Wipro ADR Jumps 3.78% on NYSE After Q4 Earnings Beat Estimates

Wipro's Q4 earnings beat estimates, but revenue and profits declined amid macroeconomic challenges. The IT major's outlook provides insights into the state of the industry.

author-image
Rafia Tasleem
Updated On
New Update
Wipro ADR Jumps 3.78% on NYSE After Q4 Earnings Beat Estimates

Wipro ADR Jumps 3.78% on NYSE After Q4 Earnings Beat Estimates

Wipro's American Depositary Receipts (ADR) jumped 3.78% to $5.36 on the New York Stock Exchange (NYSE) on April 19 after the IT major's fourth-quarter earnings beat street estimates. Despite an 8% year-over-year decline in net profit to Rs 2,835 crore, the company's revenue slumped to Rs 22,208.3 crore in the quarter ended March 2024.

The IT services segment revenue came in at $2,657.4 million, up 0.1% quarter-on-quarter but down 6.4% year-on-year. Wipro's management kept the revenue guidance for the June quarter (Q1FY25) at -1.5% to 0.5%. CFO Aparna Iyer stated, "It is a tough macroeconomic environment where clients are also going through a challenging time, and we need to partner with them."

Wipro's consolidated revenue fell 4.2% to Rs 22,208 billion, but it managed to surpass analysts' estimate of Rs 21,551 billion. New CEO Srinivas Pallia said that accelerating growth is a top priority, and the company's consulting business saw a 6.6% sequential growth in revenue. However, total order bookings fell from the previous quarter and the year-ago period.

Why this matters: The IT services industry has been facing challenges due to high inflation, geopolitical risks, and economic uncertainty, with Wipro's rivals Infosys and Tata Consultancy Services also posting lower-than-expected revenue in the fourth quarter. Wipro's performance and outlook provide insights into the current state and future prospects of the IT sector.

For the year ended March 31, 2024, Wipro's gross revenue reached Rs 897.6 billion, a 0.8% YoY decrease, while IT services segment revenue stood at Rs 10,805.3 million, a 3.8% YoY decline. The company expanded its margins by 40 bps during the quarter, resulting in a 5.2% QoQ EPS growth in Q4. Wipro's board of directors also announced an interim dividend of Rs 1.

Key Takeaways

  • Wipro's Q4 earnings beat street estimates despite 8% YoY decline in net profit.
  • IT services revenue down 6.4% YoY, management guides -1.5% to 0.5% for Q1FY25.
  • Consolidated revenue fell 4.2% to Rs 22,208 billion, surpassing analysts' estimate.
  • IT industry facing challenges due to high inflation, geopolitical risks, and economic uncertainty.
  • Wipro's FY24 gross revenue decreased 0.8% YoY, IT services revenue down 3.8% YoY.