Wipro Ltd (WIT) 2022 Q1 法說會逐字稿

Ladies and gentlemen, good day and welcome to Wipro Limited Q1 FY '22 Earnings Conference Call. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Ms. Aparna Iyer, Vice President and Corporate Treasurer. Thank you, and over to you, Ms. Iyer.

Thank you, [Martha]. A very warm welcome to our Q1 FY '22 earnings call. We will begin the call with business highlights and overview by Thierry Delaporte, our CEO and Managing Director; followed by a financial overview by our CFO, Jatin Dalal. Afterwards, the operator will open the bridge for Q&A with our management team.

Before Thierry starts, let me draw your attention to the fact that during this call, we may make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act 1995. These statements are based on management's current expectations and are associated with uncertainties and risk, which may cause the actual results to differ materially from those expected. The uncertainties and risk factors are explained in our detailed filings with the SEC. Wipro does not undertake any obligation to update the forward-looking statements to reflect events and circumstances after the date of filing.

The conference call will be archived, and a transcript will be available on our website. Over to you, Thierry.

Aparna, thank you. So hello, everyone. Thank you for joining us today. Those of you joining in from India, many of you may be coming out of a very difficult period during the second wave of the pandemic, so I wish you well. And with all humility and hope, I believe the future holds better days for everyone around the world. This is not an experience that we can write off lightly. Many of our colleagues and their loved ones have experienced grief, stress, suffering. Over the past 15 months, Wipro has stepped up in every way possible to support those affected.

Our COVID task force led by Saurabh and our COO, Sanjeev, have done everything possible for our colleagues. We ramped up efforts around oxygen provisioning, COVID testing. We established isolation centers in many Indian cities. We partnered with hospitals and managed hospital admissions for many of our employees who are stationed on site with family members in India, Wipro's task force have managed the hospitalization and care of their family.

Globally, we are continuing to offer COVID care sick leaves and enhanced medical insurance coverage. Unfortunately, we lost some of our colleagues to the virus during the second wave. In some cases, we have a spouse or such an employee has sought jobs with us, we have treated it as a priority, and we've offered them a relevant role in Wipro. And we recognize the emotional toll on people, so mental health resources are being made available for our colleagues around the world. Presently, about 56% of our employees in India are vaccinated, and we will continue to provide vaccination facility in our campuses.

But more broadly, for our community, we continue to operate a dedicated COVID hospital in our Pune campus, which has treated almost 6,000 patients so far, providing some relief to the city. And the small things that we were able to do has gone a long way to bring relief. Now before leading us through this extraordinary time, I want to thank my leadership team for steering our people and our business and every one of our employees for being such strong custodians of the spirit of Wipro and for giving us the best. This has definitely made Wipro stronger, more resilient more dependable company than ever before.

This actually reflects in our results in the last few quarters and also in what I hear from customers. They say they are seeing a more innovative mindset and operational agility from Wipro's team. Clearly, our new business strategy, simplified operating model and gold approach is starting to pay off. Our Q1 performance, therefore, continues to show considerable expansion and buoyancy. Our revenue growth trajectory has continued to show sharp improvements. Bookings have remained healthy, and our execution showed remarkable perseverance.

Let me share now some specifics. Our revenue growth during the quarter was 12.2% in reported terms and 12% on constant currency terms, which is well ahead of the top end of our guidance range, both on an overall basis and excluding CAPCO. This translate into a 21.3% year-on-year growth in constant currency terms. Not only is this the best ever quarterly result, Q1 also saw us report the highest organic sequential growth that we've delivered in 38 quarters. This tremendous growth was really led by strong volumes across almost all markets across all sectors and service offerings. Our billable head count addition during the quarter, therefore, was the strongest ever.

Revenues from our latest acquisition CAPCO, was also ahead of the guidance.

(technical difficulty)

Mr. Delaporte, this is the operator. We can't hear your audio, sir, at the moment. Ladies and gentlemen, we would request you to please stay connected while we check the line for the management.

Ladies and gentlemen, thank you for patiently waiting. We have Mr. Thierry Delaporte reconnected. Over to you, sir.

