Assessing the AI credentials of Wipro

In light of rising adoption of an artificial intelligence (AI) and machine learning portfolio – backed by a steady fourth quarter (Q4) 2019 performance and supported by double digit quarterly growth (year-on-year) in the consumer and digital segment revenue – and the October acquisition of International TechneGroup, Wipro’s sentiments are on the rise.

GlobalData’s ‘Company Filing Analytics Platform’, which analyses and showcases sentiments across companies and sectors by scanning through earning transcripts and filing documents, finds Wipro’s overall sentiment score rose 17 per cent during the Q4 2019, surpassing past quarter scores and reaching the highest in the last two years.

In comparison, Infosys – Wipro’s competitor in the ‘AI for business’ segment – saw its sentiments decline due to a quarter plagued by investigation and whistleblower incidents.

Wipro’s digital segment has seen rapid growth in the recent years and currently accounts for 40 per cent of the overall revenue. With AI set to influence multiple industry trends, Wipro is fuelling AI investments.

In January 2020, the global system integrator (GSI) announced a US$150 million fund to invest in companies focused on cyber security, app development, data analytics, cloud, automation and AI.

The provider’s strategy on data analytics and AI is paying off with the acquisition of International TechneGroup, which helped Wipro in securing its future roadmap for Industry 4.0 and Internet of Things offerings. According to CFO Jatin Dalal, the acquisition added to the company’s quarter-on-quarter revenue growth (constant currency terms).

This was also outlined in the Q4 2019 earnings transcript by CEO Abidali Neemuchwala, who commented that the acquisition also helped Wipro secure a new contract with a global automotive giant’s subsidiary in North America, under the EngineeringNXT portfolio.

Wipro is now recognised as a leading AI consultancy. Currently, the company has signed small deals for the HOLMES AI portfolio. The management is focused on expanding the ‘HOLMES for business’ portfolio across various industry verticals.

The GSI has gained traction for the AI offering by successfully showcasing its value-based pricing models designed for product delivery.

In the context of AI, Wipro signed a strategic contract with a major US-based financial services institution to formulate an effective compliance management framework while leveraging AI.

Since the launch of the HOLMES portfolio – AI and ML solutions built on Amazon Web Services – in March 2019, the portfolio has seen success in gaining 280 customers as of the end of December 2019.

Meanwhile in September 2019, Wipro signed a pivotal US$300 million contract with ICICI bank, to provide an all-inclusive suite of automation products.

The rapid growth that Wipro is seeing in the digital segment is due to clients’ preference for the company’s novelty AI offerings. In the coming quarters, Wipro is likely to invest in newer technologies to enhance current offerings for clients, which the management considers a priority over maintaining margins.

Aurojyoti Bose is lead analyst at GlobalData, a technology research company.