DQ Top 20:#4 Wipro

Wipro's revenue from continuing operations increased by 15%, excluding its BPO business. Wipro's two business lines are IT services (BPO included) and IT products with 91% of the revenues coming in from the former. The share of IT services has been increasing over the past few years due some decisions on the IT products front. The IT products business is primarily domestic and it helps the company win many domestic systems integration deals. During the year, revenue from the IT products segment decreased by 1%, primarily due to decrease in revenue from domestic sales of computers and servers following cessation of manufacturing ‘Wipro' branded desktops, laptops and servers.

At the end of Q3, the company ceased manufacturing ‘Wipro' branded desktops, laptops and servers signaling its exit from this market. The company said that it will continue to fill existing orders and honor its warranty and service obligations. Wipro will continue to maintain a presence in the hardware market by providing suitable third-party brands as a part of its solutions in large integrated deals.

Starting with Q2, Wipro implemented a new segment reporting structure to align itself with industry trends. The six IT services business segments are: Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), retail, consumer goods, Transport and Government (RCTG), Energy, Natural Resources and Utilities (ENU), Manufacturing and High-Tech (MFG) and Global Media and Telecom (GMT).

Wipro's revenue from IT services and BPO rose 18%. The company experienced growth across all IT services business segments, but particularly in ENU and HLS. In the IT services business collectively, the company added 174 new clients during the year. Within service lines, Global Infrastructure services, analytics and information management and BPO grew during the year. All geography segments showed strong growth led by Europe and the others geographic segments. Notable orders include The Home Depot order to deploy an energy management solution across 1,900+ its stores over the next two years; helping Westfield, one of the world's largest shopping centre portfolios with 90 centers in Australia, New Zealand, USA and UK, to achieve its strategic vision of creating a future ready Human Resources (HR) platform; amongst others.

The year also saw an increase in wage costs due an increase in the number of sales personnel and increased compensation as part of the annual compensation review and annual progression cycle. Also, there were notable changes in leadership positions: Appointment of Ulrich Meister as Senior Vice President and Head of Continental Europe; Shaji Farooq was appointed Head of BFSI; Soumitro Ghosh was designated to lead Wipro Infotech; and GK Prasanna took charge of Global Infrastructure Services (GIS).

In January 2014, Wipro acquired Opus CMC, a leading US-based provider of mortgage due diligence and risk management services, to strengthen its mortgage solutions and outsourcing business and complement its existing offerings in mortgage origination, servicing and secondary market.
"This acquisition will help us expand in the high end Mortgage BPO segment, and brings differentiated capability with a platform-based risk management offering. Opus CMC has an experienced management team with a deep understanding of the emerging needs of this business," the company reported.