Don’t see any cut in customer budgets; pipeline is full, visibility good: Thierry Delaporte
Don’t see any cut in customer budgets; pipeline is full, visibility good: Thierry Delaporte
Bengaluru
Bengaluru-based tech services and digital transformation provider Wipro reported a 20.9% year-on-year decline in its June ended quarter net profit to ₹2,563 crore.
The firm on Wednesday said rise in expenses, including increasing wages linked to quarterly promotions, a large dividend payout in March and falling interest rates, were the key reasons for the decline in net profit.
Gross revenue for the first quarter grew 17.9% YoY to ₹21,528.6 crore. It’s revenue from IT services, which accounts for some 95% of its total revenue, stood at $2.73 billion, an increase of 2.1% over the preceding quarter.
In his earning commentary, Wipro CEO and MD Thierry Delaporte said despite the uncertainties of the macro-economic environment, the company’s order bookings grew and the overall pipeline was in fact at an all-time high.
“Quality of our pipeline is good and we are confident. We continue to see growth in business. Our interactions with clients are positive and we don’t see a slow down in spending. In fact, we have good visibility for the next quarter, ‘‘ said Mr. Delaporte responding to a query on a possible slowdown in customer markets.
Wipro has closed 18 large deals resulting in a total contract value of $1.1 billion in the first quarter.
In the first quarter of the fiscal, owing to an increase in cost pressure, Wipro’s operating margin dropped by 200 basis points to 15% as compared to the previous quarter. The margins were likely to remain lower in the next couple of quarters, the company said.
Wipro Chief Financial Officer Jatin Dalal said, “At 15% of operating margins, we believe that we have bottomed out.’‘
In its outlook for the quarter ending September, the company said it expects revenue from its IT Services business to be in the range of $2,817 million to $2,872 million, 3-5% growth.
“High-growth services like Cloud, Digital, Engineering Services, and Cybersecurity are seeing strong interest from our clients.’‘ Mr. Delaporte added.
The company hired over 10,000 freshers in the first quarter with the quarter reporting a net hiring of 15,000. Fresher hiring, quarterly promotions and talent enhancement programmes would continue in the coming quarters as well, it said.
Wipro’s Chief Human Resources Officer Saurabh Govil said attrition has been on a declining trend in the last three quarters and it would stabilise within a couple of quarters. The tech firm reported a trailing 12 months attrition of 23.3% in Q1 as against 23.8% in the sequential quarter.
