Just like the Indian cricket team Wipro is said to be in a transition phase. ‘Work in progress’ is a term that one hears in connection with both outfits frequently. Azim Premji—the captain of the ship—looks grumpier by the quarter, even as CEO TK Kurien tries to steer the ship out of relatively choppy
waters. This has become a replay of sorts. Wipro’s peers have all received kudos during the October-December quarter and Premji has admitted that he was a tad disappointed with Wipro’s not-so-great numbers during the period.
Laggard is not a term Premji particularly likes, but that’s exactly the description that analysts have been using to put Wipro’s performance into context. To be fair, Wipro’s results have met estimates but the tepid guidance for the March quarter and declining volumes in Q3 showed the firm in bad light. For some time now, the company has been talking about specific strategies to improve its fortunes and bettering efficiency of its operations. It’s been a long wait now, by impatient corporate standards.
The issue with Wipro is that not all the verticals seem to be pulling ahead. Its healthcare vertical is a big plus for the company, growing by 7% sequentially. The same cannot be said about many of the other verticals. Getting to roll all the verticals up north has been a challenge for the firm. This is not say that all other IT firms have been able to do this, but Wipro needs to definitely find more verticals to do what healthcare is doing for its numbers. This uncertainty has led Wipro to guide for a wide band (0.5-3%) while forecasting for the next quarter. Analysts are not able to see any uptick in their revenue estimates for the next fiscal and hence the tag of an under-performer sticks.
Its IT business volumes, or the billable hours, slumped by 1% sequentially against estimates of 1.6% QoQ growth. In terms of volumes, Infosys grew 1.5%, TCS by 1.25% and HCL Tech by 3% Q3. Volumes indicate business momentum and Wipro fell short of expectations in this regard. However, please do not brush aside the fact that the company still met median estimates with regard to revenue growth, with IT revenue growing 2.4% from the September quarter to $1.577 billion. Wipro had guided for a 1.2-3.5% rise and so it was par for the course. Only that, this time, its peers had