Wipro Q3 earnings: 6 key takeaways for Dalal Street

Wipro on Friday reported a 2.8% year-on-year (YoY) rise in consolidated net profit for the December quarter to Rs 3,053 crore, which topped ET Now poll of Rs 2,950 crore.

Consolidated revenue for the quarter increased 14.3% YoY to Rs 23,229 crore, and was tad higher than the estimated Rs 23,180 crore.

Sequentially, the topline rose a meagre 3%, but the bottomline increased by a sharp 15%.

Following are the other major takeaways from the earnings:

Outlook
For FY23, Wipro expects revenue growth from the IT services business to be in the range of 11.5-12.0%, in constant currency terms. This is much slower than the strong 27% growth it had reported for FY22.

Deal wins
Wipro won deals worth $4.3 billion in the quarter, up by 26% YoY, with large deal bookings rising by 69% YoY. The growth in large deal booking was much stronger than the 24% growth reported for the September quarter.

Margin
Operating margin calculated as earnings before interest and taxes (EBIT), improved by a sharp 120 basis points sequentially to 16.3%.

The growth in margin was led by strong operational improvements and automation-led efficiencies, Chief Financial Officer Jatin Dalal said.

The expansion came even after absorbing the higher employee costs in the form of salary increases, promotions and long-term incentives for the senior leadership.

Attrition
For the fourth quarter in a row, Wipro saw attrition rate trending lower. The voluntary attrition moderated 180 bps from the previous quarter to 21.2% for the trailing 12 months (TTM). The attrition rate was as high as 23.8% in the March quarter of FY22.

Compared to HCL Technologies and Infosys, the attrition rate dropped slower for Wipro. HCL Technologies saw a 210 bps dip in the attrition rate in the third quarter, while for Infosys, it dropped by a whopping 270 bps. Tata Consultancy Services saw the lowest drop in attrition at 20 bps.

Dividend
Wipro announced the first interim dividend for the current financial year at Rs 1 a share.

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