IT services firm Wipro reported strong growth in revenues, backed by a healthy order book and better execution, all resulting in robust margins in the March-ended quarter.
“Our Q4 performance was built on top of the momentum we saw in the previous quarter. This sets the stage for the next quarter, and the next financial year,” CEO & MD Thierry Delaporte said. The IT major reported a 27.78 per cent rise in net profit at ₹2,972.3 crore in Q4 while its gross revenues grew 3.4 per cent to ₹16,245.4 crore over the corresponding period last year.
“This is the best fourth-quarter results we have reported in the last 10 years. This was led by good volume growth. Despite the steep decline in the first quarter because of the pandemic, we bounced back to finish the year with only a marginal decline of –1.4 per cent YoY,”' said Delaporte. On the IT services front, which accounts for more than 95 per cent of Wipro's gross revenues, the company reported a 3.8 per cent rise in revenues at $2.15 billion on a year on year basis. Sequentially, the IT services revenue growth was at 3.9 per cent.
The tech firm posted 344 basis points improvement YoY in its operating margin at 21 per cent for the quarter. However, margins dropped sequentially by 70 basis points owing to wage hikes, and other expenses. Jatin Dalal, Chief Financial Officer said, “Led by disciplined execution, we generated strong operating cash flows at 136.7 per cent of our net income for the full year. We successfully completed the share buyback program returning $1.3 billion to our shareholders.,''
June quarter & beyond
During the June ending quarter, the firm expects its revenue from the IT services business to be in the range of $2.19-2.23 billion, translating into a sequential growth of 2-4 per cent. However, it said the guidance will exclude revenues from its recent acquisitions Capco and Ampion. For the whole year, it expects 11-13 per cent growth in revenues based on the quarterly guidance.
“We have guided for a revenue growth 2.0 per cent to 4.0 per cent, outside of Capco & Ampion. This guidance reflects the environment we are operating in and our increased focus on the market and our improved execution rigour. All our key markets are growing on a YoY basis and that’s the solid foundation we are starting FY22 on,'” Delaporte said in his market commentary.
Suyog Kulkarni, Senior Research Analyst at Reliance Securities, said the recent restructuring efforts, which include simplified operating structuring, step-up in capability upgrade and talent management bode well for Wipro in the medium term.
Campus hiring
Wipro said it onboarded 3,000 people from campuses in Q4 and expects its campus hiring would be more robust in the current fiscal.
“We will continue to hire freshers and laterals and invest in niche skillsets in the areas of cybersecurity, AI, digital and domain skills. We are also offering bonuses, depending on the skills and expertise of each individual. It’s not going to be a cookie-cutter approach. The bonus programme is already on,” said Saurabh Govil, president and chief human resources officer.
The company hired over 7,000 people in Q4 and its total headcount as of March 31 was 197,712. Wipro is also planning a pay hike for its senior executives in June.