IT Major Likely To Post 29% Jump In Revenue; 3.8% Rise In Profit


Even as the earnings season is going on and companies are disclosing their financial results, IT major Wipro is going to disclose its results on Friday. It is expected to post a revenue growth of 29 per cent year-on-year to Rs 20,958 crore in the fourth quarter of 2021-22, and a profit after tax (PAT) growth of 3.8 per cent to Rs 3,086 crore. The company will give its guidance for the June 2022 quarter and commentary on large deal wins.

HDFC Securities in a report said, “Factored IT (information technology) services USD revenue growth of 11 per cent over FY22-24E following 27 per cent growth in FY22E and EPS CAGR (compound annual growth rate) of 12 per cent over FY22-24E, supported by structural improvement in client mining, large deal wins/acquisition synergies and strong partner ecosystem.”

Yes Securities in its report expects revenue growth of 29 per cent year-on-year to Rs 20,958 crore in the fourth quarter of 2021-22. The company’s profit after tax (PAT) is expected to grow 3.8 per cent to Rs 3,086 crore in the last quarter of the financial year 2021-22.

“We expect…Wipro to post constant currency (CC) revenue growth in the range of 3.0-3.5 per cent quarter-on-quarter,” ICICI Securities said in its report, adding that Wipro may see a dollar revenue growth of 2.7-3.2 per cent quarter-on-quarter, respectively.

It added that the company’s dollar revenue growth is expected at 3.2 per cent QoQ, factoring in 30 bps cross-currency headwind. The company is expected to report 2.7 per cent quarter-on-quarter rupee growth. Earnings before interest and tax (EBIT) margins in global IT services are expected to decline by 30 bps q-o-q, due to the impact of a salary hike amid higher attrition.

“Overall EBIT margins are expected to decline 20 bps QoQ due to weak performance in IT services. Consequently, PAT is expected to be flattish QoQ. Investor interest: commentary on recent M&A, deal wins, vertical commentary, commentary of the client’s IT budget and revenue guidance,” ICICI Securities said.

It added that Wipro had guided for 2-4 per cent constant currency growth in the fourth quarter for IT services. “We expect the company to report 3.5 per cent QoQ cc growth in revenues in IT services.”

On the whole IT sector performance, Yes Securities said, “We expect cross-currency headwind of around 10-40 bps in the quarter that would slightly dampen the reported USD revenue growth. Revenue growth is expected to be 2-4 per cent q-o-q in the USD term for large-cap IT companies.”

It added that the slight depreciation of average INR as against USD by 0.4 per cent quarter-on-year during the quarter would boost revenue growth in INR terms by around 20-40 bps quarter-on-quarter. “Tier-2 IT companies are expected to report revenue growth of 3-5 per cent in USD terms quarter-on-quarter.”

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