You could say this company has really cleaned up in the technology services business. Wipro is one of India's leading providers of system integration and outsourcing services to a global clientele; domestically the company also makes soap and other consumer products. Operating in more than 50 countries, its Wipro Technologies arm offers software development and business process outsourcing (BPO) services, as well as consulting and product engineering, while Wipro Infotech provides IT products and services to customers in India and the Asia/Pacific region. Wipro's consumer goods include personal care products (led by the Santoor, Yardley, and Unza brands), as well as commercial lighting, and office furniture.
Once highly diversified, Wipro has built up its IT products and services businesses to account for between 80% and 90% of revenues in each of the past several years. The company has benefited especially from the trend of cost-conscious companies, particularly in the US and Europe, outsourcing their IT operations to boost profits. However, a weakened US economy and stiff competition from other Indian managed IT companies like Infosys and Tata has Wipro looking to developing markets in Asia, Europe, and the Middle East to help fuel growth.
Though consumer products account for a small percentage of its overall revenues, Wipro maintains a competitive position in several product categories, including soaps and lighting. The company is a leading manufacturer of hydraulic parts and equipment primarily for the automotive market through Wipro Infrastructure Engineering. Its majority stake in Brazil-based hydraulic cylinder maker R.K.M Equipamentos Hidraulicos, extends the reach of its engineering business in Latin America. Wipro entered the aerospace and defence market in 2011 with a contract to manufacture aviation actuators. The following year, it formed a joint venture with Kawasaki to make excavator pumps for the Indian market. Wipro also provides support services for users of General Electric medical equipment through Wipro GE Healthcare, a joint venture 51% owned by GE.
The increased focus on international regions outside of North America and Europe is paying off. Total IT services revenue grew in fiscal 2012 due to increased sales to its new target regions; revenue from the Asia Pacific region rose 42% in 2012, while sales to India and the Middle East grew by 17%.
Wipro Limited's $7.5 billion in total sales for fiscal 2012 represented a 21% increase over the previous year, while profits dipped slightly due to higher operating expenses. Sales and marketing costs, in particular, jumped 25%, while general and administrative costs rose 10%; the increase in expenses were driven mainly by spending in the IT services, consumer care, and lighting product segments.
Wipro's acquisitions support its growing focus on untapped international markets for its IT products and services. In 2012 the company acquired Australia-based Promax Applications Group, a developer of applications used to manage trade promotion and optimization, to expand its presence in the Asia Pacific region. The previous year it boosted its profile in the global energy industry when it acquired US-based SAIC's oil and gas IT services business. The deal included SAIC subsidiaries in France, India, the Middle East, and the UK.
Chairman Azim Premji owns 78% of the company. – less