Consolidated net profits of IT services firm Wipro declined 0.41 per cent to Rs 3,074.5 crore in Q4FY23 from Rs 3,087.3 crore a year ago, owing to macroeconomic uncertainties and cut downs on discretionary spending in key verticals.
Net profit for the full year FY23 dipped 7.16 per cent to Rs 11,366.50 crore.
The fourth largest IT company in the country has started the new fiscal year with a negative IT services revenue growth guidance in constant currency terms for the first quarter of FY24. The company expects the IT services revenue including India State Run Enterprise (ISRE) segment for the next quarter to drop one to three per cent sequentially.
In Q4FY23, revenue from operations grew 11 per cent to Rs 23,190 crore from Rs 20,860 crore a year ago. Revenue dipped 0.17 per cent sequentially and missed the Bloomberg estimate of 23,460.30 crore.
For the full year FY23, revenue grew 14.4 per cent to Rs 90,487.60 crore from Rs 79.093.4 crore in the previous year. The company has announced a share buyback plan worth Rs 12,000 crore. The firm intends to buy back about 4.91 per cent of its shares at Rs 445 per share.
“Looking ahead, we believe the macro environment will remain challenging. Our clients, our industries, and many sectors are impacted by the prolonged uncertainty in the economic environment. This has an impact on our business projections as well,” Thierry Delaporte, CEO and Managing Director said during a press conference in Bengaluru.
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When asked about the impact of the recent banking crisis in the US and Europe, the CEO said: “You have all read what happened in the last weeks and months. There was already a certain level of pressure. We have seen its impact on some of the banks in America and Europe. It is adding to a certain level of anxiety. We have seen some slowdown but also accelerated very suddenly. We are ready, we are strong in this industry. We know things will pick up again, rapidly.”
During the fourth quarter, Wipro won total bookings of over $4.1 billion in TCV terms, up 29 per cent YoY in constant currency. The company has closed the year with the highest-ever annual bookings.
The IT major has witnessed a decline in its headcount for the second quarter with 1,823 fewer employees than the previous quarter. The previous quarter, ending in December 2022, also saw a reduction of 435 employees. The overall variable payout for the employees is expected to remain above 80 per cent.
“There is a slowdown in discretionary spending that is visible in some industries, in particular B&FS and the technology sector. We are not particularly impacted by any one single client in the way we have integrated our projection for Q1 FY24. It is more of a sectoral slowdown based on uncertainties that we have seen and the stop to some discretionary spending,” Delaporte said.
He added that while there were ramp-downs on some projects, the firm has not seen any deal cancellations so far. He further said there was a possibility of some softness in consumer packaged goods (CPG) and retail, while sectors like energy, utility and healthcare are expected to do well.
The interim dividend of Rs 1 declared by the Board at its meetings held on January 13th, 2023, shall be considered the final dividend for the financial year 2022-23.