BENGALURU: After years of under-performing peers, all eyes are on Wipro Ltd’s newly-appointed chief to see if he can finally turn around the company and bring it back on track.
Wipro’s appointment of Capgemini veteran Thierry Delaporte as CEO and managing director, effective 6 July, seems to be a step in the right direction to turn around the company, according to analysts.
“Wipro has all the key ingredients for a turnaround," analysts at ICICI Securities said in a note. “It has strong full services capabilities across applications, infrastructure, BPS (business process services), and engineering which should help the company as integrated deals gain prominence. It has a strong balance sheet ( ₹250 billion net cash) to craft more complex deal structures and partake in captive buyout opportunities."
Analysts expect Delaporte’s experience in leading different service lines as well as expertise in the financial sector to help drive Wipro’s digital business. For Wipro, cloud is a nearly $2 billion practice within its digital business which contributed 41% to the total revenues and grew 20% year-on-year in Q4 FY20.
Delaporte is also expected to help deliver growth in the fast-growing European markets. “Europe is a key bastion of growth for the industry where Wipro has struggled in the recent past with constant currency growth of 2.6% and -1.3% in FY19 and FY20 respectively," ICICI Securities said.
Delaporte joins at a time when Wipro is underperforming its peers and the covid-19 pandemic added to uncertainties. Wipro, which typically guides for the quarter ahead, has refrained from giving revenue guidance for the April-June quarter due to uncertainties around the covid-19 crisis.
Analysts believe Delaporte has his task cut out as he takes charge in the backdrop of the recessionary environment. He will have to outperform his predecessors T.K. Kurien and Abidali Z. Neemuchwala.
“These are difficult times for the industry and Wipro has been underperforming even before the covid-19 crisis. So the new chief will have a tough task at hand…the need of the hour is to tide over the slowdown and spot new opportunities and revisit the offerings in the existing portfolio," Arup Roy, research vice president, Gartner said.
“Wipro, in our view, has suffered from the lack of client relevance, differentiation, and strategy. Wipro’s list of misses is quite big, whether it is in terms of missing the BPO/infrastructure cycle or missing out on the significant traction for offshore services in Continental Europe over the last few years," Emkay Research said.
Will Thierry Delaporte be able to add that Midas touch to Wipro? As Emkay Research pointed out, “Only time will tell if Theirry can identify some of these issues and reinvigorate the company."