Wipro guided for a revenue drop between 1% and 3% in the April-June quarter, owing to a negative demand outlook. This is below estimates by brokerage houses such as Kotak, which had estimated Wipro to guide for revenue decline of 1% to growth of 1% for the period.
Wipro's FYQ4 net profit came in at ₹3,074.5 crore. The average of an ET Poll of brokerage houses had pegged an increase of 3.5% on year in net profit.
It announced a buyback of shares worth ₹12,000 crore at a price of ₹445 per share, or at a 19% premium to Thursday's close of ₹374.35 on the BSE. The total quantum of stocks approved for buyback would constitute about 4.9% of the total outstanding equity.
Over the past eight years, Wipro has conducted four buyback exercises, with the last two in 2021 and 2019 made through the tender route. In 2021, the software exporter bought back shares worth ₹9,500 crore at an offer price of ₹400 apiece.
Revenue for the quarter was ₹23,190.3 crore, up 11.2% on year and down 0.6% sequentially, in constant currency (CC).
"Looking ahead, we believe the macro environment will remain challenging. In our industry many sectors are impacted by the prolonged uncertainty of the economic environment. You certainly saw an impact in our business and projections as well," chief executive Thierry Delaporte said at a post-earnings media briefing. The company is seeing some softness in the banking and financial services space and in consulting given the current macro environment, he added.
Delaporte also said there is also a slowdown in discretionary spending in some industries like banking and financial services, retail-consumer packaged goods and technology. Wipro also saw some ramp down of projects during the quarter but no cancellations. "Energy utility and healthcare, on the other hand, is doing really well."
This miss in numbers follows similar commentary from market leader Tata Consultancy Services (TCS) and Infosys in terms of uncertainty in the client spending environment in the quarter, underlined by project cancellations and ramp downs amidst collapse of major banks and big tech layoffs.
While TCS reported a 0.6% sequential revenue growth in Q4, for Infosys, it was down 3.2% while third largest software major HCLTech posted a 1.2% dip, all on a CC basis.
Highlighting the challenging times, Infosys forecast its slowest revenue growth in six years of 4-7% for fiscal year 2024. For the full fiscal, Wipro’s net profit stood at 11,350 crore, down 7.7% on year, on revenue of 90,487.6 crore, up 14.4%. “The company’s (Wipro’s) expected revenue for the first quarter is much below expectation and indicates a tougher business environment over coming quarters,” said Mitul Shah, head of research at Reliance Securities in an analyst note.
Wipro’s quarterly operating margins stood at 16.3% in the quarter, flat sequentially but down 70 basis points from a year ago.
Its net staff addition for the quarter fell by 1,823 employees, taking the total headcount to 256,921.
The company’s attrition stood at 19.2% compared to 21.1% in the December-ended quarter while the metric was 23.8% last year.
“We continue to maintain our focus on operational improvements and productivity enhancements which led to our IT services margin exit at 16.3% in the fourth quarter despite macro headwinds, ” said Jatin Dalal, chief financial officer on margins. Post buyback, the company said it is targeting more organic growth “by design” with $1.6 billion liquidity by end of June for mergers and acquisitions plans.
Wipro bagged $4.1 billion bookings in the just ended three-month period, as against $4.3 billion worth of deals bagged in the December-ended quarter. The IT major closed 55 major deals in FY23. It didn’t give the cumulative value of these deals. In FY22, it signed 37 large deals for a total contract value of over $2.3 billion.
Europe, a market that has been facing geopolitical tensions, and Asia Pacific markets grew 9.2% and 7.9% on year respectively, in the fiscal fourth quarter. Americas 2, which includes banking, securities, investment banking and insurance, manufacturing, hi-tech, energy & utilities, and Canada, grew at 3.8% on year.
Wipro Q4 net flat at Rs 3000 cr, approves Rs 12,000-cr buyback - Economic Times
Read More
No comments:
Post a Comment