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Business News/ Industry / Infotech/  Wipro Infra Engineering may enter marine, oil, gas sectors
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Wipro Infra Engineering may enter marine, oil, gas sectors

Over the next 18-24 months, the firm may open a new business or acquire a company to venture into the sectors, as it aims to treble revenue in the next five-six years

Wipro’s infrastructure engineering business was set up nearly 40 years ago and has about 1,700 employees globally—across India, Europe, Brazil and China. Photo: MintPremium
Wipro’s infrastructure engineering business was set up nearly 40 years ago and has about 1,700 employees globally—across India, Europe, Brazil and China. Photo: Mint

Bangalore: Wipro Infrastructure Engineering, a business division of Wipro Enterprises Ltd, plans to enter the marine and oil and gas sectors. Wipro Enterprises is Wipro’s non-IT business which was hived off into a separate subsidiary last year.

Over the next 18-24 months, it may open a new business or acquire a company to venture into the sectors, as it aims to treble revenue in the next five-six years.

Wipro Infrastructure Engineering, which has three primary businesses—hydraulic products, aerospace and defence, and water treatment—is also evaluating and working on initiatives in advanced manufacturing, including additive manufacturing and 3D printing.

The business will mostly focus on overseas geographies, and not India, as it explores entering marine and oil and gas, Wipro Infrastructure Engineering chief executive Pratik Kumar said in an interview.

“We’re exploring getting into marine and oil and gas. Same product, but applications are different, the treatment it goes through is very different and you have to have an understanding of that domain and application," said Kumar, a Wipro veteran of more than two decades.

Kumar said Wipro Infrastructure Engineering, which generates $300-350 million in annual revenue and aims to hit the $1 billion mark by around 2019-20, was looking at an 18-24 month timeframe for entering these segments.

“Given our own R&D (research and development) experience, it may take us longer. Or we may look at an inorganic route, acquire a small-sized company which will bring us that capability," said Kumar, who was previously also Wipro’s global human resources head.

Kumar did not specify what size acquisitions Wipro Infrastructure Engineering would look at to enter these new segments, but said that companies in this space typically generate revenues in the range of “$10-100 million".

Wipro’s infrastructure engineering business was set up nearly 40 years ago and has about 1,700 employees globally—across India, Europe, Brazil and China.

The business currently generates a large share of its revenue from India, with construction equipment accounting for 40%. Wipro Infrastructure Engineering has 13 manufacturing units, three of which are in India.

Measures taken by the Narendra Modi-led government to deliver on its strong mandate to revive the country’s struggling infrastructure industry may benefit companies operating in this space.

“Given where India is and all the signals we’re getting from the new government, with its impetus on infrastructure, there is good reason for us to hope and believe that it’s a matter of another three-six months before we begin to see the momentum coming back. Because this sector has really been languishing in the past two-and-a-half years," Kumar said.

“The money has to flow back into the system. There are so many crores of NPAs (non-performing assets) in the infra sector which are actually sitting with these banks. There has to be a way to restructure that for the revival of those projects," he added.

Wipro Infra, which currently has three large customers in the aerospace and defence segments, recently signed two contracts with global original equipment manufacturers and is in talks with more such global manufacturers, Kumar said.

“We see a positive sentiment as far as infrastructure is concerned after the new government has come in, saying that there will be a lot of thrust on the infrastructure sector. The debottlenecking part that is being attempted should provide some thrust," said Amrit Pandurangi, a senior director at consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd.

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Published: 28 Aug 2014, 11:36 PM IST
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