IT services major Wipro’s net profit for the March quarter grew 0.7% sequentially to Rs 3,074.5 crore from Rs 3,052.9 crore in the preceding three months. The revenue for the fourth quarter ended March increased 11.2% YoY but declined 0.2% sequentially to Rs 23,190 crore as the impact of macro-economic uncertainties weigh in.
The Bengaluru-based company expects a sequential revenue growth of -3.0 to -1.0% in constant currency for the first quarter ended June on the back of a “prolonged” uncertain economic environment.
“Compared to just a few years ago, we are seeing a visible change in the structure of our deals and our market position. We are winning large transformation deals, benefitting from a consolidating market, and deepening relationships with existing clients,” said Thierry Delaporte, CEO and MD, Wipro.
The IT services revenue in dollar terms for Q4 declined 0.6% sequentially but grew 6.5% on a year-on-year basis in constant currency to $2.82 billion. Delaporte said the sequential decline was mainly on account of slowdown in discretionary spend from clients. He told reporters at a media conference in Bengaluru that Wipro is a beneficiary of the vendor consolidation in the market. During Q4, it signed 15 large deals resulting in a total contract value (TCV) of over $1.1 billion.
The operating margin for the March quarter remained flat sequentially at 16.3%. “We continue to maintain our focus on operational improvements and productivity enhancements which led to our IT services margin exit at 16.3% in Q4 despite macro headwinds. We generated strong operating cash flows at 121% of our net income for the quarter,” said Jatin Dalal, Chief Financial Officer, Wipro.
On a trailing twelve-month basis, the voluntary attrition rate reduced to 19.2% from 21.2% in the preceding three months indicating a tough job market.
The company’s board has approved a buyback of shares through the tender offer at Rs 445 per share. Wipro will buy back about 26.9 crore shares from the shareholders of the company on a proportionate basis, which will not exceed Rs 12,000 crore.
As part of his efforts to turn around the company, Delaporte has been executing a five-point strategy he laid out soon after joining the company. The strategy involves accelerating growth through prioritization of sectors and markets, strengthening relationships with strategic clients and partners, enhancing the company’s portfolio of business solutions, building talent at scale, and simplifying the operating model.
Effective January 2021, Wipro reorganised its IT services segment into four strategic market units, all of which, projected strong growth. On an annual basis, while Americas 1 and Americas 2 grew 5.9% and 3.8% year-on-year respectively in constant currency. Europe grew 9.2%, and Asia Pacific Middle East Africa (APMEA) region grew 7.9% year-on-year in constant currency.
The two global business lines – iDEAS (Integrated Digital, Engineering & Application Services) grew 7% while iCORE (Cloud Infrastructure, Digital Operations, Risk & Enterprise Cyber Security Services) grew 5.6% year-on-year in constant currency.
Wipro announced its earnings after markets hours on Thursday. Ahead of its earnings, Wipro shares closed down 0.04% at Rs 374.35 on the BSE.