Wipro registered a 3.2 percent sequential growth in consolidated profit for the quarter ended September 2020 while IT services segment earnings were ahead of analyst estimates on all fronts. The company also announced a share buyback of Rs 9,500 crore as it shared the results for the September quarter on October 13.
The company's consolidated profit increased to Rs 2,465.7 crore for the quarter compared to Rs 2,390.4 crore in the previous quarter.
Consolidated revenue during the quarter increased 1.2 percent sequentially to Rs 15,096.7 crore.
Also read: Wipro Q2 profit up 3.2%, guidance for Q3 IT services revenue growth at 1.5-3.5%
Here are the highlights of Wipro's Q2 FY20 earnings call as compiled by Narnolia Financial Advisors:
The tradition of IT services will continue to be important and the opportunity will be driven by next-generation services like cloud, digital transformation, loT, 5G.
Enterprises in the post-crisis world are transforming their technology stats so that it enables them to operate with flexibility.
Growth focus
The management will continue to invest in the existing accounts, shape large transformation dues through best-in-class self-excellence and leverage partnership with large technologies.
Focus and scale: The management will prioritise the market and sectors that are relevant and ensure of being the leader in its chosen market.
Income of offerings: The management will continue to expand its presence beyond IT office, leveraging the ecosystem of both the large tech players and the startups.
Talent: The management will invest in specific capabilities such as domain expertise, digital transformation architects program managers and technology experts.
Volumes in 2Q remain highest in comparison to the last many quarters and the company hired around 13,000 people during the quarter.
Guidance for 3QFY21
Sector view: The consumer sector will grow faster and the company remains optimistic about financial services. Energy, utilities and technology sectors will return to growth in 3Q. Communications, manufacturing, healthcare and life science will continue to grow moderately.
The demand environment has improved in the second quarter compared to the previous quarter. The intensity of self-activity continues to rise and the pipeline is robust.
Margins expanded by 20bps in 2Q to 19.2 percent led by operational improvement. Of about 80 bps, 60bps off set by appreciation, higher offshore mix, improved utilization, lower employee attrition and benefits of operational improvements.
The third quarter is expected to grow by 1.5-3.5 percent in CC terms which is reflective of some of the momentum in volumes.
Margins are expected to be in a narrow band excluding the impact of currency, but the company was able to offset the adverse 60 bps on account of rupee appreciation and delivered an expansion of 20 bps in 2Q at 19.2 percent.
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