Last updated: 15 Jul, 2021 | 03:46 pm
Rise in profits: Wipro has reported a 8.7% on-quarter rise in net profit to ₹3,232 crore in Apr-Jun 21 period, beating street estimates. Analysts had earlier estimated a net profit of around Rs 2,811 crore. It had posted a consolidated PAT of Rs 2,973 crore in the same quarter last fiscal. On a year on year basis profits saw a rise of 36%.
Wipro quarterly results: Revenue and Net Profit over last few periods
Robust revenue growth: Wipro’s revenue saw a jump of 12.4% sequentially to Rs 18,252.4 crore in the quarter ended June, beating the revenue estimate of Rs 17,563.3-crore by analysts. This is the highest in the last 38 quarters majorly due to large deal wins and higher client spending on cloud computing and artificial intelligence.
Revenue growth across verticals
The growth in the business was led by the financial services, which grew over 23% on-year in constant currency terms. Besides BFSI, Consumer Business and Communication also clocked over 12% on-quarter growth in the Apr-Jun 21 period. In terms of geography , nearly 59% of revenue was contributed by the US.
Margins: Wipro’s Operating Margin contracted by 170 bps to 18.8% due to wage hikes and other discretionary spends. IT Services Operating Margin for the quarter was at 18.8%, a decrease of 29 bps YoY. Wipro’s operating cash flows grew by 45% YoY with a significant improvement in outstanding receivables. Earnings Per Share for the quarter was at ₹5.92, an increase of 41.0% YoY.
Robust guidance: Wipro has announced a robust revenue guidance for the next quarter. Wipro expects revenue from its IT services business to be at $2,535-2,583 million in the quarter ending September. That’s a 5-7% sequential growth. The company expects full-year revenue to grow at 11-13% even excluding Capco's contribution.
Management commentary: “Our sequential revenue growth of 12.2% was well ahead of the top-end of our guidance range, both organically and with Capco. Though in the early days yet, I am pleased with the way we have collaborated with Capco to build our joint go-to-market offerings and strategy,' Wipro’s CEO Thierry Delaporte said. In March-21, Wipro had acquired British technology consultancy Capco for $1.45 billion to strengthen its position in the banking, financial services, and insurance (BFSI) sector. The BFSI segment contributes about 30% to the company’s total revenues.
Wipro Q1 earnings review:
Wipro has delivered a second consecutive quarter of strong performance on order booking, revenue and cash flows.Wipro reported a total contract value of $715 million during the reported quarter. The company added eight clients, of which two were in the $100-million band.
While Wipro has lagged its larger peers in growth the last few years, it could reduce the gap going forward, as earnings visibility improves. Wipro has reported better-than-anticipated numbers in the current period, aided by large deal wins and strong growth in revenue across verticals. While the ongoing pandemic has affected various businesses, it has forced a tectonic shift in business processes to move towards greater digitization providing a good opportunity for the IT industry. Going forward, Wipro is confident of delivering long-term sustainable growth.