{"id":155041,"date":"2023-10-18T13:22:28","date_gmt":"2023-10-18T17:22:28","guid":{"rendered":"https:\/\/44.250.171.167\/?p=155041"},"modified":"2023-10-18T13:22:30","modified_gmt":"2023-10-18T17:22:30","slug":"wipro-ltd-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/wipro-ltd-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Wipro Ltd Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Wipro Ltd (WIPRO) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Strong Deal Wins And Order Bookings<\/strong>\n<ul>\n<li>Closed large deals worth $1.3 billion in TCV, highest in last 9 quarters and 79% YoY growth.<\/li>\n<li>Booked 14 deals over $30 million in TCV vs 10 last quarter.<\/li>\n<li>Total bookings TCV at $3.8 billion, up 6% YoY.<\/li>\n<li>Won 2 near $500 million deals from existing large accounts.<\/li>\n<li>Winning more large deals now than before, but conversion to revenue is taking more time due to lower discretionary spending by clients.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Impact Of Macroeconomic Environment<\/strong>\n<ul>\n<li>Business environment uncertain with high inflation and interest rates.<\/li>\n<li>Clients focused on efficiency, existing investment optimization, faster ROI.<\/li>\n<li>Seeing lower discretionary spending and slower order book conversion.<\/li>\n<li>Revenue declined 2% QoQ in constant currency terms, while margins held steady at 16.1% in 1H24 vs 16% in 1H23.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Wipro&#8217;s AI Strategy Progress<\/strong>\n<ul>\n<li>Rolled out Gen AI training to 180,000 employees on basics.<\/li>\n<li>Integrating Gen AI into solutions and offerings across functions.<\/li>\n<li>Seeing early promising results in HR, QA testing, data generation.<\/li>\n<li>Seeing rapid adoption in healthcare, consumer, financial services sectors.<\/li>\n<li>Demand for Wipro&#8217;s Gen AI services expected to increase greatly.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Margin Outlook<\/strong>\n<ul>\n<li>Ongoing transformation driving margin resilience.<\/li>\n<li>Initiatives around delivery excellence and operational efficiency.<\/li>\n<li>Talent utilization increased 80 bps QoQ to 84.5%.<\/li>\n<li>Margins expected to remain steady in guided range.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Strategy Of Exiting Smaller Accounts<\/strong>\n<ul>\n<li>WIPRO started exiting smaller accounts in 2020 to focus on developing large accounts.<\/li>\n<li>Focus is on meaningful partnerships and transformation opportunities with fewer, larger accounts.<\/li>\n<li>Doubled the number of accounts over $100 million from 11 to 22 in 2 years.<\/li>\n<li>Top 80 accounts have resisted slowing growth better than smaller accounts.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Increase In Sales And Marketing Expenses<\/strong>\n<ul>\n<li>The increase in S&amp;M expense in 2Q is due to accelerated amortization related to a customer intangible.<\/li>\n<li>This caused a one-time increase in depreciation and amortization expense.<\/li>\n<li>Sales and marketing expenses should normalize over time<\/li>\n<\/ul>\n<\/li>\n<li><strong>Guidance And Outlook<\/strong>\n<ul>\n<li>Wipro expects things to improve in the next couple of quarters.<\/li>\n<li>Expects lower furloughs compared to previous year.<\/li>\n<li>More strategic deals focused on key areas like cloud, data, and security.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Wage Hikes<\/strong>\n<ul>\n<li>Acknowledge margin pressure from wage hikes and seasonal impacts.<\/li>\n<li>Taking measures to remain resilient but Q3 will be challenging.<\/li>\n<li>Endeavor to keep margins range-bound compared to previous quarters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Financial Services Performance<\/strong>\n<ul>\n<li>Revenue from financial services sector has slowed significantly this year across geographies.<\/li>\n<li>Tier 2 banks in the US are starting to see growth pick up again.<\/li>\n<li>Banks are focusing on cost takeout and consolidation, which Wipro sees as an opportunity.<\/li>\n<li>Wipro remains confident about pipeline and growth prospects in financial services, especially in Europe.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Europe Business<\/strong>\n<ul>\n<li>Europe revenue saw a surprising decline in 2Q, primarily driven by slowdown in financial services and manufacturing accounts.<\/li>\n<li>Pipeline continues to be strong in Europe, leadership team is bullish about growth prospects.<\/li>\n<li>No major client losses reported in Europe.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Wipro Ltd (WIPRO) Q2 FY24 Earnings Concall Strong Deal Wins And Order Bookings Closed large deals worth $1.3 billion in TCV, highest in last 9 quarters and 79% YoY growth. Booked 14 deals over $30 million in TCV vs 10 last quarter. Total bookings TCV at $3.8 billion, up 6% YoY. Won [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,8],"tags":[10169,5075,6100],"class_list":["post-155041","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-technology-stocks","tag-earnings","tag-it-services","tag-software-services"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":157752,"url":"https:\/\/alphastreet.com\/india\/wipro-limited-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":155041,"position":0},"title":"Wipro Limited Q3 FY24 Earnings Conference Call Insights","author":"Praveen","date":"January 16, 2024","format":false,"excerpt":"Key highlights from Wipro Limited (WIPRO) Q3 FY24 Earnings Concall Financial Performance IT services revenue at top end of guidance at $2.66 billion. 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