Comments
Wipro lagged behind both TCS and Infosys across several key parameters in the June quarter — lower volumes (person-months billed), larger decline in revenues (in dollar terms) and fall in revenues from important segments.
Even client additions were a mixed bag. But Wipro has managed one important factor well — mine its top clients in a significant way.
Falling behind
In the June quarter, the company managed a marginal volume growth (0.8 per cent) much lower than TCS’s 5.3 per cent and Infosys’s 2.7 per cent. In dollar terms, Wipro’s revenues declined 1.4 per cent sequentially, which is lower than Infosys’. TCS bucked the trend and delivered a 3 per cent growth in top-line.
Even realisations were lower for Wipro with a 2 per cent fall. Infosys had a deeper cut in pricing while for TCS it was marginally lower.
Key segments lag
For Wipro, key verticals such as finance solutions, and retail and transportation fell more than the overall company’s revenue rate. Manufacturing expanded marginally, while telecom, and energy and utilities fell, albeit at a slower pace.
Infosys too had to contend with declines in BFSI, and energy and utilities segments.
Here again, TCS scored with growth across its major verticals — BFSI, telecom and manufacturing.
Revenue from Americas fell more than the overall revenue rate for Wipro, though Europe managed to grow marginally.
In terms of client additions, the company managed to add one customer in the $100-million category. But in the $75-million class, Wipro had two fewer customers on a sequential basis.
The key positive for the company is that its top 10 clients have grown and the repeat business proportion stood at a healthy 99.3 per cent, suggesting that the company has been able to mine key customers well.
Outlook
From the June results, the stereotype that has been playing out over the last several quarters has now been repeated.
TCS has clearly outpaced its peers Infosys and Wipro by delivering broad-based growth across segments and geographies. It looks like the only top tier company that will match, if not better, trade body Nasscom’s projected growth rate of 11-14 per cent for the industry in the current fiscal.
Even to meet the lower end of the estimate, Infosys and Wipro will have to manage sequential revenue growth of over 4 per cent in each of the next three quarters, which could be quite challenging.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.