Thank you very much. So sorry to all of you. No, I've heard that I lost you actually a couple of seconds before I realized it, so I'm going back to the specifics. So first is our revenue growth. during the quarter, was 12.2% in reported terms, 12% on constant currency terms, which is well ahead of the top end of our guidance range, both on an overall basis, but also excluding capital. This translate into a 21.3% year-on-year growth in constant currency terms. Not only is this the best ever quarterly results, Q1 also saw us report the highest organic sequential growth that we have delivered in 38 quarters. This tremendous growth was led by strong volumes across almost all sectors, all markets and service offerings. Our billable headcount addition during the quarter, therefore, was the strongest ever. Revenues from our latest acquisition, CAPCO, was also ahead of the guidance.

Now looking at the environment. The demand environment is robust and the quality of our overall pipeline is better than before. Our growth [channel] addition during the quarter was strong, and we continue to increase our participation in deals in the marketplace. We closed 8 large deals, resulting in a TCV of over $715 million. Surely, all markets are witnessing solid demand. But in the Americas 1 market, large deal wins were exceptionally strong. At this point, we are seeing a good mix of large-, medium-sized and smaller deals.

At the announcement of acquisition of CAPCO, we have shared with you that the long-term sustainable operating margin band post the dilution of CAPCO was to be between 17% and 17.5%. During the quarter, we have delivered margins well above that range at 18.8% after consolidating 2 months of CAPCO results and significantly investing in talent and supply chain. We have added over 12,000 employees on a net basis, which is 80% of what we've added in all of last financial year and the highest in the last decade.

Now let me add some color to the underlying business performance. All numbers are in constant currency for ease of reference. There is significant traction across all our markets, and our growth is broad-based. The top 3 markets grew double digits on a year-on-year basis even without CAPCO. In Americas 1, we grew 18% year-on-year. Most of the sectors have seen strong traction with health and consumer verticals leading from the front.

In Americas 2, we grew 24% year-on-year, driven by a strong volume increase. CAPCO obviously has further elevated this performance. The demand in the BFSI sector has remained strong across all service offerings this quarter. The high-tech business grew by 26% year-on-year, while our manufacturing business is making a recovery slowly.

Our European business has delivered a year-on-year growth of 32.5% on the back of several large deal wins as well as the CAPCO acquisition, U.K., Southern Europe and Germany led this growth. Our APMEA markets grew moderately at 0.8% year-on-year, and we are now seeing improved environment in Australia, New Zealand and Southeast Asia -- the pipeline in these markets are healthy and growing.

From a service offering standpoint, our IBS global business line grew by 18.3% quarter-over-quarter and 25.3% year-on-year. Most of the subpractices showed a healthy growth. We are seeing increased demand in new age offerings like cloud transformation, the shift to cloud is unmistakable. We announced a number of cloud-related wins in different industries and geographies in the last few months. And to further our growth and commitment to clients and hyperscaler partners, we will be making a significant announcement about our cloud business in the coming weeks, which I encourage you to look out for.

Our iCORE global business line grew by 3.7% sequentially and 15.9% year-on-year. Both of our large-scale practices, infrastructure services and digital operations grew in double digits on a year-on-year basis.

Our top 10 customers grew 13.4% Q-on-Q and 17.9% year-on-year in constant currency terms. We added 2 customers to the over $100 million account category and 2 new customers in the over $50 million account category.

Now let me give you a sense of the kind of deals we are winning. First, we secured a multiyear, multimillion dollar contract this quarter from a U.S.-based health care company to consolidate the entire on-premise and cloud infrastructure operations as well as end user services using intelligent automation. The consolidation will create attractive opportunities to streamline operations, enhance user experience and ease the application portfolio migration to cloud by using the digital-first approach. Second, a leading European automobile manufacturer. As the world lead us a contract to transform and modernize their Internet and cloud security access, so they can meet the requirements of remote working. Our solution will provide protection from advanced cyber threats, enhanced security compliance, protect corporate data leaks, reduce cost and provide scalability.

Another example, a leading U.S.-based distributor of plumbing supplies has selected Wipro to support their cloud transformation journey by embedding quality engineering in the development life cycle, encompassing CRM implementation, data migration and legacy applications. Additionally, Wipro will provide managed services for cloud ERP covering multiple business functions and resulting in improved business agility and customer experience across more than 1,400 store locations.

