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Wipro Q2 Result | Profit falls 9.6% to Rs 2,930 crore, firm sees IT services revenue growth at 2-4% in Q3 –

Wipro, the country’s third largest IT services company by market capitalisation, has a reported consolidated profit of Rs 2,930.7 crore in the quarter ended September 2021 quarter, declining 9.6 percent due to contraction in margins after wage hike and amortisation charge on Capco acquisition. However, the profit grew by 18.9 percent compared to corresponding quarter last fiscal.

Gross revenue increased 7.8 percent sequentially to Rs 19,760.7 crore in the quarter ended September 2021, and the same increased 30.1 percent year-on-year.

IT services, which analysts largely track for Wipro, were at $2,580 million for the September quarter, increasing 6.9 percent QoQ and the year-on-year growth was 29.5 percent. The revenue growth in constant currency was 8.1 percent sequentially, which is far ahead of analysts estimates of 6.5-7.4 percent for the quarter, while the same grew by 28.8 percent year-on-year.

“The Q2 results demonstrate that the business strategy is working well. We grew at over 4.5 percent organic sequential growth for a second quarter in a row, resulting in a 28 percent YoY growth in the first half of this financial year,” said Thierry Delaporte, CEO and Managing Director.

He further said Wipro surpassed the $10 billion milestone of annualized revenue run rate.

On the outlook for Q3FY22, the company expects revenue from IT services business to be in the range of $2,631 million to $2,683 million, which translatesto a sequential growth of 2 percent to 4 percent.

IT services operating margin for the September 2021 quarter at 17.8 percent declined 104 bps compared to previous quarter, and fell 140 bps YoY.

“We sustained operating margins in Q2 in a narrow band even after

absorbing the full impact of recent acquisitions and investing significantly in business across sales, capabilities and talent,” said Jatin Dalal, Chief Financial Officer.

Wipro completed a salary increase covering 80 percent of colleagues, making it the second hike in this calendar, he added.

The company added 2 clients in the $100 million+ band, taking the total to 15, and made one client addition in $75 million+ category, increasing the total client list to 28 as of September 2021. In the $50 million+ category, it added 2 clients, 5 clients in $20 million+ band, and 6 in $10 million+ category, compared to previous quarter.

Banking, financial services and insurance segment, which contributed 34.8 percent to total IT services business, grew by 11.1 percent sequentially, while consumer segment, which accounted for 17.3 percent to revenue, registered 6.5 percent growth QoQ in September quarter.

Health, ENU (energy, natural resources and utilities), technology, manufacturing, and communications segments reported 5.1 percent, 0.6 percent, 6.5 percent, 3.1 percent, and 6.1 percent respectively in September quarter on sequential basis.

Further, the attrition rate (trailing twelve months) stood at 20.5 percent in September 2021 quarter, increasing significantly from 15.5 percent in Q1FY22, and 11 percent in Q2FY21.

Bengaluru-based IT services firm Wipro completed the acquisition of London-headquartered The Capital Markets Company Capco, a consultancy firm in banking and financial services space, on April 29, for $1.45 billion. It was the largest ever buyout by the company so far.

The stock price registered a massive 59 percent return in current financial year FY22 and gained 21 percent from July till today.

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