IT major Wipro reported a 12 per cent year-on-year (y-o-y) profit decline in Q3 at ₹2,694 crore, amid continued weak demand environment.
On a quarter-on-quarter (q-o-q) basis, profits were up 1.8 per cent. Revenue from operations stood at ₹22,205 crore, a 4.4 per cent y-o-y decline and 1.4 per cent sequential decline. The reported numbers were largely in line with market expectations.
The company continued to see softness largely in the BFSI, energy and utilities side of the business, thus resulting in revenue decline. Thierry Delaporte, CEO and Managing Director, said: “The demand environment still remains cautious. Clients are still making conservative investments, looking for efficiency, more returns on investments, and better optimisation for existing investments.”
Outlook improves
Wipro’s outlook for the quarter ahead has improved. It has revised its sequential guidance to -1.5 to 0.5 per cent from -3.5 to -1.5 per cent last quarter. Delaporte noted that the company is seeing green shoots in the market with the landscape evolving, and this is likely to result in the transition to revenue stabilisation from deceleration.
Even as the company continues to receive criticism for the weakness in its consulting business and underperformance of its acquisitions, the CEO remained optimistic that when the market changes for better, the consulting business will be the first to bounce back. “We have had a good performance from our consulting business with Capco reporting a double digit sequential growth in order booking, the highest in the last four quarters,” said Delaporte.
The total bookings stood at $3.8 billion, almost the same as last quarter. Large deal bookings were $0.9 billion, marginally lower than 1.3 billion last quarter. Margins remained flattish sequentially at 16 per cent. Delaporte noted that Wipro, across the board, especially in the APMEA market, has reduced low margin accounts while slowly moving towards higher value transformation projects.
Aparna C Iyer, Chief Financial Officer, said: “Our margins have remained resilient as we executed on maximizing revenue performance, realizing savings and reducing discretionary spends.” The company expects to stay range bound. Further, as the market improves on the back of transformation and efficiency plays, margin improvements can be expected in coming quarters.
Attrition this quarter further moderated to 14.2 per cent from 15.5 per cent last quarter. Headcount in Q2 reduced by 4473 employees from 2,44,707 last quarter to 240234 this quarter. Responding to the outlook for fresher hiring, Saurabh Govil, Chief Human Resources Officer, said, “we have a talent pool available within and people whom we have offered. As demand comes in, we will dip in both available resource pools.”
Commenting on its recent lawsuit on ex-CFO Jatin Dalal, the company said that it is not against talent aspiring and meeting their career goals, but is a matter of complying with contractual obligations.