Wipro Q3 Results Review - Revenue Miss, OPM Expanded; Cautious Commentary On Spending: Dolat Capital

Dolat Capital Report

Wipro Ltd. reported 0.6% QoQ constant currency growth (our estimate: 1%), at lower band of its guided range of 0.5% - 2% QoQ due to slowing spending and furloughs.

IT services Ebit margin improved by 120 basis points QoQ to 16.3% (our estimate: 15.5%) driven by efficiency gains and absence of restructuring cost from Q2.

It provided FY23 revenue guidance of 11.5-12% in CC which implies decline of 0.6% to positive 1% sequential movement for Q4. It indicates lower confidence on business performance and visibility.

Wipro is confident on its deal wins and pipeline but is factoring slowdown in discretionary spending in its outlook.

Factoring in further slip in growth outlook, we cut our growth estimates by 1.1%/2.4%/2.5 for FY23E/FY24E/FY25E.

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