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Informist, Friday, Jan. 17, 2025

 

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--Wipro Oct-Dec consol net profit INR 33.54 bln 
--Analysts saw Wipro Oct-Dec consol net profit INR 30.57 bln 
--Wipro Oct-Dec consol net profit INR 33.54 bln vs INR 32.09 bln qtr ago 
--Wipro to pay INR 6 per share interim dividend 
--Wipro Oct-Dec consol revenue INR 223.19 bln vs INR 223.02 bln qtr ago 
--Wipro Apr-Dec consol net profit INR 95.66 bln vs INR 82.11 bln year ago 
--Wipro Apr-Dec consol revenue INR 665.84 bln vs INR 675.52 bln year ago 
--Wipro Oct-Dec IT services sales INR 222.85 bln vs INR 221.96 bln qtr ago 
--Wipro Oct-Dec IT services operating margin 17.5% vs 16.8% quarter ago 
--Wipro revises policy; to pay 70% or more of net income vs 45-50% 
--Wipro revises policy; to pay 70% or more of net income in block of 3 years 
--Wipro: See Jan-Mar IT svcs sales between $2.60 bln and $2.66 bln 
--Wipro sees Jan-Mar IT svcs sales -1% to up 1% on qtr in constant currency 
--Wipro Oct-Dec total bookings $3.51 bln vs $3.56 bln quarter ago 
--Wipro Oct-Dec large deal booking $961 mln, up 6% on yr in constant currency 
--Wipro Oct-Dec 12-month attrition 15.3% vs 14.5% quarter ago 
--Wipro Oct-Dec operating cash flow INR 49.3 bln, up 3% on year 
--Wipro total headcount 232,732 as on Dec 31 vs 233,889 as on Sep 30 
--Wipro Oct-Dec employee utilisation 83.5% vs 86.4% quarter ago 
--Wipro Oct-Dec BFSI sales dn 3% on qtr, up 3.4% on yr in constant currency 
--Wipro Oct-Dec mfg sales dn 1.5% on qtr, dn 8.7% on yr in constant currency 
--Wipro Oct-Dec comm sales dn 2.3% on qtr, dn 5.3% on yr in constant currency 
--Wipro Oct-Dec total active customers 1,299 vs 1,342 quarter ago 
--Wipro Oct-Dec new customers 63 vs 28 quarter ago 
--Wipro Oct-Dec revenue from BFSI 34.1% of sales vs 34.8% quarter ago 
--Wipro Oct-Dec revenue from consumer ops 19.0% of sales vs 19.2% quarter ago 
--Wipro Oct-Dec revenue from comm ops 15.3% of sales vs 15.4% quarter ago 
--Wipro Oct-Dec revenue from health ops 14.7% of sales vs 13.6% quarter ago

 
By Anshul Choudhary

 

MUMBAI – Wipro Ltd. failed to repeat the previous quarter's performance as sales in the December quarter were flat sequentially compared with a 1.5% rise in the September quarter. Rise in sales of the health business helped offset the lower sales of its largest segment of banking, financial services, and insurance.

 

The company's consolidated revenue for the December quarter was INR 223.19 billion, unchanged from a quarter ago and marginally higher compared to the previous year. This translates to a 0.1% rise in revenue in constant currency terms. The performance for the quarter was largely in-line with the company's expectations, which had guided for flat to 2?ll in revenue in constant currency. However, the revenue was higher than analysts' expectation of INR 222.31 billion.

 

The company expects revenue from information technology services in the March quarter to be between $2.60 million and $2.66 million. In constant currency terms, it would mean sales may decline as much as 1% sequentially or rise as much as 1%.

 

The company managed to improve its margins during the December quarter, which helped beat analysts' expectations on net profit. Its consolidated net profit for Oct-Dec rose 4.5% on quarter to INR 33.54 billion, against expectations of INR 30.57 billion. However, this was the slowest growth in net profit in four quarters.

 

The operating margin of IT services for the quarter rose to 17.5% from 16.8% a quarter ago and 16% a year ago. The company said it was the fourth straight quarter when it has managed to expand margins. "In a seasonally weak quarter, our strong in-quarter execution helped us deliver above the top end of our revenue guidance. We also achieved our highest margins in the past three years...," Srini Pallia, chief executive officer and managing director of Wipro, said in a press release. The company's operating cash flow was INR 49.30 billion as on Dec. 31, up 3% on year.

 

The company's large deal wins for the December quarter were $961 million, up 6% on year in constant currency terms. However, its total bookings declined over 7% on year in constant currency terms to $3.51 billion. "We closed 17 large deals with a total value of $1B ($1 billion)," the company said in the release.

 

Wipro's total employee headcount fell by 1,157 during the quarter to 232,732. The company's last 12-month attrition was 15.3% compared with 14.5% a quarter ago. The employee utilisation rate in Oct-Dec was 83.5%, down from 86.4% a quarter ago. During the quarter, the company added 63 new customers compared with 28 customers a quarter ago. Its active clients reduced to 1,299 from 1,342 a quarter ago.

 

For the nine months ended December, the company's consolidated net profit rose 16.5% on year to INR 95.66 billion. The consolidated revenue for the period was down 1.4% to INR 665.84 billion.

 

In a major announcement, the company revised its capital allocation policy and increased the payout percentage to 70% or more of net income in a block of three years as compared to 45-50?rlier. At the same time, the company announced it will pay an interim dividend of INR 6 per share.

 

SEGMENTS, REGIONS

Most of the company's segments reported poor numbers in the December quarter. Its largest segment of BFSI, which contributed to over 34% of sales, reported a decline of 1.9% in sales in constant currency as compared with the previous quarter. Its technology and communications segment, along with consumer operations, reported a decline of nearly 1?ch in sales. Growth in the energy, manufacturing, and resources segment was muted.

 

Growth in its smallest business of health, which contributed to nearly 15% of sales, prevented the company from reporting a decline in overall sales. Revenue of its health segment rose nearly 7% on quarter in constant currency.

 

In terms of regions, Latin America was the only pace that reported sales growth sequentially with sales rising 3.9%. Wipro's health business is largely spread across Latin America. Among others, revenue from US and Canada declined slightly, while the same from Europe fell 2.7%.

 

Shares of Wipro fell ahead of the company's December quarter earnings. The shares closed at INR 281.95 on the National Stock Exchange, down 2.1%. The stock has fallen nearly 9% in one month.  End

 

US$1 = INR 86.61

 

Edited by Ashish Shirke

 

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