come together because, as you rightly said, cultures get created when people come together, and given the circumstances, it is not possible right now, but we are working very, very closely on this issue because this is going to be the future of work. This is how hybrid work will happen. How do we stay connected? We are making big investments. We are making investments and looking at driving employee experience, employee engagement. In fact, senior leaders are joining to just drive that as an agenda for the company because that's what's going to impact us in the future, and the talent war, if it's won, we'll win the war in terms of the market.

So we're very focused on this, and we are very confident that supply will never be a constraint to manage our demand. We have seen that. Last three quarters, we have added 10,000 people each every quarter, and we seem very confident going forward.

Moderator (participant)

Swati, I request you to unmute yourself, introduce yourself, and ask your questions.

Hi, Thierry and others. I just have a couple of questions. One is, I wanted to get more clarity on Varun asked about the 2.3% growth he had witnessed. So if you look at the growth, Wipro had been growing at 6.9% in the last quarter, and the previous quarter it was 12.2%. And also, if you can, I know December is a seasonally weak quarter, but can you throw a little more light on the decline in momentum that Wipro is seeing? Are there any particular factors that impacted it?

That is one good story. And if you can also share the total ACV value, which you had said had increased by 27%. If you can share the value. I have questions to Saurabh too, but once Thierry asked, I just have one question for Saurabh.

Thierry Delaporte (CEO)

Swati, I'll take the first question, but the second one, I don't think I understood it. Sorry, the line is not perfect. I didn't really hear what you said.

The total annual contract value, if you can share the annual contract value, which you had said it has increased 27% year-to-date.

Yeah, absolutely. So on that one, total annual contract value, $2.85 billion for the quarter performance. So again, on the momentum, I mean, for sure, for the last few quarters, we've guided 2%-4%.

It means sometimes you can go a little up, a little down, but we have a range, and that's how we are guiding. Here, we are right in the middle of the range. It's true that in quarter three, you have furloughs, you possibly have less working days, but it doesn't matter. The reality is that we have the same level of momentum, we have the same growth. We see more or less the same response from the market, if you like. So basically, for us, we don't see it as a slowdown. It's just we're keeping the momentum of the last quarters.

Okay. And Saurabh, the hiring. So are you stepping up the hiring again in the light of the increased attrition we are seeing? 17,000 freshers is what you had shared last quarter. So are you increasing the number for FY 2022?

Saurabh Govil (President and Chief Human Resources Officer)

Swati, as you know, freshers need to be planned. We are going ahead at 70% more freshers will be added in FY 2022 as compared to last year, last fiscal. For FY 2023, we will be going with 30,000 freshers. It's another significant shift from what we're doing in FY 2022. We continuously would be making sure our supply is not a constraint to manage the demand environment.

Also one more, Thierry, on the attrition front. I saw that Wipro had rolled out ESOP, the restricted stock unit for employees. Is this an effort to change the employees? Could you share more on the effort Wipro is taking to keep these employees?

Thierry Delaporte (CEO)

Swati, the stock unit equity which we shared is for senior leadership. It is done annually, so it's nothing which is out of cycle.

It's planned every year in December, and that was done in the quarter. That's the plan. More efforts you're doing, maybe the wage hikes? Can you talk about that? We have done. As I said, we have done just to give you three points, and I know we'll give you quickly. Apart from everything, as I said, there is a supply deficit from our demand and there's a gap there. But we are doing whatever it takes. We have had a second round of salary increases for 80% of our employee base in this current quarter. We have done three rounds of promotions for 80% of our employees in the last 12 months. So every four months, we have actually given out promotions. We're creating opportunities because we could do it because we are growing fast. There are opportunities of people to grow.

So we're making sure we are able to do that. We're continuously investing in freshers and upskilling. We're able to try and move people to areas which they want to work in. So there are a lot of things which we are working towards to make sure. And that's why the outcome of that is you're seeing is that as we feel more confident of a much more moderated attrition in the coming quarter. Thank you, Swati.

Moderator (participant)

Sajeev, please introduce yourself and proceed with your question.

Sajeev George (Analyst)

Yeah. Hi. Good evening, gentlemen. Sajeev here from BloombergQuint. Just want to get a color of the TCV growth which we are seeing. If I'm wrong, Thierry mentioned that the total contract value was $2.85 billion in the third quarter. How do you see this pipeline? And do you see a little bit of sluggishness coming into this pipeline going forward?

