Wipro Q3 results: Net profit down 12% to Rs 2,694 crore in fourth consecutive quarterly decline

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IT services company Wipro on January 12 reported a 12 percent year-on-year (YoY) fall in net profit at Rs 2,694 crore for the third quarter of the current financial year. This profit in-line Moneycontrol’s poll estimates of Rs 2,706 crore.

This is the fourth consecutive quarter wherein the company has reported a fall in profits YoY.

Consolidated revenue came in at Rs 22,205 crore, down 4.4 percent YoY, below analyst estimates of Rs 22,343 crore.

Sequentially, the bottomline rose 1.8 percent and the topline fell by 1.4 percent for the December quarter.

The Bengaluru-based firm also adjusted its revenue growth guidance for the fourth quarter at both the lower and upper end. It has now guided for a revenue growth of -1.5 percent to 0.5 percent. This comes after the company slashed the guidance to -3.5 percent to -1.5 percent in the previous quarter.

The third quarter is typically a weak one for IT companies due to the holiday season in the US and Europe, the biggest markets for Indian firms, with furloughs and fewer working days’ impacting performance.

The decline in revenue was expected primarily due to the continued weakness in the banking, financial services, and insurance (BFSI) vertical as well as the company's high exposure to consulting at a time when discretionary spending has plummeted.

Q3 is typically a weak quarter for IT companies as adverse impact from furloughs and fewer working days’ impact performance.

On Thursday, India’s top two IT companies were off to a mixed start in Q3FY24, marked by high seasonal furloughs, fewer work days, and no immediate impact of interest rate cuts.

While Tata Consultancy Services posted a year-on-year (YoY) increase of 2 percent in net profit to Rs 11,058 crore in the quarter ended December 31, 2023, its nearest rival Infosys Ltd reported a 7.3 percent YoY fall in net profit at Rs 6,106 crore in the third quarter of FY24.

In constant currency terms, topline decreased by 6.9 percent YoY and 1.7 percent sequentially.

The EBIT margin or the operating margin was down by a marginal 10 bps to 16 percent, impacted by one-month wage hike and furloughs.

The company won large deals worth $0.9 bln during the quarter, lower than $1.28 bln it won in the last quarter. Total deal wins stood at $3.8 bln, which is similar to what the company had recorded in the September quarter.

Wipro declared an interim dividend of Rs 1 per share.

Shares of the company closed 3.88 percent higher at Rs 465.45 apiece on BSE.