After TCS, Infosys and HCL Tech, another IT major Wipro is scheduled to release its financial results for the quarter that ended September 2023 on October 18, Wednesday. Analysts expect the company to post a decline in revenue on a quarterly basis and a contraction in operating margin. However, large deal wins, commentary around the deal pipeline and demand, 3QFY23-24 guidance, and margin levers are the key watch out for in the Q2 FY24 earnings.
Brokerage firm Axis Securities in its report said, “We expect Wipro to report revenue de-growth of 0.5 per cent QoQ in rupee terms. Its operating margins, too, are likely to contract aided by a wage hike of 238bps. Key monitorables would be a) Deal TCV/pipeline, b) Pricing scenario, and c) Outlook on new deals.”
In the previous quarter ended June 2023, Wipro reported a consolidated net profit of nearly 12 per cent year-on-year (YoY) rise to Rs 2,870 crore. Its consolidated revenue had increased 6 per cent to Rs 22,831 crore.
For the July-September 2023 quarter, another brokerage firm IIFL Securities in its latest report said, “Another quarter of sequential decline, we forecast revenue to decline 1 per cent CC QoQ in Q2, closer to the lower end of the company’s guided range.”
CC stands for constant currency.
Nirmal Bang said in its report said, “We estimate (-)1 per cent CC QoQ revenue growth in Q2 FY24 as against (-)2 per cent to 1 per cent CC growth guidance. There will be a cross-currency headwind of 65 bps. We expect the company to give (-)2 per cent to 1 pr cent QoQ growth guidance for 3QFY24.”
Motilal Oswal, a brokerage, said the decline may be attributed to the growing intensity of adverse macroeconomic conditions, leading to demand softness in verticals beyond BFSI and consumer. The consulting business is expected to be weak owing to the cut in discretionary spends and reprioritisation of projects.
Wipro Q2 Results: Key Monitorables To Watch Out For
Key monitorables to watch out for in Q2 FY24 results are large deal wins, commentary around the deal pipeline and demand, 3QFY23-24 guidance, and margins levers.
Brokerage firm Axis Securities in its report said, “Key monitorables would be a) Deal TCV/pipeline, b) Pricing scenario, and c) Outlook on new deals.”
IIFL Securities in its report said, “We will watch out for large deal wins, commentary around the deal pipeline and demand, 3QFY23-24 guidance, and margins levers.”
Analysts at KR Chowksey expect the company to announce a robus quantum and size of deal wins in Q2.
“Despite the macro-overhang, management expects robust deal wins going ahead owing to strong execution capabilities and continue investment from their clients for their transformation,” their report said.
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