Wipro Q4 net profit declines 8%, revenue falls 4% YoY

Bengaluru: IT services giant Wipro Ltd on Friday reported muted numbers for the fourth quarter of financial year 2023-24 with a 7.8 per cent year-on-year decline in net profit to Rs 2,835 crore, edging past market expectations. 

The Bengaluru-headquartered tech major, whose workforce shrunk by 6,180 in the January-March period, also said it will honour past hiring commitments before considering campus recruitments in the current financial year.

Last week, Indian IT services bellwether TCS beat Dalal Street estimates to report a 9 per cent year-on-year growth in net profit to Rs 12,434 crore during the fourth quarter, while the second largest domestic IT conglomerate Infosys on Thursday posted a 30 per cent annual jump in its net profit at Rs 7,969 crore for the same period.

Meanwhile, Wipro’s revenue from operations slipped 4.2 per cent to Rs 22,208 crore during the fourth quarter, from Rs 23,190 crore in the corresponding period last year. For the full year, revenue declined to Rs 89,760 crore, from Rs 90,488 crore in FY23.

“Last year posed big challenges for the whole industry. It has affected Wipro’s performance too. The economic environment is still uncertain and there might be more challenges in the short term,” newly appointed managing director and chief executive Srinivas Pallia said.

Pallia, who took the reins of the company earlier this month, also laid out five clear focus areas of the company to achieve “accelerated growth” going forward.

“We expect revenue from our IT Services business segment to be in the range of $2,617 million to $2,670 million. This translates to sequential guidance of (-)1.5per cent to +0.5 per cent in constant currency terms,” the company said in its revenue forecast for the first quarter of financial year 2024-25.

Deals worth $3.6 billion were secured during the fourth quarter to take the overall order book for the full financial year to $14.9 billion. This marked an annual 5.5 per cent decline in total bookings during FY24. Large deals however increased 17.4 per cent year-on-year at $4.6 billion.

"Securing large deals remains pivotal to the company’s growth strategy," said Biswajit Maity, senior principal analyst at global consulting firm Gartner.

Wipro's shares closed 1.92 per cent higher on Thursday at Rs 452.85 apiece on BSE.

“In Q4FY24 the earnings were muted… Of particular concern were the revenue guidance figures, with a projected range of -1.5 per cent to 0.5per cent, indicating ongoing challenges in the near term,” said Nirav Karkera, who heads research at financial services provider Fisdom.

“While we maintain a hold stance on the stock, the persistently weaker revenue guidance suggests caution in the short term,” Karkera added.