As most of you will know, we completed our acquisition of CAPCO at the end of April 2021. Over the last 2 months, we have made sure that they are gradually inducted into Wipro and start to feel at home. While these are early days, obviously, we continue to build good momentum on our joint go-to-market efforts. Not surprisingly, the synergy pipeline is shaping well, and we have started seeing some early wins. For example, we have the joint consulting win with a leading global payments provider where we will create a migration framework for 950 regional banks and merchants to move to a new digital platform for debit cards. We'll continue to announce more such wins for sure.

And finally, onto our outlook for the next quarter. We have guided for revenue growth of 5% to 7%. Even at the lower end of this guidance, we will cross the $10 billion annual run rate of revenues, which we are very excited about. While we don't guide for full year, you know that, the Q1 performance and the Q2 guidance sets us up for well ahead of double-digit growth for the full year, even excluding CAPCO. While sharing with you our new strategy last year, I had said that talent will be a critical success factor. This pandemic has overturned [solid] notions of how organizations traditionally approached talent engagement and development. The dramatic shift to a remote working environment has made labor across all sectors and markets more mobile and liberated. Therefore, higher attrition had become a universal issue. Wipro acknowledges this and is adapting quickly. We have doubled down on increasing intake from campuses across the world as well as reskilling our existing workforce. We will onboard 33% more freshers in FY '22 versus the previous year. We also intend to onboard 6,000 freshers in Q2 itself.

Growth is our priority, and we will ensure that talent supply is not a constraint to our ambition. In the short term, we will experience some inflationary pressure in people cost. We've announced a salary hike for 80% of our employees effective September 1, the second hike in this calendar year.

Now to summarize, we are pleased with the sharp improvement in our growth trajectory, and we are optimistic about building on that momentum in the remaining quarters of the financial year.

On that note, let me hand over to Jatin for his comments on the financials. Jatin, over to you.

Thank you, Thierry. Good evening, ladies and gentlemen. Thank you for joining our call. I'll summarize the financial performance. We have grown 25.7% in reported terms from Q1 of last year. Our operating margins are 30 basis points lower at 18.8% compared to Q1 of last year. We had a certain closure of audits in our taxation matters in quarter 1, whereby our tax rate for quarter 1 is 16.1%. Overall, our net income grew 35%, and our EPS grew 41%.

Let me talk about cash flows. We have managed the quarter well from DSO standpoint. We have improved it by 7 days to deliver a DSO of 68 days in quarter 1. That has helped us deliver operating cash flow at 104% of our net income and free cash flow at 90% of our net income. We had $4.1 billion gross of net cash at the end of quarter 1 and $2.6 billion of cash net of debt at the end of quarter 1.

I will now speak about our ForEx performance. We had a good realization of 74.75 in quarter 1. We have $3.4 billion of hedges at the end of quarter 1. As Thierry mentioned, we have guided for 5% to 7% sequential growth in the currencies that are mentioned on our press release.

We'll be very happy to take your questions from here. Thank you.

(Operator Instructions) The first question is from the line of Sudheer Guntupalli from ICICI Securities.

Congrats on a good quarter. My first question, Thierry, on the health BU, across the top 5 Indian companies, Wipro perhaps had the strongest footprint in health care vertical even before the onset of COVID. And over the last 4 to 5 quarters, this vertical has been doing quite well for most other players, given the ad hoc work companies have been doing in areas like contact tracing applications or vaccine logistics management, et cetera, et cetera. However, for Wipro, this vertical has been quite soft over the previous several quarters, including the current one. Any color on this as to why this is the case? And what is the outlook going forward?

You know, when we were looking at the performance in sales for the quarter, it turns out that the -- one of the best performing quarter in sales has been the health care sector. So I think we have a nice position. We are showing a little lower growth than some other sectors. It's clear, it's in revenue, 2.6% growth quarter-over-quarter. It's 10% growth year-on-year from the whole health business. There is a nice improvement in America, in particular. So I think our ambition remains the same. We'll continue to invest in this sector. It's one of our strategic sector, and we'll continue to get stronger in this sector. But we are back into growth mode in health care.

Sure, Thierry. And my second question, if I look at the guidance, excluding the impact of CAPCO and Ampion, growth guidance for the September quarter may likely be in the range of 1% to 3% in constant currency terms. This appears a little muted, especially in the context of the demand momentum we are talking about. Any thoughts on this trend? Are we being a little conservative here? Or are we foreseeing some headwinds at this juncture?

