Wipro Q1 results miss estimates; brokerages remain bearish on stock, cut target prices

livemint.com:

Wipro's Q1FY24 numbers showed a drop in performance from the prior quarter, and the company's difficult times may not get any easier anytime soon as it expects modest revenue growth in its IT services business for the next September quarter. In the period of the quarter ended June 30, 2023 (Q1FY24), the company fell short of street estimates. The IT behemoth reported a consolidated net profit (attributed to owners) of ₹2,870.1 crore in the first quarter, up 11.95% from ₹2,563.6 crore in the corresponding period last year.

However, revenue only grew by 6% YoY in the single digits. Despite a slow decline in clients' discretionary spending, Wipro claimed to have maintained its new business pace. Wipro highlighted the outcomes of the June quarter and stated that its IT services segment revenue climbed to $2,778.5 million, up 0.8% YoY and up 6.1% YoY in terms of Indian rupees.

Operating margin for IT services for the quarter increased by 112 basis points year over year to 16%. According to the company, major deal bookings, or transactions with total contract values higher than or equal to $30 million, increased by 9% year over year to $1.2 billion during the reviewed quarter, bringing the overall contract value of all orders to $3.7 billion. According to the company, voluntary attrition dropped to an eight-quarter low of 14% in Q1FY24 as it continued to reduce QoQ.

“Wipro’s first-quarter results come with a strong backbone of large deal bookings, robust client additions, and resilient margins. Despite a gradual reduction in clients’ discretionary spending, we maintained new business momentum. We earned our clients’ trust with strong delivery, innovation, and expanded services that strengthen our long-term businesses, and help