Wipro CEO Optimistic as IT Service Market Shows Signs of Recovery

By Consultants Review Team Friday, 12 January 2024

Wipro's CEO, Thierry Delaporte, expressed optimism on Friday regarding the evolving landscape of the IT service market, noting the emergence of positive trends. The tech industry, including major players like Wipro, has faced challenges as clients scaled down projects and reduced spending. While the transformation is gradual, Delaporte observes a shift in the right direction.

During the company's third-quarter earnings conference, Delaporte highlighted a slight resurgence in discretionary spending within the market, a trend that was not evident in the preceding quarters. Wipro's Q3 constant currency revenues experienced a sequential decline of 1.7%, aligning with the top end of their guidance from the previous quarter. Looking forward, the company anticipates improved performance in Q4, projecting revenues to range between -1.5% to 0.5%.

Delaporte emphasized that, as the market gradually rebounds, the consulting business is expected to be the first to recover, an area where Wipro holds a strong presence. The company has benefited from vendor consolidation and has seen growth from existing clients.

Addressing concerns about project slowdowns, Delaporte reassured that the significant rampdowns observed earlier, where projects within accounts were stalled, have largely dissipated. He clarified that no projects were canceled, with the healthcare segment exhibiting positive sequential growth of 7.3%. However, other sectors, including BFSI, manufacturing, and communications, experienced declines during the quarter.

Wipro's operating margins for the quarter stood at 16%, reflecting a 63 basis point improvement on a year-to-date basis despite revenue headwinds. Aparna C Iyer, CFO of Wipro, attributed this to the company's efforts in building a more resilient, agile, and efficient organization.

Regarding recent leadership exits, Delaporte acknowledged the departures but assured that the company is prepared for the changes. The strategic focus on talent acquisition, enhancement, and growth has led to promotions triggering some churn, with a few individuals leaving the company. Wipro has also taken legal action against some former employees, citing contractual obligations rather than opposing career aspirations. As the market shows signs of recovery, Wipro remains committed to its strategy of resilience and agility, positioning itself for positive growth in the evolving IT service landscape.

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