You're talking about Q2 now?

Yes.

Okay. No, no, we are not seeing any headwinds. Actually, we continue to grow well, and we continue to perform well. And I don't -- I'm not sure your math is accurate, to be honest, frankly. I think CAPCO will continue to grow. They've grown nicely in this quarter, they continue to grow the next quarter. But the -- what we call the business before CAPCO is going to continue to grow well as well. So it's not going to be a 1% to 3% growth the way you see it. It's going to be more.

Sure. Jatin, any color on that? What would be the organic growth guidance for the next quarter?

So Sudheer, we are not breaking it out, but Thierry's commentary is accurate from the way we see it. We will -- we see strong traction both in CAPCO as well as organic or without capital numbers. And MPN is not even completed yet, Sudheer. We will complete it during the course of the quarter.

The next question is from the line of Sandip Agarwal from Edelweiss.

Congratulations for an excellent quarter and very...

Sorry to interpret you Mr. Agarwal, your voice is breaking up, sir.

Can you hear me now, please?

We can hear you, but your voice is not clear. It's breaking up. May I request you to move to a better reception area, maybe it might help.

Yes. Sure, sure. (inaudible) should be better.

It's better at the moment. You may go ahead.

Thierry, I have a (inaudible) question and I'm not asking for a near term because we are seeing a big turnaround in the industry. So I want to know 2 things. Since you have joined, what is the change in your time line of -- when you came in, how much proportion of your time you were spending in stabilizing the operations? Building the team? Making the strategic changes? Choosing the right path of growth? And building customer delivery and experience versus now? So how much of those times you have been able to curtail and start focusing on growth, sales engine and marketing? Or you are still in the same -- you're spending your time in the same proportion as you were when you joined? That is number one.

So basically, I want to understand that how much of the teams have been stabilized since you have joined? And how much more time you will take to stabilize before you start 100% focus on growth, growth and growth? That is number one.

And number two, I wanted to know is that -- we are in a situation where probably now our country is in a monopoly situation. And what I mean by monopoly is single monopoly in fact, where there is no competition virtually outside India to execute software services, although there are a few companies which are existing, but they are also dependent on manpower from India and very less proportion is outside India and availability. Demand is chasing supply, that is the reality which we are dealing with. So my question and why this open-ended kind of guidance of double digit? And I'm not asking for any specific guidance for any quarter or any year, but can you at least say that what you are seeing now for the next 2, 3 years is something which you would not have seen in the last 10 years or 15 years, at least that kind of comfort do you have today? Or you would refrain from giving that comfort to the investors?

Okay. Okay. So I'll come back to the point 2, which is the outlook for growth for the next quarter, okay, outlook for growth next quarter. The first question was, remind me because I forgot to write it down. What was your first question? Just tell me the 2 words and I'll do it.

I just want to know the change in proportion of your time, which you will spend your money...

Okay. Okay. Yes, it's been a long day. So I -- my memory is failing me. So day 1 at Wipro, I've engaged with clients. So I've never done anything else than focusing on growth from day 1.

If I look at -- and I'm tracking my timing and the way I'm focusing my time, I would say it's 30% of my time talking to clients. So engaging directly with clients, 30% of my time, okay? 30% engaging with employees, and that's really on the people front. It's connecting with all sorts of groups about the strategy. It's not as much to share about the priorities, explain why where we are going, what is our ambition and so on, but also get feedback from them to really connect at every level. And I would say about 30%, 30 -- 40%, 30% to look at different aspects of operations. But that's not only operations, it's operations and strategy. And so it's looking at opportunities like CAPCO, and what are the strategic priorities for us and how do we progress along these lines.

So I've not -- to be honest, since your question seems to be about do you have time to focus on anything else than operations. I've never stopped focusing on the market and on our clients, and we are growth obsessed inside the organization. Every time we're in a meeting, we talk about clients, we talk about the growth, we talk about deals, and this is what we are doing, okay?

