Result-Analysis-Elite-Wealth.

Result-Analysis

Result Analysis: Wipro Ltd. Result Update Q2FY22
Particulars (In Rs. Cr.) Q2FY22 Q1FY22 Q2FY21 QoQ % YoY%
Revenue from Operations 19668.9 18,467 15096.7 6.51% 30.29%
Other Income 504.7 577.9 554.7 -12.67% -9.01%
Total Income 20173.6 19045.3 15651.4 3.35% 18.53%
Employee Benefit Expenses 11120.2 10271.1 8316.8 8.27% 33.71%
Employee benefit Expenses as % of Sales 56.54% 55.62% 55.09% 92 145
EBIT 3902.4 3947.9 3334.03 -1.15% 17.05%
EBIT Margin 17.8% 19% 18.6% -154 -224
Profit After Tax 2930.7 3242.6 2465.7 -9.62% 18.86%
PATM (%) 14.53% 20.71% 18.01% -618 -348
EPS (in Rs.) 5.36 5.94 4.33 -9.76% 23.79%

Result Highlight: 

  • Consolidated Revenue rose 6.51% QoQ and 30.29% YoY to Rs 19668.9 crore, above estimates.

  • In constant currency term revenue in IT service grew 8.1% QoQ.

  • EBIT Margin contracted to 17.8% from 19% last quarter due to wage hike.

  • Net profit rose 18.86% to Rs 2930.7 crore for the Sept quarter compared with Rs 2465.7 crore in the same quarter last year.

  • Wipro reported a spike in voluntary quarterly annualized attrition rate at 20.5% compared to 15.5% in 1QFY22 and 11.0% in 2QFY21, management expects attrition to further increase in 3QFY22 and said it will take a few quarters to normalize.

  • Wipro reported strong growth across all the sectors, led by BFSI with 42.9% YoY and 12.5% QoQ growth in CC terms. This was followed by the Consumer sector (37.7% YoY), Technology (26.2% YoY), Communication (23.4% YoY), Energy, Natural Resources & Utilities (22.5% YoY), Healthcare (10.2% YoY) and Manufacturing (6.2% YoY).

  • Wipro had a large deal TCV of over USD580m. In 1HFY22, ACV/TCV witnessed 28%/19% YoY growth. 

Management commentary: 

  • Majority of the growth was volume led and was across sectors and markets

  • Deal pipeline is at a record high and has a good mix of large and mid-size deals.

  • The Engineering business grew 25% YoY in 2Q, its CQGR over the past four quarters is ~5%. The Cloud business grew 27% YoY in 1HFY22, with the pipeline crossing USD8b.

  • The management continues to build good momentum on go to market with Capco. It has started winning some deals. There have been 10 deal wins since the closure of the acquisition. 

Conference Call Highlights 

  • Guidance: Wipro expects its IT Services revenue to be in the range of US$2,631- 2,683mn in 3QFY22, indicating a growth of 2-4% QoQ in CC terms over 2QFY22.

  • Wipro states that its new revenue run-rate surpassed the US$10bn mark, with US$2.4bn of this amount being added just in the last 12 months. This revenue milestone is of greater significance for Wipro because it has achieved this milestone while undergoing its largest ever internal transformation

  • Wipro’s top two markets Americas and Europe grew by 15% and 29% YoY.

  • Company’s top customer grew by 29% YoY, top five customers grew by 33% YoY and top 10 grew by 32% YoY. In 2QFY22, Wipro added 2 new customers to the US$100mn+ bucket and two more customers in the US$50mn+ bucket.

  • Wipro added 8,150 freshers in 2QFY22, taking the total employee base to 221,365. The company is willing to continue to aggressively build on this momentum, and is well positioned to add over 25,000 freshers in FY23.

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