Wipro arms flex muscles

Wipro Ltd's businesses, other than Wipro Technologies (the company's global IT business), that account for a little over Rs 3,000 crore are coming into their own.

For instance, it's just today that Wipro Infotech (its India, Middle East and South-East Asian arm) acquired Singapore-based 3D Networks and Planet PSG "" a $36 million infrastructure management services company "" for $23 million (around Rs 115 crore) in a total cash deal. This is Wipro's eight acquisition in the past 10 months.

The business of Wipro Infotech has transformed from being relatively small and concentrating just on PCs and enterprise products to now getting the best of outsourcing deals, not only from India but also the middle-east, explains Anurag Behar, vice-president, mission quality, corporate brand & innovation, Wipro. The second quarter figures reflect his optimism.

For the quarter-ended September 30, 2006, Wipro Infotech recorded revenues of Rs 542.60 crore, a growth of 36 per cent YoY. Its services business contributed 38 per cent to the total revenues during the quarter and grew 46 per cent YoY while its products business grew 31 per cent YoY. The Middle East and Asia Pacific business grew 59 per cent YoY.

The division won two long-term total outsourcing contracts in India totalling $100 million, covering application and infrastructure provisioning and management, and accounted for 15 per cent of Wipro's total revenue for the quarter ended September 30, 2006.

"We keep launching new services almost every quarter and are investing a lot on new generation technologies like supply chain management, customer relationship management and supply relationship management. We are also investing a lot on all other verticals we focus "" retail, TMTS, banking and finance," explains Suresh Vaswani, president, Wipro Infotech.

This quarter, Wipro Infotech won 65 new contracts across consulting, solutions and infrastructure as compared to 42 contracts won in the first quarter of this fiscal. It won 14 new customers with its application operations dupport service in less than three months. Its global service management centre (GSMC) in Mysore was launched in March this year and currently serves about 30 customers including Maruti, Corporation Bank and Optimix, according to Gaurav Chadha, Head-Business Development, Wipro infotech.

Not to be left behind during the second quarter, Wipro Consumer Care and Lighting recorded revenues of Rs 203 crore, a growth of 41 per cent YoY. It accounted for 6 per cent of the revenue for the quarter ended September 30, 2006. "This business has been growing at 25 per cent CAGR in a relatively-flat market," says Behar. Brand Santoor is growing dramatically (organic growth) and all the acquisitions have been in line with our branding strategy "" Chandrika Ayurvedic soap, Glucovita glucose powder and North West Switches (modular switches) this May.

The lighting segment has benefited from the boom in the real estate market, explains Behar.

Not only has the core lighting business soared but "we have also been selling lighting (bagged an implemented the Delhi Metro Lighting project this year) and office modular furniture". As for Wipro Sanjeevani Isabgol, "it's too nascent a business to take a call. It's being seeded now" he adds.

The other important business segment, Wipro Infrastructure, took over Sweden-based Hydrauto Group AB for $31 million in an all cash deal just this September. The acquisition is expected to be completed by the third quarter 2006-07. This was Wipro's first acquisition in this sector.

With Wipro Infrastructure, almost 60-70 per cent of the hydraulic equipment (material-handling) is used in the construction equipment business. Since infrastructure development "" roads, ports and airports "" has got a boost and should last for the next 5-10 years, "our business should see good growth", says Behar who is also the MD of this business division.