Why Former Chairman Azim Premji Has Expressed His Unhappiness About Wipro

Wipro¡¯s underperformance this year on both the business as well as stock market front seems to be bothering its former chairman Azim Premji.

What Has Azim Premji Said About Wipro?

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Former Wipro Chairman Azim Premji has expressed his displeasure to son Rishad Premji and CEO Thierry Delaporte, according to four people aware of the development, a Mint report said. Premji, who owns 73% of Wipro, even expressed his disappointment to CEO Delaporte in a private 45-minute meeting ahead of Wipro¡¯s 18 October board meeting to approve its second-quarter earnings, one of the executives said.

Why Is Azim Premji Unhappy With Wipro?

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It's noteworthy that Wipro¡¯s underperformance in the last six quarters alone is not the reason that has made Azim Premji unhappy. Wipro does not expect any incremental growth at least until June of next year, according to its current order book and internal hiring estimates, a Wipro finance executive said.

Wipro expects revenue to fall up to 3.5% in the October-December period. This will imply its revenue in the October-December period will be almost the same as it was in the October-December period of 2021.

78-year-old Premji is said to be unhappy as Wipro¡¯s turnaround has been hobbled by sweeping cultural changes, falling growth and profitability, a steady stream of exits and underperforming stock, the people said on the condition of anonymity.

Also Read: All You Need To Know About Wipro's New CFO Aparna Iyer

When Was Wipro Founded?

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Wipro was incorporated on December 29, 1945 by its founder Mohamed Premji. Then in 1966, after Mohamed Premji's death, his son Azim Premji took over Wipro as its chairperson at the age of 21.

How Have Wipro's Business & Shares Performed Against Rivals?

In its Q2 results released in October 2023, Wipro's consolidated profit had remained almost flat at Rs 2,667.3 crore in the second quarter ended September 30. The company posted a profit after tax of Rs 2,649.1 crore a year ago. Its consolidated revenue from operations declined marginally to Rs 22,515.9 crore in the reported period from Rs 22,539.7 crore it registered in the September 2022 quarter, according to the filing. As far as shares are concerned, it is just about 5% up this year to date.

When it comes to its competitors, HCL Technologies Ltd had reported a 10 percent rise in its consolidated net profit at Rs 3,832 crore for the quarter ended September 30, 2023, in-line with estimates. The company had posted a net profit of Rs 3,489 crore in the year-ago period. HCL Tech had lowered its FY24 revenue growth guidance to 4-5% year-on-year. However, its shares have zoomed this year, jumping more than 30% this year to date.

As far as TCS is concerned, it reported a 9% year-on-year (YoY) growth in consolidated net profit for the quarter ended September 2023 to Rs 11,342 crore. Consolidated revenue grew nearly 8% YoY to Rs 59,692 crore. TCS shares are more than 9% up this year to date.

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Tech Mahindra had posted a 61.1 per cent year-on-year (YoY) fall in Q2 of FY24 consolidated net profit at ?505.3 crore. In the same quarter last year, the company's net profit was ?1,299.2 crore. Revenue from operations declined 2% year-on-year (YoY) to Rs 12,864 crore in the reporting quarter against Rs 13,129 crore in the year-ago period. Tech Mahindra's shares are up more than 18% this year to date.

In the case of Infosys, consolidated revenue from operations stood at ?38,994 crore during the quarter ended September from ?36,538 crore in Q2FY23. It was up 2.8% from ?37,933 crore in Q4FY23 (that ended in March 2023). Infosys had reported a mere 3.2% year-on-year rise in its consolidated net profit (attributable to owners of the company) for the fiscal second quarter ended September (Q2FY24) to ?6,212 crore. Infosys had reported a profit of ?6,021 crore in the year-ago period. Infosys shares are down more than 5% this year to date.

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