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Target: ₹450
CMP: ₹414.10
Wipro’s revenue growth stood below our expectations at ₹21,528.6 crore, up only 3.2 per cent q-o-q and 18 per cent y-o-y in CC terms. Operating profit de-grew by 9 per cent q-o-q to ₹3,189 crore, aided by higher employee costs, rising subcontracting costs, and higher onsite expenses. Net profit for the quarter reported a de-growth of 17 per cent quarter-on-quarter at ₹2,589 crore. The management has given Q2-FY23 guidance of 3-5 per cent revenue growth in CC terms and its commentary continues to be positive in the verticals such as BFSI, Hi-tech Media, Life Sciences, and Communications.
The majority of the verticals are witnessing moderate growth and are likely to continue their growth in the forthcoming quarters in the backdrop of a strong deal pipeline.
On the geographical front, America-1 improved by 3.3 per cent q-o-q, while America-2 improved by 1.6 per cent, Europe (24 per cent of revenue) de-grew 3.2 per cent, and APMEA business grew 0.2 per cent in CC terms. Slowing down of European business has become a concern.
Furthermore, slowing down the automation spend from the world's largest economies has become a concern too in the forthcoming quarters. Rising operating costs such as employee, travelling and higher onsite expenses may put operating margins under stress.
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