Wipro reports mixed FY24 results; AI fuels optimism
NEW JERSEY, UNITED STATES and BANGALORE, INDIA – Technology services and consulting provider Wipro Limited recently released its financial results for the quarter and year ending March 31, 2024.
Despite a challenging macroeconomic environment, the company has shown resilience with a notable increase in net income and large deal bookings.
Annual gross revenue and IT services segment revenue
The company reported a slight decrease in gross revenue, amounting to ₹897.6 billion (US$10.8 billion), marking a year-over-year decline of 0.8%. This dip reflects the broader challenges in the tech sector, influenced by economic uncertainties and shifting market demands.
In the IT services segment, Wipro also saw a revenue of US$10.8 billion, which also decreased by 3.8% compared to the previous year. This decline is attributed to various factors, including reduced client spending in certain sectors and competitive pressures.
Net income, earnings per share, and cash flow
Net income for the year was reported at ₹110.5 billion (US$1.3 billion), a decrease of 2.7% from the previous fiscal year. This reduction in net income aligns with the slight revenue decline and ongoing investments in strategic areas like digital transformation and acquisitions.
Earnings per share (EPS) for the year stood at ₹20.89 (US$0.25), showing a marginal increase of 0.8% year over year. This indicates resilient profitability per share despite the overall decrease in net income.
The company’s operating cash flow remains strong at 158.6% of net income for the year, showcasing Wipro’s strong cash generation capabilities. The IT services operating margin for the year improved by 50 basis points YoY, despite the revenue downturn.
Quarterly performance shows margin improvement
For the quarter, Wipro’s IT services segment operating margin increased 40 basis points quarter-over-quarter (QoQ), signaling efficiency gains and cost management success.
The net income rose by 5.2% QoQ, reflecting the company’s ability to maintain profitability in a tough market.
Leadership optimistic about future prospects
Wipro CEO and Managing Director Srini Pallia expressed optimism about the future, citing the advent of artificial intelligence as a transformative force for clients.
“At Wipro, we have been gearing up for this moment. We have the capabilities, leadership, and the strength of over 230,000 Wiproites around the world to help us realize our goals,” he added.
He emphasized Wipro’s readiness to leverage this technological shift for growth.
Meanwhile, Chief Financial Officer Aparna Iyer highlighted the margin expansion and the highest operating cash flow in recent years as signs of the company’s financial health.
Wipro’s outlook for the upcoming quarter
Looking ahead, Wipro expects revenue from its IT services business segment to reach US$2.6 billion for the quarter ending June 30, 2024. This forecast translates to a sequential guidance of (-)1.5% to +0.5% in constant currency terms.
Wipro recently secured the #4 spot in the OA500 2024, an objective index of the world’s top 500 outsourcing companies.
