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Wipro Q2FY23 results out, Revenues up by 15%

On October 12, IT services major Wipro Ltd reported a 10% dip in its consolidated net profit for the quarter ended September 30, 2022. The company was already in the news as it fired 300 employees due to moonlighting.  

The company gave a revenue growth guidance of 0.2-2 per cent for the third quarter, much lower than what the Street expected and also less than the Q1 guidance of 3-5 per cent.

Revenues Up 15%, Net profit slips by 10% 

The consolidated net profit for the quarter ended September 30, 2022 was INR 2,659 crore from INR 2,930 crore in the year-ago period depicting a drop of 10%. The Bengaluru-based company’s revenue from operations stood at INR 22,539.7 crore, a 14.60 percent growth over INR 19,667.4 crore in the previous year.

Sequentially, the revenue increased 4.69 percent from INR 21,528.6 crore in the previous quarter. Profit was up 3.71 percent from INR 2563.6 crore in the previous quarter. Wipro telecasted that IT services segment revenue was at $2,797.7 million, an increase of 8.4 percent year on year (YoY). Constant currency IT services segment revenue increased by 4.1 percent quarter on quarter (QoQ) and 12.9 percent YoY.

Wipro’s order bookings (Total Contract Value) during the quarter grew by 23.8 percent YoY. Large deal bookings – meaning deals greater than or equal to $30 million – grew by 42 percent YoY in H123.

During the September quarter, Wipro’s top 5 clients grew 19% YoY, and the top 10 clients grew 17% YoY in constant currency terms.

Margin & Expenses 

Total expenses stood at INR 18,605 crore, up 20% YoY. The company depicted average margins with net and operating margins at 12% and 17%, respectively, in Q2 FY2023. 


Attrition for the quarter came in at 23 per cent, down from 23.3 per cent in Q1FY23. For the first half of the year, the company onboarded 14,000 freshers, which it claimed was 72 per cent higher than what the company did last year. The company also said that it rolled out quarterly promotions and salary increases effective September.

Sectoral mix

In terms of sector mix, Wipro derived 35.2% of its revenue from BFSI, 18.8% from consumer and 11.4% from health. Top 10 clients contributed around 21% to its revenue. In the quarter, 62% of the revenues came in USD currency, 10% in GBP and 9% in Euro.

Balance Sheet Position 

As of September 30, 2022, total assets stood at INR 1,14,187 crore compared to INR 1,07,918 crore as of March 31, 2022. Cash and cash equivalents were Rs 7,302 crore. Operating cash flow came in at INR 5,208 crore. 

Management Commentary: 

“Our strong performance in the quarter is further proof that our strategy is yielding the intended results. The solid growth in our bookings, large deal signings, and revenues underscores our improved market competitiveness and enhanced value proposition,” Wipro CEO and MD Thierry Delaporte said in a statement.

He said the company’s ongoing investments in high-growth strategic areas have allowed the company to steadily increase our win rate and enhance the quality of its pipeline.

“We achieved margins of 15.1% in Q2 after absorbing the impact of salary increases and promotions. Our margin improvement was led by better price realisations and strong operational improvements in automation-led productivity. Our operating cash flows were robust and at 181% of our Net Income for the year,” Wipro CFO Jatin Dalal said.

Growth Outlook

In its guidance for the December quarter, Wipro said it expects revenue from the IT services business to be in the range of $2,811 – $2,853 million, which translates to a sequential growth of 0.5% to 2%.

Our Viewpoint 

In the current times when global recession is overhead and Wipro performed on average for the quarter compared to its peers, we at AlphaStreet maintain a hold viewpoint on the stock. The company seems to be fairly valued at current levels compared to its peers. We lower our FY23/FY24 EPS estimate by 6%/2% to factor in a miss on growth and elevated risk. We await further evidence of the execution of Wipro’s refreshed strategy, and a successful turnaround from its growth struggles over the last decade before turning more constructive on the IT stock.

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