Wipro Q4 results preview: Sharekhan expects Wipro to clock 8.4 per cent YoY drop in profit at Rs 2,816 crore in the March quarter from Rs 3,075 crore in the same quarter last year. It sees sales for Wipro falling 5 per cent YoY to Rs 22,117 crore
Wipro Q4 earnings preview: Nirmal Bang said Wipro is delivering $3 billion-plus revenue for the last five consecutive quarters with the December quarter deal wins at a healthy $3.8 billion. It expect TCV to not fall below $3 billion.
IT major Wipro, whose CEO Thierry Delaporte recently resigned, is seen reporting an 4-8 per cent year-on-year (YoY) fall in net profit for the March quarter (Q4) on a 4-5 per cent drop in sales. Ebit margin is seen contracting on a sequential basis due to impact of wage hikes, analysts said ahead of Wipro’s Q4 results on Friday, April 19. Investors would watch out for the management commentary on whether conversion of deal wins to revenue pick up, the impact of high-profile senior management exits on the business and the recovery in the consulting business.
Wipro has named Srinivas Pallia, CEO of the Americas 1 business unit of Wipro, as the new CEO.
Sharekhan expects Wipro to clock 8.4 per cent YoY drop in profit at Rs 2,816 crore in the March quarter from Rs 3,075 crore in the same quarter last year. It sees sales for Wipro falling 5 per cent YoY to Rs 22,117 crore from Rs 23,289 crore. Operating profit margin is seen falling 117 basis points to 18.6 per cent from 19.8 per cent YoY. Dollar revenue is seen at $2,647 million, down 6.7 per cent YoY (down 0.3 per cent QoQ, down 0.4 per cent in constant currency terms).
“Wipro is expected to report a sequential decline of 0.4 per cent in revenue in CC terms, in line within the Q4 guided range of minus 1.5 per cent to 0.5 per cent. due to cut in discretionary spends. EBIT margin is expected decline 60 bps q-o-q largely due to impact of wage hike,” it said.
In terms of TCV, Nirmal Bang said Wipro is delivering $3 billion-plus revenue for the last five consecutive quarters with the December quarter deal wins at a healthy $3.8 billion. It expect TCV to not fall below $3 billion.
“This also comes on the back of Wipro’s efforts to let go of some small and loss-making accounts and chase larger deals. The larger issue for Wipro is conversion of TCV to revenue, which seems to be more acute than its peers,” it said while expecting Q4 profit to fall 4.3 per cent YoY to Rs 2,942 crore and Q4 sales 3.9 per cent to Rs 22,286 crore.
Nirmal Bang said it sees 0.5 per cent CC QoQ revenue growth against minus 1.5 per cent to 0.5 per cent CC growth guidance. There would be a cross-currency tailwind of 25 bps, it projected.
“Our growth number comes on the back of the cautiously optimistic guidance by Wipro and it being one of the only players to indicate green shoots in discretionary spending,” it said.
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