Preview: Wipro may guide 2-4% sales growth for December quarter

MUMBAI: is likely to taper its revenue growth guidance for the December quarter in constant currency terms to 2-4 per cent against the 5-7 per cent growth expected in the September quarter.

The IT services major will report its September quarter earnings on Wednesday.

Analysts expect the company to report 7-7.1 per cent growth in consolidated revenues in constant currency terms for the September quarter aided by a ramp-up in large deal wins in the previous quarter, and benefits from the acquisition of Capco.

The Bengaluru-based IT services firm is likely to report a 4.6 per cent sequential growth in consolidated revenues at Rs 19,314 crore for the reported quarter, according to an poll. The company, however, may report an 11 per cent quarter-on-quarter drop in consolidated net profit at Rs 2,877 crore.

The operating performance of the IT services giant will continue to deteriorate due to the challenges caused by a sector-wide shortage of talent. Analysts expect Wipro to report a more than 100 basis points sequential decline in operating margins for its IT services business.

The company undertook another round of wage hike in the quarter in order to improve talent retention. However, analysts still expect the attrition rate to rise to 20 per cent in the coming quarter given the stiff war for talent in the sector.

Deal wins are also likely to slow down in the September quarter, as the company has not made any meaningful deal win announcements throughout the quarter. That said, analysts still expect the pipeline to remain strong based on the commentary given by sector-leader Tata Consultancy Services.

Besides the earnings, investors will keenly await management commentaries on demand in critical verticals like banking, financial services and insurance and travel. Further, investors would also like to know how the company will look to deal with the rising pressure on margins caused by the talent shortage.


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