QUARTERLY RESULTS

Act swifty, or Wipro may face serious growth challenges: Experts

wipro-reuters [File] The logo of Wipro is seen inside the company's headquarters in Bengaluru | Reuters

After IT major Wipro announced a fall in its net profit which fell around 20.3 per cent to Rs 1,803 crore in the Q4 of FY ending March 2018 experts are saying that the growth engine for Wipro is challenged and it is not only for the present quarter but it has been happening over the last few years for the company. The experts with whom THE WEEK spoke to said that the company may have to face serious growth challenges if steps are not taken to steer the growth strategy for the company in the near future. The company has attributed the main reason for this poor quarterly performance due to the bankruptcy of its telecom client Aircel and the British energy client Carillion.

“Wipro is facing client related challenges and its growth engine is challenged. I feel that the company at the same time has not been able to manage its client portfolio well, as they did not foresee the future possibilities of their clients going bankrupt. Bankruptcy of its two clients may not have happened immediately and it would have been a result of months of challenges for its clients and so it was not an overnight phenomenon. They did not see that happening and suffered. The new financial year started on a challenging note and they will continue to have a tough time over the next few more quarters and it will take time for them to stabilize. It will have an affect on its stock performance also,” Amit Chandra IT analyst at Mumbai-based HDFC Securities told THE WEEK.

Another expert Kris Lakshmikanth, CEO and founder of Head Hunters India Limited, said that the poor growth performance of Wipro has been happening for quite some time and the previous CEO T.K. Kurien and its present CEO Abidali Neemuchwala has not been very successful in steering the growth for the company, though they have tried to implement their growth strategies but they have not been successful. “The present management will not take Wipro anywhere because they have been struggling to get good business. I feel that the company's management lacks an aggressive marketing strategy and needs to up its spend more on marketing activities. I feel that Wipro's choice of Neemuchwala as its CEO has not translated into good business and there also needs to be a few management changes to steer growth in the company,” said Lakshmikanth.

Experts such as Alok Shende of Mumbai based Ascentius Consulting feel that the growth for the company is not coming and the company has not balanced its client portfolios well and they need to have a diversity in terms of portfolio of clients from all the verticals and not just concentrate on a limited number of verticals. “Bankruptcy of a client can derail the complete growth performance of a company and can also drastically affect its bottom line also. I feel that their present and past strategies have not helped the company in achieving growth. I feel that with the improvement in the global economy, there can be some signs of improvement for the company this year,” said Shende.

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