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Wipro clocks 12% net profit in Q1; attrition rate falls

Wipro clocks 12% net profit in Q1; attrition rate falls
  • Wipro's income from operations in June quarter rises 6% to Rs 22,831 crore
  • Wipro's guidance: IT services $ revenue seen at $2,722- $2,805 million in Q2FY24.
  • The IT major has reported an attrition rate at 17.3% which is lower than 19.4% in Q4FY23.

IT services major, Wipro, has reported a 11.9% year-on-year (YoY) growth in net profit in the first quarter of the current financial year (Q1FY24). Sequentially, however, the net profit or is down over 6%.

Wipro's consolidated net profit for the reported quarter is at Rs 2,870 crore. The IT services major had recorded a net profit of Rs 2,563 crore in the year-ago period.

The revenue for the reported quarter grew 6% compared to the same period in the last financial year. The reading at Rs 22,831 crore is slightly below what the analysts were expecting and is a slight improvement when compared to Rs 21,528 crore in Q1FY23. The decline in revenue is due to weakness in the banking, financial services and insurance (BFSI) vertical.

Wipro Q1: Key readings

Parameter

Q4FY23

Q1FY24

Change

Revenue (Rs cr)

23,176

22,755

1.8% fall

EBIT (Rs cr)

3,767

3,652

3% fall

Margin (%)

16.25

16.05

20 bps down



The IT major has reported an attrition rate at 17.3% which is lower than 19.4% in Q4FY23.

For the current quarter, the company says that the dollar revenue from IT services is seen at $2,722- $2,805 million.

"We expect revenue from our IT Services business segment to be in the range of USD 2,722-2,805 million. This translates to sequential guidance of -2 per cent to +1 per cent in constant currency terms," the company said in a statement.

The company’s Q1 guidance for CC revenue growth was at -3 to -1% as it expected the macro environment to remain challenging.

Wipro management commentary

The IT major has said that there has been a gradual reduction in discretionary spending.

“Wipro’s first quarter results come with a strong backbone of large deal bookings, robust client additions, and resilient margins.. The launch of Wipro ai360 and the USD 1 billion investment solidifies Wipro’s position as a leading transformation partner that delivers the results and innovation our clients need to future-proof their businesses,” he said.

Jatin Dalal, Chief Financial Officer, said, “Our ongoing focus on operational improvement has ensured that margin remains steady even in a softening revenue environment. Our operating Margin for the first quarter was 16% an expansion of 112 basis point YoY. We generated strong operating cash flows at 130% of our net income for the Quarter. EPS for the quarter grew by 11.5% YoY.”

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