Wipro reports 9 per cent drop in Q2 net profit at Rs 2,659 crore

BENGALURU:  IT company Wipro on Wednesday reported a 9% decline in its consolidated net profit for the second quarter at Rs 2,659 crore compared to Rs 2,931 crore in the year-ago period. However, on a sequential basis, the company’s net profit was up 3.7% from Rs 2,564 crore in the previous quarter.

Its revenue for the second quarter met estimates, as it stood at Rs 22,540 crore, a 14.6% increase from the same quarter last year.  The company’s revenue in the year-ago period was Rs 19,667 crore. The company’s IT Services Operating Margin for the quarter was at 15.1%, an increase of 16 bps QoQ.

Speaking at the Q2 earnings conference, Thierry Delaporte, CEO and Managing Director, Wipro, said, “We are seeing a change in the level of optimism, as businesses around the world are dealing with inflationary pressures, geopolitical turmoil, energy crises and rising interest rates. Almost every major economy is experiencing economic deceleration.”

He added that business strategy is sound, and the company’s value proposition continues to resonate with clients across markets. “Our ongoing investments in high-growth strategic areas have allowed us to steadily increase our win rate and enhance the quality of our pipeline. As a result of these efforts and our sharp focus on operational excellence, we are now seeing an improvement in our margins,” he added.

In Q2, the company signed 11 deals with a total contract value of $725 million.  Its European business delivered a YoY growth of 12% in Q2. Jatin Dalal, Chief Financial Officer, said, “We achieved margins of 15.1% in Q2 after absorbing the impact of salary increases and promotions.”

He said the margin improvement was led by better price realisations and strong operational improvements in automation-led productivity. Wipro expects revenue from its IT services business in the third quarter to be in the range of $2,811 million to $2,853 million (0.5% to 2.0% QoQ growth).