Wipro is expected to report muted earnings for the fourth quarter of FY24 amid a weak demand environment. The IT services major will announce its Q4 results on Friday, April 19.
Wipro Q4 results commentary will be important to watch out as the company’s CEO Thierry Delaporte had recently resigned and it has named Srinivas Pallia as its new CEO. Pallia was earlier the CEO of Americas 1 business unit of Wipro.
Wipro is estimated to report a consolidated net profit of ₹2,746 crore Q4FY24, registering a muted growth of 1.92% from ₹2,694.2 crore in Q3FY24.
The company’s IT services revenue is expected to see a sequential growth of 0.18% to $2,661 million from $2,656 million, while in rupee terms, the revenue may fall by 0.28% to ₹22,141 crore from ₹22,205.1 crore, quarter-on-quarter (QoQ), due to macro impact and continued softness in verticals, as per average estimates of five brokerages.
Consulting business continues to be weak, owing to cut down in discretionary spends and reprioritizing of projects.
JM Financial expects -0.2% constant currency (CC) revenue growth with a 25 bps cross currency tailwind translating into flat QoQ USD revenue growth for IT Services. CC growth will likely be in the upper half of the guided band of – 1.5% to 0.5%.
Operating performance of Wipro in Q4 is also expected to remain muted as IT services earnings before interest and tax (EBIT) is estimated to fall 1.34% to ₹3,495 crore from ₹3,542.6 crore, QoQ.
EBIT margin may remain stable at 15.9% as against 16% in the December quarter, as per the estimates, due to two month incremental impact of wage hike, while cost efficiency program is expected to largely offset the wage hike impact.
Also Read: Wipro appoints Malay Joshi as CEO of its largest market Americas 1
Wipro is expected to guide for a decline of 1% QoQ to growth of 1% QoQ in IT services’ USD sales in CC terms for Q1FY25.
Going ahead, key things to look for include IT services USD sales growth and margin outlook especially for Q1FY25E and beyond and margin outlook for near term as well as medium to long term, analysts said.
Moreover, any portfolio or client specific issues espcially resulting from ongoing geopolitical and macro concerns, update on deal pipeline, client decision making and order book for 4Q and beyond, further sizable M&A plans post big M&A of Capco & Rizing and plans to drive synergy benefits from Capco/Rizing and capital allocation plans will also be watched.
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Published: 18 Apr 2024, 03:49 PM IST