The annual profit growth is far lower than its peers but sequentially Wipro is likely to perform on par as revenue and net profits are likely to rise in the range of 3-5 per cent.
“Wipro had guided for 2-4 per cent CC (constant currency) growth in Q3 for IT services. We expect the company to report 4 per cent QoQ CC growth in revenues in IT services. We expect dollar revenue growth of 3.3 per cent QoQ, factoring in 70 bps cross-currency headwind,” said analysts at ICICIdirect.
The broker feels Wipro’s EBIT margin in global IT services is expected to decline by 10 bps QoQ, due to the impact of salary hike for the lower pyramid amid higher attrition. Overall EBIT margins are expected to decline 30 bps QoQ due to continued weak performance from ISRE.
Wipro is one of the most highly-rated IT companies but it pales in comparison to Infosys. Investors have also been bullish on its prospects. The stock has jumped 6 per cent in the last three months and 55 per cent in the last one year.
“We expect a strong IT services revenue growth of 3.6 per cent QoQ in dollar terms, 4.2 per cent QoQ CC above guided range of 2-4 per cent QoQ CC, driven by strength in broad-based demand for discretionary spends and strong client mining efforts. Margin may decline by 50bps QoQ due to full quarter impact of wage hike which was rolled out in Sept for mid and junior levels,” said analysts at Phillip Capital.
They expect Wipro to guide for 2-4 per cent QoQ CC revenue growth for Q4FY22.
Segment-wise, IDBI Capital expects BFSI, Hi-Tech, retail and healthcare to perform well and drive 3.9 per cent QoQ growth in revenues partially offset by 50 bps cross-currency impact.
Key things to watch out for:
- Commentary on recent M&A and potential benefits, client’s IT budget
- Deal wins
- Further wage hike
- Growth in large accounts
- Measures to tackle supply-side challenges and defend margins
- Q4FY22 guidance
