Wipro's revenue from top 10 clients on the decline

The revenue contributions from Wipro's top 10 clients have reduced by four percentage points to 17 per cent of its IT services revenues during the past three years amid pricing pressure, technology shifts, and global uncertainties.

Global businesses have reduced spending on traditional IT services and shifted their dollars to digital technology areas such as cloud.

“Our 10 largest IT services clients accounted for approximately 21 per cent, 19 per cent, and 17 per cent of our IT services revenues for the years ended March 31, 2015, 2016, and 2017, respectively,” said the Bengaluru-headquartered software services major in its annual report.

Wipro earned net profits of Rs 8,514 crore on revenues of Rs 55,040 crore in FY17. 

Growth in dollar terms was 7.4 per cent to $8.5 billion in the last fiscal year, at a time when its larger peer, TCS, grew 6.2 per cent at $17.58 billion. Revenue growth in dollar terms was at par with that of Infosys.

Wipro, India’s third-largest software services exporter, and its peers such as Infosys and TCS have seen their customers slash budgets on traditional IT services — building applications or maintaining them on servers located on their premises, and shifting the dollars to newer services in digital and cloud. 

At the same time, clients are seeking to automate testing and first-level maintenance services, hurting Indian firms. The new dollars are being invested in emerging areas such as digital, making an application that looks good and works on a smartphone as efficient as a Facebook app, while making sure that the backend software talk to each other more effectively for the right outcome.

Wipro said it was offering premium services across the digital value-chain, including advisory, strategy, design and engineering, and has been investing in non-linearity initiatives including deploying its artificial intelligence platform Holmes.

In digital contracts, clients expect firms such as Wipro to consult and work with them locally to arrive at a solution before they deliver from offshore locations such as India. This shift has also forced companies to look at increased hiring in countries such as the US.

Wipro plans to have nearly 50 per cent of its US workforce to be locals. The firm says global firms are looking at consolidating their IT vendors as they look at both value and cost.

“However, we continuously strive to differentiate ourselves from the competition and sustain prices and profits by demonstrating the unique and differentiated value we bring to our clients,” it said.