Wipro joins Q1 party of top-tier IT firms

Information technology (IT) major Wipro Ltd on Thursday ended the first quarter of the current fiscal with a 35.6% year-on-year jump in consolidated net profit at ₹3,243 crore, on the back of a strong deal pipeline and a robust demand environment for its core software-services and digital offerings in a pandemic-hit market.

“It is one of our best ever quarterly results. Q1 also saw us report the highest organic sequential revenue growth [in dollar terms] that we have delivered in 38 quarters. This was led by strong volumes across geographies and sectors and service offerings,” said Thierry Delaporte, CEO and managing director, Wipro, while addressing a virtual press conference announcing the first-quarter results.

In dollar terms, Wipro’s revenue from IT-services business for the April-June period stood at $2.41 billion, up 12.2% quarter-on-quarter. While in constant currency terms it grew by 12% quarter-on-quarter, its highest organic sequential dollar revenue growth in the last 38 quarters. Indian IT companies typically use the constant currency method to eliminate the effects of exchange rate fluctuations while calculating financial results.

“We see a robust demand environment. The quality of our overall deal pipeline is better than before. In Q1, we closed eight large deals resulting in a total contract value (TCV) of over $715 million. We are witnessing solid demands across all our markets including a good mix of large, medium-sized, and smaller deals,” added Delaporte.

For the second-quarter ending September 30, 2021, Wipro expects revenue from its IT services business to be in the range of $2.53 billion to $2.58 billion, which translates into a quarter-on-quarter growth of 5% to 7%.

The Bengaluru-based IT firms’s consolidated net profit during the April-June quarter stood at ₹3,243 crore compared to ₹2,390 crore in the same period last year. For the preceding March quarter, Wipro’s profit stood ₹2,972 crore. Quarter-on-quarter Wipro’s profit was up 9%. The company’s consolidated revenue from operations was up 22.4% at ₹18,252 crore in Q1 as against ₹14,913 crore in the same period last year.

Wipro management pointed out that of the 12.2% quarter-on-quarter dollar revenue growth reported in the April-June period, 4.9% was organic growth while the rest was from its acquisition of Capco.

In March this year, Wipro had announced the acquisition of London-headquartered consultancy firm Capco for $1.45 billion in cash. According to analysts, the deal was expected to boost one of Wipro’s key revenue generators: the banking and financial services offerings. The privately held British firm provides technology consulting to banking and financial institutions across Americas, Europe, and the Asia-Pacific regions.

“Though in the early days yet, I am pleased with the way we have collaborated with Capco to build our joint go-to-market offerings and strategy. We remain focussed on deepening our customer relationships, investing in talent and capabilities for the future, and winning market share,” Delaporte said in a statement.

Keeping the robust demand environment in mind, Wipro plans to hire over 12,000 freshers in FY22, and also wants to raise that number to 22,000 for FY23.

Shares of Wipro closed at ₹575.75 a piece, up 2.52%% on the BSE on Thursday, while the Sensex ended the day marginally up by 0.48%.