Wipro Q3 profits fall but margins hold amid uncertainty

NEW JERSEY, UNITED STATES and BANGALORE, INDIA — Indian IT services and consulting firm Wipro reported mixed financial results for the third quarter of the fiscal year 2024, ending December 31, 2023. 

While the firm’s net profit declined 12% year-over-year, some metrics like operating margin and earnings per share showed resilience.

Wipro’s gross revenue for the quarter dropped 4.4% annually to Rs 22,205 crore ($2.7 billion), as per filings. Revenue from the IT services segment specifically fell 2.1% sequentially to $2.66 billion, but the operating margin remained steady at 16% despite wage hikes. Net profit dropped 12% to Rs 2,700 crore, although earnings per share grew 2% helped by share buybacks.

“Our investments in people, processes, and business operations are continuing to pay off,” said Thierry Delaporte, CEO and Managing Director, highlighting healthy order bookings of $3.8 billion. 

However, for the March 2024 quarter, Wipro forecasts IT services revenue to range between $2.62 billion and $2.67 billion, indicating a sequential decline of 1.5% to growth of 0.5%.

The cautious guidance reflects an uncertain macro environment and weakness in key verticals like banking. However, silver linings include early signs of growth returning to consulting vertical and moderation in attrition rate to 12.3%.

Wipro Chief Financial Officer Aparna Iyer added that they are “building a more resilient, agile, and efficient organization,” which helped them sustain their margins at 16%, a 63 basis point improvement on a year-to-date basis.