IT major Wipro reported a 6.6 per cent sequential decline in net profit at ₹2,870 crore, amidst a continued weak demand environment. On a year-on-year basis, profits grew 12 per cent from ₹2,564 crore, a year ago.
Revenue from operations stood at ₹22,831 crore, a 6 per cent y-o-y growth and 1.54 per cent q-o-q decline. The management attributed the decline to specific sectors being impacted and a slowdown in discretionary spending. In constant currency terms, revenue dipped by 2.8 per cent.
Wipro’s outlook for the quarter ahead remains soft, the sequential guidance has been tepidly revised to -2 per cent to 1 per cent from -1 to -3 per cent guided last quarter.
Thierry Delaporte, CEO and Managing Director, said, “We are seeing tech investments normalise after the sharp accelerated spending during the second half of the pandemic. Clients are expecting faster returns on investment and optimising costs. However, we continue to see demand in high-growth areas like cloud.”
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In the current environment, hightech, BFSI, and communications sectors have been impacted the most due to soft discretionary spending. The growth contributors although are the sectors such as healthcare, medical devices, consumer goods and life sciences.
Deal bookings
Total bookings stood at $3.7 billion and large deal bookings was at $1.2 billion. Margins remained flattish sequentially at 16 per cent, down by 30 basis points from the last quarter. Although, the management remains optimistic that margins won’t dip below 16 per cent going forward.
Jatin Dalal, Chief Financial Officer, said, “There are internal steps that can be taken to offset some of the impact of wage hikes or any other cost increase. One such is clearly the utilisation which has improved from the previous quarter, and it will continue to find more success as we move forward. And, automation that we can deploy in our fixed-price projects.”
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Attrition rate
Attrition this quarter further moderated to 17.3 per cent from 19.4 per cent last quarter. Although, on a quarterly annualized basis excluding DOP, attrition came at an eight-quarter low of 14 per cent. Headcount in Q1 reduced by 8,812 employees from 2,58,570 last quarter to 2,49,758 this quarter.
The management, although did not provide a hiring target, said it will continue to hire in critical areas. Saurabh Govil, Chief Human Resources Officer at Wipro, said, “We will calibrate the hiring target quarterly based on the demand environment. The promotion cycles will continue and a variable payout up to 80 per cent will be provided in Q1 for the employees.”
