India's third largest IT services company has reported its quarterly numbers. Read it here. Wipro Ltd, which has been in turnaround mode for what seems like almost ever, has turned in a weak set of numbers. The outlook it has promised for the next quarter is also not very enthusing.
Usual statements from the management of how bold investments in digital and cloud, are paying off, should be taken with a pinch of salt. Wipro has tried to buy growth and its past track record indicates that it has had mixed success on that front.
A leadership transition is complete with T K Kurien who initially laid all the groundwork and lead the turnaround, retiring from the company. Abidali Neemuchwala has been firmly ensconced in his role of CEO for a little over a year and working under the benign gaze of patriarch Azim Premji. Rishad Premji, his son is involved as the Chief Strategy Officer as well as looking after the interests of the promoter family.
Wipro like most of its Indian IT peers requires a fundamental shift in its thinking and strategy, if it wants to get back to the heydays of rip-roaring growth it enjoyed in the early part of the 21st century. Some of the changes it needs to do cannot be done under public gaze where there is a 90-day curse of having to benchmark oneself on a quarterly basis. It needs to drastically restructure including trimming headcount dramatically. All that is easier to do if it is privately held and doesn't have to be in the public arc lights, media and regulatory scrutiny all the time. Which is why for instance Michael Dell took his eponymously named company private.
Why Wipro alone and not say TCS or a Infosys? Unlike its Indian peers, Wipro is uniquely positioned to take bold bets and enter unchartered territory. With the promoter family controlling more than 70 per cent of shares, it is easier to do, than say Infosys where shareholding is widely dispersed and promoters hold just about 16 per cent of the total equity of the company. TCS with the turmoil happening in the Tata Group would not have the stomach for anything radical.
Premji in the past has not hesitated to take bold steps and while this columnist is not the first to suggest this course of action, maybe it is time for Wipro to seriously consider this. There is even a precedent within the group. Wipro's FMCG, lighting and furniture business was spun into a separate company and de-listed. Since then by all measures, it has done very well. Maybe all the tech arm of the group needs to is to take a lesson from its sibling.