Wipro posts 28% rise in net profit in Q4

In dollar terms, gross revenues were at $2.2 billion. In the IT services segment, which accounts for more than 95 per cent of Wipro's gross revenues, the company reported 3 per cent rise in revenues at $2.15 billion, which is 0.5 per cent on YoY basis in constant currency terms

Bengaluru: IT services major Wipro on Thursday posted better than expected Q4 performance with sound sequential revenue growth coupled with expansion in operating margin.

The Bengaluru-headquartered firm reported 27.78 per cent rise in its net profit at Rs 2,972.3 crore for the fourth quarter ended in March 2021. Its gross revenues during the quarter grew 3.4 per cent to Rs 16,245.4 crore over the same period a year ago. In dollar terms, gross revenues were at $2.2 billion. In the IT services segment, which accounts for more than 95 per cent of Wipro's gross revenues, the company reported 3 per cent rise in revenues at $2.15 billion, which is 0.5 per cent on YoY basis in constant currency terms. Sequentially, the IT services' revenue growth was at 3 per cent in CC term.

During the fourth quarter, the firm expects its revenue from IT services business to be in the range of $2.19 billion to $2.23 billion, translating into a sequential growth of 2-4 per cent. The company, however, said the guidance didn't include revenues from its recent acquisitions of UK-based consulting major Capco and Ampion. For the whole fiscal, the company may witness 11-13 per cent growth in revenues based on the quarterly guidance, it said extrapolating the quarterly numbers. For FY21, gross revenues were at Rs 61,940 crore ($8.5 billion), an increase of 1.5 per cent over the same period of last year. Net profit rose 11.2 per cent at Rs 10,868 crore for the last financial year. The IT services segment, revenues, however, declined by 2.3 per cent to $8.13 billion for FY21 in CC term. In the fourth quarter, Wipro bagged 12 large deals with a total contract value (TCV) of $1.4 billion.

"We delivered a third consistent quarter of strong revenue growth, deal wins and operating margins. We are excited with this wave of business momentum that we are witnessing. All key markets are now growing on YoY basis and this provides us a solid foundation to build on next year growth rates," said Thierry Delaporte, CEO & MD of Wipro. Wipro posted 340 basis points improvement YoY in its operating margin at 21 per cent for the fourth quarter. However, margins dropped sequentially by 70 basis points owing to wage hikes, and other expenses. For FY21, margins improved 220 basis points at 20.3 per cent as compared to last fiscal year.

"Margins have shown consistent improvement in past quarters. We expect the momentum to continue in the current fiscal year except the first quarter. In the first quarter, salary hikes and investments in key areas will impact margins," said Jatin Dalal, CFO at Wipro. Among verticals, the company said BFSI (banking, financial services & insurance) vertical posted 2.7 per cent sequential growth, while technology grew around 10 per cent in Q4 of FY21. All major geographies including America 1, America 2 and Europe also showed positive growth in fourth quarter. The company's attrition level went up by 110 basis points to 12.1 per cent during fourth quarter. It added 7,404 employees on net basis during the fourth quarter to take its headcount to 197,712. The company has given salary hikes in January to its junior employees and is currently doing so for its senior staffers.