Wipro records 8% YoY profit decline at ₹2,835 crore in Q4 on weak demand

Bengaluru-based IT major Wipro reported 8 per cent year-on-year (YoY) profit decline in Q4 at ₹2,835 crore, amid persistent weak demand environment. 

On a quarter-on-quarter (q-o-q) basis, profits were up 5.2 per cent. Revenue from operations stood at ₹22,208 crore, registering flat growth on a sequential basis, and 4 per cent YoY decline. 

The reported numbers were largely in line with market expectations. Further, Wipro maintains a modest outlook. The guidance for the first quarter of FY25 is -1.5 to 0.5 per cent. 

Focus areas

The new CEO & MD Srini Pallia said the economic environment is still uncertain and there might be more challenges in the short term. Going forward the company will have five key focus areas.

“We will concentrate on revitalising the company, accelerate large deal growth momentum by working closely with clients and partners, strengthen relationships with large clients and partners and further invest in accounts that have potential to grow into large accounts. Focus on industry specific offering and business solutions led by consulting and inclusive AI, and continue to simplify our operating model and focus on execution rigor with speed,” he said. 

Wipro underscored that the greenshoots it saw in the consulting business last quarter, saw continued traction in Q4. Capco’s (its biggest acquisition) sequential revenue, the company said, grew by 6.6 per cent and order booking grew by 43.6 per cent. 

Also read: Infosys Q4 results: Are analysts not learning lessons or is the company faltering?

The total bookings stood at $3.6 billion, marginally lower than $3.8 billion signed last quarter. Large deal bookings stood at $1.2 billion, higher than $0.9 billion last quarter. Margins have improved by a tad, from 16 per cent last quarter to 16.4 per cent in Q4. 

The company expects margin to be range-bound in the short term. Aparna C Iyer, Chief Financial Officer, said, “The 17 per cent margin level is certainly an aspirational level we still hold. We have made a journey from 16.1 per cent to 16.4 per cent, so far. We also have to invest in growth. For us to meaningfully improve our margins we must also see an improvement of the revenue trajectory so those are the factors at play.” 

Headcount down

Attrition this quarter remained at 14.2 per cent Headcount in Q4 reduced by 6,180 employees from 2,40,234 last quarter to 234054 this quarter. Saurabh Govil, Chief Human Resources Officer, said, “We have been able to significantly improve utilization, it is at an all-time high and I hope to improve on this. We are still to finish all the offers made previously during the Covid times, before we go ahead to hire further. We will induct freshers this year, but there is no set target.” 

Also read: At Wipro, Srini has a mountain to climb

Dhruv Mudaraddi, Research Analyst, StoxBox, said, “Wipro has been slow in ramping up deals and converting them to revenue, which the company won in the previous quarters and challenges in employee retention and satisfaction are a big part of it. The guidance makes us wary about the recovery of the company’s growth and the overall demand environment. The new CEO has in front of him a mountain of uncertainties which we expect won’t be easy to climb at least until Q2FY25 when we expect the discretionary spending to pick up.” 

(With inputs from bl intern Vidushi Nautiyal)