IT services firm Wipro on July 13 reported 11.9 percent year-on-year (YoY) growth in net profit in the first quarter ended June 30, 2023. Sequentially, however, net profit was down by 6.6 percent due to decline in all major financial metrics.
Wipro's consolidated net profit for Q1FY24 stood at Rs 2,870 crore, missing analyst estimates of Rs 2,976 crore for this quarter. The Bengaluru-based IT services major had posted a net profit of Rs 2,563 crore in the year-ago period.
Revenue for the quarter grew 6 percent YoY at Rs 22,831 crore as compared to Rs 21,528 crore in Q1FY23, missing estimates of Rs Rs 23,014 crore.
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The decline in revenue was expected primarily due to persistent weakness in the banking, financial services and insurance (BFSI) vertical as well as its higher exposure to consulting at a time that discretionary spends have fallen.
The company’s Q1 guidance for CC revenue growth was at -3 to -1 percent as it expected the macro environment to remain challenging. Wipro is the third company from the largecap IT pack to post its numbers, and was expected to post the weakest growth amongst its largecap peers.
This comes at a time when IT companies have increasingly spoken about demand volatility and near-term challenges due to macroeconomic uncertainties coupled with companies reporting rampdowns in projects.
Among its peers, Tata Consultancy Services saw its numbers come in line with estimates due to a muted quarter, while HCLTech saw a big miss on all fronts.
For Q2FY24, Wipro’s has guided for a revenue growth of -2 percent to 1 percent in constant currency terms.
The company also added that it received total bookings of $3.7 billion for the quarter. The large deal bookings growth stood at 9 percent YoY; highest in last eight quarters.
Wipro's operating cash flows came at 130 percent of net income.
Moreover, Wipro's employee headcount stood at 249,758 with an attrition rate of 17.3 percent.
Chief Executive Officer Thierry Delaporte said in a statement that the company maintained new business momentum despite a gradual reduction in discretionary spending.
“Wipro’s first quarter results come with a strong backbone of large deal bookings, robust client additions, and resilient margins.. The launch of Wipro ai360 and the USD 1 billion investment solidifies Wipro’s position as a leading transformation partner that delivers the results and innovation our clients need to future-proof their businesses,” he said.
Jatin Dalal, Chief Financial Officer, said, “Our ongoing focus on operational improvement has ensured that margin remains steady even in a softening revenue environment. Our operating Margin for the first quarter was 16% an expansion of 112 basis point YoY. We generated strong operating cash flows at 130% of our net income for the Quarter. EPS for the quarter grew by 11.5% YoY.”
Meanwhile, shares of Wipro on July 13 closed 0.70 percent higher at Rs 394.35 apiece on BSE.
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