Wipro Net Profit Plummets 11.9% YoY In Q3 FY2024

Wipro faced significant challenges in the third quarter of the fiscal year 2024, reporting an 11.9 per cent year-on-year (YoY) drop in consolidated net profit. The company's consolidated net profit for the quarter stood at Rs 2,700 crore, compared to Rs 3,065 crore in the same quarter of the previous year.

This decline in net profit aligns closely with analyst estimates, reflecting the challenges and dynamics within the industry during this period. Despite the dip in net profit, Wipro's leadership remained optimistic about the company's performance in the face of ongoing market conditions.

Consolidated sales for the quarter were reported at Rs 22,205 crore, down from Rs 23,229 crore in the corresponding quarter of the previous year. The gross revenue reached Rs 22,210 crore, indicating a 1.4 per cent decrease quarter-on-quarter (QoQ).

“Our investments in people, processes, and business operations are continuing to pay off,” said Thierry Delaporte, CEO and Managing Director, Wipro. 

“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,” he added.

Segments

In the IT services segment, Wipro reported a decrease of 2.1 per cent QoQ in revenue, with IT services operating margin for the quarter at 16.0 per cent, reflecting an 11 basis points decline QoQ. The IT services segment EBIT for the quarter was Rs 3,540 crore, marking a 1.8 per cent QoQ decrease.

Deal Bookings

Wipro's deal bookings for the reporting period totaled USD 3.8 billion, reflecting a 13.5 per cent year-on-year decline in constant currency. Additionally, the total contract value (TCV) of large deals amounted to USD 0.9 billion, marking an 8.3 per cent year-on-year decrease.

“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 per cent, 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.” - Aparna C. Iyer, Chief Financial Officer, Wipro

The company's net income for the quarter showed a modest increase of 1.8 per cent QoQ, reaching Rs 2,690 crore. Earnings per share for the quarter stood at Rs 5.16, reflecting a 2 per cent QoQ increase.

Attrition And Headcount

Wipro also highlighted its proactive measures in managing attrition, which reached a 10-quarter low of 12.3 per cent in Q3 FY2024. Additionally, an interim dividend of Rs 1 per equity share/ADS was declared during this period.

The company's headcount saw a reduction of 4,470 employees for the third quarter (Q3) of the fiscal year 2024. As of 31 December 2023, Wipro's headcount stood at 2,40,234, down from 2,44,707 in the previous quarter (Q2 FY24).

Guidance

Looking ahead, Wipro provided guidance for its IT Services business segment revenue, expecting it to be in the range of USD 2,615 million to USD 2,669 million, translating to a sequential guidance of -1.5 per cent to +0.5 per cent in constant currency terms.