Wipro's Q3 Net Profit Rises 4.5% QoQ, Beats Estimates; Margins Hit 3-Year High
Q3 Results Exceed Expectations
Wipro Ltd reported a 4.5% quarter-on-quarter increase in consolidated net profit, reaching ₹3,354 crore for the quarter ended December 31, 2024. This performance surpassed analysts' expectations, who had predicted a 5% decline. The IT major's Q3 FY25 revenue remained flat at ₹22,319 crore, showing a marginal 0.1% sequential growth.
Analysts polled by Moneycontrol had estimated a net profit of ₹3,040 crore and a revenue dip to ₹22,176 crore. In addition to exceeding profit estimates, Wipro declared an interim dividend of ₹6 per share and revised its capital allocation policy to commit at least 70% of net income as payouts over a three-year period.
Operating Margin and Attrition
Wipro's operating margin improved to 17.5%, the highest in three years. This improvement was driven by operational efficiencies and cost optimization. The company also saw a decline in its voluntary attrition rate to 15.3% on a trailing 12-month basis, indicating improved employee retention.
Revenue and Bookings
While IT services revenue declined 1.2% sequentially to $2.63 billion, it grew by 0.1% quarter-on-quarter in constant currency terms. Wipro's total bookings for the quarter were $3.5 billion, and large deal bookings rose 6% year-on-year to $961 million. The company also highlighted strong cash generation, with operating cash flow reaching ₹4,931 crore, which was 146.5% of net income.
Future Outlook
Looking ahead, Wipro projects IT services revenue for the March quarter to be in the range of $2,602-2,655 million, translating to a sequential change of -1% to 1% in constant currency terms.
Management Commentary
Srini Pallia, CEO and Managing Director, stated that Wipro’s strong execution allowed it to surpass revenue guidance in a seasonally weak quarter and that the company achieved its highest margins in three years. Wipro CFO Aparna Iyer added that the company's margin expanded for the fourth consecutive quarter, with strong earnings per share growth, and robust cash generation.
Key Deals and Partnerships
Wipro secured 17 large deals in the quarter, with a total contract value of $1 billion. These included wins across industries such as healthcare, financial services, media, and telecommunications. Noteworthy deals include partnering with a US-based health insurer to implement AI-powered platforms and transforming the core banking system of an Indian private bank.
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