Wipro Posts Mixed Q3 Results, Weakens Q4 Outlook

Wipro Ltd. announced its third-quarter financial results today, revealing that revenue and profit margins did not meet analyst projections. The Indian IT services behemoth also provided a cautious outlook for the upcoming January-March quarter, signaling a significant slowdown in growth.

Q3 Financial Performance

The company's IT services revenue for the reported quarter reached $2,635.4 million, marking a modest 1.2% sequential increase on a constant currency basis. This figure was within Wipro's previously guided range of -0.5% to +1.5%. However, this fell short of the 1.6% consensus estimate. In rupee terms, revenue stood at ₹23,378 crore, up 3.3% sequentially but below the CNBC-TV18 poll of ₹23,549 crore.

Earnings Before Interest and Taxes (EBIT) declined by 5.5% from the previous quarter to ₹3,573.5 crore. This was notably lower than the polled expectation of ₹3,883 crore. Consequently, operating margins compressed to 15.3%, down from 16.7% in the prior quarter and missing the poll of 16.5%.

Subdued Q4 Guidance

Looking ahead to the January-March period, Wipro projected constant currency revenue growth to be between 0% and 2%. This guidance came in below the analyst consensus, which had anticipated a range of 1% to 3%, inclusive of contributions from the Harman acquisition. The softer outlook suggests continued headwinds for the company's core IT services business.

Market Reaction

Investors reacted cautiously to the results and outlook. Wipro shares had closed Friday up 2.5% at ₹266.8 ahead of the announcement. However, the US-listed shares experienced a significant downturn, slumping over 3% in after-hours trading following the release of the financial figures.