Wipro posts ‘best-ever’ Q1 on robust demand

Our Bureau. Bengaluru | Updated on July 15, 2021

Net surges 35%; deal pipeline ‘strong’

Terming it the “best-ever” results on the back of robust demand and a strong deal pipeline, Wipro Ltd on Thursday said its consolidated net profit for the first quarter of FY22 rose 35.2 per cent to ₹3,230 crore over the same period last year.

The IT services major said it witnessed its highest organic sequential growth in 38 quarters with revenues rising 22.4 per cent to ₹18,250 crore. “Even at the lower end of our guidance, we will cross the $10-billion annual run rate of revenues. The Q1 performance and the Q2 guidance set us up for a well ahead of double-digit growth for the full year, even excluding Capco,” said Thierry Delaporte, CEO & MD.

Delaporte said demand was robust and the quality of the company’s overall pipeline was better than before. “Our top three markets grew in double digits. All markets are witnessing solid demand and deal wins are exceptionally strong in the Americas,” he said.

Margin pressure

Though the company faced margin pressure on account of its Capco acquisition and wage hikes, it guided for sequential revenue growth of 5-7 per cent for Q2 of FY22 and revenues of $2.535-2.583 billion. Wipro, however, posted a drop in operating margin. It saw a dip of 220 basis points sequentially in its margin that came at 18.8 per cent. “While 1.3 per cent was due to the Capco acquisition, the rest 90 basis point impact was due to our significant investment in talent,’’ said Jatin Dalal, CFO.

IT services

In the IT services segment, which accounts for more than 95 per cent of Wipro’s gross revenues, the company reported revenues at $2.41 billion, which is 21.3 per cent on a YoY basis in constant currency terms. Sequentially, the IT services revenue grew 12 per cent in constant currency terms. Excluding Capco, Wipro’s organic growth stood at 4.9 per cent sequentially.

Hiring plan

In Q1, the IT firm net added 12,178 employees to take its total headcount to 2,09,890. The company would on-board 33 per cent more freshers in FY22 compared to last year. It also intends taking on over 6,000 freshers in the second quarter.

Saurabh Govil, Chief Human Resources Officer, said, “We are seeing an unprecedented intake of freshers. We will send out offer letters to 30,000 freshers this year who would join the company next year.’’ The quarter saw Wipro’s attrition rising 340 basis points to 15.5 per cent.

Suyog Kulkarni, Senior Research Analyst at Reliance Securities, said the recent restructuring efforts, which include simplified operating structure, capability upgrade and talent management bode well for Wipro in the medium-term.

Published on July 15, 2021

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