HCL displaces Wipro as India’s 3rd largest IT firm
HCL Technologies Ltd surpassed Wipro Ltd to become India’s third biggest software services provider in the three months to June 30, marking the first change in the pecking order of the country’s $167 billion information technology outsourcing industry in six years.
On Friday, Noida-based HCL Technologies said that its dollar revenue increased 0.8% to $2.05 billion in the quarter ended June 30 from the proceeding three months. Bengaluru-based Wipro’s dollar revenue declined 1.7% sequentially to $2.03 billion in the first quarter.
Last year, Wipro’s full-year revenue totalled $8.06 billion, about $220 million more than HCL Technologies’s $7.84 billion. However, billionaire Shiv Nadarled HCL Technologies expects its dollar revenue to grow by as much as 10.4% in the current financial year, implying that the company expects to end the current financial year with $8.65 billion in revenue.
Azim Premji-led Wipro, which does not give a full-year revenue outlook, will need to grow 7.32% this year to retain its third position, a tough ask as Wipro has not reported this level of annual growth since 2012-13, when the firm grew 7.1%.
Nasdaq-listed Cognizant Technology Solutions, which edged past Infosys Ltd in quarterly revenue in the June quarter of 2012, has not been considered in the list as it is only listed in the US.
HCL Technologies’ rise has come on the back of years of underperformance by Wipro and a more aggressive approach in acquiring companies. Until a few years ago, both companies used to generate significant business from managing data centres or offering infrastructure services to their clients.
That revenue disappeared with the rise of cloud computing and when firms such as Amazon Web Services began offering computing power by the hour (cloud computing).
To mitigate this, both Wipro and HCL Technologies have looked at acquiring companies which can help them offer new technology solutions. For now, this approach appears to have proved financially lucrative for HCL while Wipro grapples with its own set of challenges.
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