On your second question, outlook for the next years. What is very clear is that there is a strong demand, okay? It's a very good market for companies. It's time to take market share. It's time to grow. But it's -- for that, you need to really focus on the areas of interest for the client. So really, the areas of high demand around cybersecurity, around data, around digital transformation, around cloud journey. All these topics are in high demand. And for sure, there's attrition here because as you said, it's -- we are going after talent, and we are in an environment where there's going to be a shortage in talent at some point in time. And so we are, I think, well positioned. We've had a very good impact on in terms of attraction, in term attractiveness for the potential employees or people that we are hiring, and we'll continue to do so.

My view is that the market will continue to be good for the next quarters. I cannot predict for the next years. But I can certainly predict that for the next quarter, there is a very good perspective of growth and high demand because the company, the clients, from every sectors, every industry we are working with are driving transformation program. They are investing in technology today. And so -- and I see it's very visible in connecting with our clients that they are engaged in significant transformation program. So definitely a promising market for the foreseeable future for us.

The next question is from the line of Nitin Padmanabhan from Investec.

I had 2 questions. The first one is, how do we think about margins going forward? What do you think would be the puts and takes in terms of headwinds and tailwinds? Just a broad thought process there.

And the second one is, if I look at the BFS or the financial services revenue, excluding CAPCO, it looks almost flattish. I just wanted your thoughts on the underlying environment on the core business there. And second, any thoughts on the energy and utilities vertical? And what's driving the strength in that business?

Okay. All right. So a couple of questions. So the first one is around your reading of the growth for the first quarter. So in the first quarter, after CAPCO will be part of the organization, but we are still communicating on the contribution to the growth of CAPCO in Q1. Of the 12.2% growth in reported terms delivered in Q1, 4.9% is organic, okay? 4.9% quarter-over-quarter is the organic growth generated by Wipro before CAPCO, okay? So it's a strong growth. CAPCO's growth has been strong, and therefore, overall, it's a very strong growth, 12.2% reported terms, 21.3% in constant currency terms year-on-year. So this is for the growth itself.

The margin profile, what we've said, it's probably -- I think, we are very consistent. What we've said probably 3 to 4 quarters ago is we are going to drive a growth agenda, growth strategy, but not to the expense of margins. We will protect and maintain the margins at sustainable level that we have qualified between 19% and 19.5%. Then we've done the CAPCO acquisition. We've said that CAPCO would have a 2 points of margin impact on our OM. And therefore, we are -- we consider that the margin around 17%, 17.5% is going to be the level where we will be for the foreseeable future. We've done better this quarter, 18.8%, but it doesn't change our -- the way we are seeing our margin profile.

Jatin, you want to give more color to it?

Thanks, Thierry. So Nitin, the way we have looked at it, and we have always maintained it, Thierry also spoke about it that growth remains a priority. And you have to appreciate that this is a year of opportunity for every player. And certainly, for us, and you've seen the growth that we delivered in quarter 4, and we have delivered in quarter 1. And we have to invest in people because that would be a key differentiator in the current market environment, and we have done so. We gave salary increase for our junior staff on 1st January. We are going to give them once again a salary increase in 1st September. For our senior staff, we have given salary increase in 1st June, for which 2 months impact will come in quarter 2. So we will remain invested in the talent in this year to make sure that we capture the -- what market has to offer and we capture share.

Having said that, there are definitely levers that we will continue to leverage. Pyramid is one, and you heard Saurabh talk about the kind of fresher addition that we are going to do. Certainly, offshoring is one big thing which continues to play out quite well. Third is automation. Fourth is productivity that we can drive -- rotation that we can drive across organization on this scale leverage that operating leverage can play out in a growth scenario like this. So there are many levers that we remain very focused on. and we'll continue to work on. But we will remain focused on revenue, and we will make a fine balance with margin as they move forward. But our commentary on the medium-term outlook, you heard from Thierry, that's what we keep in mind. But as you have seen, quarter 1, we have delivered significantly more.

Sure. That's helpful. So would one expect that after the September salary increases for 80% of the people, similarly, it would be followed with -- for the senior management as well, mid-level and senior beyond that. So what I'm trying to ask is would it be a full year kind of every quarter kind of salary increase impact?

This is -- we had in Jan and we had another one in this quarter for mid-level and senior. Would we see a follow-through similarly post September for the senior and mid -- in the next quarter as well? If that's how one should think about it?

