Wipro Q3 Results Highlights: IT major reports 12% YoY decline in net profit, revenue at ₹22,205 cr

Wipro Q3 Results Live: To sum up, here are top 11 key highlights from Wipro's Q3 results for FY24 -

1. Gross revenue reached ₹222.1 billion ($2.7 billion), a decrease of 1.4% QoQ.

2. IT services segment revenue was at $2,656.1 million, a decrease of 2.1% QoQ.

3. Non-GAAP constant currency IT Services segment revenue decreased 1.7% QoQ.

4. Total bookings was at $3.8 billion, up by 0.2% QoQ and large deal bookings4 was at $0.9 billion.

5. IT services segment EBIT for the quarter was ₹35.4 billion ($425.8 million), a decrease of 1.8% QoQ.

6. IT services operating margin for the quarter was at 16.0%, down by 11 bps QoQ.

7. Net income for the quarter was at ₹26.9 billion ($323.9 million), an increase of 1.8% QoQ.

8. Earnings per share for the quarter was at ₹5.16 ($0.06), an increase of 2.0% QoQ.

9. Operating cash flows at 177.3% of Net Income for the quarter was at ₹47.9 billion ($575.7 million).

10. Voluntary attrition has continued to moderate QoQ, coming in at 10-quarter low of 12.3% in Q3’24.

11. Interim dividend declared of ₹1 ($0.0121) per equity share/ADS.

Wipro Q3 Results Live:- Here are top five large deals won by the company, as per regulatory filing -

1. Wipro was selected by a US-based member-governed health insurance non-profit to deploy an integrated Business Platform as a Service to deliver end-to-end plan administration services.
2. An American Retail Bank has chosen Wipro as the end-to-end product development partner for the client’s Payments & Digital Platform groups.
3. A Middle Eastern financial regulatory body has selected Wipro as a technology partner to strengthen its IT applications and infrastructure. 
4. One of the world’s largest wind turbine manufacturers has selected Wipro to transform its Enterprise Resource Planning landscape to harmonize the Finance, Manufacturing, Sales, Supply Chain and Customer service processes.
5. An international banking institution has selected Wipro to transform its business applications portfolio.

Wipro Q3 Results Live: The company delivered IT services operating margin at 16%. Also saw an increase by 2% QoQ in EPS.

Wipro Q3 Results Live: The IT giant reported a 2.1% quarter-to-quarter (QoQ) decrease in IT services segment revenue at $2,656.1 million. Non-GAAP constant currency IT Services segment revenue decreased 1.7% QoQ.

Wipro Q3 Results Live: The company, in its latest financial result, further revealed that the earnings per share for the quarter was at ₹5.16 ($0.061), an increase of 2.0% QoQ.

Wipro Q3 Results Live: Chief Financial Officer Aparna C Iyer revealed that the company has continued to give out salary hikes to its employees in the range of 6-8%, which is the industry standard. She further clarified that the salary hikes paid to the employees have not impacted the margins.

Wipro Q3 Results Live: Wipro CEO Thierry Delaporte said in the press conference that the company is likely to see an improvement in the margin once the market turns around. “ Market hasn't changed from earlier quarters, lack of discretionary spend hurting growth,” Delaporte said.

Wipro Q3 Results Live: CHRO Saurabh Govil, in a press conference, said that the company will continue to hire fresh talent for certain skills and technologies. The company saw a decline in its headcount by 4,473.

Wipro Q3 Results Live: “I am pleased with our rigor of execution across all financial metrics- revenue, margin, EPS, and cash flow. We are building a more resilient, agile, and efficient organization which has helped us sustain our margins at 16%, a 63 basis point improvement on a year-to-date basis despite revenue headwinds and absorbing the impact of the investments we are making for growth and people.”

Wipro Q3 Results Live: The total headcount as of December 31 stood at 2,40,234, down by 4,473. The attrition volume for the quarter ended in December stood at 14.2%. However, the company further revealed that voluntary attrition has continued to moderate for quarter-to-quarter (QoQ), coming in at 10-quarter low of 12.3% inQ3’24.

Wipro Q3 Results Live: The IT service provider reported total booking at $3.8 billion, down by 13.5% year-on-year (YoY) in terms of constant currency and up by 0.2% quarter-to-quarter (QoQ). Large Deal bookings were at $0.9 billion, decline by 8.3% YoY in constant currency terms.

