Godrej & Wipro

8/2/2019 Godrej & Wipro

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By

Kriti Gupta

MBA (Banking and Insurance)


2/19

Wipro Ltd. is the flagship company of the Azim HPremji group. Wipro was incorporated in the year1945.

Wipro is a global IT services company. The companyprovides comprehensive IT solutions and services,

including systems integration, information systemsoutsourcing, software application development andmaintenance, and research and development servicesto corporations.

The company mainly operates in the US. It is

headquartered in Karnataka, India and employs morethan 108,071 people worldwide as of March 2010.

It has interests varying from information technology,consumer care, lighting, engineering and healthcarebusinesses.


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3325

4963

57626030

6913

652 816 880 1020 1178

0

1000

2000

3000

4000

5000

6000

7000

8000

2006-07 2007-08 2008-09 2009-10 2010-11

Revenue ($ Mn)

Net Income($ Mn)


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Wipro Corporation revenue at Rs.311 Billionfor 2011

IT Services contribute 76% of Revenue and

93% of PBIT Revenue growth of 16% and PBITgrowth of 12%

IT Products account for 12% of Revenue and3% of PBIT

Consumer Care and Lighting businesscontribute 9% of Revenue and 6% of PBIT


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2611

3647

4323 4390

5221

0

1000

2000

3000

4000

50006000

IT Services($ Mn)

IT Services($ Mn)


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Partner to Industry Leaders

904 active global clients as of March31, 2011

150+ Fortune 500 customers

Global footprint

Listed on NYSE in October 2000 Present in 54 countries

20,000+ employees onsite across geographies

Diverse talent pool

122,000+ employees

76 nationalities represented in workforce


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Particulars 2007 2008 2009 2010 2011

Revenue(Rs Mn)

136839 199575 255338 271574 310987

EPS(Rs) 19.92 22.62 26.81 31.78 21.74

PAT (Rs Mn) 29421 32829 38860 46116 53321

Debt EquityRatio

0.039 0.38 0.38 0.31 0.22


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STRENGTH WEAKNESS

Billionaire-founder AzimPremji's early allianceswith global leaders likeJack Welch helped thecompany establish itscredibility, among themost diversified ITconglomerates withbusinesses ranging fromsoaps to hydraulic

pumps and embeddedsoftware.

Lags peers in salesand marketing spendand initiatives, lackof articulatedstrategy and vision,strategy focused ontraditional ITcapabilities


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OPPURTUNITY THREAT

New CEO TK Kurien'sstrategy to create aleaner, sharperorganization couldresult in more profitsand wallet share oflarge customers, shiftfrom pure techpositioning to a morebroad-based vendorfocused on solving

business problems.

Life after Premjicontinues to be aworry, too much focus

on cost reductioncould come at cost oflong-term strategicdirection.


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Broad based portfolio across Verticals,Geographies, Service Lines and Customers

Strong ($1B) and Established (20+ years)

presence in some of the key growth marketsIndia & Middle East

A complete, integrated portfolio of services

Leadership in R&D worlds largest

independent 3rd party R&D shop


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Established in 1897,by Ardeshir Godrej, whoseinventions are the foundations of todays Godrejempire

Godrej enjoys the patronage and confidence ofover 470 million Indians who come face-to-facewith it every single day

With seven major companies and interests inseveral high-growth verticals real estate,industrial engineering, appliances, furniture,security and agri care, to name a few the groupis marking annual turnover at approximately Rs.

13,500 crore 20% of the groups business is conducted

overseas in more than 60 countries


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Four of its brands were ranked in Brand Equitys100 Most Trusted Brands Survey of 2010

Good Knight, its iconic across-all-socio-economiccategories brand, jumped to a historic high rank oftwelve

Godrej No. 1 and Cinthol, its two highly visiblesoap brands were ranked 13th and 14threspectively in the personal care category

Godrej Expert Powder Hair Dye made its debutlisting

GCPL continues to be recognised amongst some ofthe best employers to work for in India andamongst the top 25 employers in Asia


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Not so long ago, the fast moving consumer goods(FMCG) category was actually a slow moving one

when liberalization was introduced, Incomesclimbed steeply and with that the needs,dormant for so long, came to the surface

It cannot come as a surprise to discover that theFMCG market is, today, a Rs. 130,000 croresbusiness that has grown at an incredible averageof 11% each year over the last decade

It is expected to continue its steep rise till atleast 2020 and has the potential to touch sales ofRs. 370,000 crores making it the third largestindustry in India after finance and food


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Particulars 2007 2008 2009 2010 2011

D/Eratio

1.02 .89 .12 .01 .18

EPS (Rs) 5.40 6.56 6.29 8.05 13.44

SalesTurnover(Cr)

799.41 922.78 1135.37 1301.58 2477.46

PAT 122.03 148.12 161.55 248.12 434.95

ROCE 64.27 66.03 32.65 35.73 28.43


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STRENGTHS WEAKNESSES

Gaining value share inhair color category withrural thrust throughsuccessful rollout ofthe partnership with

barbers across thecountry

Strong distribution

Strong R & D

High spending onAdvertisement andmarketing (20% ofcapital investment)

Skilled Labour shortage

Godrej has no soap inpremium segmentwhich its competitors

has


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OPPORTUNITIES THREATS

Food inflation hasstarted easing which ispositive for FMCGsector from demandperspective

Recent acquisitionspresent strongintegrationopportunities

Fast growing beautymarket (growing at 13%annually)

Growing competitionfrom private labels

Cost of raw materialsand other inputs

Sharp market sharegain by ITC in thesoaps segment

Price fluctuation in

vegetable oil is keyinput for soaps


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The recent merger of Godrej Household ProductsLimited with GCPL has paved the way for thecompany to have a single focal point and thusdrive expansion and growth

GCPL is now the largest home-grown householdand personal care company in India and, thesecond largest household insecticides companyin Asia

It bought out Keyline Brands in the UnitedKingdom, the Rapidol and Kinky Group in South

Africa and through Godrej Global Mideast FZE, itowns international brands and trademarks inEurope, Australia, Canada, Africa and the MiddleEast


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Godrej & Wipro