According to analysts, the first two quarters are usually dull for the company historically, hence growth will be higher in the subsequent two quarters.
If Wipro Infotech achieves the $1 billion mark, it would make Wipro the first Indian company to touch the figure through its largely domestic market-focussed arm. It derives about 90 per cent of its revenue from India.
In fiscal 2006-07, TCS earned domestic revenue of about Rs 1,680 crore (Rs 16.80 billion), a one per cent growth year-on-year, according to its annual report.
The other major Indian IT services provider Infosys has very little focus on the Indian market (a mere one per cent). The company recently announced an arm dedicated to India. MNCs such as IBM, on the other hand, are quite active in India.
Suresh Vaswani, president, Wipro Infotech, said, "We are clearly driving a much larger growth than the market. In terms of gross sales, we closed the first half at nearly Rs 2,000 crore (Rs 20 billion). Ideally, this period represents 45 per cent of the full year growth, while the remaining 55 per cent comes in during the second half. Our pipeline is good and the market is also robust."
If this ratio is maintained, Wipro Infotech is expected to touch the Rs 4,100 crore (Rs 41 billion) mark for the whole of FY08. The division contributes close to 20 per cent of the parent company's revenue.
"We expect big IT spending in the domestic market in the next two quarters, especially by companies in the telecom and manufacturing space. It is a good sign that Wipro's domestic arm is finally coming of age," said James Abraham, Partner & Director, Boston Consulting Group.
According to Abraham, all the major markets in West Asia including the UAE and Saudi Arabia are looking "highly promising". Even in Qatar, the small gas producing country in West Asia, a lot of investments are expected to happen in IT infrastructure, which is a good sign.
Wipro Infotech has already fine-tuned its business model in line with the emerging business opportunities in the domestic and West Asian markets. During the last two and a half years, the company has won 10 outsourcing deals in India including some larger ones such as the Dena Bank deal ($60 million) and one from HDFC Bank ($80 million).
The company says that the size of many of the deals it won earlier were expected to increase in line with the growth of its customers.
The company is now taking its partnership approach to the global level with a focus on emerging markets. It has multiple technology partners such as Cisco, Nortel, IBM, HP and Sun Microsystems. Wipro is working with Cisco one of its largest partners with the strategic intent of crossing a specified revenue.
Meanwhile, Wipro Infotech has introduced new practices with a focus on the Indian and West Asian market. The company has invested in building an SEZ practice that will start with a team of about 25 people.
The practice aims at providing IT infrastructure services to SEZs so as to integrate the service offerings being offered within it, combining its strength across solutions, services and infrastructure.
The company has already won the Navi Mumbai SEZ project, for which it will draw up the entire IT architecture and IT road map.
"It is virtually managing the whole operation of the SEZ for which the IT infrastructure is required. It's an innovation area for us and we hope to see good business there," said Gaurav Chadda, head - business development, Wipro Infotech.
