- 14 Jul 2023
- ICICIdirect
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WIPRO Q1 RESULTS 2024: PROFIT RISES BUT BELOW ESTIMATES
WIPRO - 246 Change: -4.98 (-1.98 %)
Wipro reported its June quarter numbers, and despite reporting growth, it fell short of estimates. Let us look at Wipro Q1FY24 quarterly numbers in detail.
About Wipro
Wipro is a leading global information technology company providing consulting, technology, and business process services. With a rich history spanning several decades, Wipro has established itself as a trusted partner for businesses across industries, delivering innovative solutions and driving digital transformation.
Crucial parameters
- PE Ratio: 22.67
- Sector PE: 26.24
- Dividend Yield: 2.65%
- ROE: 15.21%
Share price movement
After the result announcement on Thursday, the HCL share price opened on a positive note on Friday and was trading nearly 1.4% up on Friday afternoon. In the six-month period, Wipro shares have traded flat.
In the last year, the share price is again flat on the negative side - peers have given higher returns in this period. In the 5-year period, Wiprp shares have given 88% returns to its investors.
Wipro latest quarterly Q1FY24 Result Details
Revenue: The company reported a revenue of Rs 22,831 crore for Q1FY24. In constant currency terms, sequentially, the revenue was down 2.8% and rose 1.1% year on year. The top line increased from the European market but declined slightly for the APMEA year on year. Among sectors, most sectors were flat sequentially. Energy, Natural Resources and Utilities, and Health gained share YoY.
Profits: Wipro's consolidated net profit for Q1FY24 stood at Rs 2,870 crore. In the year-ago period, the company had posted a net profit of Rs 2,563 crore. It reported 11.9% year-on-year (YoY) growth in net profit in the first quarter ended June 30, 2023. Sequentially, net profit was down by 6.6% due to a decline in all major financial metrics.
Hi-tech and Banking, financial services, and insurance (BFSI) were impacted most in this quarter due to softer discretionary spending.
Guidance: Wipro's Q1 guidance for CC revenue growth was between -1% and -3%, as it expected the macro environment to remain challenging. For Q2FY24, the company has guided revenue growth of -2% to 1% in constant currency.
Employee count: The company reported a total headcount of 249,758, which came down from 258,570 in the March quarter. Voluntary TTM attrition stood at 17.3%
Other updates: Wipro received total bookings of $3.7 billion for the quarter. The large deal bookings growth stood at 9% YoY - it is the highest in the last eight quarters. Also, company operating cash flows came at 130% of net income. The operating margins have improved YoY from 14.9% to 16% in Q1FY24. However, they are down sequentially from 16.3%.
Management commentary: “Wipro’s first-quarter results come with a strong backbone of large deal bookings, robust client additions, and resilient margins. The launch of Wipro ai360 and the USD 1 billion investment solidifies Wipro’s position as a leading transformation partner that delivers the results and innovation our clients need to future-proof their businesses,” CEO, Thierry Delaporte.
To sum up
The company is expected to underperform compared to its peers because of two reasons: problems with topline growth and low deal-wins. The company has a lower valuation compared to other peers like TCS and HCL, which may limit the downside in the short to medium term. Another worry for investors could be the weak guidance provided by the company.