Wipro Guides For Degrowth In Q1 Amid Tariff Uncertainty
The company does not have any hiring targets for FY26 and it will be decided based on the business environment, says the chief HR officer.
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Wipro Ltd.'s outlook for the June quarter remains muted amid an uncertain macro environment as the company guides for degrowth of -3.5% to -1.5%.
Consolidated revenue in the fourth quarter of the last financial year rose 0.8% sequentially to Rs 22,504.2 crore, according to an exchange filing on Wednesday. That compares with the Rs 22,684-crore consensus estimate of analysts tracked by Bloomberg.
The information technology major's net profit increased 6.6% sequentially to Rs 3,588 crore, beating the consensus estimate of Rs 3,364 crore.
Wipro Q4 FY25 Earnings Highlights (Consolidated, QoQ)
Revenue up 0.8% at Rs 22,504.2 crore (Estimate: Rs 22,684 crore).
Net profit rose 6.6% Rs 3,588 crore (Estimate: Rs 3,364 crore).
EBIT increased 1% to Rs 3,902 crore (Estimate: Rs 3,923 crore).
Margin flat at 17.3% (Estimate: 17.29%).
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Wipro has provided a muted guidance of -3.5% to -1.5% in constant currency terms, amid a damp demand environment. Its guidance for the fourth quarter was -1% to 1%. Wipro now expects revenue from the IT services business segment to be in the range of $2,505 million to $2,557 million.
The management said the guidance bakes in the uncertainty in the demand environment and is based on the current visibility that the company has.
"Recent tariff announcements have only added to the uncertain demand environment," Chief Executive Officer Srini Pallia said. "Underlying demand for tech reinvention remains strong but clients are approaching cautiously."
Given the uncertainty, we expect clients to take a measured approach in discretionary spending and large transformational programmes.CEO Srini Pallia
The CEO pointed out that Wipro saw one of its large transformation-projects pause due to the uncertainty.
The current uncertainty varies in countries, markets and sectors. Manufacturing, automotive, industrial and consumer verticals will be affected. The banking, financial services and insurance sector will be conservative on discretionary spend until there is certainty, according to Pallia.
IT services operating margin was at 17.5%, flat sequentially and expansion of 1.1% year-on-year basis. Operating cash flows stood at Rs 37.5 billion, decrease of 28% YoY and at 104% of net income for the quarter.
Total bookings came in $3.95 billion, higher than $3.5 billion recorded last quarter. Large deal bookings stood at $1.763 billion, higher than $961 million last quarter.
"We are faced with headwinds and an uncertain macro environment. This is putting downward pressure on revenues," Chief Financial Officer Aparna Iyer said. "Even in the current macro environment, we will maintain the margins in a narrow band of 17–17.5%"
Employee headcount was 233,346, an increase of 614 employees. Voluntary attrition was at 15%, marginally lower than 15.3% last quarter, on a trailing 12-month basis.
The company does not have any hiring targets for the current fiscal and it will be decided based on the business environment, according to Chief HR Officer Saurabh Govil. "We don't want to onboard and not deploy, we burnt our hands three years ago."
The wage hike cycle begins in September and a decision on wage hikes will be taken closer to the period, depending on the business environment, Govil added.
Before the quarterly results were declared, shares of Wipro closed 1.39% higher at Rs 247.5 apiece on the BSE, compared to a 0.4% advance in the benchmark Sensex.
