Wipro mayseefastest growthin revenue among peers this fiscal
Under Thierry Delaporte, Wipro saw an industry-leading 12.2% sequential revenue growth in the June quarter
NEW DELHI: Wipro Ltd is set to report the fastest annual revenue growth among India’s top five software services firms this year.
Wipro’s performance will be the first for the company in the nearly three-decade history of the Indian outsourcing industry, where it competes with Tata Consultancy Services Ltd, Cognizant Technology Solutions Corp., Infosys Ltd, and HCL Technologies Ltd.
Spearheaded by chief executive officer Thierry Delaporte, an industry-leading 12.2% sequential revenue growth in the June quarter has set up the Bengaluru-based company firmly on course for the rest of the year.
Wipro does not give full-year guidance. Instead, the company has forecast for a 5-7% sequential growth in revenue in constant currency terms this quarter.
Assuming the company does not report any sequential revenue growth in the third and the fourth quarter, Wipro will still end FY22 with revenues of $10.01 billion, a 23.1% rise from last year’s $8.13 billion,
“We have guided for revenue growth of 5% to 7%. Even at the lower end of this guidance, we will cross the 10 billion annual run rates of revenues, which we are very excited about,” Delaporte said in a post-earnings call with analysts on 15 July.
“While we do not guide for the full year, you know that the Q1 performance and the Q2 guidance sets us up for well ahead of double-digit growth, even excluding Capco,” he said.
A double-digit organic growth is important as Wipro has struggled to keep pace with its larger peers in the last decade, especially over the last few years. A case in point being in 2018 when the company did not see any organic growth.
Wipro’s share performance in the last 14 months is reflecting its improved financial performance.
The shares have soared 195% on the BSE between May 29, 2020 when it announced Delaporte’s appointment as the new CEO and July 30 this year. Shares of Infosys, HCL, TCS, and Cognizant have given returns of 132.5%, 89%, 60% and 37% respectively during this period.
Cognizant has reported the fastest full-year revenue growth in 14 of the last 22 years since it went public in 1998. The Teaneck, New Jersey-based company said last week during its second-quarter earnings that it expects to grow at the most 11% this year. Cognizant follows the January to December calendar year while Indian IT firms follow the April-March financial year.
Bengaluru-based Infosys has predicted its full-year revenue to grow between 14% and 16% in constant currency terms.
Meanwhile, HCL said it expects double-digit revenue growth. However, a muted performance in the June quarter means that the company will grow at-best in low teens, according to estimates.
TCS, the largest IT firm, does not give any quarterly or yearly guidance. But a 2.7% sequential growth in the first quarter means full-year revenue is expected to grow at-best 14%.
An aggressive acquisition strategy, along with setting in place a simplified organization structure, assembling a new team including hiring senior executives from companies like Accenture, and a slew of other initiatives such as empowering client account partners has helped Delaporte steer Wipro well until now.