Wipro logs ‘best-ever’ Q1 with profit at ₹3,230 cr
BENGALURU: Wipro Ltd posted its “best ever” quarterly earnings on Thursday, with chief executive Thierry Delaporte steering a turnaround of the software services provider that has lagged behind its rivals for much of the past decade. His efforts, albeit, have been helped by a global embrace of digital technologies.
The Bengaluru-based company said fiscal first-quarter profit rose 35% to ₹3,230 crore from a year ago, beating analyst estimates by a wide margin. Revenue grew 22.4% to ₹18,250 crore in the three months to 30 June. Analysts expected profit and revenue of ₹2,826.2 crore and ₹17,602.6 crore, respectively, according to a Bloomberg survey.
Delaporte, who completed a year in office this month, is executing a five-point strategy, including prioritizing sectors and markets, strengthening relationships with strategic clients and partners, enhancing the portfolio of business solutions, building talent at scale and simplifying the operating model, to accelerate growth.
The disruptions caused by the pandemic has accelerated digital adoption by companies, offering new opportunities for companies such as Wipro.
Wipro’s dollar revenue grew 12.2% to $2.41 billion from the preceding March quarter on the back of eight large deal wins worth a total contract value of $715 million. This was the company’s fastest sequential growth in 38 quarters, surpassing its own quarterly forecast of 2-4%, excluding the acquisitions of Capco and Ampion.
Wipro expects revenue for the second quarter to be in the range of $2.53-2.58 billion, translating to a sequential growth of 5-7%. Unlike Infosys, which provides fullyear forecasts, Wipro typically guides for the quarter ahead. However, Delaporte said Wipro is “well ahead of double-digit growth for the full year”.
The operating margin for the June quarter, however, narrowed to 18.8% from 21% in the preceding three months because of high costs related to attrition and hiring. Voluntary attrition rose to 15.5%.
Wipro said it continues with its talent retention measures and will be offering salary hikes to 80% of its employees in September. Wipro made the highest-ever net addition of 12,000 people in the June quarter, taking its total to 209,890 employees.