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Wipro Expected Results
Wipro’s third-quarter revenue is anticipated to experience a 4% sequential decline due to subdued demand, with profit margins expected to be impacted by upcoming wage hikes.
In the third quarter of the current fiscal year, Wipro Ltd, a major IT player, is expected to witness a 4% QoQ decline in revenue. Analysts attribute this downturn to increased furloughs, particularly in the banking, financial services, and insurance (BFSI) and hi-tech sectors. Weak discretionary demand and cross-currency tailwinds in Q3 FY24 are further anticipated to keep net profit subdued. Wipro is set to announce its October-December results on January 12, 2024.
According to the average estimate of five brokerages, revenue is projected to drop 4% QoQ to Rs 22,408 crore, falling below the lower end of the management guidance band of -1.5% to -3.5% revenue growth for the quarter. Concurrently, net profit is expected to experience a significant 9% QoQ decline to Rs 2,756 crore.
The muted revenue growth is also likely to impact Wipro’s earnings before interest, tax, depreciation, and amortization (EBITDA), with analysts at Axis Capital predicting a flat EBITDA of Rs 4,245 crore in Q3 FY24 compared to Rs 4,231 crore in Q2 FY24.
Moreover, the recently implemented wage hikes, effective from December 1, are anticipated to affect Wipro’s earnings before interest and tax (EBIT) margins, leading to a 30 basis points (bps) decrease on a QoQ basis to 16% in Q3 FY24, down from 16.3% in Q2 FY24. This impact is expected to be limited to one month.
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