Financial Daily from THE HINDU group of publications
Thursday, Jul 25, 2002
Financial Daily from THE HINDU group of publications Thursday, Jul 25, 2002 |
|
|
|
|
|
Info-Tech
-
Software Wipro may be indirectly hit by WorldCom's woes Abhrajit Gangopadhyay
BANGALORE, July 24 SOFTWARE major Wipro Ltd is likely to be "indirectly" affected following US Internet traffic carrier WorldCom's bankruptcy filing, analysts said. Telecom equipment manufacturers, who still contribute a significant share to Wipro's revenue, are seen severely hit by WorldCom's fiscal woes and such jitters could shrink their business-flows to vendors like Wipro, analysts added. However, Wipro said that it has "no exposure to WorldCom". "There is a definite overhang", Mr. Bhupinder Ahuja, software analyst with Deutsche Bank Securities, said. "There are some common clients of WorldCom and Wipro and there could be some problems, perhaps in terms of payments to the clients by WorldCom, but what could be the material impact on Wipro is yet to be ascertained", he said. "There are concerns, whether Cisco, Lucent and other telecom-box manufacturers will temporarily cut down on business tracking WorldCom's bankruptcy", a technology analyst with DSP-Merrill Lynch said. "We do not see it as an immediate threat to Wipro's business as there are no direct impact", an analyst with a top domestic brokerage said. WorldCom that carries half of global Internet traffic is one of the top buyers of telecom equipment from makers such as Cisco and Lucent. With sales to one of the top customers drying up in the wake of WorldCom's failure to emerge out of Chapter 11 bankruptcy protection, fortunes of the box-makers could be "severely" hit, analysts said. This, in turn, could shrink order flows to outsourcing vendors, they added. However, Wipro has been steadily minimising its exposure to the telecom equipment manufacturers as they slipped into "pain", tracking a slowing US economy. "Now only close to one-sixth of Wipro's revenue comes from telecom box-makers, down by almost half of what it was a year ago", the analyst with the domestic brokerage said.
Send this article to Friends by E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|