Wipro disappoints on margins frontWIPRO - 460 Change: 8.45 (1.87 %)
News: Wipro reported a weak set of Q3FY22 numbers. IT services revenues increased 3% QoQ in constant currency (CC) while dollar revenues were up 2.3% QoQ to US$2,639 mn (vs. our expectations of 4% QoQ growth in CC). Rupee revenues were at | 19,974 crore, up 3.1% QoQ (vs. our expectation of 3.0% QoQ. IT services EBIT margin declined 60 bps QoQ to 17.1% vs. 17.7% last quarter (including other operating income) and was below our estimate of 17.6%, IT margins were lower than expected due to higher-than-expected increase in employee expenses and SG&A expenses.
Views: The company’s operating performance was disappointing as revenues as well as margins came below our expectations. The supply side challenges will continue for couple of quarters, which would put pressure on margins. The demand outlook continues to be strong as clients continue to spend on new technologies.