Wipro Q3 2023 Revenue Drops Despite Growth in Sales in Americas

Wipro, a global technology services and consulting company, has disclosed its financial performance for the quarter ended December 31, 2023.
Wipro IT dealsWipro’s revenue for the October-December quarter reached $2.7 billion, marking a marginal decline of 1.4 percent quarter-on-quarter (QoQ).

Wipro’s IT services segment recorded revenue of $2,656.1 million, reflecting a QoQ decrease of 2.1 percent. Wipro’s IT services revenue in the same quarter last year was $2,821.4 million.

The number of employees at Wipro reached 240,234.

Total bookings amounted to $3.8 billion, showing a modest increase of 0.2 percent QoQ, with large deal bookings reaching $0.9 billion, Wipro said.

Wipro clients in number and deal size

22 — > $100 mn
31 — > $75 mn
46 — > $50 mn
121 – > $20 mn
203 – > $10 mn
305 – > $5 mn
430 – > $3 mn
750 – > $1 mn

IT services segment EBIT for the quarter stood at ₹35.4 billion ($425.8 million), indicating a 1.8 percent QoQ decrease. The IT services operating margin was at 16.0 percent, down by 11 basis points QoQ.

Net income for the quarter amounted to ₹26.9 billion ($323.9 million), representing a 1.8 percent QoQ increase.

Wipro anticipates revenue from its IT Services business segment to fall within the range of $2,615 million to $2,669 million. This corresponds to a sequential guidance of -1.5 percent to +0.5 percent in constant currency terms.

Thierry Delaporte, CEO and Managing Director of Wipro, commented, “In a seasonally soft quarter, deal booking momentum remained strong. Our large deals recorded a 20 percent year-to-date growth. Further, we are starting to see early signs of a return to growth in Consulting, as demonstrated by the double-digit growth in order bookings in our Capco business.”

Delaporte highlighted the company’s commitment to their ai360 strategy, stating, “Under our ai360 strategy, AI is now embedded across most of our existing solutions and client offerings. We’re deploying AI internally across all business and functional areas as well, with the goals of efficiency, productivity, and scale. We are confident that these investments will allow us to capitalize on emerging opportunities as the macro environment improves.”

Wipro disclosed that its revenue contribution from the Americas increased to 61 percent of its total revenue from the previous year quarter’s 59.7 percent.

Wipro’s revenue contribution from Europe dropped to 27.7 percent of its total revenue from the previous year quarter’s 28.8 percent.

Wipro’s revenue contribution from Asia-Pacific and Middle-East-Africa dropped to 11.3 percent of its total revenue from the previous year quarter’s 11.5 percent.

“Despite of QoQ revenue drop Wipro’s future looks promising because of its strong customer focus and a business pipeline. Wipro holds strong vision and transformation capability. It has good customer satisfaction ratings from a majority of its clients and has made substantial investments in enhancing its consulting and industry expertise to enhance its capability,” Biswajit Maity, Sr Principal Analyst, Gartner, said.

Coming to IT sector outlook, CIOs are persistently concentrating on multi-year investments in digital transformation, which is anticipated to result in increased spending on IT services, possibly achieving double-digit growth, as observed at this point in time.

Nevertheless, it is crucial to note that businesses are now scrutinizing IT expenses more thoroughly, allocating funds only when there is clear, demonstrable business value. The execution of the deal might take long time than expected.

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