Wipro, an Indian IT services company, forecasted 11.5-12% revenue growth in constant currency for the full fiscal year 23.Its revenue from IT services increased 0.6% sequentially and 10.4% year on year in Q3.In the third quarter, the company reported total deal wins with a total contract value of $4.3 billion, with large deal wins totaling more than $1 billion.
Wipro, an Indian IT services company, said on Friday that it expects constant currency revenue to grow between 11.5 and 12% in FY23.It reported 0.6% sequential growth in constant currency IT services revenue in Q3, falling short of analyst expectations of 1% growth. Its constant currency IT services revenue increased 10.4% year on year.Wipro reported a 14.3% year-on-year increase in revenue to 23,229 crore, which was slightly lower than analyst expectations. However, its net profit increased 2.8% year on year to 3,053 crore, up from 2,969 crore in the same period last year, exceeding analyst expectations.
“Technology spending remains strong. Our clients want value-driven transformation, tighter governance, and a higher return on investment. “Cloud transformation remains a priority, even as we strive for a greater emphasis on returns,” said Thierry Delaporte, CEO and managing director of Wipro.
Its operating margins in the IT services segment increased by 120 basis points to 16.3% in Q3, up from 15.1% in Q2. However, its operating margin is down 130 basis points from the same period last year.
According to Wipro’s chief financial officer Jatin Dala, the margin recovery was led by automation-led efficiencies, and “this expansion of margins came after absorbing the investments we made in our people through salary increases, promotions, and long-term incentives for our senior leadership.”
Analysts at Nomura and Kotak Institutional Equities predicted that margins would increase by 40 to 60 basis points. The company declared a 1 per share interim dividend.
Wipro reported deal wins with a total contract value of $4.3 billion in Q3, up 26% year on year, with large deal wins totaling more than $1 billion.
Wipro saw the most significant client growth in the over $1 million and over $3 million segments, adding 10 clients in the over $1 million segment and six clients in the over $3 million segment. Notably, it added four new clients in the $10 million+ range.
However, its client base in the over $50 million, over $75 million, and over $100 million segments remained stable.
“Our ability to deliver on client objectives regardless of where they are in their cloud journeys,” Delaporte said.
Wipro reported a decrease in attrition rates for the fourth quarter in a row. Its attrition rate has dropped 180 basis points in a row to 21.2%. It joins TCS, Infosys, and HCL Tech in reporting a decrease in attrition rates.
Wipro, on the other hand, reported a 435-person reduction in its total headcount, which stood at 2,58,744 in Q3, compared to 2,59,179 in Q2. TCS, the industry leader, also reported a 2,197-person reduction in headcount.
Infosys and HCL Tech, on the other hand, added 1,627 and 2,945 employees, respectively.
In Q3, Europe outperformed the other regions in terms of revenue growth.
Despite concerns about a slowdown in Europe, the region led IT services revenue growth in Q3, increasing at a 6% sequential rate, followed by Americas 1 and Americas 2, according to the company.
“Our business in Europe continues to be a strong pillar of growth. “Almost all of Europe’s regions grew by double digits this quarter, led by the Nordics, the United Kingdom and Ireland, Germany, and southern Europe,” Delaporte said.