Wipro once again ended at the bottom of the pile among top-tier IT players, with its September quarter numbers falling behind peers.

During the period, the company’s revenues grew 1.8 per cent sequentially in dollar terms, much lower than the 3.1-6.4 per cent delivered by TCS and Infosys. Wipro’s numbers though, compare favourably to HCL Technologies’ 1.9 per cent.

Falling behind peers

Of course, the company did have positives in the form of growth in key service areas, traction in the Americas and improvements in utilization. Wipro also has managed to tap into discretionary spends reasonably well during the quarter.

But the quarter witnessed fall in revenues from Europe, declines in its finance solutions and manufacturing verticals. Large-size client addition too was not as strong as peers, with the count just increasing by three for Wipro in the $20-75 million bands. Infosys and Wipro on the other hand added 7-10 clients in the larger categories.

Utilization improved to 79.4 per cent during the quarter, which is still a good 3-6 percentage points lower than peers, indicating that the company needs to play well to catch up.

TCS and Infosys had broad-based growth across verticals and service lines during the September period.

Challenges ahead

While the company has indicated that the second half may be stronger than the first. But given that the December quarter tends to be a seasonally weak period for IT companies, it may be quite challenging for Wipro to end up even with double digit growth for the full year. The trade body Nasscom has projected a growth rate 13-14 per cent for the industry in FY15. Only TCS from the top tier pack looks set to exceed those numbers. It may thus clearly enjoy a substantial valuation premium compared to peers for the foreseeable future.

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