Friday was the fifth consecutive day that Wipro Ltd.'s shares fell, ahead of the IT giant's March quarter earnings. The stock dropped after it was reported that Wipro's net profit for the fourth quarter of FY24 decreased by 4–8% year over year (YoY) on a 4%–5% decrease in sales. The fact that bigger competitor Infosys provided a cautious growth estimate for FY25 also contributed to the counter's decline.
The stock, which has already down 6% in April, slightly declined to Rs 444.25, marking the sixth session in a row of declines. "We expect Wipro to guide for dip of 1 per cent to growth of 1 per cent QoQ in IT Services US$ sales in CC terms for 1QFY25E," Equirus Capital stated.
Investor attention is anticipated by this brokerage to be focused on the dollar sales growth and margin projection for IT services, particularly for the June quarter and beyond. It stated that investors will be watching for any updates on transaction pipeline, client decision-making, and order book, as well as any commentary on client-specific challenges arising from continued macro worries.
In addition to Wipro's intentions to maximize the synergistic advantages from Capco and Rizing, they would also want to know whether there are any other significant M&A plans following the major M&A of Capco & Rizing.
According to Sharekhan, Wipro's earnings for the March quarter might have decreased by 8.4% YoY to Rs 2,816 crore from Rs 3,075 crore in the same period the previous year. This brokerage projects that Wipro's sales would decrease by 5% YoY to Rs 22,117 crore from Rs 23,289 crore in the same quarter last year. The operating profit margin is expected to decrease by 117 basis points from 19.8% YoY to 18.6%. With $2,647 million in revenue in dollars, it is down 6.7% year over year (down 0.4% in constant currency terms and 0.3% in QoQ).
"Due to a reduction in discretionary spending, Wipro is anticipated to post a sequential fall in revenue in CC terms of 0.4%, in line with the Q4 targeted range of minus 1.5% to 0.5%. It added, "EBIT margin is expected to decline 60 bps quarter-over-quarter primarily due to the impact of wage hikes.
According to Nirmal Bang, Wipro has closed deals worth more than $3 billion over the previous five quarters, with a robust $3.8 billion coming from deals closed in the December quarter. It anticipates that TCV won't drop below $3 billion.
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