IT major Wipro is set to announce its second-quarter results; its larger peers TCS, Infosys, and HCL Tech posted last week. Amid the downturn in the sector, the majors have posted subdued revenue and profit metrics. Here are five things to watch out for in the Wipro Q2 numbers.
Revenue growth
Brokerages estimate revenue will decline in the range of 0.6 to 1.7 per cent, within the -2 per cent to 1 per cent band put out by the company as part of guidance. Revenue is expected to be impacted by a cut in discretionary spending and softness in BFSI, consumer, and other verticals. “Wipro will likely report the weakest growth among IT companies, with guidance for the December 2023E quarter fairly muted,” Kotak said in a report.
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Margin and guidance
Margins are expected to recover by 16-50 bps, in line with guidance this quarter. Deferring wage hikes and cost-control measures would aid margins. Wipro is expects to narrow its guidance to -1 to 1 per cent, from -2 to 1 per cent in the last quarter.
Attrition and Hiring
Attrition in Q1 had moderated to 17.3 per cent from 19.4 per cent in the previous quarter. The headcount fell by by 8,812 employees to 2,49,758 in Q1, from 2,58,570 in Q4. The management said it would continue to hire in critical areas. Given that its peers are stalling campus placements, Wipro’s plans are to be watched.
Senior-level exits
Resignation of long-time Wipro CFO Jatin Dalal has reignited the senior-level attrition issue, which has been alarming market watchers. Executives’ comment on stability in the senior management will be awaited.
Management Commentary
Management commentary on the reasons why growth rates have lagged behind that of its peers, the effect of a slowdown in discretionary spending on consulting business, the demand environment for various verticals, and margin levers to reach the desired margin level of 17 per cent.