Wipro losing grip to rivals in US market

Jan 21 2013, 03:47 IST
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SummaryEven as US and Europe, which account for close to 80% of India's IT export revenue, keep their budget on a tight leash, earnings of top-tier Indian IT firms have managed to show an uptick in demand from their largest markets.

Even as US and Europe, which account for close to 80% of India's IT export revenue, keep their budget on a tight leash, earnings of top-tier Indian IT firms have managed to show an uptick in demand from their largest markets. Wipro, however, was the only company among the pack to post a sequential revenue decline in the US region during the December quarter.

Experts feel the country's third-largest software-services exporter, which still appears to be struggling from the impact of its internal restructuring, has not been able to adjust to the change in market realities. The firm's revenue from the US region slipped 0.7% sequentially, while the year-on-year declined 0.5%.

“In the last two years, Wipro has been a laggard among top-tier IT companies. Since T K Kurien came in, there have been significant changes within the company, including management reshuffle, marketing strategies and approach towards various businesses. Wipro has been on an experimentation mode and some of its experiments have not worked for the company. They lost out quite a bit in that process to competition,” said Pradeep Mukherji, president and managing partner, Avasant, an IT-BPO advisory firm.

Wipro's third quarter performance, when compared to its peers on revenue growth from the North America market. reveals a stark difference. Infosys' revenue from North America grew 1.6% sequentially, while it was 2.5% for TCS. The Noida-based HCL Technologies recorded a growth of 3.4%. “We would like to grow in all the markets. The US contribution has slipped a bit but we will bounce back once the growth comes back,” said Kurien, CEO – IT, business, Wipro. “The US market has always contributed around 50% of the company’s revenue and we would not like to get overweight on any particular geography,” he said.

According to Sanjeev Hota, assistant vice-president, IT research, Sharekhan, it is not about the market in the US but the vertical and clients Wipro is catering to. “TCS has grown in the US market because 46% of its revenue is from BFSI. The US is a big market for banking and financial services. Even HCL Technologies has a strong hold in the infrastructure management services (IMS) space, which is again a huge market in the US.

Wipro is catering to a different category of clients,” he said. Hota feels 'secular growth' is missing at Wipro. “In Europe, growth happened this quarter because of some ramp up in the utilities vertical in

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