IT giant Wipro announced a multi-million dollar deal with a US firm that positively impacted its stocks.
Indian IT services company Wipro revealed on Thursday that it has secured a deal worth $550 million from a US-based communications service provider. The duration of the pact is 5 years. Wipro has stated that, per the agreement, they will provide managed services for some products and industry-specific solutions within the specified period.
However, the name of the American firm was not disclosed in the company’s exchange filing.
Notably, just before the official announcement of the deal, Wipro’s shares closed 2.09% higher at ₹461 each on the Bombay Stock Exchange (BSE). This development, as reported by the Mint, could potentially lead to a positive shift in the company’s stock price.
On April 19, Wipro released its financial results for the January-March quarter of the fiscal year 2023-24 (Q4FY24), revealing a decrease of 8% in consolidated net profit, amounting to ₹2,835 crore. Around the same time, its new CEO, Srinivas Pallia, took charge.
This is Wipro’s second megadeal win since the appointment of Pallia, after the departure of its previous CEO, Thierry Delaporte, just one week into the new fiscal year 2025. Over a month ago, it disclosed a multi-billion dollar agreement with Nokia to revamp its employee service desk and provide immediate IT assistance to its worldwide staff. Although the precise magnitude of that deal was not specified.
In FY24, Wipro disclosed $4.6 billion worth of large deals without revealing the actual sizes of each. Most IT service companies’ primary revenue generators are big or mega deals, often exceeding $500 million.
In the last fiscal year, communication contributed the least to Wipro’s revenue, making up about 4.2% of the total $10.8 billion revenue. Manufacturing followed with a 6.9% share, while technology and energy, natural resources, and utilities accounted for 11.7% and 11.8%, respectively. Banking, financial services, and insurance (BFSI) dominated, with one-third of Wipro’s business, at 33.4%.
Srini Pallia expressed that FY24 presented challenges for the industry and the macroeconomic environment remained uncertain. However, he conveyed optimism regarding the opportunities ahead.
Pallia noted that a significant technological shift was imminent, with artificial intelligence reshaping clients’ needs as they aimed to leverage its potential for competitive advantage and increased business value.
In December 2023, Wipro’s Chief Growth Officer, Stephanie Trautman, resigned. In a strategic move to enhance its business operations, Wipro disbanded the growth office and restructured it into strategic market units (SMUs). These units, overseen by the then-CEO, Delaporte, are expected to drive the company’s growth in the future, instilling optimism in the market.
