On 29 April this year, Indian IT major Wipro completed its acquisition of UK-based technology consultancy Capco. It was a big deal, and not just because it cost Wipro US$1.45 billion. Capco is the company’s largest buy so far, marking a key milestone in its comeback trail. A trail headed by Wipro’s new chief executive officer (CEO), industry veteran Thierry Delaporte, who joined in July 2020.
Wipro’s fall had been in the making for nearly two decades now. Once the top dog of India’s IT sector after TCS, the Bengaluru-headquartered company slowly and steadily fell behind rivals such as Infosys, Cognizant, and HCL Technologies. In fact, Wipro lost its position as the third-largest Indian IT service provider by revenue (after TCS and Infosys) to HCL as recently as fiscal year ended March 2019.
The company had been underperforming for years—its 10-year compound annual growth revenue is in single digits compared to the double-digit growth of peers. It seemed like there was no way to stop the slide. Delaporte, ex-chief operating officer of Paris-headquartered IT major Capgemini, had his work cut out.
In less than a year, he dismantled and remade Wipro’s management structures and teams, letting go of some of the old guard, while others left on their own. He also infused aggression, chasing growth organically and through acquisitions, such as the Capco one.
The acquisition is significant in more ways than one. It brings in capabilities and clients for Wipro, expanding the company’s presence in its mainstay banking, financial services and insurance (BFSI) segment. More importantly, however, it signals that the company’s promoters have given Delaporte a free hand to turn around Wipro.
The Premjis—Indian business tycoon Azim Premji and his son Rishad Premji, who took over as chairman from his father in July 2019—own about 73% of Wipro. This is among the largest promoter stakes in Indian IT. The big promoter shadow, it has been speculated, contributed to the revolving door of Wipro CEOs; Delaporte is the third to hold that position in five years.
Delaporte, though, is seemingly being allowed to run the show the way he thinks best—without the need to look over his shoulders for a nod from the promoters. Responding to queries from The Ken, a Wipro spokesperson said, “CEO Thierry Delaporte has the complete freedom and authority to drive the changes he wants. He enjoys the confidence and support of Chairman Rishad Premji and other Board members.”
The changes have meant that the Wipro narrative is now one of an underdog picking itself up. Its March 2021 quarterly results were its best in a decade, marked by big deal wins, a sharp jump in operating margin and a 27% year-on-year growth in profit to Rs 2,974 crore (US$406.4 million).