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  1. How GFC hit Infosys, Wipro performances: Credit Suisse

How GFC hit Infosys, Wipro performances: Credit Suisse

Infosys and Wipro’s performance deteriorated post the GFC, possibly due to the changed environment.

By: | Published: June 8, 2016 7:07 AM

Infosys and Wipro’s performance deteriorated post the GFC, possibly due to the changed environment.

Infosys was hurt by its excessive focus on “high-end” services even as discretionary budgets were being cut, poor sales execution and the loss of employee morale. Inadequate investments to take advantage of a demand uptick, absence of leadership continuity, lack of uniform growth across segments and exposure to challenged segments such as energy and telecom equipment hurt Wipro.

Repositioning of Infosys, new CEO Vishal Sikka’s client connects, intense focus on large accounts/deals, greater flexibility while bidding for deals, tighter execution and uplift in employee morale all helped in getting Infosys back on track, in our view. Importantly, all cylinders were fired—growth was uniform across geographies and verticals.

Things changed for both Infosys and Wipro, both high-quality companies, post the GFC — they struggled to adjust to the changed business environment. Infosys suffered from its inflexibility on pricing and excessive focus on high-end services (consulting and products) at the cost of the traditional outsourcing business, which was still growing at a decent pace for its competitors.

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