Wipro surpassed its Q1 revenue guidance as it saw demand accelerating from cloud and digital transformation, which was further supported by the company’s new business strategy.
Consolidated net profit for the first quarter grew 34.7 per cent at Rs 3,248 crore on a year-on-year basis, and was up 9.2 per cent sequentially. Revenue for the quarter, at Rs 18,525 crore, grew 22.3 per cent y-o-y and was up 12.4 per cent sequentially.
In US dollar terms, the company reported revenue of $2.4 billion a growth of 12 per cent sequentially in constant currency. This is much ahead of the Street expectations of a growth of 10 per cent qoq. The company also stated that of the 12 per cent growth, 4.9 per cent was organic and the rest came in from Capco.
The company’s revenue guidance or Q2FY22 ranges between $2,535 million to $2,583 million, representing a growth of 5-7 per cent.
“If you look at the guidance for the second quarter and what we have done in Q1, we see the company delivering a double digit growth for the fiscal,” said Thierry Delaporte, CEO & MD, Wipro. However, the company’s margins were down by more than 200 basis points to 18.8 per cent. He also added that growth was broad based with all verticals and geographies reporting double digit growth.
Aided by the acquisition of Capco, Wipro surpassed larger peers like TCS and Infosys on growth and profitability on sequential basis. Wipro clocked in 12 per cent revenue in constant currency sequentially, Infosys reported 4.8 per cent growth and TCS reported 2.7 per cent rise sequentially.
“Wipro reported heathy set of Q1FY22 numbers. We believe the company has reported robust organic revenue growth of 6% and has given strong guidance of 5-7% QoQ in Q2FY22. This coupled with healthy deal wins prompt us to be positive on the stock. We would be revisiting our estimates and target price post the conference call,” said a first cut note from ICICI Direct Research.
Sanjeev Hota, head of research, Sharekhan by BNP Paribas said: “Wipro has reported better-than-expected revenue performance, while IT EBIT margin missed our estimates. Company provided strong revenue growth guidance of 5% to 7% on QoQ for Q2FY22, in-line with our expectations. The company closed 8 large deals with a TCV of over $715 million, down 49% QoQ. Strong demand environment, return of multi-quarter highest organic growth, improving deal pipeline, record-high hiring, client additions and healthy deal wins are expected to drive revenue growth in coming years. We have “Buy rating on Wipro.”
As with its peers, Wipro too saw its attrition go up for the quarter, which was at 15.5 per cent. The company’s headcount cross the 200,000-mark milestone and it also said that they will be hiring aggressively going ahead to contain supply side constrains. The company said that they will hire 12,000 freshers in FY22. In Q1 the company had already onboarded 2,000 freshers.