Wipro profit up 19% y-o-y, falls sequentially

Our Bureau Bengaluru | Updated on October 13, 2021

‘Q2 results demonstrate that our business strategy is working well’

IT services major Wipro reported a consolidated net profit of ₹2,930.7 crore in the quarter ended September 2021, posting an increase of 18.9 per cent on a year-on-year basis. On a sequential basis, its net profit declined 9.6 per cent due to wage hikes and amortisation charges on the Capco acquisition.

Revenues increased 30.1 per cent year-on-year to ₹19,667.40 crore during the quarter and 7.8 per cent quarter-on-quarter. IT services, which contribute over 95 per cent of Wipro’s total income, were at $2.58 billion for the September quarter, which was a 6.9 per cent rise sequentially and 29.5 per cent y-o-y.

IT services business

The company expects revenue from the IT services business to be in the range of $2.631 billion to $2.683 billion for Q3, which translates to a sequential growth of 2 per cent to 4 per cent.

IT services’ operating margin for the September 2021 quarter was at 17.8 per cent, a decline of 104 bps compared to the previous quarter.

“We sustained operating margins in Q2 in a narrow band even after absorbing the full impact of recent acquisitions and investing significantly in business across sales, capabilities and talent,” said Jatin Dalal, Chief Financial Officer.

“The Q2 results demonstrate that our business strategy is working well. We grew at over 4.5 per cent organic sequential increase for the second quarter in a row, resulting in a 28 per cent y-o-y growth in the first half of this financial year,” said Thierry Delaporte, CEO and MD, Wipro, adding: “We surpassed the $10-billion milestone of annualised revenue run rate. The majority of our growth is volume-led and the demand environment remains very strong. Our pipeline is one of the highest in recent quarters with many mid and small size deals.”

Delaporte, who was here at Wipro’s Sarjapur campus for the first time after he took over the mantle in July last year, further said: “We’ve experienced secular growth across all markets, sectors and global business lines. Our recent acquisitions have also performed ahead of expectations.”

There was significant traction across all markets; the top two markets, Americas and Europe, grew 15 per cent and 29 per cent y-o-y, respectively, even without the recent acquisitions, he added.

In his commentary Delaporte further said the demand environment continued to be very strong, and the company’s pipeline was a clear reflection of that.

“In fact, our pipeline is among the highest in recent quarters. We have a good mix of large and medium-sized deals. There are in fact many mid-sized deals and slightly smaller-sized Transformation Deals in the market right now,” he elaborated.

The quarter saw Wipro’s attrition at 20.5 per cent, a 15.5 per cent increase from last quarter. The tech firm rolled out a second hike this year for some 80 per cent of its employees in September. It also onboarded 8,150 freshers in Q2.

Published on October 13, 2021

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