Wipro Q1 preview: PAT may dip 7-10% YoY as supply pressure remains, revenue likely to grow 14-18%

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26 Aug, 2025 12:21

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Wipro Limited, one of India’s top four IT services companies, is expected to report subdued earnings on July 20 for the first quarter ended June 2022, as has been the case with rivals TCS and HCL.

According to a poll based on the reports from various brokerages, the Azim Premji-owned company is expected to see a dip of 7-10 percent in its consolidated profit after tax (PAT) from the year-ago period, while the growth in consolidated revenue is likely in the region of 14-18 percent year on year.

The growth for the quarter is expected to be soft due to seasonal headwinds and moderation in demand.

The Bengaluru-based company is expected to report a consolidated PAT of Rs 2,900–3,000 crore for the quarter, with consolidated revenue in the range of Rs 21,300–21,700 crore.

The company clocked a PAT of Rs 3,232 crore during the same period last year on revenues of Rs 18,252 crore.

During the January-March 2022 period, the company registered a consolidated PAT of Rs 3,087 crore when it achieved revenue of Rs 20,860 crore.

Also read:  Wipro steps up investments in emerging areas of metaverse, web 3.0: Rishad Premji

Brokerage views

Constant currency revenue

Brokerages expect the company to achieve a constant currency (CC) revenue growth of between 1 and 2.5 percent, which will be in keeping with the guidance provided during the previous quarter. It had provided growth guidance of 1-3 percent.

“We forecast CC revenue growth of 2.8 percent led by—(1) 65 bps contribution from Rizing acquisition and (2) 2.1 percent growth in CC basis,” analysts at Kotak Institutional Equities said in a report. Revenue growth is modest in the context of strength in overall demand.

With the acquisitions of Capco and Rizing, Wipro now has higher exposure to consulting (discretionary spends), which can face some headwinds in the event of an economic slowdown.

Brokerage firm Phillip Capital expects IT services CC revenue growth of 2.3 percent (1 percent QoQ in USD), which is well within the guidance range provided by the company. The brokerage has taken into consideration a 60 bps impact of the acquisition of Rizing based on 1-month.

Wipro on April 27 announced that would acquire Rizing Intermediate Holdings for about $540 million (around Rs 4,135 crore) in an all-cash deal.

Also read: TCS Q1 net profit rises 5% YoY to Rs 9,478 crore, attrition soars to 19.7%

Margins

As witnessed in the past few quarters, supply-side pressures continue to dent the margins of Indian IT companies and Wipro, too, will continue to feel the heat with the rise in wages and travel costs. A weaker Indian rupee, however, will likely cushion the impact on margins to a certain extent.

The earnings before interest and tax (EBIT) margins are likely to contract between 200-250 bps year on year and by 30-100 bps on-quarter.

Brokerages expect the EBIT margins for the quarter in the range of 16-17 percent.

Also read: HCL Tech Q1 Result | Net profit rises 2% to Rs 3,281 crore, revenue grows 17%

Guidance

Brokerages expect the company to provide revenue guidance of 3-5 percent CC growth on a sequential basis including two months of Rizing acquisition.

“Expect Wipro to guide for 2.5-4.5 percent growth in CC on a sequential basis, which includes 1.2 percent contribution from Rizing acquisition, and we expect an organic growth guidance of 1.5-3.5 percent,” the Kotak Institutional Equities report said.

Focus areas

An overall strong demand environment has supported the new CEO's turnaround efforts in the past two years. However, “we need to monitor whether the new organisation structure and strategy is able to deliver above average industry growth in a slowdown scenario”, an ICICI Securities report said.

Investors and experts will also be looking for signs of a slowdown in business and success in securing price increases to offset cost pressures. They will also watch for the impact of higher energy prices and inflation on tech spending.

The levers to defend margins noting a potential increase in cost structure and wage pressure and the pipeline of mega-deals (that seems to have dried up for Wipro) will also get experts' attention.

At 1.47 pm, Wipro was trading .07 percent lower at  Rs 404.45 on the National Stock Exchange. The stock has lost close to 30 percent over the past year.

Disclaimer: The views and investment tips of experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.