BENGALURU/MUMBAI: Wipro touched a record Rs 3 lakh crore (or Rs 3 trillion) in market capitalisation, becoming only the third Indian IT company to do so after TCS and Infosys. The company’s shares have seen a strong rally over the past one year, suggesting investor confidence in its strategies under new CEO Thierry Delaporte.
Shares of the Azim Premji-owned company opened at Rs 546 on the BSE on Thursday, before touching an intra-day high of Rs 550, which took its market cap to a shade over Rs 3 lakh crore. The stock, however, pared the gains to close at Rs 539, down less than 1% from Wednesday’s close.
“We believe Wipro’s strong full services capabilities across applications, infra, BPS (business process services) and engineering will help in winning integrated deals, and help win large deals as seen in recent quarters. Hence, we expect the company to register 21% YoY dollar revenue growth in FY22E (of which 13% is organic and rest through acquisition) and 13% YoY in FY23E,” ICICI said in a note to investors.
Wipro touched the Rs 1 lakh crore mark in December 2009 and then it took almost 11 years to breach the Rs 2 lakh crore mark, which was achieved in October last year. The next benchmark came in just 9 months.
The performance under the previous two CEOs, Abidali Neemuchwala and T K Kurien, were far from remarkable, unlike those of some of Wipro’s peers. Growth was sluggish with bets on sectors like energy and healthcare going awry due to macroeconomic conditions and change in policies in the US.
Delaporte redefined the service lines for better focus and trimmed some senior management. Under him, the company won its largest deal ever, from German retailer Metro, and has built a healthy pipeline of digital deals. Wipro’s shares have risen 140% since he came on board.
Delaporte recently said, “Complexity was driving slowness and lack of decision-making in the organisation. We had 27 P&Ls and now we have 4. Simplicity is a must. We are reinforcing the power of the account executive and restructuring the organisation around them so that he has more powers to take decisions for Wipro and reducing the number of layers between the executive and the most senior person in the company.”
India had 10 listed companies with more than Rs 3 lakh crore in mcap as of Thursday. Wipro became the 11th to touch the milestone, though by the end of the day it was slightly below that. Reliance Industries, TCS and HDFC remain the most valuable companies. The company recently also moved past Cognizant to become the fourth most valuable IT services company globally, after Accenture and its larger Indian rivals.
“The new CEO’s strategy refresh could revive growth on improving win rates and underlying uptick in digital demand and drive higher profitability,” Elara Capital said.