Wipro's Consulting Business Capco Shows Signs of Stability Amid Improving BFSI Revenues

Wipro's consulting arm Capco sees 6.6% sequential growth in Q4, driven by BFSI sector recovery, as the IT giant focuses on revitalizing its business amid economic challenges.

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Dil Bar Irshad
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Wipro's Consulting Business Capco Shows Signs of Stability Amid Improving BFSI Revenues

Wipro's Consulting Business Capco Shows Signs of Stability Amid Improving BFSI Revenues

Wipro, one of India's leading IT services companies, has reported early signs of stability in its consulting business Capco, which has grown 6.6% sequentially in the fourth quarter of fiscal year 2024. According to CEO Srinivas Pallia and CFO Aparna C Iyer, this growth is attributed to improving revenues from the banking, financial services, and insurance (BFSI) sector.

Capco, a British consulting firm acquired by Wipro for $1.45 billion three years ago, has been successfully integrated into the company's operations. However, the process would have been faster without the economic slowdown. Despite the challenges, Wipro has been able to command premium pricing from the consulting business even in the present scenario.

Pallia highlighted five focus areas to revitalize the company: accelerating large deal momentum, strengthening relationships with large clients, focusing on industry-specific offerings and business solutions led by consulting and AI, building a talented and AI-ready workforce, and simplifying the operating model. He expressed optimism about the long-term opportunities, despite short-term challenges, and emphasized the need for transparent and rigorous execution to deliver tangible results.

Why this matters: The stability and growth of Wipro's consulting business Capco amid improving BFSI revenues is a positive sign for the company and the Indian IT industry as a whole. It indicates that the sector is starting to recover from the impact of the economic slowdown and that there is potential for further growth in the future.

Wipro reported an 8% year-on-year profit decline in Q4, with revenue remaining flat sequentially. The company maintains a modest outlook, with guidance for Q1 FY25 at -1.5% to 0.5%. Wipro's total bookings stood at $3.6 billion, with large deal bookings at $1.2 billion. Margins improved slightly from 16% to 16.4%, but the company expects them to remain range-bound in the short term. Attrition remained at 14.2%, and the company reduced its headcount by 6,180 employees in Q4.

Key Takeaways

  • Wipro's consulting biz Capco sees 6.6% Q4 growth, driven by BFSI sector.
  • Capco integration successful despite economic slowdown, Wipro commands premium pricing.
  • Wipro focuses on large deals, client relationships, industry-specific offerings, AI workforce.
  • Wipro reports 8% YoY profit decline, Q1 FY25 guidance at -1.5% to 0.5%.
  • Margins improve slightly, attrition at 14.2%, headcount reduced by 6,180 in Q4.