Wipro Technologies Ltd.

Company Overview

Wipro Limited (Wipro), incorporated in 1945, is a global information technology (IT) services
company. The Company is organized in segments, which include Global IT Services and
Products (GBITP) (comprising of IT Services and BPO Services segments), India and AsiaPac
IT Services and Products; Consumer Care and Lighting, and Others. The business is
segmented into 5 areas IT Services (Max. Business), Product Engineering solutions, Technology
Infrastructure Services (Picking up), BPO and Consulting
Global IT Services and Products: Customers in Americas, Europe and Japan. (GBITP)

The range of its services includes IT consulting, custom application design, development, re-
engineering and maintenance, systems integration, package implementation, technology
infrastructure outsourcing, BPO services and research and development services in the areas of
hardware and software design. Its services extend from enterprise application services to e-
Business solutions.

Wipro's research and development services division accounted for 35% of its IT Services and
Products revenue in fiscal 2007. Wipro's research and development services are organized into
three areas of focus: telecommunications and inter-networking, embedded systems and
Internet access devices, and telecommunications and service providers.

India and AsiaPac IT Services and Products

The India and AsiaPac IT Services and Products segment accounted for 16% of Wipro's revenue
in fiscal 2007. The Company's suite of services and products consists of technology products;
integration, IT management and infrastructure outsourcing services; custom application
development, application integration, package implementation and maintenance, and consulting.

In India, the Company offers a portfolio of international brands in desktops, servers, notebooks,
storage products, networking solutions and packaged software to meet its clients' requirements.
The Company offers availability services, such as hardware and software maintenance, and
network availability services. These services are typically bundled with sales of the Company's
technology products.

Wipro also provides consulting services in the areas of business continuity and risk management,
technology, process and strategy.

The Company competes with IBM, Hewlett Packard, EDS, Dell, TCS, HCL Infosystems and
Infosys.

Consumer Care and Lighting

Wipro's Consumer Care and Lighting business segment accounted for 5% of its revenue in fiscal
2007. The Company's product lines include hydrogenated cooking oil, soaps and toiletries,
wellness products, light bulbs and fluorescent tubes, and lighting accessories.

Brands include Santoor, Chandrika and Wipro Active.

The Company's product line includes incandescent light bulbs, compact fluorescent lamps and
luminaries. It operates both in commercial and retail markets. Its product line consists of
hydrogenated cooking oils, a cooking medium used in homes, and bulk consumption points like
bakeries and restaurants. It sells this product under the brand name Wipro Sunflower.
The Company competes with Hindustan Lever, General Electric and Philips.

Growth figures for last five years

Comparison with Competitors

TCS Infosys Wipro

Sales growth (CAGR, 36% 29% 38%
FY05-FY07, %)
Profits growth (CAGR, 39% 35% 42%
FY05-FY07, %)
Revenue in crores 15471.99 13149 13679.6
Operating margins (%) 27.8 32.12 23.9
No. of employees (Nos.) 105000 72241 75000
Attrition 13.70% 11.50% 20.00%
P/E 30.08 29.29 25.96
EPS 38.39 66.14 19.48

1) Wipro’s profit growth is maximum because of series of acquisitions by Wipro n different

areas like Financial Services, FMCG and Infrastructure services
2) The operating margins are lower because of hike in onsite salaries, increased expenditure
on R&D services, foreign exchange problems and expenses incurred after number of
acquisitions
3) Attrition Rate is higher in Wipro and is close to 20% because people going for higher
studies
4) Financial Services are growing at a CAGR of 50% for last four years and has crossed 1
billion mark in overall revenue
5) The hardware work in Wipro specially in Telecom area is the killer differentiator, Infosys
on the other hand is rated highest for their systems excellence whereas TCS is mostly
appreciated for their execution skills.
6) TCS still enjoys the maximum revenue
7) Data Quest rates TCS as no.1, Wipro as 2nd and Infosys as 3rd in top 20 IT rankings

Business Philosophy: Inorganic Growth

One of the major components of Wipro’s growth is attributed to the series of acquisitions in
diverse business portfolios. The major focus of Wipro is to gain market competence in business
consulting and strategic division. Their recent acquisitions in American Management Systems,
Nervewire and Ericsson’s Indian IT R&D Operations will enable it to seek high end consulting in
offshore outsourcing. From recent acquisitions we can make out that Wipro is strengthening its
BFSI, Energy and Utilities and Telecom Domain.

Please find the list of acquisitions at

Reuters - http://stocks.us.reuters.com/stocks/fullDescription.asp?rpc=66&symbol=WIT

Some recent ones

WIPRO'S ACQUISITION APPETITE

Acquired
Nature of business Period Deal size
entity
3D Networks Communication
Nov-06 23
and Planet PSG solutions
Computer-aided
design
Quantech Jul-06 10
and engineering
services
Telecom design and
Saraware Oy Jun-06 32
engg. services
Enabler Retail solutions Jun-06 52
Business
cMango management Apr-06 20
service solutions
Unza FMCG Jul-07 246*
* Approximately $246 million in an all cash deal (All figures in $million)

Question: Can acquisitions help Indian companies to join big league?

Wipro is in move to enhance its IT infrastructure management division by acquiring Infocrossing

for $500 million with $18.70 per share deal. This acquisition of an acknowledged industry leader
in technology infrastructure space broadens the data center and mainframe capabilities of Wipro
Technologies. Infocrossing will considerably enhance Wipro’s ADM & BPO offerings to
Healthcare customers.

Wipro also acquired mechanical design firm Quantech; retail solutions firm Enabler; and
wireless design firm Sarawareall three aimed at skill acquisition

Wipro’s strategy for growth

• Business acquisitions is most visible strategy of Wipro, I have already discussed in

Philosophy
• Account Management Process
• Consulting and Domain Experts (from product out to customer centric). According to
2005 estimates the annual consulting revenue is 5% of total. But Wipro is bullish on this
space
• Geographical footprint expansion in Germany, Japan, Canada and Middle East
• Increasing global delivery capabilities through centers in Beijing and Shanghai,
Bucharest, Portugal and Brazil.
• Increase in training spend, significant increased training onsite in US, Europe, Japan and
Middle East to complement offshore training initiatives in India
• Transforming BPO business from a call center to an integrated solution offerings