BPO unit helps improve operating margins

The business process outsourcing (BPO) division of Wipro Technologies continues to gain traction and is expanding its service line while also helping the software services major boost its operating margins. For the third quarter of the current fiscal, Wipro BPO unit reported revenues of Rs 235.8 crore, showing a sequential growth of 2.5% in rupee terms and 7.1% in dollar terms. On a year-on-year (Y-o-Y) basis, revenues grew by 24%.

During the third quarter, Wipro BPO made a net addition of 1,508 people taking its total headcount to 16,863, while attrition stood at 14.8%. The addition of headcount in this quarter is against a negative of 584 people in Q2 of the current fiscal. Wipro CFO Suresh Senapaty said: “We witnessed a continued margin expansion in our BPO business by 60 basis points sequentially.”

T K Kurien, chief executive, Wipro BPO, said that margin expansion came in despite the full impact of the salary hike effected during the quarter. He said Wipro BPO has been expanding into newer service lines especially in the financial services sector. Currently, it has about 115 service lines, up from 101.

The mix of people being taken into Wipro BPO business has also seen change with the more emphasis on campus recuirtment to creat a more stable employee base. The third quarter also saw people with backgrounds like chartered accountants, MBAs, analytics join the company.

Mr Kurien said that it is taking numerous HR related initiatives which include the top management touching base with its employees every month along with increasing the brand pull of Wipro BPO. In the coming quarters, Wipro BPO is looking at improving its pricing as it has been recording 4-6% increase over the last one year.