Wipro has kept up its pace in securing new deals, despite a challenging quarter. The company’s revenue growth for the June quarter met its own predictions but fell short of what analysts expected. However, Wipro showed strength in maintaining its profit margins and continued to win new deals.
Similar to its larger competitors, Wipro saw a slight increase in its banking, financial services, and insurance (BFSI) sector, which makes up 34% of its revenue. Although the company’s revenue forecast for the September quarter is a bit more optimistic than the June quarter, it may take a few more quarters for demand to fully recover.
In the June quarter, Wipro’s IT services segment revenue fell by 1.2% to $2,625.9 million. This was within its forecast range of a 1.5% drop to a 0.5% increase but lower than analysts’ average expectation of a 0.3% growth. The operating margin slightly improved to 16.5%, the highest in eight quarters. Overall, net profit increased by 6% from the previous quarter to ₹3,003.2 crore, boosted by higher other income.
Wipro’s headcount grew by 337 to 234,391 employees in the June quarter, showing a slight improvement after six quarters of decline. The employee attrition rate dropped slightly to 14.1%.
Revenue in the BFSI sector increased by 0.3% sequentially in the June quarter, following a 2.6% growth in the previous quarter. The consumer sector saw a 1.5% growth after a 0.4% decline in the prior quarter. However, other sectors like healthcare, energy and utilities, technology, manufacturing, and communications saw a decline in revenue for the June quarter.
Despite pressure on its top line, Wipro continued to secure new deals. The total contract value (TCV) of new deals was $3,284 million, compared to $3,607 million in the previous quarter. Large deals, with a value above $30 million, accounted for a TCV of $1,154 million, close to the $1,191 million in the previous quarter.
For the September quarter, Wipro expects revenue to either decrease by 1% or increase by a similar amount on a sequential basis, excluding currency fluctuations. This is a more optimistic outlook compared to its forecast for the first quarter.
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