Wipro clocks ₹3,352 crore profit in June quarter:Revenue falls short of estimates; board announces ₹2/share dividend

IT sector giant Wipro Limited has released its results for the April-June quarter of the current financial year. The company’s consolidated net profit in the first quarter increased by 0.6% on an annual basis to ₹3,352 crore. In the same quarter last year, the company had posted a profit of ₹3,330 crore. However, Wipro’s revenue fell short of analysts’ estimates. Along with the results, the company’s board also announced a dividend of ₹2 per equity share. Revenue increased by 10.6%, but remained below estimates In the first quarter, Wipro’s consolidated revenue increased by 10.6% on an annual basis to reach ₹24,479 crore. Despite this, it remained below the average analyst estimate ₹24,776 crore, according to Reuters-LSEG data. On a quarterly basis, the company’s gross revenue recorded a modest growth of 1%. IT Services Performance and Revenue Wipro’s main business, i.e., IT services revenue, stood at $2.61 billion. This is 1% higher on an annual basis, but compared to the previous quarter, it has declined by 1.4%. In constant currency terms, IT services revenue saw a decline of 1.2% on a quarterly basis and a growth of 0.9% on an annual basis. 12.9% Jump in Large Deal Bookings During the quarter, Wipro’s total bookings stood at $3.37 billion, which is 2.4% lower than the previous quarter in constant currency. However, the relief for the company was that large deal bookings saw an impressive jump of 12.9% on a quarterly basis and reached 1.63 billion dollars. Status of Margin and Attrition Rate The company’s IT services operating margin stood at 16%. This saw a decline of 130 basis points compared to the previous quarter and 120 basis points compared to last year. Operating cash flow this quarter was ₹3,288 crore, which is 98% of total net income. Meanwhile, on a trailing twelve-month basis, the company’s voluntary attrition rate, i.e., the ratio of employees leaving their jobs, was recorded at 13.9%. What is the guidance for the next quarter For the July-September quarter, i.e., the second quarter, Wipro has estimated IT services revenue in the range of $2.57 billion to $2.63 billion. This means that constant currency growth in the next quarter could be between -1.5% to 0.5%. Wipro is a technology services and consulting company Wipro Limited is a leading technology services and consulting company. It has a presence in 65 countries. Azim Premji inherited control of Wipro from his father in 1966 at the age of 21. Under his leadership, Wipro diversified from vegetable oil production to providing IT services, software solutions, and consulting services. Consolidated Profit Means Performance of the Entire Group Company results come in two parts – standalone and consolidated. Standalone shows the financial performance of only one unit, while the consolidated or combined financial report provides the report of the entire company. What is Constant Currency? When Indian IT companies do business at the global level, they receive payments in foreign currencies like dollar, euro or pound. But the exchange rate between dollar and rupee keeps fluctuating constantly. To measure the real growth of a company by removing the impact of this fluctuation, ‘constant currency’ is used. In this, revenue is calculated by assuming the currency rate fixed at a certain level so that the true performance can be determined.