The IT firm Wipro reported in-line third-quarter earnings for the financial year 2021-22 (Q3FY22) as against street’s expectations. The company’s gross revenue and IT services revenues grew marginally sequentially, whereas it registered a double-digit growth year-on-year basis. 

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As per the company’s filing to exchanges, “Gross revenue came at Rs 20,310 crore ($2.7 billion1), an increase of 3.3 per cent quarter-on-quarter and 29.6 per cent YoY. Similarly, IT Services segment revenue stood at $2,639.7 million, an increase of 2.3 per cent QoQ and 27.5 per cent YoY.” 

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Also inline with the expectations, the IT Services operating margin of Bengaluru-based company for the quarter stood at 17.6 per cent, a decrease of 19 bps sequentially. While Wipro’s net income for Q3FY22 came at Rs 2970 crore ($399.1 million1), increase of 1.3 per cent QoQ, as per the statement. 

The company in its outlook for the quarter ending March 31, 2022, said, “We expect revenue from our IT Services business to be in the range of $2,692 million to $2,745 million. This translates to a sequential growth of 2-4 per cent.” 

Meanwhile, the company has declared an interim dividend of Rs 1 ($0.0131) per equity share/ADS. 

Wipro’s closing strength of employees for IT Services was at 231,671, an increase of 41,363 employees on a net basis YoY, while it added 10,306 employees during the quarter, the company said in earnings highlights.

Highlighting the growth of balance sheet, the company said, “The operating cash clow was at Rs 3010 crore ($404.2 million), which is 101.3 per cent of net income.”

In management commentary, Thierry Delaporte, CEO and Managing Director said, “Order bookings have been strong too, and we have added seven new customers in the more than $100 million revenue league, in the last 12 months.”

The company’s strategy and improved execution continue to serve us well, and we are confident of building on this momentum, the MD and CEO said, adding further, “We are also excited to have completed the acquisitions of Edgile and LeanSwift Solutions in the quarter, both of which will add to our capabilities significantly.”

Prashanth Tapse, Vice President (Research) at Mehta Equities Ltd on Wipro’s result said, “The IT company reports quarterly earnings in-line with street expectation including future CC guidance. Revenues wise Wipro missed street expectations and margins were in-line as expected while net profit was almost flat when compared with Rs 2,968 crore reported in the year-ago period.”

“Order bookings continued to be robust by adding 7 new customers in the more than $100 million revenue league, in the last 12 months”, the analyst added.

“Based on the results we expect stock would react marginally down from today closing of Rs 691 and give opportunity to accumulate in the range of Rs 660-675. We are overall optimistic on the stocks with medium to long term horizon,” Tapse said in his comment.