Wipro - CEO Resigns; Insider Takes Charge: Nirmal Bang

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.Thierry Delaporte, who took up the Chief Executive Officer role in July 2020, has resigned a year before his contract ended in June 2025. He was an external candidate for that role. That he would be forced to resign was widely discussed in the media for six-12 months. There was a perception that he had lost the confidence of Premjis (promoters) not only due to the underperformance vis-a-vis the tier-1 Indian peer set, but also due to the loss of senior Wipro Ltd. talent to other companies. A string of SBU heads and other senior folks quit over the last two years and joined in senior roles in other firms (some examples: Angan Guha – Head of Americas 2 (~30% of revenue) which housed the critical banking, financial services and insurance unit joined as CEO of Birlasoft in December 2022, Rajan Kohli – the Digital business head joined as CEO of Citius Tech in April 2023, Jatin Dalal – the CFO joined Cognizant in December 2023). .Thierry has been replaced by Srini Pallia who is a 32-year veteran of Wipro and last served as CEO of the Americas 1 unit, a role he took on in January 2021. Americas 1 unit includes healthcare and medical devices, consumer goods and lifesciences, retail, transportation and services, communication, media and info services, tech products and platforms and Latin America. .In the near term, we think external demand conditions will dictate the growth trajectory of Wipro and the consulting unit may act as a drag. The test for Srini Pallia would be how Wipro measures up against its peers when demand normalises. He needs to put in place the blocks now, to see that Wipro starts running fast as soon as the demand picks up. We think both investors and promoters would give him three years to deliver though his tenure has been set at five years..We maintain a Sell on Wipro with target price of Rs 441, which is based on target price-to-earning multiple of 16.6 times (30% discount to Tata Consultancy Services Ltd.) on FY26E earnings per share.The high discount of 30% that we are assigning is due to its significantly below peer group revenue performance in the recent quarters and the significantly lower return on invested capital due to its inability to squeeze out enough value from its M&A moves. We believe the new CEO needs to execute before we can think of changing our target PE multiple.Click on the attachment to read the full report:.Vistara Crisis Management: Pilot Help From Air India Will Take Time To Fly — Profit Exclusive.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Wipro - CEO Resigns; Insider Takes Charge: Nirmal Bang

We believe the new CEO needs to execute before we can think of changing our target PE multiple.

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Wipro - CEO Resigns; Insider Takes Charge: Nirmal Bang

We believe the new CEO needs to execute before we can think of changing our target PE multiple.

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