Shares of Wipro gained around 1% after the company announced a major multi-year deal with Olam Group. According to a regulatory filing, the contract, spanning eight years, is expected to exceed $1 billion in total value and $800 million of committed spend.
The partnership focuses on the implementation of artificial intelligence in Olam’s “farm-to-fork” ecosystem. Wipro will leverage its platform, Wipro Intelligence, to provide end-to-end digital transformation in farming, supply chain operations, trading, forecasting, and customer engagement.
Olam Group is a global agri-business with presence in 60-plus countries, serving nearly 22,000 customers and an employee base of approximately 40,000.
This deal highlights the increased role of AI in reshaping traditional industries like agriculture and food supply chains.
The deal also includes the acquisition of Mindsprint, the IT services division of Olam, for $375 million. Mindsprint brings domain-specific knowledge and reported revenue of $135 million in CY25.
After the announcement, Wipro stock traded close to Rs. 197-Rs. 201, which indicates a positive short-term response. The larger picture, however, shows that challenges remain.
The share has fallen around 25%-27% year-to-date and by 19% in the last three months. Much of the decline has been caused by AI-related disruption and limited growth compared to competitors.
The contribution by the Olam contract per annum is estimated to be slightly over 1% of the total revenue of Wipro, which restricts its immediate financial effect.
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Wipro shows moderate financial performance over the last three years, with revenue growth of around 4% and profit growth near 2%.
This performance is mostly due to growing competition and the fast transition towards AI-based services.
Although this acquisition reinforces the positioning of Wipro in the transformation of AI, it also highlights the industry transformation.
The demand on the IT companies to invest heavily in AI capabilities to keep up with competition is forcing the companies to squeeze their margins in the short term.
Despite a limited near-term earnings impact, the deal has strategic value. It increases the presence of Wipro in the food and agri-tech industry, which is likely to gain advantages through digitization and transformation based on sustainability.
The Wipro intellectual property portfolio and domain expertise are further boosted by the integration of Mindsprint, which can open the possibility of having large-scale contracts globally.