Wipro needs more consistent performance for accelerating revenue growth

Bengaluru, 22 April: IT major Wipro requires more consistency in its performance to accelerate revenue growth in coming quarters.

Brokerage firms opined that though the fourth quarter results were in line with market expectations, the company might face headwinds in coming quarters.

“The new management has called out few strategic initiatives and is focused on accelerating profitable growth for the company. The immediate priority is to proactively chasing large deals and scaling potential accounts, while keeping consulting and AI services on top. Although, the management indicated of having seen some green-shoots and demand recovery within discretionary consulting space, however, it requires more consistency and growth to build any concrete view,” Brokerage firm, Prabhudas Lilladher said in a report.

According to experts, revenue conversion from large deals owing to delay in ramp ups.

“We believe, the revenue conversion still remains a challenge for the company, given its exposure to discretionary areas (including consulting) is quite meaningful. The slower large deal ramp ups, delay in executions, and lack of immediate mega deal alternatives to plug those gaps would certainly keep the top-line growth unstable,” the brokerage said.

During Q4, Wipro bagged deals worth $3.6 billion, out which large deals were valued at $1.2 billion. For FY24, total deal bookings were $14.9 billion, out of which $4.6 billion were large deals.

The IT firm’s new CEO, Srini Pallia has said that company would focus on chasing of large deals, consulting-led growth and more AI-powered solutions for accelerating its revenue growth.

On the operating margin front, the company saw an improvement of margin by 40 basis points to 16.4 per cent in Q4. For the whole fiscal, margin stood at 16.1 per cent, an increase of 50 basis points over last year.

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