Thierry Delaporte (CEO)

No. 2.85 is ACV. We do not see, Sajeev, any sluggishness, actually. The performance on bookings, on order books, has been strong in every of our market units, in every market, in every service lines and sectors. We actually see the opposite. We're seeing a very strong demand. Another indication, Sajeev, of that is the evolution of our pipeline. Our pipeline, which are deals that we should be able to close over the next quarters, is the strongest it's ever been. Finally, our win rate is improving, as I said, versus what we had in the past. More pipeline, a better win rate should continue to sustain nice performance on bookings.

Sajeev George (Analyst)

Do you see pressure going forward with respect to supply side? You are hiring a lot in Q4 and FY 2023. But wage cost, do you see that going up as going forward?

Is there going to be more pressure on the margins? And will that require you to do further wage hikes as you go into Q4 and subsequent quarters?

Thierry Delaporte (CEO)

So there's several points in your question, Sajeev. The first one is, is there a pressure on the supply side? I think it's clear. Yes, there is one in the market today, obviously, between attrition and the fast growth. By definition, we are hiring a lot of people. And so there's a certain high activity in that space. Would it help if there was lower attrition? Definitely, yes. And that's why we're welcoming the fact that attrition will moderate in Q4. And the fact also that we feel we have a better grip on this attrition. Is there pressure on the cost side? I mean, it's clear that hiring lateral is usually more expensive.

But we are doing a lot of activities, and we have onboarded a lot of freshers, 70% more than last year. I can't even tell you how much more versus two years ago. But so I think it's a way to balance. So net, net, I think we should be able to maintain, and therefore, the feeling that we can sustain our margins as well.

Sajeev George (Analyst)

Okay. Thank you.

Thierry Delaporte (CEO)

You're welcome.

Moderator (participant)

Kushal, please unmute yourself and proceed with your question. Kushal, please introduce yourself and go ahead with your question.

Thierry Delaporte (CEO)

May I? We can move to the next person. Kushal is not there.

Moderator (participant)

Sure. Uma Kannan, you can introduce yourself and proceed with your question.

Uma Kannan (Journalist and Principal Correspondent)

Yeah. Hello. Good evening. I'm Uma Kannan from The New Indian Express. I have a couple of questions. I could see your top markets have performed very well in this quarter compared to last quarter.

So what are your plans for these markets in the coming quarter as well as in FY 2023? Also, in terms of total deal value, what are your plans going forward? And what can we expect in terms of the deal price?

Thierry Delaporte (CEO)

So the first question, if I understood well, was on the market, on the growth in the markets, right?

Uma Kannan (Journalist and Principal Correspondent)

Correct.

Thierry Delaporte (CEO)

Okay. Understood. Okay. So what should we expect? America will continue to grow solidly, Kushal. Europe is growing and will continue to drive growth. In Europe, we see growth in every market. And in Asia-Pac, we have been growing well as well. Some markets like the Middle East where we hadn't grown, and we are starting to grow again. So from a geographical standpoint, I would say, and Latin America is a growth area for us as well. So all these markets are growing.

If I'm looking at sectors now, I would say definitely banking and insurance are growing. Energy and utilities will resume growth and will accelerate. Manufacturing is doing well. There's clearly a recovery of the manufacturing sector post-first waves of the pandemic. And we see growth as well in healthcare and in consumer. So across sectors as well, frankly. The second point, I missed that. Sorry.

Uma Kannan (Journalist and Principal Correspondent)

So what can we expect in terms of the deal wins in the coming quarter as well as in FY 2023? What kind of deal wins that we can expect?

Thierry Delaporte (CEO)

Okay. Stephanie, you want to take that one?

Stephanie Trautman (Chief Growth Officer)

Sure. Thanks, Uma. We see a very robust pipeline of deals of all sizes. So large deals, some mega deals, as well as, as Thierry mentioned earlier, medium and small-sized deals. And we think that that trend will continue to have a healthy mix.

You'll see that we're focused on the market and driving value with digital transformation and cloud transformation. And we continue to invest heavily in our teams that are out in the markets with our clients and with our capabilities and doing that with our partners. So I think we'll continue to have a robust pipeline. I think it'll represent all types of deals. And I think the value that we'll deliver in our solutions will help us achieve better pricing in certain instances as well where clients are looking for more value and scarce talent. So we're very excited about the pipeline and the prospects for Q4 and next year.

Uma Kannan (Journalist and Principal Correspondent)

Thank you. Thank you.

Moderator (participant)

Pramatha, please unmute yourself, identify yourself, and proceed with your question. Hi. Hello.

