Wipro Q4: Wipro Q4 Preview: Profit rise seen as flattish; June revenue growth guidance likely at 2-4%
The company, slated to post its earnings on Friday, may guide for 2-4 per cent revenue growth for the June quarter.
Domestic brokerage Kotak Institutional Equities (KIE) said Wipro is likely to post Q4FY22 revenue at Rs 21,001.3 crore, up 28.6 per cent year-on-year (YoY), powered by continued strength in discretionary spending and success in the mining of large accounts.
On a quarter-on-quarter (QoQ) basis, the figure may rise by 2.8 per cent. KIE forecasts constant currency (CC) revenue growth of 3.5 per cent, which will fall in the 2-4 per cent guidance band suggested by Wipro. Revenues include 40 bps contribution from Edgile and LeanSwift acquisitions, it said.
“We expect 2-4 per cent revenue growth guidance for June 2022 quarter. This excludes any contribution from acquisitions,” said the brokerage. It has pegged net profit for the quarter at Rs 3,067 crore, up 3.2 per cent YoY. The brokerage said TCV of deals might be muted in Q4.
Sharekhan expects a similar 3.3 per cent YoY rise in March quarter profit for the Bengaluru-headquartered firm at Rs 3,071 crore.
This brokerage expects CC revenue growth of 3.6 per cent QoQ and a cross-currency headwind of 30 bps. In dollar terms, Sharkhan expects the revenue to grow by 3.3 per cent QoQ. In rupee terms, it sees revenue growth of 29 per cent YoY and 3.1 per cent QoQ to Rs 21,067 crore.
“EBIT margin in IT services is expected to decline by 10 bps QoQ, owing to higher hiring expenses to backfill rising attrition and rising discretionary expenses,” it said. Margin trajectory, given supply-side pressures and increasing discretionary spends will be keenly tracked by investors.
On the lower end, brokerage JM Financial sees a 0.8 per cent YoY rise in profit after tax at Rs 2,994.7 crore, while revenue growth, it said, is likely at 29.4 per cent to Rs 20,558.4 crore. It is also estimating a 3.2 per cent QoQ dollar-revenue growth with 80 bps CC headwinds at $2,723 million.
“We expect IT Services EBIT margins to be flat QoQ as benefits from slight currency depreciation are negated by supply-side pressures,” the brokerage said.
June revenue outlook, CY22/FY23 client IT spending trends and margin outlook in the near/medium term, given the likely resumption of travel expenses, will be key monitorables, it added.
