Wipro Q4 Results Preview: Profit seen flat sequentially, pay hikes likely to hurt margins


NEW DELHI: Wipro appears to be like set to report flat sequential development in revenue for the March quarter, by means of development may nonetheless be as excessive as 26-32 per cent on a year-on-year (YoY) foundation. Sales are seen rising 3 per cent each on quarter-on-quarter and year-on-year bases. Salary hikes in the course of the three-month interval could dent the IT main’s margins, however a beneficial forex tailwind may assist the corporate offset these to an extent, in accordance to analysts.

The IT agency could information for 1-3 per cent income development in fixed forex (CC) phrases for the June quarter, as in opposition to steering of 1.5-3.5 per cent QoQ for the March quarter, they stated.

expects Wipro to report 25.8 per cent YoY development in revenue to Rs 2,925.60 crore. Sequentially, the de-growth in revenue is seen at 1.4 per cent. Sales are seen rising 3.1 per cent YoY, and a pair of.8 per cent QoQ, to Rs 16,151 crore.

“We expect the IT services EBIT margin to decline by 70 basis points sequentially to 21 per cent due to a salary hike to 80 per cent of employees with effect from January, partly offset by offshore shift and operating efficiencies,” it stated.

HDFC Securities sees Wipro’s revenue at Rs 2,996 crore, up 28.8 per cent YoY (up 1 per cent QoQ). It sees gross sales rising 3.4 per cent YoY (3.5 per cent QoQ) t0 $2,144 million in greenback phrases, and a pair of.6 per cent YoY (2.9 per cent QoQ) to Rs 16,125 crore in rupee phrases. The ebit margin is seen falling 99 foundation factors QoQ (up 432 foundation factors) to 20.2 per cent.

Axis Securities expects Wipro to report income development of 1.7 per cent on QoQ in fixed forex phrases. This brokerage sees revenue rising 31.8 per cent YoY to Rs 3,065 crore. This brokerage sees the corporate’s margin rising to 26.7 per cent within the March quarter from 26.3 per cent within the October-December quarter, and 19.6 per cent within the three-month interval ended September 30.

Analysts say one ought to be careful for demand developments in Wipro’s key verticals like BFSI, client, manufacturing and well being. Investors will keenly look out for any replace on the transition to the brand new working mannequin, and the corporate’s margin outlook in addition to deal pipeline.



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