InvestorQ : What is your quick take on the quarterly results of Wipro for the September 2022 quarter?
manisha Kolvenkar made post

What is your quick take on the quarterly results of Wipro for the September 2022 quarter?

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Crowny Pinto answered.
1 month ago
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The IT stock to disappoint the most was Wipro in Q2FY23. It reported 14.6% growth in total revenues at Rs22,540cr but profits faltered as we shall see later. Sequential revenues were up 4.70%. The total contract value (TCV) for Q2FY23 was up 23.8% yoy while the large order bookings were up by an impressive 42%, so Delaporte has reasons to celebrate. IT segment saw constant currency revenue growth of 4.1% with the operating cash flows at a rather impressive 180% of net income. Wipro reported 19% higher tally in the top 5 clients and a 17% enhanced count in the top 10 clients. In terms of guidance for Q3, the revenue growth is expected to be in the range between 0.5% and 2% sequentially, which is disappointing. Here is a quick summary of financials.

Wipro Ltd

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 22,540

₹ 19,669

14.60%

₹ 21,529

4.70%

Operating Profit (Rs cr)

₹ 3,380

₹ 3,441

-1.78%

₹ 3,183

6.19%

Net Profit (Rs cr)

₹ 2,659

₹ 2,931

-9.27%

₹ 2,564

3.72%

Diluted EPS (Rs)

₹ 4.86

₹ 5.36

₹ 4.69

OPM

15.00%

17.50%

14.79%

Net Margins

11.80%

14.90%

11.91%

Let me now turn to the profit performance. PAT for September 2022 quarter fell -9.27% at Rs2,659cr amidst rising operating costs. Operating margins of the IT services business stood at 15.1%. Voluntary attrition at Wipro mildly tapered to 23%, which is still better than Infosys attrition at 27% in the Q2FY23. The small sequential margin improvement reported by Wipro in the quarter was triggered by better price realizations Wipro fine-tuned its focus on premium clients. Net margins for the Q2FY23 quarter tapered to 11.8%. That was flat sequentially but lower on yoy basis by 310 bps.

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