Wipro First Quarter Results: Net Profit increased 12% year-on-year to Rs 287 billion, lower than expected
Quarterly sales increased 6% year-on-year to Rs 2,283.1 billion, below the forecast of Rs 2,301.4 billion compared to Rs 2,152.8 billion in the first quarter of FY23.
Meanwhile, shares of Wipro on July 13 closed 0.70 percent higher at Rs 394.35 apiece on BSE.
IT services company Wipro reported on July 13 that its net profit for the first quarter ended June 30, 2023 increased by 11.9% year-on-year. However, compared to the previous quarter, net profit fell by 6.6%, reflecting declines in all key financial indicators.
Wipro posted a consolidated net profit of INR 2.87 billion in the first quarter of 2024, below analysts’ expectations of INR 2.976 billion for the quarter. Bangalore-based IT services group reported a net profit of Rs 2.563 billion in the same period last year.
Quarterly sales increased 6% year-on-year to Rs 2,283.1 billion, below the forecast of Rs 2,301.4 billion compared to Rs 2,152.8 billion in the first quarter of FY23. The decline in revenue was primarily due to continued weakness in the Banking, Financial Services and Insurance (BFSI) sector and increased advisory activity amidst lower discretionary spending.
The company’s guidance for CC revenue growth in the first quarter is -3% to -1%, based on expectations that the macroeconomic environment will remain challenging. Wipro, the third large tech company to report earnings, was expected to post the weakest growth among its large-cap peers.
This comes at a time when IT companies are increasingly talking about demand volatility and short-term challenges stemming from macroeconomic uncertainty, coupled with company reports of project declines.
Among peers, Tata Consultancy Services reported as expected results after a weak quarter, while HCL Tech suffered a major setback on all fronts.
Wipro expects revenue growth of -2% to 1% at constant exchange rates for the second quarter of 2024.
The company also added that total bookings for the quarter were $3.7 billion. Large booking growth was 9% year-on-year. Highest in eight quarters.
Wipro’s operating cash flow was 130% of net profit.
Additionally, Wipro had 249,758 employees and a turnover rate of 17.3 percent. Chief Executive Thierry Delaporte said in a statement that the company is maintaining momentum in new business despite the phasing out of discretionary spending.
“Wipro’s first quarter performance is built on a strong backbone of strong bookings, strong customer additions and solid earnings. It cements Wipro’s position as a key transformation partner.”
Jatin Dalal, Chief Financial Officer (CFO) said: Operating margin in the first quarter he was 16%, up 112 basis points year over year. Generated strong operating cash flow of 130% of net income for the quarter. Earnings per share for the quarter increased 11.5% year-on-year. ”
Meanwhile, BSE-listed Wipro shares closed at Rs 394.35 per share on July 13, up 0.70 per cent.