No. The -- this is Saurabh here, the plan is not to give senior. There is no plan for that. It will come now in the normal cycle, which is the annual cycle in the next fiscal for everybody. So after the second cycle, which we are doing in September now for the junior people, everybody will get into a normal cycle from the next.

Sure. That's helpful. My last question, which we missed was on the energy and utilities vertical and what's driving the strength there?

Thierry, I'll go ahead and answer that.

Okay. I was on mute. Sorry. Go ahead. Go ahead.

Okay. No problem. So Nitin, we are seeing good traction in the market for energy and utilities. And as the demand is coming back, the growth will remain a little lumpy. So I'm very happy with the performance that we have delivered for the current quarter. But I think it will remain lumpy. We have progressed very well on a project and ramped that up. But it's not that we are seeing another sort of 11% growth in offing once again in quarter 2. So it would remain a little lumpy as we go forward.

Yes. Yes, exactly. So that's what I was going to say. If you look at the energy and utility sector, we have a healthy business here. We have a good pipeline. The growth that shows that you've seen here this quarter is a little bit exceptional and I don't think we will necessarily sustain it at this level going forward. But it's a good sector for us for sure.

The next question is from the line of Vibhor Singhal from PhillipCapital.

So the 2 questions from my side. First for Thierry. Just wanting to -- basically, just wanted to understand here that this year, of course, we've been doing great the first quarter growth is and the second quarter guidance ensures that we will be able to flow much higher than double-digit growth rate on an organic basis also even if we exclude the CAPCO asset integration. Just wanted to get your perspective on how sustainable do you think this growth momentum is in terms of large deals that we are saving in terms of the demand environment?

I mean, for long, I think we had (inaudible) underperforming experience for quite a while in terms of growth rates. So given that this year, of course, we were coming off a low base of last year, which was impacted [the time of the mix] and well upside '22 onwards and all, do you see enough demand environment for us to be able to at least be at par with our peers and continue this growth momentum? Or do you believe given that the current environment that been (inaudible) there could be some slowdown as well?

So I mean, you definitely can assume that we'll continue to grow at the nice pace. If you look at -- again, if you look at the performance in Q1, it will be interesting to see how this compared with the competition. I believe we will be at the high end of the growth sequential and year-on-year of -- in our industry, even excluding CAPCO, okay? So that's, for Q2, we continue to see the growth being strong -- And although I cannot tell and I will not guide for beyond that. But as we said, we know already that given where we're going, how things are going and so on, given the volume of opportunities in the pipeline, given the strength of our relationship with our clients, given the quality of our solutions and capabilities. We know we will grow a solid nice double-digit growth this year as well from your standpoint. So you can assume that we'll be showing growth for a good period of time.

Any concerns regarding (inaudible) from your conversations with the clients? Any kind of pushback that you might be getting?

Sorry, your voice came muffled. I didn't hear. You said any concern around what?

Yes, sorry. My question was any concern that you might have come across from your conversations with clients regarding the third or fourth COVID wave? And maybe as clients are looking to just maybe wait and watch and then with their (inaudible).

Yes. Okay. Okay. So your question was specific to COVID. Understood. So I mean every country is going through [his] challenges, and it's certainly been incredibly challenging for India, in particular, in Q1. And so trust me, we have delivered this performance despite or in a very difficult context for India, as you know. I think our teams have been incredibly resilient over the last 15 months and showed ability to really deliver with no loss of productivity and very strong growth and strong work and strong quality work to our clients.

I think whether we like it or not, there's a reality is that our industry has learned, adapted and can work in the current environment pretty well. So now that it's my preferred option. I definitely prefer a world without COVID. But from a business standpoint, I think we can definitely continue to sustain growth despite a difficult health environment.

Sure. Great to hear that. And then just one last question from my side. In terms of capital integration, I would assume that the -- all the payments that are required to be made have been made. So just wanted to get your stance on are we already having around $4.1 billion of cash. And on top of that, we're raising $750 million of bond as recently did.

So I mean what is the size of the company as to why are we doing this? Is it low cost of capital? Or preparing for some other -- war chest for something else? Just wanted to get your perspective on that.

