- Wipro's ADRs rebounded to $1.86 after initial 4.5% drop post-Q2 results and guidance
- Q2 net profit fell 4.5% QoQ to Rs 3,200 crore; revenue rose 1.1% to Rs 24,753 crore
- Q3 IT services revenue forecast expects slight decline or flat growth in constant currency
Wipro's American Depositary Receipts (ADRs) pared losses after falling as much as 4.5% following the Bengaluru-based IT services company's September-quarter results and December-quarter revenue guidance. The ADRs were last trading at $1.86, up 3.61%.
In addition Infosys ADRs also rose upto 5% on Thursday.
Wipro expects revenue from its IT services business to decline 1.5% or grow 0.5% sequentially in constant currency terms in the third quarter of the current financial year. The guidance comes after the company reported flat constant-currency revenue growth in the September quarter.
In US dollar terms, revenue stood at $2,611.5 million, down 0.1% from $2,614.5 million in the June quarter.
Wipro Q2 Results: Profit Falls 4.5%
Wipro reported a 4.5% quarter-on-quarter decline in net profit to Rs 3,200 crore in the September quarter, compared with Rs 3,352 crore in the previous quarter. Revenue increased 1.1% to Rs 24,753 crore from Rs 24,479 crore, while earnings before interest and tax (Ebit) rose 4.1% to Rs 3,986 crore from Rs 3,830 crore. The Ebit margin expanded 50 basis points to 16.1% from 15.6%.
IT services revenue declined 0.9% sequentially to Rs 24,667 crore. Constant-currency growth for the segment was flat, compared with a 1.2% decline in the June quarter. The results were broadly in line with estimates on key operating metrics, although net profit fell short of expectations.
READ | How Wipro Handed Back 2.6 Times Its Half-Year Profit To Shareholders
Wipro Q3 Guidance: Management Expects Deal Flow To Improve
Wipro CFO Aparna C. Iyer said some deals that were expected to be signed in the September quarter did not close during the period. The company expects those deals to flow through in the December quarter and anticipates robust deal bookings.
Iyer said the company remained confident about the coming quarters, supported by its existing pipeline and deal wins. She also said Wipro tracks AI-related numbers internally but does not disclose them separately.
Wipro CEO Srini Pallia said the business remained resilient despite a challenging macroeconomic environment and that the company was encouraged by emerging opportunities across markets.
The company described its December-quarter guidance as consistent with the seasonal weakness typically seen during the period. Management also highlighted a healthy mix of expansion and new bookings.
Wipro's total bookings stood at $2.6 billion in the September quarter, down 22.9% sequentially in constant-currency terms from $3.3 billion in the June quarter. Large-deal total contract value (TCV) declined to $700 million from $1.6 billion, a sequential fall of 58.6% in constant-currency terms.
Despite the decline, management pointed to opportunities across sectors. Wipro reported good deal wins in energy and continued traction in travel, transportation and consumer businesses. Recent deal ramp-ups also supported performance.
READ | Wipro Q2 Results: Net Profit Slips To Rs 3,200 Crore
However, the Americas 1 market remained weak, with revenue declining 2.3%, while the banking, financial services and insurance (BFSI) segment stabilised, growing 1%. Healthcare in the US continued to face pressure from policy changes.
Iyer said Wipro hired 7,500 freshers last year and plans to maintain a similar hiring range in the current year. The company will continue hiring globally, with a focus on skills it needs for its business.
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