Mega deals hold key for Wipro’s turnaround

$500-mn deals are great to keep the company afloat but can’t be thought of as a reversal of downward growth.These are early signs that Wipro is trying to turn the tide, but they will have to come up with a slew of initiatives working with the stakeholder ecosystem - Ashish Chaturvedi, a practice leader at HFS Research, tells Bizz Buzz

Doubling Down

i) The IT major bagged a $500-mn deal last week

ii)IT firm requires more focus on deals in cloud-AI-data spaces

iii)The company already promoted several insiders to accelerate revenue growth

iv)The large deal win came just 2 months after its new CEO Srinivas Pallia took charge

Bengaluru: Wipro requires more large deal wins, reduce dependency on a few new clients and increase their reach further in developing economies to script a turnaround story under the new CEO.

Experts said that the last week’s large deal win worth $500 million is a good beginning, but the Bengaluru-headquartered firm has to take a slew of measures to accelerate revenue growth.

“$500-million-dollar deals are great to keep the company afloat, but can’t be thought of as a reversal of downward growth.These are early signs that Wipro is trying to turn the tide, but they will have to come up with a slew of initiatives working with the stakeholder ecosystem of tech partners, clients, analysts, and advisors,” Ashish Chaturvedi, a practice leader at international IT consultancy firm, HFS Research told BizzBuzz.

“The company also needs to reduce dependency on a few new clients and further penetrate developing geographies,” he said.

The Azim Premji-promoted firm last week announced a large deal win worth $500 million from a leading US telecom service provider to offer managed service and some industry-specific solutions. The time period for the execution of this contract is over a period of five years, the company has said.The large deal win came just two months after its new CEO Srinivas Pallia took charge post the resignation of former chief Thierry Delaporte. Under the new CEO, the company has already taken several initiatives. It has promoted several company insiders to top jobs in past months,appointed Malay Joshi, a long-timer with over three decades in the company, as the CEO of Americas 1. Similarly, the IT major appointed Hari Shetty, another Wipro veteran as chief strategist and sales excellence officer earlier.

According to experts, the technology discussion is moving towards integrated packaged software capabilities. Therefore, IT services providers, who are proponent of disruptive technologies such as Generative AI and have great relationships with hyperscalers (like AWS, Google, Microsoft) and the associated tech ecosystem, are set to gain the most.

“Wipro needs to double down on deals involving the intersection of cloud (computing)-AI-data (analytics). This is where big money with high-margin lies,” Chaturvedi said.

Wipro has been lagging its peers in terms of revenue growth in recent years after showing improvement during the post-pandemic period. Wipro’s revenue from IT services saw a fall of 4.4 per cent during the last fiscal year. In comparison, TCS’ revenue growth of 3.4 per cent in FY24, while Infosys’ revenue grew 1.9 per cent during this period.