WiproBSE 1.22 % is betting on two of its largest verticals serving the financial services and oil and gas sectors as India’s third largest software exporter scouts for opportunities in Canada to offset lackluster performance in the US.
According to industry lobby Nasscom, Canada offers a $2.5 billion market for home-grown IT firms as more Canadian companies, especially in financial services and oil and gas, outsource work. Wipro’s renewed thrust in Canada is because it expects to outrival completion in Canada, boosting North American revenue at a time when the company is barely able to keep up with competition in the US.
“Canada is a hugely important geography for us because we have our goal to regain our glory in the North American market,” Wipro Chief Executive TK Kurien told ET last month. “We can try like hell (but) can only catch up in the US. But Canada is a virgin market. And so that is the strategy for us.”
Kurien’s plans to increase his company’s footprint in Canada got a boost after Wipro won its biggest outsourcing contract, worth $1.2 billion from Albertabased utilities firm ATCO, last month. Bangalore-based Wipro, which posted $6.6 billion revenue in the fiscal year ended in March, has tasked senior executive Brian Allatt to reach out to more utilities and oil and gas companies in Canada. Allatt, previously vice president of strategic accounts, will now be managing director of the division dealing with Canada’s energy, natural resources and utilities businesses and will report to Arun Krishnamurthi, head of the global utilities vertical.
“Both Canada and US are important geographies because of the way energy dynamics are changing,” Anand Padmanabhan, CEO of energy, natural resources and utilities segment at Wipro, told ET in an interview.
“Canada is resource-rich and through the ATCO deal we will like to show what we can offer to the rest of the geography.” Wipro leads the pack in the oil and gas segment, generating a little over $1 billion or about 16 per cent of total revenue. However, in the banking, financial services and insurance segment (BFSI), the company lags rivals including Tata Consultancy ServicesBSE -0.09 % and Infosys. It is working on improving the contribution of financial services to total revenue from the current 27 per cent.
“The Canadian BFSI vertical is another key growth area for us,” said Shaji Farooq, head of the BFSI division at Wipro. Some experts, however, say Wipro could face challenges from that country’s stringent immigration regulations as well as tough competition from bigger rivals. Although companies don’t provide revenue breakups for US and Canada, analysts estimate the local leaders, TCS and InfosysBSE 0.08 %, have a large share of the Canadian IT market than Wipro.