New York: The applause from brokers on the New York Stock Exchange (NYSE) trading floor drowned out the sound of the closing bell, which Wipro chairman Azim Premji rang Wednesday to celebrate Wipro’s fifth anniversary of being listed on the NYSE. The Indian flag flew at the entrance of the New York Stock Exchange as Premji came out of an analyst meeting and then talked to reporters about the future of Indian outsourcing.

He also outlined Wipro’s plans to make acquisitions to build new skills and enter new markets, while hiring at a breakneck pace to keep up with growth. “We are driving productivity at about 10% a year so if we grow 30% a year we have to increase net head count by about 20% a year,” said Premji as Wipro announced it would hire 8,000 people at a consumer electronics facility in Kochi by 2008.

Premji tried to counter fears that Indian firms were under pressure to increase volume growth to offset the effects of a 12 percent average rise in Indian salaries from November last year. “Salaries are going up but salaries are going up everywhere in the world. If you look at our base costs, it is about $7,500 per person, per year. An engineer in the US costs $60,000 so even if costs in the US go up by 3% and costs go up by 12% in India it will take 25 years for the two costs to converge,” said Premji. “So our challenge is not our price offering as far as the developed world is concerned. Our challenge is we have to be one step ahead of emerging low-cost competition like China, Vietnam, East Europe, Latin America and the Philippines.” Premji, however, said it would be premature to write off India just because Chinese engineers were cheaper. “India is a huge source of talent.

There will be 380,000 engineers graduating in India this year. You don’t have to sell India - it has established its credibility. India has about 65% of the global outsourcing business and I think we can retain market share.” Wipro is eyeing big global deals in 2006 including a bigger slice of the action when General Motors hands out the remaining $15 billion in five-year contracts later this year. As a strategic move, Wipro has opened offices in Shanghai and Beijing to take advantage of low-cost Chinese skills and is looking for acquisitions to enter new markets. “We don’t want purely linear growth. We did two acquisitions in the last two months. We bought New Logic which has a footprint in Austria, Germany and France and we bought an American firm mPower,” said Premji, India’s wealthiest man with his 83% stake in the $15 billion company. —With Bloomberg.

“We are looking at increasing our footprint in Europe through acquisitions and opening centers in Bucharest and Romania.” Wipro currently operates in 35 countries, offering software development, BPO services, management consulting as well as product engineering.

The CFO of wipro Mr. Suresh Senapaty said that Wipro Ltd is “very actively looking” at selling more American depositary receipts in the US and the response from the investors increased and the investors are demanding for more and more ADRS. Though there is no specific decision taken on it, it’s on our radar.” Wipro, which has traded on the New York Stock Exchange for the past five years, may sell more shares to fund acquisitions, Senapaty said. The company has said it plans to expand overseas through acquisitions and gain skills for new businesses. “As and when we have a large enough (acquisition) target, we’ll be able to do it,” Senapaty said.

Meanwhile, American investors are obviously thrilled with Indian outsourcer Wipro’s better-than expected 24% jump in quarterly profit.

Release Source: www.c2b2bnews.com

Top