More Stories

Informist, Thursday, Oct. 17, 202

 

Please click here to read all liners published on this story

--Wipro Q2 IT svcs sales up 0.6%, not 1.3%, QoQ in constant currency 
--Wipro Jul-Sept communications sales down 11.5% on year in constant currency 
--Wipro Jul-Sept communications sales up 3.5% on qtr in constant currency 
--Wipro Jul-Sept mfg segment sales down 11.7% on year in constant currency 
--Wipro Jul-Sept mfg segment sales down 2% on quarter in constant currency 
--Wipro Jul-Sept BFSI segment sales up 2.7% on quarter in constant currency 
--Wipro Jul-Sept operating cash flow INR 42.7 bln, up 10.5% on year 
--Wipro Jul-Sept employee utilisation 86.4% vs 87.7% quarter ago 
--Wipro Jul-Sept 12-month attrition at 14.5% vs 14.1% quarter ago 
--Wipro Total headcount 233,889 as on Sep 30 vs 232,911 quarter ago 
--Wipro Jul-Sept IT services operating margin 16.8%, up 30 bps on quarter 
--Wipro Jul-Sept IT svcs revenue up 1.3% on quarter in constant currency 
--Large deal bookings $1.49 bln in Jul-Sept, up 28.8% on quarter 
--Wipro total bookings $3.56 bln in Jul-Sept 
--Apr-Sept consol revenue INR 442.65 bln vs INR 453.47 bln year ago 
--Apr-Sept consol net profit INR 62.12 bln vs INR 55.16 bln year ago 
--Board OKs 1-for-1 bonus share issue 
--Wipro Jul-Sept consol revenue INR 223.02 bln vs INR 219.64 bln qtr ago 
--Wipro Jul-Sept consol net profit INR 32.09 bln vs INR 30.03 bln qtr ago 
--Wipro Jul-Sept consol revenue INR 223.02 bln 
--Analysts saw Wipro Jul-Sept consol net profit INR 29.8 bln 
--Wipro Jul-Sept consol net profit INR 32.09 b
 

By Apoorva Choubey 

 

MUMBAI – Wipro Ltd. managed to beat the Street's expectations for earnings and profitability for the September quarter, as strong deal bookings, cross-currency tailwinds and growth in the company's financial services and communications vertical more than offset the weakness in the manufacturing and energy segments. In fact, the pace of sequential growth in profit and revenue seen by Wipro during Jul-Sept was the highest in seven quarters. 

 

The company's consolidated net profit rose 7% on quarter to INR 32.1 billion, exceeding analysts' estimate of INR 29.79 billion. The last time the pace of growth in Wipro's profit after tax was higher than 7% was in Oct-Dec of 2022, when the bottom line had jumped 15%. 

 

The information technology company's consolidated revenue for Jul-Sept was INR 223.0 billion, up 1.5% from a quarter ago, and a tad higher than the projected INR 222.35 billion. Over the last seven quarters, Wipro has either reported a sequential decline in top line or flat sales growth. 

 

In constant currency terms, the sales were up 0.6% on quarter, compared with analysts' expectation of flat sequential growth. The top line was underpinned by better-than-expected large deal bookings, which jumped 29% on quarter to $1.5 billion. Wipro's total deal wins for the quarter were $3.6 billion, compared to $3.3 billion a quarter ago.

 

"Based on strong execution in Q2, we met our expectations for revenue growth, bookings, and margins," Chief Executive Officer and Managing Director Srini Pallia said in a press release. The company continued to expand its top accounts, while large deal bookings surpassed $1 billion once again, he said. "We grew in three out of four markets, as well as, in BFSI, consumer and technology and communications sectors," he added. The company defines large deals as those having a total contract value of $30 million or more. 

 

During the September quarter, the growth in the main segments of the company, such as the banking, financial services and insurance segment, led to Wipro's overall IT services business witnessing a 1.3% sequential rise in revenue to $2.7 billion. In constant currency terms, the IT services segment's revenue rose 0.6% on quarter.

 

The earnings before interest and taxes margin rose over 30 basis points on quarter to 16.8% for Jul-Sept, outperforming even the most optimistic of estimates. Ahead of the results, analysts were divided on how Wipro's earnings before interest and depreciation margin may fare during the quarter. While some believed the wage hikes and decline in utilisation rates may impact the margin on a sequential basis, others, including Kotak Institutional Equities, expected the EBIT margin to be stable due to depreciation of the rupee against the dollar, and cost control measures. The estimates for the company's EBIT margin ranged from 15.2% to 16.5%.

 

Among the verticals, the company saw strong demand for the banking and financial services vertical, which remains the biggest vertical for Wipro with a 35% contribution to revenues. In fact, Wipro has one of the highest dependencies on the BFSI vertical among large Indian IT companies.

 

During the reporting quarter, the BFSI vertical saw a near 3% rise in sales in constant currency sales, on a sequential basis. The Bengaluru-based company's communications segment sales rose 3.5% on quarter in constant currency terms, while those from the manufacturing division fell 2%. Revenue from energy, natural resources and utilities segment fell 4% on quarter.

 

Wipro net added 978 employees during the quarter, taking its total headcount to 233,889 as on Sep 30. The company's last 12-month attrition was 14.5% compared to 14.1% a quarter ago. The employee utilisation rate was 86.4% in Jul-Sept, down from 87.7% a quarter ago. 
 

The company shelled out INR 189.9 billion as total expenses in Jul-Sept, a rise of 1.7% sequentially. This was the highest rise in total expenses in eight quarters. 

 

During the quarter ended September, the staff cost for Wipro rose nearly 2% on quarter to INR 134.7 billion, while subcontracting and licencing fee fell 1% to INR 24.6 billion. Tax expense increased 7% to INR 10.5 billion. 

 

On a year-on-year basis, Wipro's Jul-Sept earnings were mixed, as revenues were down 1%, but net profit jumped 21%. The company's IT services sales fell 2.3% in constant currency terms while operating margin was up 70 bps. 

 

For Apr-Sept, Wipro's consolidated revenue fell over 2% on year to INR 442.65 billion. Its profit after tax jumped 13% to INR 62.12 billion. 

 

The company's board also approved a one-for-one bonus share issue. Today, shares of Wipro closed 0.6% lower at INR 528.75 rupees on the National Stock Exchange. The company reported its earnings after market hours.  End

 

US$1 = INR 84.07

 

Edited by Saji George Titus

 

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.