Wipro Q3 PAT almost flat at Rs 2,969 crore, to continue WFH amid Omicron wave

IT services major Wipro Ltd on Wednesday posted a consolidated net profit of Rs 2,969 crore for the December 2021 quarter, almost flat compared to the year-ago period, but said demand environment continues to be “robust”.

The company has decided to close its offices globally for the next four weeks “as a proactive measure” in the backdrop of fast-spreading Omicron variant of coronavirus, Wipro CEO and Managing Director Thierry Delaporte said.

IT companies had relied on the ‘work from home’ arrangement due to the onslaught of the COVID-19 pandemic but over the past few months, some were planning to get employees back to work from office, in a gradual manner.

Delaporte, during Wipro’s earnings call, said the company’s plans for the return to office, even in a hybrid model, for fully vaccinated employees will be “calibrated in the context of the evolving situation”, keeping both employees’ safety and client preferences in mind.

“That said, we are continuing to service our customers, with dedication and agility, as always,” he said.

In October last year, the company had mentioned that it is starting to return to offices in many parts of the world, in a staggered manner. The return to office will be a careful and gradual process, the company has then stated.

Meanwhile, Wipro’s net profit stood at Rs 2,969 crore for the financial year’s third quarter ended December 31, 2021, as against Rs 2,968 crore in the corresponding period of the previous year. On a sequential basis, the net profit was up 1.3 per cent.

For the March 2022 quarter, the company expects revenue from the IT services business to be in the range of USD 2,692 million to USD 2,745 million, translating into a sequential growth of 2-4 per cent.

The revenue from operations grew 29.6 per cent to Rs 20,313.6 crore from Rs 15,670 crore in the quarter ended December 2020. Seen sequentially, it was 3.2 per cent higher.

“We have guided for a revenue growth of 2-4 per cent, which will translate into a full-year growth of 27 per cent to 28 per cent. The demand environment continues to be robust, and our growth path over the last few quarters reflects this,” Delaporte said.

Wipro will stay on course with its strategic priorities, Delaporte pointed out while exuding confidence about “sustaining the growth momentum”.

According to the company, the demand environment is strong.

“Our growth rates, our pipeline, and our order bookings all reflect that. Our pipeline in fact shows a healthy mix of medium and large deals across all our business lines,” Delaporte said.

The company continues to see rapid expansion in small- and mid-sized deals, which represents growth in existing accounts, as well as expansion of market portfolios.

Wipro, which gets a bulk of its topline (revenue) from IT services, said it expects revenues from that business to be in the range of USD 2,692 million to USD 2,745 million in the March 2022 quarter, a sequential growth of 2 per cent to 4 per cent.

For the December 2021 quarter, IT services revenue grew 2.3 per cent sequentially to USD 2,639.7 million, in line with the forecast that had been given by the company in October.

In October, Wipro had said it expects its December quarter revenue from IT services business to be in the range of USD 2,631-2,683 million, a sequential growth of 2-4 per cent.

Wipro Chief Financial Officer Jatin Dalal said the company delivered robust operating margins after absorbing substantial investments on salary increases, owing to continued improvement in operating metrics.

The company’s headcount for IT services stood at 2,31,671, an increase of 41,363 employees on a net basis year-on-year. It added 10,306 employees during the quarter.

Wipro has declared an interim dividend of Re 1 per equity share.

The company shares closed marginally lower at Rs 691.35 apiece on the BSE on Wednesday. The results were declared after market hours.

The company expects to hire about 30,000 freshers in FY23, and is striving to ensure that supply is not a constraint in managing the demand environment.

The fresher hiring numbers are pegged at about 17,500 for the current financial year.

In a big day of IT earnings, Wipro’s larger rivals TCS and Infosys too posted their Q3 report card on Wednesday.

India’s second-largest software services company Infosys has reported an 11.8 per cent rise in consolidated net profit to Rs 5,809 crore for December 2021 quarter. The IT firm also increased its revenue growth guidance for FY22 to 19.5-20 per cent.

Infosys’ revenue grew 22.9 per cent to Rs 31,867 crore in the quarter ended December 2021 from Rs 25,927 crore in the year-ago period.

Tata Consultancy Services (TCS) reported a 12.2 per cent rise in its consolidated net profit to Rs 9,769 crore for the December 2021 quarter, and announced an Rs 18,000-crore buyback offer for its shareholders at Rs 4,500 per scrip.