2024-06-10 05:32:07 ET
Summary
- Hopes of an eventual Thierry Delaporte-led Wipro turnaround have been dashed.
- The next chapter looks to be status quo under company veteran Srini Pallia.
- Wipro’s valuation offers little buffer against either governance risks or growth/margin challenges.
Wipro ( WIT ) dealt investors a double blow in recent months, firstly with the resignation of CEO Thierry Delaporte and then with disappointing quarterly results. To be fair, many of the headwinds that have plagued the industry are beyond management’s control, as interest rate cut delays continue to keep valuations and, by extension, tech budgets capped. But there have been enough signs of improvement in the global economy and IT-related deal wins, particularly on the AI side, to keep me optimistic about an eventual top-line turnaround (a key reason for my bullishness earlier this year ). My concern, though, is whether Wipro can capitalize when things get better, particularly with the added instability that comes with another senior management reshuffle. Pending a bigger de-rating to the still pricey ~20x forward P/E multiple, I will be sitting on the sidelines....
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Wipro: Turnaround Interrupted