After Accenture, TCS, and Infosys, Wipro has surpassed Cognizant in market capitalization and is now the fourth most valuable IT services firm in the world, signalling restored investor interest in the Bengaluru-based business nearly a year after its new CEO Thierry Delaporte took over.
On the NYSE, Wipro’s ADR rose 2.4 percent to $7.4 per share, giving the firm a market capitalization of $38.1 billion. With a market capitalization of $37.7 billion, Cognizant was up 1.2 percent at $71.5 in morning trading on the Nasdaq. For the past two years, Cognizant has experienced sluggish sales growth. It’s a rare turn of events, given that the New York-based firm surpassed Wipro in terms of sales a decade ago and is still well ahead. Cognizant’s revenue for the 2020 fiscal year was $16.5 billion, more than double that of Wipro, which had $8.1 billion at the end of March.
Wipro has shown signs of improvement under Delaporte, who has refocused the company’s service lines and reduced senior management. The business has created a robust pipeline of digital transactions, including its largest deal ever with German retailer Metro. Wipro’s growth was sluggish under previous CEOs Abidali Neemuchwala and TK Kurien, with bets on sectors like energy and healthcare going awry due to macroeconomic conditions and changes in US policies. Since Delaporte joined Wipro, the company’s stock has increased by 127 percent.
After years of explosive development, Cognizant has slowed significantly. The downturn began near the end of the previous CEO’s tenure, Francisco D’Souza’s, and has not changed significantly under CEO Brian Humphries’ tenure. Although it has invested around $1.5 billion on acquisitions in the last two years, the effect on the top line has been minimal. Its full-year profit dropped by 24% to $1.4 billion, while Wipro’s increased by 11% to $1.4 billion. In contrast to Wipro, whose operating margin is up to 20.3 percent, the company’s operating margin has dwindled to 12.7 percent. In the last two years, the company’s stock has increased by around 16 percent.
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Hello, my name is Anuj Boruah. I am quite interested in writing about current events in business, finance, and the economy. I work as a newswriter at Reviewminute.