Business Standard

Wipro Q4 Preview: profits may decline 8-10%, revenues to dip 4-5% YoY

According to brokerage estimates, Wipro is likely to report a net profit in the range of Rs 2,778 crore to Rs 2,829 crore for the fourth quarter, down 8-10 per cent year on year (YoY)

wipro

Photo: Bloomberg

Shivam Tyagi New Delhi

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Wipro is expected to register a decline in revenue and profit for the January-March quarter (Q4FY24) as compared to the same quarter in the year ago period due to seasonality, weakness in discretionary spending and cautious sentiment across major verticals impacting revenue growth in Q4, analysts said.?
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According to brokerage estimates, Wipro is likely to report a net profit in the range of Rs 2,778 crore to Rs 2,829 crore for the fourth quarter, down 8-10 per cent year on year (YoY) against Q4FY23 where it reported Rs 3,076 crore.?

Further the company’s revenue is expected to decline by 4-5 per cent YoY to be registered between Rs 22,126 crore and Rs 22,346 crore, according to brokerage estimates.?

Key moniterables: The street wii watch out for the company’s commentary on any strategic changes with the new CEO of Capco; impact of lower discretionary spending on the consulting business; performance of impacted verticals such as BFSI and tech; FY25 revenue growth and margin outlook

Here’s what brokerages expect:

Nomura: It expects revenues to decline by 0.4 per cent quarter on quarter (QoQ) in constant currency terms (CC).?

It estimates Ebit margins to expand 20 basis points led by continued cost control program of Wipro.

Key things to watch out for Nomura remain commentary on consulting business and outlook on client CY24 budgets.

Further, the brokerage gave a “Sell” rating to Wipro with a target price of Rs 410.?

Axis Securities: Axis Securities predicts Wipro to report revenue de-growth of 0.1 per cent QoQ in rupee terms and its operating margins are likely to expand on account of lower onsite expenses.

Key monitorables for the brokerage are deal pipeline, pricing scenario, and outlook on new deals

BNP Paribas: We expect USD services revenue to decline 0.2 per cent QoQ (flat q-q CC), above the midpoint of the guidance with some extended furloughs and the continued impact of a slowdown related to a cut in discretionary tech spending.

It models 22 basis points QoQ expansion in IT services Ebit margin to 16.2 per cent on account of operating efficiencies and cost optimisation.?

The company expects Wipro to guide for quarterly CC revenue growth of -1 per cent to 1 per cent QoQ for 1QFY25.?

The brokerage will watch out for any large deal wins and pipeline; hiring plans; investments in GenAI partnerships and solutions; updates on core geographies and top-10 accounts and commentary on client budgets.

PhillipCapital: It predicts Wipro's CC revenue to decline by -0.4 per cent QoQ and within its guided range of -1.5 per cent to 0.5 per cent QoQ in CC.?

It says the company’s revenue was impacted by the weak demand environment. Adding that, the IT Services company’s margins are expected to remain flat at 16 per cent. “Weak revenue growth and partial wage hikes will limit margin expansion,” the brokerage said in a note.?

PhillipCapital will watch out for Q1FY25 growth guidance, consulting outlook, deal win to revenue conversion comments and vertical outlook.??

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First Published: Apr 19 2024 | 9:09 AM IST

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