Wipro Q4FY22 preview: IT services EBIT margin likely to be flat due to supply side pressures
Premium- Wipro's performance in Q4 is expected to be a mixed pack with revenue likely to record double-digit growth and profitability expected to be muted.
All eyes will be watching IT-major Wipro on Friday as the company will be presenting its financial performance for the quarter and year ended March 31, 2022 period. Wipro's performance in Q4 is expected to be a mixed pack with revenue likely to record double-digit growth and profitability expected to be muted.
Ahead of Q4 earnings, Wipro shares traded on a positive note on Thursday. Wipro shares also tracked broader bullish markets. It closed at ₹522.55 apiece up 0.64% on BSE.
Wipro's peers TCS, Infosys, and HCL Tech have already presented their Q4 and full-year FY22 earnings. Investors will keenly watch how the company fared compared to its peers.
Analysts at JM Financial Services said, "We are estimating 3.2% QoQ USD revenue growth with 80 bps cross-currency headwinds. Constant Currency Revenue growth estimate of 4% QoQ includes the full quarter benefit of Edgile and Leanswift acquisitions. We expect IT Services EBIT margins to be flat QoQ as benefits from slight currency depreciation are negated by supply-side pressures."
As per JM Financial, key things to watch out for are - June'22 revenue outlook, CY22/FY23 client IT spending trends, and margin outlook in the near/medium term given the likely resumption of travel expenses.
JM Financial expects Wipro to guide for 2-4% QoQ c/c growth for June'22 quarter.
In December 2021 quarter, Wipro had announced the Revenue outlook for its IT Services business to be in the range of $2,692 million to $2,745 million. This translates to a sequential growth of 2.0% to 4.0% for Q4FY22.
JM Financial expects Wipro to report revenue of ₹20,558.4 crore in Q4FY22 up by 29.4% yoy and 2.3% qoq. In dollar terms, revenue is seen at $2,723 million up by 26.5% yoy and 3.2% qoq.
MINT PREMIUM See All
Net profit is expected at ₹2,994.7 crore in Q4FY22 marginally higher on a year-on-year and quarter-on-quarter basis.
In Q3FY22, Wipro witnessed a net profit of ₹2,969 crore up by 1.3 % quarter-on-quarter basis, while gross revenue was at ₹20,310 crore - an increase of 3.3% QoQ and 29.6% YoY.
IT Services Segment Revenue was at $2,639.7 million in Q3FY22, an increase of 2.3% QoQ and 27.5% YoY. Non-GAAP constant currency revenue of this segment increased by 3.0% QoQ and 28.5% YoY.
As of December 2021, the company's strength of employees for IT Services was 231,671, an increase of 41,363 employees on a net basis. YoY. It added 10,306 employees during the quarter