Wipro Q4 results: Acquisitions, deal wins drive revenue growth

Last updated: 15 Apr, 2021 | 01:28 pm

Wipro Q4 results: Acquisitions, deal wins drive revenue growth
  • Profit jumps: Wipro, India's fourth-largest software services exporter, has reported a 0.1% on-quarter rise in net profit to ₹2,972 crore in Jan-Mar 21 period, in-line with analyst estimates.
  • Robust revenue growth: Wipro’s revenue rose 3.67% on-quarter to ₹16,245 crore, beating analyst estimates of ₹16,100 crore. Revenue from IT services stood at $2,152.4 million, 3.9% more than the last quarter. Wipro had forecast 1.5-3.5% dollar revenue growth in the fourth quarter.
  • Margins ease from 5-year high: Last quarter, Wipro’s margins had improved to a  22 quarter high. In the Jan-Mar 21 period, margin narrowed to 20.5% from 21.2% earlier but beat analysts forecast of 20.1%. The margin was hit by wage hikes. IT services operating margin for the quarter witnessed an expansion of 344 bps YoY, and for the year at 20.3%, an expansion of 218 bps YoY.
  • Large deal wins aid growth: Wipro closed 12 large deals during the quarter with a total contract value of $1.4 billion. It added one new customer in the $100-million-plus band and three clients in the $75-million-plus band. 
  • Acquisitions: The quarter was marked by the acquisition of London-based Capco for $1.45 billion to spur growth and scale up its banking, insurance and financial services operations. Wipro had also acquired Australian cybersecurity firm Ampion for $117 million.
  • Robust guidance: The company now expects revenue to grow 11-13% in FY22. Wipro expects its IT services revenue in dollar terms in the range of $2,195-2,238 million for the Q1FY22, a growth of 2-4 percent over Jan-Mar 21 period.

Wipro has delivered a third consecutive quarter of strong performance on order booking, revenue and margins.This is the third quarter under the new CEO Theirry Delaporte. While Wipro has lagged its larger peers in growth the last few years, it could reduce the gap going forward, as earnings visibility improves. 

While the ongoing pandemic has affected various businesses, it has forced businesses to move towards greater digitization, providing a good opportunity for the IT industry.  All the key markets of Wipro are now growing on YoY basis, and this provides a good foundation to grow further.

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