Wipro Q3 Results Live: “Our investments in people, processes, and business operations are continuing to pay off. “In a seasonally soft quarter, deal booking momentum remained strong. Our large deals recorded a 20 percent year-to-date growth. Further, we are starting to see early signs of a return to growth in Consulting, as demonstrated by the double-digit growth in order bookings in our Capco business. Under our ai360 strategy, AI is now embedded across most of our existing solutions and client offerings. We’re deploying AI internally across all business and functional areas as well, with the goals of efficiency, productivity, and scale. We are confident that these investments will allow us to capitalize on emerging opportunities, as the macro environment improves.”

Wipro Q3 Results Live: The IT company reported revenue from its IT Services business segment in the range of $2,615 million to $2,669 million. This translates to sequential guidance of -1.5% to +0.5% in constant currency terms.

Wipro Q3 Results Live: The company, in its third financial quarter results ending December 2023, reported a marginal decline of 11 bps to 16% in EBIT margin or operating margin due to one-month wage hike and furloughs. 

It further reported a decrease in topline by 6.9% year-on-year (YoY) in constant currency terms.

During the nine months ended December 3 1, 2023, the company concluded the buyback of 269,662,921 equity shares (at a price of ₹445 per equity share) as approved by the Board of Directors on April 27, 2023. This has resulted in a total cash outflow on: ₹145,173 (including tax on buyback on ₹24,783 and transaction costs related to buyback on ₹390).

Wipro Ltd posted discouraging financial results for the quarter ending in December, witnessing a nearly 12% year-on-year decline in consolidated net profit, amounting to ₹2,694 crore. Concurrently, the consolidated revenue experienced a 4.4% decrease, reaching ₹22,205 crore.

Payment of interim dividend of t 1/- per equity share of par value t 21- each to the members of the company as on January 24, 2024, being the Record Date. The payment of Interim Dividend will be made on or before February 10, 2024.

Wipro, on Friday, announces PAT at ₹2,694 cr, revenue at ₹22,205 cr vs ₹22,516 cr (QoQ).

Wipro share price ended 3.97% higher at ₹466 per share on Friday's trading session, against previous close at ₹448 on Thursday ahead of Q3 result announcement. The Wipro stock has gained nearly 18.18% in the last six months and 18.30% in the last one year.

IT sector’s Q3FY24 results, while modest in absolute terms, shall be along expectations, overall, says Nuvama Institutional Equities. The strong deal flow momentum reinforces our positive stance on the sector. The recent Fed commentary further enhances tech spending visibility in the medium to long term. We expect growth to rebound in FY25 driven by a sustainable strong demand environment, said the brokerage.

JM Financial expects Wipro to deliver a 2.2% drop in Constant Currency (CC) revenue growth with a 20 bps cross currency impact translating into a 2.4% QoQ fall in USD revenue for IT Services within the guided band of -3.5% to -1.5%. It expects EBIT margins to decline 50 bps to 15.6% as it builds in wage hike in Q3. Further, the brokerage firm expects Wipro to guide for a (1)-0% QoQ CC growth in Q4FY24.

Wipro share price traded over 4% higher on Friday ahead of the Q3 results today. The rally was fuelled by overall optimism in the IT sector after TCS and Infosys reported better-than-expected December quarter earnings. All the IT stocks gained as analysts believe the IT industry is close to the trough of this cycle. Signs of improvement in the global economy and strong deal wins in recent quarters give confidence about the revenue growth acceleration.

Wipro shares rallied as much as 4.67% to an intraday high of ₹469.00 apiece on the BSE. 

Wipro reported a revenue CAGR of 3.7%, EBITDA CAGR of 8.1% and net profit of 5.8% in FY24-26. Wipro shares are trading at FY25e P/E of 20x.

Shares of Wipro and HCL Technologies witnessed strong buying in the early morning session on Friday, expecting strong Q3 results today from these Indian IT majors. Wipro share price today opened upside at ₹455 apiece on NSE and went on to touch an intraday high of ₹468.95 apiece within a few minutes of the stock market's opening bell. Read here

Wipro share price has rallied over 10% in the past one month, while the stock has given 18% returns in one year period. Wipro shares have underperformed the Nifty IT index that has gained more than 26% in the past one year.

Equirus Securities expects Wipro’s IT services USD sales to decline by 2.6% QoQ in CC terms versus guidance of QoQ dip of 1.5% to decline of 3.5% QoQ in CC terms. Recurring IT services EBIT margins are expected to dip by 12 bps led by soft sales performance and impact from wage hikes effective December 1, 2023. We expect Wipro to guide for a decline of 1% QoQ to growth of 1% QoQ in IT services’ USD sales in CC terms for 4QFY24E.

