Wipro will report its December quarter results on Friday, a day after Infosys’ quarter earnings. As per Wipro, the quarterly results will be out post market hours i.e. after 3:30 PM IST. Wipro’s results will be available in the investors section of the company’s website and well as on stock exchanges.
Analysts noted that Wipro’s order wins stood low at $725 million in the September quarter and that hiring too was exceptionally low for the quarter in a bid to improve utilisation. They believe order wins for December quarter may come in below the second quarter level and that the low hiring trend may continue. Commentary on demand for Capco Consulting is something to watch out for, along with the impact of lower utilisation in that division, Nirmal Bang Institutional Equities said in a preview note.
Conference call
At 7:30 pm on Friday, Wipro’s senior management will discuss the company’s performance for the quarter and full year and answer questions sent by 6:30 PM to mail ids dipak.bohra@wipro.com or abhishekkumar.jain@wipro.com.
The audio from the conference call would be available online through a webcast.
Read more: Infosys Q3 results: Can Salil Parekh-led firm beat TCS in terms of revenues, profit?
Q3 preview
Emkay Global expects Wipro to report a profit after tax of Rs 3,037.80 crore, up 2.3 per cent over Rs 2,969 crore in the year-ago quarter. Net sales are seen rising 15.5 per cent to Rs 23,468 crore compared with Rs 20,313 crore. Ebitda margin for the quarter is seen at 19.2 per cent compared with 20.6 per cent in the year-ago quarter, down 137 basis points.
“We expect 0.6 per cent QoQ dollar revenue growth in the IT services segment after factoring in 40 bps cross-currency headwinds. Wipro had guided revenue growth to be 0.5-2 per cent QoQ in CC terms. We expect EBIT margin of IT services to expand by 40bps sequentially on account of operational efficiencies, employee pyramid rationalisation, and rupee depreciation, negating the full quarter impact of the salary hikes,” Emkay said.
Nuvama Institutional Equities sees Wipro’s profit at Rs 3,052 crore, up 2.8 per cent YoY. It sees revenues for Wipro rising 15.6 per cent YoY to Rs 23,483 crore. Nuvama pegs Wipro’s Ebit margin at 15.3 per cent.
Q4 guidance
Kotak Institutional Equities expects Wipro to guide for a muted 0-2 per cent CC revenue growth for the March 2023 quarter. Nirmal Bang and Nuvama Institutional Equities also expected the same revenue guidance range for the fourth quarter.
What to watch
Kotak Institutional Equities expects investors to focus on: the impact of recession on discretionary portfolio of the business, especially CAPCO. It said investors would want to know about the client behaviour in the current slowdown cycle versus the past and the performance of Wipro’s acquired entities, noting that most are in discretionary spending areas.
Besides, investors would also want to know about the annual client budgeting exercise, and the measures Wipro is taking to increase margins to aspired 17 per cent-plus level.
