Rank 2: WIPRO: A Tale of Two Divisions

This was probably one of the toughest years at Wipro. Growth rate
plunged to single-digit numbers-down from around 40% in the past few years to a
mere 7.9% in FY 2001-02. But therein lies a tale. Wipro Technologies, the
software and services exports arm, actually grew at well over industry
standards, at 28% to Rs 2,297.7 crore, while revenues of Wipro Infotech, its
domestic and Asia-Pacific arm fell by 23% to Rs 881.6 crore. In absolute terms,
it meant that a growth of nearly Rs 497.6 crore in software exports was offset
by a fall of Rs 265.6 crore in the domestic business. Similarly, Wipro Tech’s
profit before tax grew 28%, while that of Wipro Infotech fell 28%.

Performance Highlights Wipro Tech bags $70-million global SI order–one of the largest in Indian IT services history European revenues up to an impressive 36% Systems revenues dip 24%, networking slips 23% Strengths Focus on R&D services to pay off after downturn Has grown European business, de-risking itself from too much dependence on North America Weaknesses Domestic systems business needs a major leg up, and the APAC business hasn’t grown as fast as it should have Constant organizational restructuring can hamper quick decision-making Wipro Ltd. l Startup: 1980 l Products & services: Desktops, servers, thin clients, availability services, facilities management, infrastructure consulting, software development l Branches: 45 l Dealers: 300 l Address: Doddakannelli, Sarjapur Road, Bangalore 560035 l Tel: 8440011 l Fax: 8440350 l Website: wipro.co.in

The company's domestic hardware business, in fact, got battered from all
sides. Systems and networking revenues were down to nearly a third. The
peripherals business was hived off into a separate company called Wipro
ePeripherals in 2000-so that revenue stream was out, as was the global support
business, which was handed over to Wipro Technologies. On a like-to-like
comparison, therefore, Wipro Infotech revenues fell by a comparatively less
drastic 14%. The only good news came from domestic hardware services, which grew
by 15% to Rs 178 crore. By March this year, Infotech also completed its first
full year of Asia-Pacific operations, which, however, brought in only Rs 3.8
crore in revenues.

The story at Wipro Technologies, though, was quite different. Apart from
bagging one of the largest SI orders ever, the division successfully managed to
grow its European business–unlike a lot of its competitors, which are still
struggling to penetrate this geography. More importantly, in a tough environment
that had everyone running for volumes, it continued to get nearly half its
revenues from high-value R&D services. Wipro Tech’s profitability in a
tough year, however, also came from some tough belt-tightening measures,
including the laying off of about 277 people under the "Bottom 5%"
policy. This made Wipro Tech one of the few software companies among the Top 10
where the headcount actually decreased by the end of the year. In all ways, a
year to remember at Wipro.