Sure. So this $4.1 billion of gross of net cash is after the $750 million of bond proceeds have come in, so it is inclusive. Second is we did it because we wanted to keep a healthy mix of debt and internal accruals for our large acquisitions such as CAPCO. We have done it for CAPCO. And we should retain the flexibility on the balance sheet, and that's the purpose. It is not created for any specific purpose as in for some other active purposes or other -- watches for a specific goal. It is something if you see historically also, you would see it on our balance sheet, the size of the cash, and it is in line with that.

And the payments for the CAPCO acquisitions have all been made?

That is completed in quarter 1 completely.

The next question is from the line of Dipesh Manta from Emkay Global.

Congrats for strong (inaudible). A few questions. First of all, Thierry, can you help us understand what led to this positive surprise, whether it is very broad-based? Or fuel deals ramp up lead to some surprises? And on CAPCO, is there any seasonality or one-off in this quarter? Or this is organic business growth, which led to even beat on CAPCO's side?

Second question is on slightly medium term. Now we have seen services business remain largely linear, so now we are seeing very strong demand environment. Do you think we can have some linearity into business either through pricing construct or maybe from automation or something if you can provide some slightly medium-term perspective, how do you expect that linearity to play out over medium term?

And third question is about India SRE business. Now we have seen last few quarters of consistent, steady performance and substantial improvement in profitability. So if you can provide some medium-term outlook on profitability of India SRE business.

Okay. Sorry, business, CAPCO seasonality, linearity of revenue. So on the CAPCO side, no, and the first question was really on our growth. Why such a strong performance on growth. So to your question, I can easily respond and clearly say it's not coming from one-off or one thing somewhere that has been -- having a big impact or one large deal or no.

No, it's broad-based. It's really across our strategic market units across our regions. We are seeing growth demand and opportunities everywhere. So that's what gives us also confidence because it's not based on 1 splendid win. It's many, many deals everywhere. So that is solid.

CAPCO. CAPCO seasonality. There will be a seasonality in CAPCO, but it's not actually playing in -- it's not playing in Q1. Q1 is a normal quarter. I don't think there is anything particular. I think CAPCO being 50% in Europe, you know that traditionally summertime in Europe is a little softer because it's vacation or summertime. But having said that, the trend and the growth and the opportunity showed by CAPCO team is strong as well. So I think it will continue, and it will continue to surprise us positively as we work and develop opportunities of synergies as well.

Linearity of revenue. I think it's clear that there will be the way we can leverage platform, the way we can raise prices, the way we can leverage automation to create a slight disconnect between growth and the headcount evolution. But for the best part, my view is that there will be a certain level of continuity of the linearity between those 2 parameters. So you should assume that growth will be fueled by headcount growth as well for the best part.

Last, SRE business. I think the SRE business has been in a recovery mode for several quarters. It's doing well. I think it's getting stronger and stronger. And so I think the work done by Sanjeev in the last years, now our COO, and the work done by (inaudible) continue to reinforce our position in this market. We have also clarified our strategy and define where we want to invest versus places where we know we don't want to invest. And I think it's making us more agile, more focused and probably more consistent as well for our clients.

Jatin, anything you want to add around those points?

Would have only a point I will add is, Dipesh, while we have had good numbers in terms of profitability for a couple of last 3 quarters or so, from a modeling standpoint, you should continue to model and sort of a single-digit positive margins for that business, which I think is a very good outcome given where it is an SRE segment.

We have -- as Thierry mentioned, we have been quite successful in completing some of our long-pending projects, and that has given us a better outcome than what we originally anticipated. But I don't think we can say that this business is a 20% plus margin business.

The next question is from the line of Kawaljeet Saluja from Kotak.

My question is that, Jatin, the CAPCO acquisition has been influence on revenues from your top 5 or top 10 accounts. And the context of this question is that it's quite unusual and it's quite remarkable as well to have growth from top 10 accounts at around 13% sequentially. That has got me curious as to what the (inaudible) of CAPCO on the top 10 accounts.

Kawaljeet, that is right. There has been addition because of CAPCO in some of our common customers, and that has been reflected in top 10 performance.

Thanks for that clarification, Jatin. Now my second question is around the global account executive structure. I remember that was a change made by Thierry in Jan. And that called for a change also in profile of global account executives. Now do you have the right profile of people that you wanted at that level? And if yes, when does one start seeing the benefits of this change into the numbers? Not to say that the numbers are not good, it's already good, but just curious about that.

