Wipro, one of India’s leading information technology companies, has reported a decline of 2.8% in revenue for the June quarter, compared to the previous quarter. The year-on-year revenue growth was also weak in comparison to its peers. In an interaction with The Times of India, Wipro CEO Thierry Delaporte attributed this decline to businesses reducing discretionary spends across various industries in light of the weak macro environment.
Delaporte acknowledged that Wipro continues to lag behind its peers in terms of revenue growth. When asked if this reflects a higher exposure to the consulting business, he stated that while Wipro has a significant portion of its business in consulting (14-15%), it is a segment they are happy with and expect to bounce back first. He highlighted that the slowdown over the last three quarters is primarily due to a reduction in discretionary spending on small engagements, while larger deals continue to be substantial.
The CEO noted that the banking and technology sectors contribute to almost 50% of Wipro’s business, but both industries have significantly reduced their discretionary spend in recent quarters. Despite the revenue decline, Delaporte assured that Wipro has not lost any large accounts and believes they are not losing market share in their existing accounts.
Regarding Wipro’s acquisitions of Capco and Rizing, which focus on BFSI (banking, financial services, and insurance) and SAP consulting respectively, Delaporte explained that these businesses were acquired for strategic reasons. However, in the current market scenario, where companies are cutting costs, the consulting fees tend to be the first to be reduced, impacting the growth of these subsidiaries.
When asked about the problems in the banking sector, Delaporte acknowledged a significant slowdown in the industry over the past six to nine months. However, he does not foresee further degradation at the moment. He mentioned that the crisis earlier this year, particularly events like the Credit Suisse and UBS deal, created anxiety among leaders, leading to a halt in spending. Delaporte believes that while there is still market uncertainty, the problems are more pronounced in America compared to Europe or Asia.
Addressing Wipro’s struggle to regain growth, Delaporte emphasized that the company is not changing its strategy. Instead, they are accelerating their transformation efforts and investing more in operational excellence. He expressed satisfaction with the company’s position as a leader in the AI space and reaffirmed that Wipro’s board, including Chairman Rishad Premji, fully supports their strategy. Delaporte highlighted the strong working relationship with Rishad, praising the fluidity, simplicity, and transparency in their collaboration.
Despite the recent revenue decline, Wipro remains confident in its ability to navigate the challenges posed by the weak macro environment and is focused on executing its strategic plans to drive future growth.