Wipro Q3 results
Last updated: 13 Jan, 2021 | 12:51 pm
- Profit jumps: Wipro, India's fourth-largest software services exporter, has reported a 20.3% on-quarter rise in net profit to ₹2,966.7 crore in Oct-Dec 20 period, beating analyst estimates. Analysts had earlier estimated a net profit of about ₹2,550 crore.
- Robust revenue growth: Wipro's revenue rose 3.68% on-quarter to ₹15,670 crore, beating analyst estimates of ₹15,490 crore. Wipro's IT Services Revenue growth came in at 3.9% QoQ, the highest in 36 quarters.
- Margins at 5-year high: Wipro's margins have improved to a 22 quarter high. The expansion was led by improved revenue growth and efficiency in operations. IT Services Operating Margin rose 243 bps QoQ to 21.7%. Wipro's operating cash flows grew by 45 percent YoY with a significant improvement in outstanding receivables.
- Robust guidance: Wipro has announced robust revenue guidance for the next quarter. Wipro expects revenue from IT services business to be in the range of $2,102 million to $2,143 million, which translates to a QoQ growth of 1.5-3.5%. This is much higher than the expected range of 0-2%, predicted by analysts earlier.
- Dividend: Wipro has announced an interim dividend of Rs 1 per share, for which the record date has been fixed as January 25, 2021. The payment of the interim dividend will be made on or before February 2, 2021.
Wipro has delivered a second consecutive quarter of strong performance on order booking, revenue and margins. This is just the second 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. In December, Wipro had signed a $700-million takeover deal with Metro AG. With the intention to extend up to 4 additional years, it can be a potential spend of up to $1 billion.
Wipro has reported better-than-anticipated numbers. Wipro has seen an excellent quarter with growth in revenues, expansion of margins and robust cash generation. While the ongoing pandemic has affected various businesses, it has forced a tectonic shift in businesses 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.