Q3FY24 is expected to be a soft quarter due to seasonality of fewer working days and higher furloughs. Revenue growth is likely to be between -4% and +4% for most companies – dragged by lower discretionary tech spends, delay in execution of deals and furloughs. Deal flow shall continue to be stable — which should translate to a strong revenue recovery in coming quarters, according to Nuvama Institutional Equities. 

We expect most companies to retain their FY24 guidance. Focus shall now shift from FY24 to FY25/26, with keen interest in how client budgets are shaping up for CY24, especially after recent Fed commentary. We stay positive on the sector, with medium to long term growth potential outweighing near-term headwinds, in our view, said the brokerage firm.

Yes Securities expects Wipro’s Q3 net profit to fall 1.4% QoQ to ₹2,629.2 crore, while its revenue to drop 0.7% QoQ to ₹22,363.6 crore. EBITDA during the quarter is expected to dip 29% sequentially to ₹4,111.8 crore.

Wipro’s commentary on recent senior exits; impact of lower discretionary spending on the consulting business; performance of impacted verticals such as BFSI and tech; 4QFY24 guidance and FY25 outlook; large deal wins and pipeline; investments in GenAI partnerships and solutions; updates on core geographies and top-10 accounts and commentary on client budgets and any leadership changes will be 

Nifty IT Index gained more than 4% in the morning trades on Friday post results declared by Tata Consultancy Services and Infosys on Thursday. The results came, after the market hours. The Nifty IT Index also scaled 52-week highs with Infosys seeing its share price rise more than 7% while TCS share price was up almost 4%. Read here

The IT industry is close to the trough of this cycle. Signs of improvement in the global economy and strong deal wins in recent quarters give us confidence about the revenue growth acceleration that we forecast for FY25, said BNP Paribas. It prefers large-cap firms with strong client relationships, scale to invest in GenAI and reasonable valuations.

Wipro’s weak Q3FY24 guidance highlights the challenging macro environment that we think will lead to a sharp slowdown in growth in FY24E and keep margins under pressure in the absence of operating leverage. We also think Wipro’s higher BFSI consulting exposure puts it at a higher risk of persistent weakness than peers, said JPMorgan.

JPMorgan made minor tweaks to its estimates and increased its target multiple on Wipro to 17x from 15x, as it bakes in a lower risk free rate on expectations of interest rate cuts in CY24.

The brokerage has an ‘Underweight’ rating on Wipro and raised the target price to ₹420 from ₹370 earlier.

“We expect Wipro to see the slowest growth amongst its large cap peers over FY24-26E, as we believe it will continue to face execution challenges at a time when it is witnessing senior level exits including the departures of the CFO and Chief Growth Officer,” said JPMorgan.

According to stock market experts, IT companies are expected to deliver muted numbers due to macroeconomic headwinds and looming recession fears. So, the focus will be largely on their guidance as they expect a better business outlook for Indian IT majors. Read here

An analysis of the publicly announced deal wins in 3QFY24 of the key IT companies reveals a surprising dip in wins from North America compared to the earlier quarters. In addition, no mega deals have been announced compared to six in the previous quarter, said Kotak Institutional Equities. 

While we acknowledge that publicly announced deal wins only account for a small fraction of overall deal wins, modest announcements, especially in the troubled North American geography, are surprising (as companies highlight record pipelines) and a tad worrying, it said.

Wipro’ IT services revenue is expected to decline 2.9% to $2,633 million, while in rupee terms, it may fall 2% to ₹22,100 crore, sequentially, according to Motilal Oswal. The company’s net profit is likely to fall 5.8% QoQ to ₹2,500 crore, as per the brokerage estimates. IT services EBIT margin may drop by 100 basis points (bps) to 15.1% from 16.1%, QoQ.

Wipro is estimated to report a revenue decline of 2.7% QoQ in CC, due to furloughs and macro impact, leading to continued softness in verticals. IT Services margin should see a contraction of 100 bps on account of compensation revision and weak growth. Consulting business continues to be weak owing to a cut in discretionary spending and reprioritizing projects, said brokerage firm Motilal Oswal Financial Services. Wipro’s commentary on revenue conversion, consulting, and deal pipeline will be the key monitorables.

Wipro is facing revenue decline over the last three quarters, while deal wins are not getting reflected in revenue growth as the previous assignments are getting paused or cancelled, noted brokerage firm Anand Rathi. 

