Wipro, a global IT company that provide consulting and business process services, has beaten Cognizant technology solutions in Market Capitalisation.
Wipro stands in fourth place as the most valuable information technology service firm among the top companies like Accenture, TCS and Infosys. These market cap numbers have triggered a renewed confidence among the investors, A year after Wipro’s newly appointed CEO, Thierry Delaporte.
As per the media reports, Wipro‘s American depositary receipts (ADR) grew from 2.4% to 7.4 apiece on the NYSE, which gave the company’s market capitalisation of $38.1 billion.
The Nasdaq-listed Cognizant technology solution was up by 1.2% at $71.5 in morning trade on the Nasdaq, resulting in the market capitalisation of $37.7 billion.
For the past two years, Cognizant has had moderate revenue growth. Cognizant strode past Wipro in terms of revenue a decade ago in an awkward turn of events and is still way ahead on that count. For FY20, Cognizant’s revenue was $16.5 billion, which is more than double that of Wipro, which ended its fiscal on March 31 with $8.1 billion.
Wipro‘s new CEO has made the company turn around; he has redefined their service lines to ensure better focus and also trimmed Wipro’s senior management. Wipro won their largest deal ever with a German retailer Metro which has opened the door to a bunch of digital deals. Previous Wipro CEOs Abidali Neemuchwala and TK Kurien under these leaders the company’s growth has been sluggish, dealing with the clients in the sectors like energy and healthcare which went badly due to change in policies and macroeconomic conditions in the US. With the new CEO, Delaporte Wipro, shares have skyrocketed with a whopping rise of 127%.
Cognizant‘s downfall started after their previous CEO, Francisco Dsouza, ‘s tenure with the company ended. And the new CEO, Brian Humphries, has been unable to revive it. They have spent around $1.5 billion on acquisitions of various companies, which has not been able to revive the topline growth of the company. Their profit for the full year fell by 24% to $1.4 billion. Comparing to Wipro’s increased by 11% to $1.4 billion. The operating margin languish is at 12.7% in comparison to Wipro’s is up at 20.3%. The company share prices have gone up by 16% in the last two years.’
Read more about Why Cognizant’s executives are leaving
Cognizant is dropping the ball in many areas where their top-level executes are leaving and unable to retain talent; Cognizant had an attrition rate of 21% compared to Wipro, which was at 12%. Cognizant’s CEO confirmed the loss of many commercial opportunities because of its inability to source talent.
As per Top Analysts, Wipro has finally started with the right goal, and their turnaround is bound to happen. Acquisitions like Capco and Ampion which has significantly heightened Wipro’s digital capabilities . Cognizant has not been as impactful compared to when it started their intensity to crack deals and to progress at a high rate for the last decade has slowed down.
Read more about Cognizant attrition
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