Wipro Ltd Management Discussions.

IT services industry overview

Various industries across the world have struggled to adapt to the extraordinary circumstances caused by the COVID-19 pandemic. While the pandemic affected economies and industries, economies are experiencing a strong but unbalanced recovery. With increased consumer spending, the IT industry recorded its highest year-on- year growth ever. The pandemic has rapidly accelerated digital transformation for many organizations and has led to the adoption of digital business models driven by online customer service, remote working, supply chain reinventions, and automation for operational excellence. This disruption has created space for organizations across industries to drive innovation in services and products such as telehealth, online shopping experience enhanced with Augmented Reality (AR) / Virtual Reality (VR), digital payments, and virtual learning solutions. Consumers are more inclined to use digital services like digital payments, digital shopping (retail, e-commerce and housing sector) and digital healthcare. While the IT industry is witnessing an unprecedented demand, supply remains constrained and talent recruitment and retention continues to be a key concern along with current geo-political situation and rising inflation.

Outlook, opportunities and threats

Companies are investing in large and complex cloud migration and transformation programs, creating multi-year opportunities for consulting services and implementation. Due to increased demand for hyper personalized products and services, next generation technologies such as data and AI , mixed reality, digital engineering, blockchain, multi-cloud, cybersecurity, edge computing, and 5G is expected to continue to grow exponentially.

With accelerated rates of vaccination and reduction in mobility restrictions, most economies are expected to reach pre-pandemic levels. While consumption demand has improved, the recovery is uneven due to factors like imbalanced labor markets, global supply chain disruptions, geo-political conflicts, inflation, and a dearth of talent. The continuous increase in demand for skilled talent has been building pressure on IT services providers amidst a significant increase in hiring, salary hikes and higher subcontracting costs. While there is no direct impact our business from the ongoing geo-political conflict between Russia and Ukraine, we continue to monitor these developments.

A focus on ESG parameters is emerging as a new differentiator with the pandemic accelerating its adoption across the globe. It has become an important consideration for IT services provider selection. Clients expect providers to not only meet global standards on ESG, but also help them make progress on their ESG goals across key themes such as climate change, diversity and inclusion, corporate governance and cybersecurity.

According to the Strategic Review 2022 published by NASSCOM ("the NASSCOM Report"), the Indian technology sector is estimated to witness a growth of 15.5% to reach approximately $227 billion revenue in fiscal year 2022 (excluding e-commerce). Exports (including hardware) are estimated to grow at 17.2% to reach approximately $178 billion in fiscal year 2022 and the domestic sector is forecasted to reach approximately $49 billion in fiscal year 2022, growing at approximately 10%.

Business overview

Celebrating over 75 years of innovation, Wipro is a purpose-driven, global technology services and consulting firm with over 240,000 employees and business partners across 66 countries helping our customers, communities and planet thrive in the digital world.

We are recognized globally for our strong commitment to sustainability. We nurture inclusivity as an intrinsic part of WiproRs.s culture. Our deep resolve to improve the communities we live and work in, is appreciated by our customers, investors, analysts, and employees.

We are technologists, designers, strategists, and business partners, who share an unwavering commitment to achieving our customerRs.s ambitions and creating a humane, sustainable, and resilient future for all. Our recognized capabilities across 26 industry segments in digital strategy, Wipro FullStride cloud services, engineering, AI, and cybersecurity, have established us as a trusted leader in orchestrating transformation.

WiproRs.s holistic portfolio of capabilities and ability to navigate vertically and horizontally across ecosystems helps our clients achieve differentiation and competitive advantage. Our focus is to maximize business outcomes by converging themes across industry domains, products, services, and partners as we develop and deliver tailored business solutions for our clients.

We help orchestrate the transformation jou rney for our clients by bringing together technology, industry expertise and ecosystems to solve complex problems and deliver value through holistic business solutions that drive outcomes. Our simplified operating model and integration of consulting and technology practices strengthens our ability to deliver such solutions effectively and at scale.

We are focused towards building long-term relationships with customers and tightly aligned visions and outcomes structured through a highly governed and co-managed engagement process.

The rise of ESG factors is redefining and elevating sustainability across industries. We are a founding member of the Rs.Transform to Net ZeroRs. initiative and are committed to contribute to the goal of planetary zero- carbon emissions. We are also committed to bringing our expertise in strategy, design, and technology to help transform our customers and sectors of the global economy to sustainable business models, products, services, and ecosystems.

Our IT Services segment provides a range of IT and IT- enabled services which include digital strategy advisory, customer-centric design, consulting, infrastructure services, business process services, research and development, cloud, mobility and advanced analytics and product engineering to leading enterprises worldwide.

Please refer details related to segment-wise performance and profitability in ?) 48

Our IT Products segment provides a range of third-party IT products, which allows us to offer comprehensive IT system integration services. These products include computing, platforms and storage, networking solutions, enterprise information security and software products, including databases and operating systems. We provide IT products as a complement to our IT services offerings rather than sell standalone IT products, and our focus continues to be on consulting and digital engagements, with a more selective approach in bidding for SI engagements.

Our ISRE segment consists of IT Services offerings to organizations owned or controlled by the GoI and/or any Indian State Governments. Our ISRE strategy focuses on consulting and digital engagements, and we are selective in bidding for SI projects with long working capital cycles.