New deal ramp-ups appear to be on track and hence, there was expectation that the company would return to growth by Q3. This did not materialise and now the expectation is that the company will return to growth by Q1 FY25. With such revenue declines and higher-than-expected furloughs in Q3, the margins are also likely to have been impacted, said the brokerage. 

Anand Rathi reduced margin expectation for Wipro by 100 bps for FY25, leading to lower profit estimates.

Wipro’s revenue is likely to de-grow by 0.6% QoQ to ₹22,412 crore, aided by weaker rampup. Operating margins may expand by 87 bps QoQ to 15.7%, led by strong volume growth, said Axis Securities. It expects net profit to rise 5% QoQ to ₹2,778 crore. The management commentary on the new deal ramp-up and visibility going ahead is the key thing to monitor.

Nifty IT index rallied over 3% after better than expected Q3 results from TCS and Infosys. Wipro shares also gained more than 3% while Infosys led the pack with a 5% jump.

Wipro share price rallied over 3% in early trade on Friday ahead of the announcement of Q3 results today. Wipro shares gained as much as 3.28% to ₹462.75 apiece on the BSE. 

Wipro shares opened at ₹454.55 apiece as against previous close of ₹448.05.

Wipro’s USD services revenue is expected to decline 2.5% QoQ (-2.0% QoQ in CC), in line with guidance and due to seasonal furloughs and the continued impact of a slowdown related to a cut in discretionary tech spending. We model contraction in IT services EBIT margin of 33 bps QoQ to 15.7% on wage hikes and muted revenue, partially offset by operating efficiencies. We expect Wipro to guide for quarterly CC revenue growth of -1% to 1% YoY for 4QFY24, said BNP Paribas.

Wipro’s IT services revenue is expected to decline -2.9% QoQ in CC and - 3.2% QoQ in USD. Margins are expected to contract by ~20 bps on revenue decline and 1 month wage hike impact. We expect Wipro to give -1% to +1% CC QoQ revenue growth guidance for Q4FY24. Will look for updates on consultancy business and improvement in deal execution, Nuvama Institutional Equities.

For Wipro, analysts at BNP Paribas expect services revenue to decline 2.5% sequentially in (2.0% sequentially in constant currency terms), in line with guidance and due to seasonal furloughs and the continued impact of a slowdown related to a cut in discretionary tech spending. They model contraction in IT services Ebit margin of 33 basis points sequentially to 15.7% on wage hikes and muted revenue, partially offset by operating efficiencies. Read here

Wipro will declare Q3 results today. Investors will watch out for IT services US dollar sales growth and margin outlook especially for 4QFY24 and beyond, margin outlook for near term as well as medium to long term, any portfolio or client specific issues especially resulting from ongoing geopolitical or macro concerns, update on deal pipeline, client decision making and order book for Q3 and beyond, further sizable M&A plans post big M&A of Capco & Rizing and plans to drive synergy benefits from Capco/Rizing and capital allocation plans.

Wipro is expected to guide for a decline of 1% QoQ to growth of 1% QoQ in IT services' USD sales in CC terms for 4QFY24E. 

Wipro’s earnings before interest and taxes (EBIT) in Q3FY24 is expected to fall 2.1% to ₹3,266 crore from ₹3,334.5 crore in the September 2023 quarter. The company’s IT services EBIT margin during the third quarter of FY24 is also estimated to see around 40 basis points (bps) contraction on account of compensation revision and weak growth. 

Wipro’s net profit in the quarter ended December 2023 is expected to rise 1.6% to ₹2,688.9 crore from ₹2,646.3 crore in the September quarter.

Wipro’s IT services revenue in Q3FY24 is expected to fall 2.5% to $2,645 million from $2,713 million in the previous quarter. In rupee terms, revenue is likely to fall 1.4% to ₹22,191.6 crore from ₹22,515.9 crore, QoQ, impacted by seasonal furloughs, weakness in BFSI, and Hitech verticals and weakness in consulting business. 

For the IT industry, the December quarter is always a seasonally difficult time, but it became worse due to the ongoing downturn in the US and Europe, which account for the majority of software services exporters' revenue.

The slowdown across major verticals and key geographies should persist, with BFSI, Retail, Hi-Tech, and Communications likely to experience higher-than anticipated furloughs in 3Q.

Wipro, the IT services major, is set to announce its Q3 results today, January 12. Wipro Q3 results are expected to remain weak with a drop in IT services revenue and operating margins. Growth guidance and consulting business outlook will be eyed by investors.