My query again, a follow-up to the last query, would be since you mentioned that pricing is improving, can you give us some color in terms of what offerings or what areas within your portfolio have been able to kind of basically for which clients are kind of open to increasing to better pricing? And also, a question for Saurabh would be in terms of attrition, where exactly is the leakage happening? We have talked about all the measures that are being put into place, but what area, what set of employees? Is there any has that been identified where we can plug the leakage, basically? So yeah, these two queries. Thank you.

Thierry Delaporte (CEO)

Romit? Yeah. That's it. Yeah. Romit, I'll go ahead with the first one. So I think we are definitely seeing a slight positive, I would say, step on pricing. And that is reflected by both factors.

The first is the kind of work that we are doing, the kind of value we are delivering to customers. So that is definitely a step up, a secular movement towards that. And the second is also regarding the sort of scarcity of certain skill sets in the marketplace and Wipro's ability to bring on board at the right time, at the point of impact to our customers. And these two really are, I would say, the key drivers for the slight, as I said, positive step that we have seen in the pricing in the last few months.

Saurabh Govil (President and Chief Human Resources Officer)

And to your second question on where are we seeing the pockets, the pockets are in high-growth areas. So if I look at on data, on cloud, on practices like Salesforce, engineering, these are the areas where we have these high-growth areas and where we are seeing attrition.

The experience where we are seeing is between three to eight years is where we are seeing the maximum attrition of people in that experience pocket. So these are the two pockets which we are trying to focus on. And we are trying to see that if we can build a good pipeline of well-full-stacked trained freshers to take up this period of time, both from an attrition growth and cost perspective, it's a plus for the organization. So that's our endeavor as we move forward in the coming quarters. Just to follow up to that, Saurabh, what part of you had mentioned, I think, around 25,000 freshers that were planned for this year. So what share of that has already been onboarded? We had said 17,500 would be onboarded in this fiscal. We have already onboarded 17,000.

So we are looking at a very few numbers in the last quarter there because the entire process gets over in the first, and we want to onboard everyone. For the next year, we are looking at 30,000+ freshers. And it's a cycle, as you know, people have to pass out and then come through. That's what we will see the numbers.

Thank you.

Moderator (participant)

Sunita, please identify yourself and proceed with your question.

Sunita Nappal (Analyst)

Hi, gentlemen. My name is Sunita Nappal. I'm from Informist Media. Wish you a very happy new year. Maybe my first question to you is that if you look at the deals that you had so far in this year, basically, you've clocked $1.9 billion. And if I take the run rate of every quarter, roughly about $600 million. And we will be finishing the year with $2.5 billion. That's kind of the guidance this year.

Last year, we saw a substantial bump up in last two quarters, which was largely because of the two mega deals that were bagging each other quarter. Are the mega deals becoming more elusive in this year, or there are some in pipeline that you are hopeful that you will be bagging? That's my first question. I'll ask the second question after you answer it.

Thierry Delaporte (CEO)

Okay. Okay. So it's actually a very good question. The fact that indeed, exactly a year ago, we are closing Metro deal. And this, which was definitely a mega deal, a $1 billion deal, the performance in itself this year or this quarter that has been uniquely strong, the strongest ever, actually has been done without a mega deal. So that's interesting. We haven't lost any mega deal in the quarter.

We actually have some large deals or very large deals in the pipeline for Q4 and Q1 2023. So we are very looking forward to it. There's a possibility, but I might be wrong, Sunita, more time to investigate and understand. But there's a possibility that some because we are seeing it in our relationship with our clients. In some cases, some of our large deals are coming in chunks as opposed to one just because of the necessity to drive speed and agility from the client. But for us, we take it the same way. Whether we have three large chunks adding up to a mega deal or a deal signed once is the same. It's really depending on clients' expectations and way of doing things.

Having said that, it's true that in our performance this quarter, there was more, what I would say, some large deals and a lot more than ever, medium-sized deals. If I can go ahead with the question, Sunita.

Sunita Nappal (Analyst)

Yeah. If I can follow up with the question, are you seeing inclinations from the clients willing to pay more since you're facing supply-side issues? And you talked about the speed is of essence. Are the clients willing to pay you a higher price if you are giving them early delivery or however you define it?

Thierry Delaporte (CEO)

I would say yes. We are seeing it in cases. Regularly, we see because you're absolutely right. Often, the client's not so much about rates. It's also about, can you do it today? Are you able to respond to this expectation and turn into execution now?

