Wipro client numbers drop due to weak discretionary spending, Q3 furloughs

Wipro’s top 5 and top 10 clients showed YoY growth in CC terms, with 7 out of the top 10 clients seeing increased revenues.

India’s fourth-largest information technology (IT) firm Wipro’s client base took a hit in the third quarter of financial year 2024-25 due to weak discretionary spending and seasonal furloughs.

Moreover, the Bengaluru-headquartered firm also saw the dollar strength partly offsetting the revenues from the Great Britain Pound (GBP) and Euro currencies.

“For the last four quarters, we've seen a weak discretionary environment that's also impacting the number of clients that is out there,“ Chief Financial Officer Aparna Iyer briefed a press conference after declaring Q3FY25 results.

The IT industry, along with Wipro, has seen discretionary spending take a backseat after macroeconomic issues hit key markets of North America and Europe in the past couple of quarters.

In Q3, the company’s customer base from the over $100 million through over $1 million bracket stood at 1,806, down from 1,837 a quarter ago. In Q3FY24, this metric stood at 1,908.

“You would appreciate these numbers are reported on a trailing 12-month basis,” Iyer added.

The strength of the US dollar, Iyer pointed out, also negatively affected revenues from key markets like the UK and Eurozone, where the company earns in GBP and Euro.

In Q3FY25, the percent of revenue from USD increased to 62 percent from 61 percent sequentially and on a year-on-year basis. Whereas, GBP and Euro’s share decreased to 11 percent, each, from 11 percent and 10 percent, respectively.

However, it wasn’t all bleak for the IT major.

The CFO highlighted that Wipro’s top 5 and top 10 clients showed growth on a year-on-year basis in constant currency terms, with seven out of the top 10 clients seeing increased revenues.

“So we are making inroads in terms of mining our top clients and we are very optimistic about it,” Iyer further said.

Meanwhile, the company reported a 4.5 percent quarter-on-quarter increase in consolidated net profit to Rs 3,354 crore for the quarter ended December 31, 2024, surpassing analysts’ expectations. The IT major's Q3 FY25 revenue remained flat at Rs 22,319 crore, growing 0.1 percent sequentially.

Analysts polled by Moneycontrol had estimated the company’s net profit to decline by 5 percent quarter-on-quarter to Rs 3,040 crore and revenue to dip by 0.6 percent to Rs 22,176 crore.

Wipro declared an interim dividend of Rs 6 per share and revised its capital allocation policy to commit at least 70 percent of net income as payouts over a three-year period.

Operating margin improved to 17.5 percent, the highest in three years, driven by operational efficiencies and cost optimisation.

Also, read: Wipro ADRs surge 4% after Q3 earnings beat, multi-year high margins