Wipro's profit profile to improve after demerger: CFO Suresh Senapathy

Wipro Chief Financial Officer Suresh Senapathy said on Thursday that profit margins of the company's IT division are expected to improve after the demerger of non-IT businesses.

Wipro is demerging three non-IT business divisions - Wipro Consumer Care & Lighting (including furniture business), Wipro Infrastructure Engineering (hydraulics and water businesses) and Medical Diagnostic Product & Services business - into a privately-held company to be named Wipro Enterprises Ltd.

"It (demerger) will help in simplification, clarity in the minds of customers, target companies, investors and analysts. That is why we think the competitiveness of Wipro Limited will improve," Senapathy said.

He added there are no plans to list Wipro Enterprises.

Stating that Wipro's multiple businesses are not necessarily big enough to go through the process of listing and sustaining it, Senapathy said: "This is one of the reasons why we took a decision that IT business becomes a pure play and remaining businesses become diversified entities."

Asked how the cash and debt would be divided between Wipro and Wipro Enterprises, Senapathy said the debt and cash are primarily specific to various businesses. Therefore, they automatically get split into various businesses in that ratios.

Senapathy said there would not be separate CEOs and CFOs for various businesses under Wipro Enterprises as Wipro Enterprises already has their CEOs and CFOs.

"There is already an organisation up and running independently," he added.

Talking about the completion of the demerger process, Senapathy said the "expectation is that the whole demerger process will get executed in the next financial year."

With inputs from PTI