IT major Wipro on Friday declared its Q1 FY25 financial results. The IT major has posted a consolidated net profit of Rs 3,003.2 crore for the June 2024 quarter, a rise of 4.63 per cent year-on-year. Its revenue from operations during April-June 2024 quarter fell 3.79 per cent to Rs 21,963.8 crore, compared with Rs 22,831 crore in the year-ago period.
On a quarter-on-quarter basis, Wipro’s revenue fell marginally by 1.1 per cent, while its net profit rose 5.94 per cent, according to a BSE filing.
Wipro Dividend in Q1 FY25
Wipro has not announced any dividends this time.
Attrition
Wipro’s voluntary attrition stood at 14.1 per cent on a trailing 12-month basis.
Wipro Outlook for Q3
On the outlook, Wipro expects revenue from its IT services business segment to be in the range of $2,600 million to $2,652 million for the ongoing September 2024 quarter, which translates to sequential guidance of (-)1.0 per cent to +1.0 per cent in constant currency terms.’
Wipro Share Price
Ahead of the results, Wipro’s shares on Friday closed lower by around Rs 14.9 or 2.60 per cent at Rs 558.3 apiece on the BSE.
Wipro Q1: What Top Management Says
Srini Pallia, CEO and managing director of Wipro, said, “We recorded another quarter of total large deal bookings over $1 bn, with our largest win in the recent years. Our top accounts continued to grow, accompanied by a growth in Americas1 SMU, BFSI and Consumer sectors. We are pleased with the momentum we have built in Q1 across industries and sectors and confident in our ability to execute better on bookings and profitable growth as we transition to Q2. While we continue to build on our ai360 strategy and preparing our workforce for an AI-first future.”
Aparna Iyer, chief financial officer of Wipro, said, “We continued to expand our margins to 16.5% in Q125, this is a 42-bps improvement YoY. Our margin performance is also reflected in our EPS increase of 10% YoY. Our operating cash flows continue to be strong at 131.6% of our net income which takes our current investment and cash balance to $5.4 billion.”
In the previous quarter of Q4FY24, Wipro’s profit after tax (PAT) had stood at Rs 2,834.6 crore, a growth of 4.95 per cent from Rs 2,694.2 crore in Q3FY24. However, on a year-on-year basis, the net profit was down by 8.5 per cent from its profit of Rs 3,074.5 crore in Q4FY24. Further, its consolidated revenue was flat at Rs 22,208.3 crore in Q4FY24, versus Rs 22,205.1 crore in Q3FY24.
Wipro Q1 Results: What Analysts Had Expected
Manish Chowdhury, Head of Research, StoxBox, said, “We anticipate Wipro to post flat sequential revenue growth that may exceed earlier projections when it reports its first-quarter results later today. This anticipated performance is bolstered by contributions from CAPCO and potential recovery in the Americas market. We expect marginal improvement in margins attributed to effective cost containment measures. Profit after tax is also anticipated to marginally improve compared to the previous quarter.”
He added that Wipro’s focus will be on Wipro’s ability to secure significant deals, including a notable one in the communications sector – a sector where it has not made a major deal since 2021.
“Key metrics to watch include strategic initiatives of Wipro’s new management and insights into the consultancy industry’s resurgence,” Chowdhury said.
Kotak Institutional Equities also expects flat revenues for the quarter. Wipro’s revenues is expected to be above the midpoint of guidance of -1.5-0.5%.
“We attribute relatively strong performance to strength in CAPCO and likely recovery in the Americas market. We forecast a 30 bps increase in EBIT margin qoq due to cost containment and efficiency measures. We forecast strong deal signings after multiple quarters of disappointment. Wipro announced its first mega-deal in 2021 in the communications vertical. The company has signed other deals as well besides the mega-deal announced recently,” Kotak added.
IT Sector Q1 Results: TCS, HCL, Infosys
On Thursday, Infosys reported a 7.1% year-on-year increase in Q4 FY25 net profit to Rs 6,368 crore, surpassing expectations. Last week, IT giants Tata Consultancy Services (TCS) and HCL Tech also announced their earnings for the June 2024 quarter, both surpassing expectations. This led to a rise in their share prices.
TCS, India’s largest IT services company, reported a 9% year-on-year increase in consolidated net profit, reaching Rs 12,040 crore for the first quarter of FY 2024-25, ending on June 30. The company’s revenue from operations during April-June 2024 rose by 5.4% year-on-year to Rs 62,613 crore. Analysts had anticipated a profit of Rs 11,999 crore and revenue of Rs 62,190 crore.
HCL Technologies recorded a substantial 20.45% year-on-year increase in net profit, amounting to Rs 4,257 crore for the first quarter of FY 2024-25. Its revenue from operations during April-June 2024 grew by 6.69%, reaching Rs 28,057 crore, compared to Rs 26,296 crore in the same period last year.
