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Is the constant revolving door at Wipro a reason for its sluggish growth?

Wipro has seen four CEOs in the past 10 years.

June 01, 2020 / 10:21 PM IST
 
 
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Despite constant changes in the top executive role in the past 10 years, Wipro has lagged on the growth front.

The company has grown at a much slower pace than its peers.

After growing at 19 percent and 13.4 percent in FY11 and FY12 at $5.2 billion and $5.9 billion respectively, the growth began to slump to single digit from FY13.

Since FY13, the gap between Wipro and its peers began to widen.

Let us take Infosys for instance. Infosys overtook Wipro to become the second largest IT service provider in early 2000s. (Infosys' revenue was Rs 2603 crore in FY2002 compared to Wipro's Rs 2300 crore.)

However the gap between the firms the two firms began to widen in FY12. In FY2012 difference between Wipro and Infosys  reached $1 billion in revenues it now stands at $4.15 billion. Infosys' FY20 revenue stood at $12.8 billion.

In case of HCL Tech, Wipro was $1.8 billion ahead of HCL Tech in terms of revenues in FY10. In a decade that changed too.

HCL Tech displaced Wipro become the third largest IT service provider in FY19. HCL Tech registered $8.6 billion in FY19 to Wipro’s $8.1 billion.

In just a span of one year, tables turned and the difference between the two firms is $1.70 billion, led by HCL Tech. In FY20, HCL Tech grew 15.1 percent to $9936 million whereas Wipro grew only 1.6 percent to $8256 million.

Between 2010 and now, HCL Tech had three CEOs, Vineet Nayar, Anant Gupta and current CEO C Vijayakumar. Wipro has seen four CEOs in the past 10 years.

Multiple industry watchers and analysts Moneycontrol spoke to pointed out to the structural challenges executives have to navigate and the slower pace of innovation.

Sanchit Vir Gogia, founder, Greyhound Research, said that the pace of innovation in Wipro is slow compared to the rate at which technology landscape is evolving.

Abidali Neemuchwala, who took over as CEO in February 2016, to some extend tried to address that. It was under his leadership Wipro's digital strategy was launched.

According to an industry watcher, this involves investment and would take time to show results.

"This also explains why the growth has been slow under Neemuchwala," he added.

That is exactly why a lot is riding on Thierry Delaporte’s appointment as the new CEO. He will have to accelerate growth by changing organisational level.

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Swathi Moorthy
first published: Jun 1, 2020 09:45 pm

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