Wipro posted a fairly strong performance on the revenue front with a beat on revenues and beat on profitability and the management shared a very strong revenue growth guidance of 5-7% for Q2. Q1 Margins however were under pressure at 18.8%. IT services grew at 12% QOQ in Constant currency terms (USD growth of 12.2% QOQ) and profits at Rs 3232 crore up nearly 8.7% QOQ.
Thierry Delaporte, CEO and MD said, Q1 organic growth stood at 4.9% and the rest came from Capco. This was the highest ever organic QOQ growth in 38 quarters and overall revenue growth was best ever. Management is confident of double digit growth in FY22 even without Capco. Overall demand environment is robust, quality of pipeline is strong and closed 8 large deals in Q1 resulting in TCV of over USD 715mn. All markets are seeing solid demand and large deals have been exceptionally strong in Americas market.
Delaporte said, “Despite the severe onslaught of the pandemic, we delivered our best-ever quarter, with secular growth across all SMUs, Sectors and GBLs. Our sequential revenue growth of 12.2% was well ahead of the top-end of our guidance range, both organically and with Capco. Though in the early days yet, I am pleased with the way we have collaborated with Capco to build our joint go-to-market offerings and strategy. We remain focused on deepening our customer relationships, investing in talent & capabilities for the future, and winning market share.”
Management said, Margins at 18.8% of this Capco integration impact is about 1.3%. Attrition level is rising in the industry but we are confident of managing change in environment without impacting business.
Wipro had signed an agreement to acquire Ampion on April 1, 2021, and this was to be closed during Q1’22. However certain regulatory approvals are still pending and the transaction is now expected to be closed in Q2’22.
WIPRO Q1FY22 REVIEW:
- IT services Revenue was at $2,414.5 mn vs $2152mn, up 12.2% QOQ.
- IT services revenue at Rs 18,048 crore vs Rs 15,892 crore, up 13.6% QOQ.
- IT services operating margin 18.8% vs 21% QOQ.
- Consol PAT 3238 cr vs 2974cr, up 8.9% QOQ.
- Consol Revenue at Rs 18,252 crore vs Rs 16,245 crore, up 12.4% QOQ, up 22.4% YoY.
- IT Services workforce crossed the milestone of 200K.
- Attrition TTM at 15.5%.
