The broking firm CLSA has given a “Sell” rating on Wipro a target price of Rs 445 after its CEO Thierry Delaporte tendered his resignation on April 06. Wipro announced Srini Pallai as the new CEO.
CLSA said that Wipro has “consistently underperformed its peers” after Azim Premji left the CEO’s post. It believes that the new CEO has a tough task ahead with Wipro.
Later during the week, Wipro will be reporting its Q4 results. CLSA in its research report said that the company was consistently performing poorly under Delaporte. Also, the IT- major was unable to retain senior talent, which includes CFO, COO, and various other business heads.
Further, under Delaporte, Wipro spent a significant amount of $2.7 billion on acquisitions. This is one of the highest spends by any large Indian IT company for acquisitions.
The brokerage house added in the report, that Pallia has handled multiple roles at Wipro, largely in S&M functions across verticals, service lines and geographies, particularly the US and Latin America. “The performance of the Americas1 strategic market over Q4FY20-Q3FY24 and the consumer business unit over FY16-21, when Pallia was in charge, was slightly better than Wipro’s overall performance.” “We believe an internal candidate for the CEO position may be appropriate,” CLSA added.