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Wipro Quarterly Results: Q3 FY22

21 April 2022

Wipro declared its quarterly results for the third quarter of FY22. While the company reported nearly 29% y-o-y rise in revenue, the net profit, during the same period, was flat. 

Financial performance

The standalone net profit of the company fell 8.67% YoY to Rs.2419.8 crores in the third quarter of FY22 compared to Rs.2649.7 crores reported in the same quarter in FY21. 

When it came to the revenue, however, the company posted impressive figures. Revenue from operations jumped to Rs.15,278 crores in Q3 FY22 from Rs.12,596 crores in Q3 FY21 registering a growth of 21.29% on a YoY basis. The consolidated revenue increased 3.3% sequentially and 29.6% on a YoY basis to amount to Rs.20,313 crores, equal to USD 2.7 billion. The consolidated profit during the period remained flat. For the December quarter of FY22, the net profit of Wipro stood at Rs 2972.3 crore as compared with Rs 2996.5 crore in the year-ago period. On a sequentially basis, it increased marginally by 1.3%.

The operating profit of the company grew 1.8% sequentially and 5.1% on a yearly basis. It stood at Rs.35.5 billion after the end of Q3 FY22. The growth in the operating margins was contributed to the improvement in the operating metrics of the company despite incurring considerable expenses on salary hikes.  Wipro reported adding 7 new customers in the more than $100 million revenue league in the last 12 months.

While the IT major added 10,306 employees in the December quarter, increasing its overall employee strength by 41,363 on a net basis YoY, the attrition rate continued to be a pain point for the company in the quarter. The attrition rose to 22.7% (voluntary TTM) in Q3 from 20.5% in the preceding quarter.

Wipro also declared an interim dividend of Re.1 per share which would be paid on or before 5th February 2022. 

Hits 

  • 3.3% QoQ and 29.6% YoY jump in the consolidated revenue
  • 1.3% sequential increase in the net consolidated income
  • Revenue from IT services jumped 2.3% sequentially and 27.5% YoY
  • EPS increased 4.2% YoY to stand at Rs.5.43 per share
  • In terms of Annual Contract Value (ACV), the order book grew by 27% on a YTD basis

Misses 

  • 8.67% YoY decline in the PAT – from Rs.2649.7 crores to Rs.2419.8 crores 
  • Operating margin from the IT services segment fell 19 basis points on a sequential basis to stand at 17.6%
  • Attrition at 22.7% in Q3 FY22 against from 20.5% in the previous quarter. 

Segment-wise performance 

  • BFSI – 35.2% in Q3FY22 compared to 30.5% in Q3FY22
  • Consumer – 17.7% in Q3FY22 compared to 16.4% in Q3FY22
  • Healthcare – 11.8% in Q3FY22 compared to 13.9% in Q3FY22
  • Energy, natural resources and utility – 11.17% in Q3FY22 compared to 13.1% in Q3FY22
  • Technology – 11.9% in Q3FY22 compared to 12.6% in Q3FY22
  • Manufacturing – 6.7% in Q3FY22 compared to 8.3% in Q3FY22
  • Communications – 5% in Q3FY22 compared to 5.2% in Q3FY22

Other things to know

  • During the last quarter, Wipro has added 7 new customers in the USD 100 million+ revenue category, 5 in the USD 75 million + category, and 9 in the USD 50 million + category. 
  • During the October-December 2022 quarter, Wipro completed the acquisition of two companies – Edgile and Lean Swift Solutions
  • Over the last year, Wipro’s stock price has jumped 49.62% beating the Nifty IT Index return which was recorded at 24.82%
  • The company added 41,363 employees during the quarter taking the total employee strength to 231,671 in the IT services segment
  • For the next quarter, the company expects a sequential growth between 2% and 4% in the revenue of its IT services segment. This converts to revenue between USD 2,692 million and USD 2,745 million

What the management says 

Thierry Delaporte, CEO and Managing Director of the company, said, “Wipro has delivered a fifth consecutive quarter of strong performance, both on revenues, and margins. Order bookings have been strong too, and we have added seven new customers in the more than $100 Mn revenue league, in the last 12 months.”

On the outlook for the quarter ending March 31, 2022, the company mentioned that it expects revenue from IT Services business to be in the range of $2,692 million to $2,745 million. 

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