HCL Tech snaps at Wipro’s heels, may emerge as third largest IT player
City: 

Vendor rankings in the Indian IT services industry have remained rather consistent over the past many years with TCS leading the pack by a healthy margin. However, the industry is now poised for a change.

HCL Technologies is rapidly closing in on its rival Wipro in a rather thrilling race. HCL continues to grow at a faster pace than Wipro by a significant margin – for the December quarter HCL saw growth of 3.3 per cent QoQ and 14 per cent YoY, exceeding Wipro’s flat QoQ growth and 5.8 per cent YoY growth. HCL has shown consistent rise compared to Wipro, says Ovum, a London-based IT analyst firm.

In the September 2015 quarter, the difference between Wipro and HCL in revenue terms was around $250 million. This has, since then narrowed to about $25m for the December 2017 quarter. So, on an annualised basis the gap has narrowed from around $1 billion to $100m.

Hansa Iyengar, senior analyst, advanced digital services at Ovum, said: “Quite a dramatic shift has happened over a couple of years. During this period, HCL also overtook Wipro to become the largest Indian engineering services provider and its engineering services business continues to grow at over 30 per cent QoQ (it grew 38 per cent for the quarter ended Dec 2017).”

Moreover, Wipro has had a few struggles of its own as it went through internal upheavals and troubles with sustaining growth across its key markets, she said.

“Both Wipro and HCL are betting big on the digital services space, however, decline in the traditional service lines is hitting Wipro harder than HCL. Unless Wipro finds a way to plug in the decline and boost growth rates, the next few quarters will likely see HCL overtake it to become the fourth largest India-based IT services provider (third largest if you remove Cognizant),” observed Iyengar.

The last time a shake-up in rankings happened was in 2012 when ‘upstart’ Cognizant sped past Infosys to become the No. 2 .