Kawaljeet, as Thierry responds to it -- sort of respond to that question, I want to just add 1 point to what I said that even if you take the aggregation of CAPCO out, we would like to clarify that the sequential growth is ahead of company growth rate on -- without CAPCO basis in top 10 as well as on a Y-o-Y basis. It's a double-digit number. So even without CAPCO aggregation, the growth momentum is quite robust.

Yes, on the account executive focus, you're absolutely right, Kawaljeet. We have really invested a lot in building strong account executive roles inside the organization running our large accounts. We have hired many new account executives. We have spent time with our best account executive to help them to get more accountability but also more responsibility, more ability, more support.

We have really restructured our model operating model so that they become central to the large accounts growth strategy. And it's definitely bearing fruits. I mean even again, excluding CAPCO, the large accounts are growing faster than the total company. And it's new in the past, typically, the large accounts were growing less than the growth of the company. And so that was something to be corrected, and we are seeing a nice impact on the growth of these accounts after the organizational change and maybe the investments we've made into talent, senior talent.

The next question is from the line of Sumeet Jain from Goldman Sachs.

So firstly, I wanted to understand, in terms of your broad-based growth, if I look at your industry verticals, the growth has come from media, telecom, retail and ENU. And if I exclude the CAPCO acquisition, financial services also had a pretty weak growth. And even we had a weak growth in health care and manufacturing and high-tech vertical.

So just want to understand in terms of broad-based growth in what areas are you growing? Or I'd say our TCB deal win of $750 million with 8 large deal wins? In what industry verticals are these deals largely comprised of?

So if you look at deals that we closed in the quarter, clearly, the sector that stands out in terms of performance have been the health care sector. Also the consumer sector. I would say, the BFSI sector, okay? If we are looking now at the revenue growth performance per sector, 23% BFSI, now, of course, influenced by CAPCO, but 14% quarter-on-quarter from consumer, 12% quarter-on-quarter from E&U, 12% from communications, those are very strong performance. Technology has been growing mildly, 2.5%, but 14% year-on-year.

So I would say there's always room for doing better, for sure. But I would say the growth profile has been good. The only sector that hasn't shown growth this quarter is the manufacturing sector. And we will resume growth in the next quarter. So that's really the view from a sector standpoint.

Jatin, you want to add?

No, Thierry, you have covered it.

So maybe just a follow up on your TCV deal wins. I think you mentioned $750 million. Can you give us some quarter-on-quarter or a Y-o-Y comparison, how this deal wins behaved?

So you know what's interesting is we have a different profile of deals that what we've had over the last 2 quarters. Over the last 2 quarters, we've had -- we have had every time 1 mega deal. So obviously, the mega deal has huge impact on the total. Now interestingly enough, if you look at the [ACV] performance, it's as strong as what we've done in the last 2 quarters. But we -- we've done it with smaller deals. So we knew we were not geared up yet to have an engine that creates 1 deal per quarter. We haven't lost any large deal, by the way, this quarter. It's really that we have to build the pipeline for that, and it's building up well, but it's going to take a bit of time. But the volume of deals in medium and large, medium- and smaller-sized deals has been really good. So it's a different segmentation of deals from the previous quarter. But for overall, in total amount and in order creation, if you like, it's actually been a solid performance. We've done better, significantly better than the plan we had built for the quarter.

That's very helpful, Thierry. And maybe last thing, I think in your guidance of 5% to 7%, given that we don't know when the Ampion acquisition will get closed. Can you split out the organic growth within this 5% to 7%?

So I'll take that. Sumeet, since CAPCO is becoming -- is part of Wipro now and depending upon the customers, where we play, the growth could come either from the main entity or from CAPCO. I think our success lies in being 1 company and not breaking this out -- So we shared this for quarter 1 because it's a first quarter of acquisition. But going forward, we will give an aggregate number for growth. So I'm unable to break that down from 5% to 7% standpoint.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Ms. Aparna Iyer for closing comments.

Thank you all for joining the call today. In case we could not take any of your questions due to time constraints, please feel free to reach out to the Investor Relations team. Have a nice day, and good night. Stay safe. Thank you.

Thank you. On behalf of Wipro Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.