The impact of transformation for our clients are such that it's more about reliability and speed than it could be potentially about cost. So we are seeing it. We are taking the opportunity to go back to clients and discuss with them rates when we feel that this is what needs to be done.

Sunita Nappal (Analyst)

Okay. If I can ask last question, other than attrition, what is keeping you awake at night? Any worry points or the soft spots that you see in the near term that could derail the growth story?

Thierry Delaporte (CEO)

Sunita, frankly, I tell you one thing. If I had to think about something that keeps me awake, I particularly reacted to the new wave of COVID.

And that's why we decided to ask all our employees to stay home and not travel and not go to the office unless necessary because I still remember what has happened, in particular in India, in the April to June timeframe, and I don't want them to leave it again. And I don't think our clients or employees want it either.

Moderator (participant)

We have just enough time for one last question. Varun, would you like to go ahead with your question?

Hi, Thierry. If I can just ask one last question here. Thierry, Wipro has acquired a lot of companies under your watch. How do you really see the integration risk? And if I have to ask you, if you could share, how exactly is Wipro making sure that much of the companies which it is acquiring continues to give it all the requisite benefits and there are no integration challenges?

Thierry Delaporte (CEO)

Thank you. Yeah. Yeah. Varun, so good point and good question. Thank you. I would say yes, you're right. We are doing regularly acquisitions when it makes sense and will continue. It is definitely part of our strategy. I think it's always done with a lot of it's more strategic than opportunistic. We really want to focus and build patiently and in an organized fashion our machine and reinforce our position in the key areas. My view is that as we are doing more acquisition, we are getting better and better. Unlike people would believe that you need to do only a few acquisitions because it's difficult. Actually, we are learning, and I'm sure my colleagues could speak about it too, that now we have a PMI. So we have a PMI team. We have a very structured process.

We have systematic reviews on multiple fronts, whether it's on the legal front, on the tax front, on the IT front, on the HR front. I think we have all these processes, but we also have now it's a systematic part of our reviews of our management routine to review the integration of those entities, and I tell you one thing, I'm very satisfied with the way we've integrated those companies. We do not have more attrition in these entities than what we see in our own business. We see that we are going to hit and very often should deliver more than what was in our synergy plans and so on, and so I think it's just becoming more part of our DNA at Wipro.

Moderator (participant)

We did one last question. Shivani, would you like to go ahead with your question?

Yeah. Hi. Can you hear me?

Thierry Delaporte (CEO)

Yes. Yes.

Good evening, Thierry. Thierry, just a simple one question. What has been the inorganic growth rate for this quarter? If you could share that. Saurabh, and a quick follow-up to the numbers that you shared, 30,000 for FY 2023. For FY 2022, if you could just reiterate the fresher hiring and also the total lateral hirings that the company has done. Thank you.

Jatin Dalal (CFO)

Yeah. So Thierry, I'll go ahead with the first one. And before I respond on inorganic, let me clarify a point which came up earlier. We have grown 3% sequentially versus our guidance of 2%-4%. And that is the number that we should look at because that's the operational work that has happened. So if you are 100, you become 103. Operationally, you deliver so many projects to our customers and converted so much revenue.

Sometimes, because of the exchange rate movement between the previous quarter and current quarter, you would see that your revenue falls by a particular number. And that impact is also reflected in the realized revenue, which is 2.3%. Interesting is Q3 last year, we had 0.6% higher, which was a gain on Forex. This quarter, we have 0.7%, which is loss on Forex. But my request is to evaluate our performance, look at the constant currency number as true reflection of execution on the ground. Your second question on the inorganic versus organic, as Thierry alluded to in the beginning, that was part of our guidance. And as we integrate well, sometimes the revenue comes from the core entity. Sometimes the revenue comes from Wipro. We see it as a single stream. The more we distinguish, the more divide we create.

So after a couple of quarters, we see one revenue stream, and that's what we have shared with you.

Saurabh Govil (President and Chief Human Resources Officer)

On freshers, 17,500 for FY 2022, 30,000 for FY 2023. Those are the numbers which you're looking at. On laterals, it is dependent on demand. I again repeat, supply side is stretched, but that will not be a constraint to support the demand which we have.

Okay.

Moderator (participant)

With that, we'll close the press conference. Thank you so much for joining.

Thierry Delaporte (CEO)

Thank you very much, everyone.

Jatin Dalal (CFO)

Thank you very much. Thank you. Thank you.