Wipro Signals Drop in IT Spending During Current Quarter

Wipro said it expects revenue from IT Services business segment to be in the range of $2.617 billion to $2.670 million, translating to sequential guidance of –1.5 percent to +0.5 percent.
Wipro ai360Biswajit Maity, Sr Principal Analyst, Gartner, said: “In Q4, Wipro saw muted growth, yet we remain optimistic about the promising outlook with a healthy pipeline of business opportunities as organizations increase their investments in digital transformations. This slowdown is due to reduced customer spending and extended decision-making processes.”

“Wipro maintains strong client relationships and provides excellent value for money. While it experienced significant growth in India, Wipro faced challenges in other APAC countries. Despite having lower attrition rates compared to others, some clients express concerns about resource allocation, which could hinder growth. Additionally, Q4 witnessed a slight increase in staff turnover compared to Q3,” Biswajit Maity said.

Wipro has posted 6.6 percent drop in revenue to $2.66 billion during January-March 2024 as enterprises start cutting IT spending.

Wipro’s revenue in the 12 months of fiscal 2024 fell 4.4 percent to $10.8 billion with operating margin of 16.1 percent.

Wipro has generated 30.0 percent from Americas 1 and 30.1 percent from Americas 2. The remaining revenue came from Europe (28.4 percent) and Asia Pacific and the Middle East (11.5 percent).

Wipro has generated 33.4 percent of its revenue from Banking, Financial Services & Insurance, 18.8 percent from Consumer, 13.2 percent from Health, 11.8 percent from Energy, Natural Resources and Utilities, 11.7 percent from Technology, 6.9 percent from Manufacturing and 4.2 percent from Communications.

Wipro’s total bookings fell 5.5 percent to $14.9 billion. Wipro’s large deal TVC was $4.6 billion, clocking 17.4 percent.

Srini Pallia, CEO and Managing Director, said: “We are on the brink of a major technological shift. Artificial intelligence is transforming our clients’ needs as they seek to harness its power for competitive advantage and enhanced business value. At Wipro, we have been gearing up for this moment.”

Wipro said its top customer generated 3 percent of its revenue, while top five customers account for 13 percent of its revenue and top 10 customers generated 21.4 percent of its revenue.

Wipro said the number of employee reached 234,054 in Q4 FY 2023–24 as against 240,234 in Q3 FY 2023–24, 244,707 in Q2 FY 2023–24, 249,758 in Q1 FY 2023–24, 258,570 in Q4 FY 2022–23. Wipro’s employee attrition was 14.2 percent in FY 2023–24 vs 19.4 percent in FY 2022–23.

Wipro rivals Tata Consultancy Services (TCS) and Infosys have also revealed significant drop in the number of employees.

Aparna Iyer, Chief Financial Officer, said “We expanded our margins by 40 basis points during the quarter resulting in EPS growth of 5.2 percent QoQ in Q4. Despite a challenging macro-environment our IT services margin expanded by 50 basis points for the full year FY24.”

Baburajan Kizhakedath

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