Wipro's Net Profit Declines 7.9% in Q4 FY24 Amid Challenging Industry Conditions

Wipro's Q4 FY24 results reflect broader IT industry challenges: declining profits, revenue amid economic uncertainty and AI disruption. Analysts have mixed views on the stock's future performance.

Dil Bar Irshad
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Wipro's Net Profit Declines 7.9% in Q4 FY24 Amid Challenging Industry Conditions

Wipro's Net Profit Declines 7.9% in Q4 FY24 Amid Challenging Industry Conditions

Wipro, one of India's leading IT firms, reported a 7.9% decline in consolidated net profit to Rs 2,835 crore for the fourth quarter of fiscal year 2024.

The company's revenue also slipped 4.2% to Rs 22,208 crore during the same period. This comes amid challenging conditions in the IT industry and an uncertain macroeconomic environment, with artificial intelligence transforming client needs.

For the full fiscal year 2024, Wipro's consolidated net profit declined 2.69% to Rs 1,1045.2 crore. Revenue from operations rose marginally to Rs 22,208.3 crore in Q4 FY24, but net profit slipped 7.8% and revenue declined 4.23% on a year-on-year basis. Profit before tax stood at Rs 3,862.2 crore, up 8.73% quarter-on-quarter but down 3.89% year-on-year.

Wipro's IT services segment revenue came in at $2,657.4 million, up 0.1% quarter-on-quarter but down 6.4% year-on-year. The company's IT services operating margin for the quarter was at 16.4%, up 40 basis points quarter-on-quarter. For Q1 FY25, Wipro expects IT services revenue to be in the range of $2,617 million to $2,670 million.

The company's total bookings declined 4.85% quarter-on-quarter and 13.54% year-on-year, while large deal bookings increased 31.1% quarter-on-quarter and 9.5% year-on-year. Wipro CEO Srini Pallia acknowledged that the macroeconomic environment remains uncertain and artificial intelligence is transforming client needs. CFO Aparna Iyer highlighted the expansion of margins, EPS growth, and strong operating cash flow despite the challenging macro environment.

Why this matters: Wipro's results reflect the broader challenges faced by the IT industry amid global economic uncertainty and the disruptive impact of artificial intelligence on client needs. As one of India's major IT firms, Wipro's performance serves as a bellwether for the sector and underscores the need for companies to adapt to the rapidly evolving technological landscape.

Wipro's stock has fallen 15.41% from its one-year high of Rs 546.10 seen on February 19, 2024, but has gained 27.19% from its 52-week low of Rs 363.20 hit on April 21 last year. Technical analysts have provided mixed views, with some suggesting buying the stock at current levels with a target of Rs 500, while others advise traders to exit as the stock may slip towards the Rs 450 level. As Wipro CEO Srini Pallia noted, "FY24 proved to be a challenging year for the industry, with the macroeconomic environment remaining uncertain. Artificial intelligence is transforming clients' needs, and Wipro is

Key Takeaways

  • Wipro's Q4 FY24 net profit declined 7.9% to Rs 2,835 cr, revenue fell 4.2% to Rs 22,208 cr.
  • For FY24, Wipro's net profit fell 2.69% to Rs 11,045.2 cr, revenue rose marginally to Rs 22,208.3 cr.
  • Wipro's IT services revenue was $2,657.4 mn, down 6.4% YoY, but operating margin rose 40 bps QoQ.
  • Wipro expects Q1 FY25 IT services revenue to be $2,617-2,670 mn, total bookings fell 13.54% YoY.
  • Wipro's CEO cited uncertain macro environment, AI transforming client needs as challenges for the industry.