Last Updated on October 19, 2023 by BFSLTeam BFSLTeam
Table of Content
Introduction
Wipro Limited is one of the pioneers of the Indian IT industry that has become a significant global player in the information technology, consulting, and business process services (BPS) sectors. Established in 1945 and headquartered in Bangalore, India, the company has a strong presence in multiple countries, offering a wide array of IT services, such as:
- Application development and maintenance
- Software development
- Consulting
- Cybersecurity
- Cloud computing
- Data analytics
The company is listed on the Indian stock exchanges as well as the NYSE and has grown remarkably through numerous subsidiaries and acquisitions across related sectors.
The company reported its consolidated financial and operational performance results for the 3-month period that ended on 30 Sep, 2023. Here’s a quick synopsis of the notable aspects.
Additional Read: Q2 Results Dashboard
Performance Highlights
- Total revenue from operations: ₹ 22,515.9 Cr
- Profit before tax (PBT): ₹ 3,509.2 Cr
- Profit after tax (PAT): ₹ 2,667.3 Cr
- Total comprehensive income: ₹ 2,837.6 Cr
The Indian IT giant, Wipro Ltd. had a flat to below expectations Q2, as displayed in the key financial metric. The revenue dropped 0.1% YoY and stood at ₹ 22,515.9 Cr as compared to ₹ 22,539.7 Cr in the same period last year. The PBT was ₹ 3,420.1 Cr on 30 Sep, 2022, the PBT on 30 Sep, 2023 was reported to be ₹ 3,509.2 Cr.
The reported revenue from the IT services segment was USD 2,713.3 million which is a decrease of 2.3% compared to the previous quarter. Global slowdown and reduced IT spending by companies were quoted to be the chief reasons for this decline.
The PAT, however, saw a 0.70% increase to move from ₹ 2,649.1 Cr in Q2 FY 22-23 to ₹ 2,667.3 Cr in Q2 FY 23-24 leading to an enhanced operating margin for the IT services segment in the quarter of 16.1%. Although this is a smallish 10 basis points increase QoQ, it is a significantly high 100 basis points jump as compared to the same quarter last year.
The earnings per share (EPS) of the company saw a 4.1% YoY rise to reach ₹ 5.06 per share.
Additional Read: Wipro Share Price
Management Commentary
Major Announcements
- Merger of 5 units into itself, namely:
- Wipro HR Services India Private Limited
- Wipro Overseas IT Services Private Limited
- Wipro Technology Product Services Private Limited (formerly known as Encore Theme Technologies Private Limited)
- Wipro Trademarks Holding Limited
- Wipro VLSI Design Services India Private Limited (collectively “Transferor Company”)
- Total bookings for the quarter: USD 3.8 Bn, up 6% YoY in constant currency terms.
- Total Contract Value of large deals: USD 1.3 Bn (highest in 9 quarters), sharp jump of 79% YoY in constant currency terms.
- Outlook for Q3 set to sequential guidance of -3.5% to -1.5% in constant currency terms.
Operational Highlights
- IT Products segment revenue for Q2 FY 23-24 was ₹ 146.9 Cr with a loss of close to ₹ 47 Cr.
- IT Services segment revenue for Q2 FY 23-24 was ₹ 22,369.0 Cr.
- Sectoral mix continued to be BFSI heavy, with 33.6% of revenues coming from this segment. This was followed by Consumer segment (18.7%) and Healthcare (12.7%), to round off the top 3 sectors for the company.
- Almost 60% of the company’s business came from the Americas strategic market unit followed by 28.6% from Europe and 11.7% from AP+MEA.
- The company’s total headcount, as of 30 Sep, 2023, stood at 244,707 with a Trailing 12 Months attrition volume of 15.5%.
Some of the key wins and deals announced by Wipro for the quarter include:
| Customer | Scope |
| US-based multinational clothing company | Application support, analytics, cybersecurity, automation, and consulting. |
| Global leader in technology | comprehensive silicon engineering services, chip definition, design verification, tapeout. |
| American food service distributor | Multi-year IT transformation and modernisation project. |
| Multinational consumer electronics company | Cross-functional customer service transformation program, performance management, bespoke analytics and reporting. |
| Global leader in medical technology | Service desk automation, employee self-service and self-help. |
| One of the largest energy and utilities companies in Brazil | Billing process modernisation, cloud infra, analytics. |
| Leading workplace pension provider in the UK | Regulated Pensions Administration and Technology Services to the member of its Defined Contribution (DC) Pensions book |
Recognitions
– Leader in the 2023 Gartner® Magic Quadrant™ for Public Cloud IT Transformation Services
– Leader in Everest Group’s Digital Twin Services PEAK Matrix® Assessment 2023
– Leader in ISG Provider Lens™ – Cybersecurity – Solutions and Services 2023 – US, UK, France, Nordics (multiple quadrants)
– Leader in Avasant’s High-Tech Industry Digital Services RadarView™ 2023 – 2024
– Leader in Everest Group’s Network Transformation and Managed Services PEAK Matrix® Assessment – System Integrators (SIs) 2023
– Leader in Avasant’s Application Modernisation Services RadarView™ 2023
– Leader in ISG Provider Lens™ – Customer Experience Services 2023 – Europe (multiple quadrants) & US (Digital Operations)
YoY Comparison: Reported Key Financial Figures
| Q2 FY23 | Q2 FY24 | |
| Revenue | ₹ 22,539.7 Cr | ₹ 22,515.9 Cr |
| Gross Profit | ₹ 6.156.2 Cr | ₹ 6,596.8 Cr |
| Profit before tax | ₹ 3,420.1 Cr | ₹ 3,509.2 Cr |
| Profit after tax | ₹ 2,649.1 Cr | ₹ 2,667.3 Cr |
Stock Performance
Wipro’s stock performance on 18 Oct, 2023 – the day the results were reported – saw a slight increase in the morning with the price reaching an intraday high of ₹ 413.65. However, since then there was mostly a downward trend with the stock price closing at ₹ 407.50 which is almost a 1% decline from its previous closing price.
