Wipro Q1 Preview: PAT, sales may fall QoQ; guidance for Q2 likely to be soft

economictimes.indiatimes.com:

Wipro Ltd is likely to report a drop in both revenue and profit for the quarter ended June, weighed down by unfavorable business environment and subdued tech spending by clients. In dollar terms, analysts expect the company to report a 2% sequential decline in revenue in constant currency terms, which is at the midpoint of its guided range. For its IT services revenue, Wipro had offered a guidance in the range of $2,753 million to $2,811 million — translating to a decline of 1-3% sequentially.

In rupee terms, the company’s consolidated revenue is likely to fall by about 1% quarter-on-quarter to Rs 23,009 crore, according to the average of estimates given by 11 brokerages. The bottomline is expected to fall by 2% to Rs 3,009 crore. The Bengaluru-based software major will release its earnings on Thursday.

After a soft June quarter, which usually is the strongest for the IT industry, analysts expect Wipro to give a muted guidance for the September quarter. “For 2QFY24, Wipro should guide for a revenue growth of -1% to +1% CC QoQ,” Antique Stock Broking said in its report. Kotak Institutional Equities, too, expects a similar guidance from the technology major.Here’s summarising analysts’ expectations on Wipro’s earnings:Antique Stock Broking We expect Wipro IT services revenue to decline 2% QoQ in CC terms, in line with midpoint guidance of -1.0% to -3.0%.

We build in a cross-currency tailwind of 40 bps. IT services margin to remain flat QoQ as the benefit of higher utilization and the moderation in attrition are largely offset by muted revenue. Key investor focus areas would be commentary on demand, deal wins/pipeline, outlook on verticals, and guidance for 2QFY24.Nirmal Bang We estimate (-) 2.0% CC QoQ revenue growth in