Wipro Q4 results: Net profit falls 8% to Rs 2,835 cr, revenue down 4.2%
Bengaluru-based IT services major Wipro posted a net profit of Rs 2,835 crore for the fourth quarter ended March 2024, down nearly 8 per cent from a year ago. It is up 5.2 per cent quarter-on-quarter (Q-o-Q) and above consensus Bloomberg estimates of Rs 2,771 crore.
Revenue for the March quarter declined 4.2 per cent from the year-ago period to Rs 22,208 crore. This is in line with consensus Bloomberg estimates that pegged the revenue at Rs 22,228 crore.
On a sequential basis, revenue growth remained flat as pressure continued on discretionary spending.
Wipro has forecast revenue from its IT services business segment to be in the range of $2.62 billion to $2.68 billion in Q1 FY25. This translates to a sequential guidance of -1.5 per cent to +0.5 per cent in constant currency terms.
Wipro guides for the quarter ahead in contrast to Infosys and HCLTech, which guide for the full year.
Infosys, which declared its earnings a day earlier, has projected a revenue growth guidance of 1-3 per cent in constant currency for FY25. Tata Consultancy Services (TCS) does not provide guidance.
The IT services revenue in dollar terms declined 6.6 per cent year-on-year (Y-o-Y) and 0.3 per cent sequentially in constant currency to $2.66 billion. This is on the back of large deal wins of over $ 1.2 billion in total contract value (TCV).
“FY24 proved to be a challenging year for our industry, and the macroeconomic environment remains uncertain. However, I am optimistic on the opportunities that lie ahead. We are on the brink of a major technological shift. Artificial intelligence (AI) is transforming our clients’ needs as they seek to harness its power for competitive advantage and enhanced business value. At Wipro, we have been gearing up for this moment,” said Wipro’s newly-appointed chief executive officer (CEO) and managing director (MD) Srini Pallia, a company veteran of three decades.
Pallia succeeded Thierry Delaporte this month as the latter resigned from the company with effect from April 6. Delaporte’s last day at Wipro will be May 31.
Delaporte had induced several structural changes in the company like creating four strategic market units (SMUs) and four global business lines (GBLs) centred around key technology areas.
Operating margin expanded to 16.4 per cent in the fourth quarter from 16 per cent in the preceding three months and 16.3 per cent from a year ago.
“We expanded our margins by 40 basis points (bps) during the quarter resulting in earnings per share (EPS) growth of 5.2 per cent Q-o-Q in Q4. Despite a challenging macro-environment, our IT services margin expanded by 50 bps for the full year in FY24,” said Aparna Iyer, chief financial officer (CFO).
In terms of verticals, BFSI and consumer contributed more than 50 per cent to the overall revenues.
While BFSI declined 9.4 per cent Y-o-Y in constant currency, consumer fell 7.4 per cent. Healthcare was the only vertical that delivered a growth of 9 per cent in constant currency.
Voluntary attrition rate for the March quarter in the last 12 months remained stable at 14.2 per cent, sequentially. It declined 520 bps from 19.4 per cent in the year-ago period.
Headcount during the fourth quarter declined by 6,180, sequentially, taking the total employee base to 234,054.
“In Q4, Wipro experienced muted growth and yet it maintains a promising outlook with a healthy business pipeline. As organisations prioritise multi-year digital transformations, IT services spending may rise, bolstering Wipro’s prospects for positive growth in the upcoming quarters. The muted growth can be attributed to weakened discretionary spending and extended decision-making cycles among customers,” said Biswajit Maity, senior principal analyst, Gartner.
Wipro announced its earnings after market hours on Friday. Ahead of its earnings, Wipro shares were up nearly 2 per cent to close at Rs 452.85 on the BSE.
First Published: Apr 19 2024 | 9:16 PM IST