Wipro’s ER&D Revenues to Soar 30% in FY25, Leading Indian IT Growth

Wipro Engineering Edge, the engineering and R&D (ER&D) unit of India’s fourth-largest IT company, expects to gain nearly $300 million in additional business in FY25. The unit contributed about $1 billion, or 10%, to Wipro’s $10.8 billion revenue in FY24, growing at about 9%.

However, Wipro saw a 4% drop in annual revenue in FY24, making it the only company among India’s big four IT firms to report a revenue decline.

Boost from Key Sectors

The $300 million increase in ER&D revenue for FY25 will come mainly from sectors like hardware, semiconductors, Industry 4.0, wireless networks, and cabling. Industry 4.0 involves integrating digital technologies into manufacturing processes.

“The ER&D division’s growth in FY24 mainly came from the Americas, contributing just under $1 billion to the Engineering Edge unit,” said an executive who requested anonymity.

What is Wipro ER&D?

Wipro Engineering Edge, led by Harmeet Chauhan, has over 25,000 employees. Chauhan, who previously worked at HCL Technologies Ltd’s ER&D division, joined Wipro in April 2023. This was when Wipro’s ER&D business unit was rebranded as Wipro Engineering Edge.

On April 1, 2023, Wipro reorganized into four global business lines: Wipro FullStride Cloud, Wipro Enterprise Futuring, Wipro Engineering Edge, and Wipro Consulting. These lines focus on cloud, AI, ER&D, and consulting services.

Although the engineering unit is expected to grow significantly, its revenue per employee is lower than the overall company average. Wipro Engineering Edge’s revenue per employee is about $40,000, compared to Wipro’s overall average of $43,868.

Wipro does not publicly disclose its Engineering Edge revenue. An email to Wipro for comments went unanswered.

Indian IT’s ER&D Opportunity

Indian IT companies have been enhancing their ER&D capabilities to design and produce better products and digitize business operations across various industries, including banking, healthcare, retail, and manufacturing.

According to the National Association of Software and Service Companies (Nasscom), ER&D led the growth of India’s $254-billion IT sector in the past year. ER&D revenues grew by 7.4% to $43.3 billion in the fiscal year ending March 2024, nearly double the overall IT sector growth rate of 3.8%.

“Post-Covid, many industries have undergone large-scale digitization, driving a focus on engineering. Sectors like Aerospace, Defense, and Automotive are experiencing major disruptions due to sustainability, efficiency, autonomous technology, and electrification, which are driving innovation through heavy engineering investments,” Nasscom reported.

Sanjeev Hota, VP and head of research at Sharekhan, attributes the growth in ER&D to its relative newness compared to other services like consulting and business process management. “The base is low for ER&D compared to other services, which is why the growth rate is higher for IT companies in this area,” Hota said.

Among Indian IT companies, HCL Technologies Ltd has the highest focus on ER&D, with these services making up 16%, or $2.1 billion, of its $13.2 billion FY24 revenue. This is double the revenue generated by Wipro’s ER&D unit. HCLTech further boosted its ER&D services by acquiring German automotive engineering firm ASAP Group in July 2023.

Infosys Ltd, Wipro’s rival, has also been expanding its ER&D offerings. In 2024, Infosys acquired semiconductor design firm InSemi in January and German engineering research and development firm in-tech for $480 million in April.