Wipro has reported a 9.27 per cent year-on-year (y-o-y) fall in net profit at ₹2,659 crore from ₹2930 crore, for the quarter ended September 30, missing street expectations. However, on a sequential basis, profit hiked 3.72 per cent from ₹2,563.6 crore in the June quarter.

Revenue from operations stood at ₹22,539.7 crore, a 14.60 per cent increase y-o-y. On a q-o-q basis, revenue increased 4.69 per cent from ₹21,528.6 crore in the last quarter. The IT services operating margin for the quarter was at 15.1 per cent, a mere increase of 16 bps.

Amid macroeconomic headwinds, Wipro has reported below expectations, at a time when its larger peer TCS reported 8.41 per cent y-o-y hike in net profit and an 18 per cent y-o-y hike in revenue. However, Wipro’s management is upbeat about its performance and further growth.

‘Yielding results’

Thierry Delaporte, CEO and MD, said, “Our strong performance in the quarter is further proof that our strategy is yielding intended results. The solid growth in our bookings, large deal signings and revenues underscore our improved market competitiveness and enhanced value proposition.”

The management has given modest guidance. It expects revenue from the IT Services business to be in the range of $2,811-$2,853 million, translating to a sequential growth of 0.5-2 per cent.

Jatin Dalal, CFO, said, “Our margin improvement was led by better price realisations and strong operational improvements in automation-led productivity. Our operating cash flows was robust and at 181 per cent of our net income for the year.”

Wipro had a headcount of 2,59,179 employees at the end of Q1. The attrition rate stood at 23 per cent, against 23.3 per cent in the last quarter. The company’s American Depository Receipts (ADR) tanked 3.65 per cent in early hours.

Naveen Mishra, VP Analyst at Gartner, said, “As compared to FY22, the latest Q2 operating margin has continued to decline to 15.1 per cent, primarily driven by the increasing salary cost and promotions offered, to control talent attrition, which remains a big concern for the entire IT services industry. We don’t expect the talent war to slow down soon in FY23.”