Wipro Q4 Results Today: Net Profit, Revenue May Decline Amid Weak Discretionary Spending

The fall in Q4 net profit and revenue is likely due to seasonality, weakness in discretionary spending and cautious sentiment across major verticals impacting revenue growth.

After TCS and Infosys, another IT major Wipro is set to announce its Q4 financial earnings on April 19. According to analysts, Wipro’s net profit in the January-March 2024 quarter is likely to have declined by 8-10 per cent to Rs 2,778 crore-Rs 2,829 crore. Its revenue is also expected to have fallen 4-5 per cent during Q4 FY24.

Wipro had reported a net profit of Rs 3,076 crore in the March 2023 quarter.

According to the analysts, the fall in Q4 net profit and revenue is likely due to seasonality, weakness in discretionary spending and cautious sentiment across major verticals impacting revenue growth.

Analysts at brokerage houses expect Wipro’s revenue to decline 4-5 per cent YoY to remain in the range of Rs 22,126 crore to Rs 22,346 crore.

Nomura in its note said it expects Wipro’s revenue to fall 0.4 per cent sequentially in constant currency terms (CC). It estimates EBIT margins to expand by 20 basis points led by the continued cost control program of Wipro.

It said commentary on consulting business and outlook on client CY24 budgets need to be watched.

Another brokerage Sharekhan said Wipro is likely to post an 8.4 per cent YoY decline in its Q4 FY24 profit to Rs 2,816 crore, against Rs 3,075 crore a year ago. It sees sales for Wipro falling 5 per cent YoY to Rs 22,117 crore from Rs 23,289 crore. 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 spending. EBIT margin is expected to decline 60 bps q-o-q largely due to impact of wage hike,” it said.

On total contract value (TCV), brokerage Nirmal Bang said Wipro is delivering $3 billion-plus revenue for the last five consecutive quarters with the December 2023 quarter deal wins at a healthy $3.8 billion. It expects 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.

Nirmal Bang expects 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.

IT major Infosys on Thursday posted a 30 per cent year-on-year jump in its net profit to Rs 7,969 crore for the fourth quarter ended March 2024 quarter. However, its revenues during January-March 2024 rose just 1.3 per cent YoY to Rs 37,923 crore, compared with Rs 37,441 crore a year ago.

Infosys’ net profit had stood at Rs 6,128 crore in the corresponding quarter last year.

Meanwhile, kickstarting the Q4FY24 earnings season, India’s largest IT services company TCS on April 12 reported a 9.1 per cent growth in its March quarter net profit at Rs 12,434 crore. In the fiscal year 2023-24, the company’s net profit grew 9 per cent to Rs 45,908 crore.