shares of Wipro down about 6% 652 each on the BSE in early trading session on Thursday after the IT services major posted a consolidated net profit of Rs. 2,969 crore for the December 2021 quarter, almost flat compared to the year-ago period, but said the demand environment remains ‘strong’.
IT Service Provider’s revenue from operations grew 29.6% during the quarter under review 20,313 crore as compared to 15,670 crore in the same quarter last year. Its revenue from IT services saw growth of 2.3% quarter-on-quarter (QoQ) and 27.5% year-on-year (YoY).
“Revenue and EBIT (earnings before interest and taxes) margins are slightly lower than expected. Revenue growth was led by strong performance in the BFSI and consumer verticals. EBIT margin was down on a sequential basis primarily due to higher employee cost (cost of revenue) which increased sequentially. Deal bookings remained strong,” said Piyush Pandey, Lead Analyst – Institutional Equities, Yes Securities. It currently has an Ad Rating on IT Stocks.
Wipro expects revenue from IT services business to be in the range of $2,692-$2,745 million in the fourth quarter of the current fiscal, which translates to a sequential growth of 2% to 4%. The board of the company has also declared interim dividend of 1 per equity share.
“Wipro’s Q3FY22 results were a mixed bag with missing estimates of revenue but surprising margins on the positive side due to lower amortization. The growth outlook remains strong and margins are likely to remain stable at 17% level in FY22. In -24, we expect Wipro to deliver 10%/8.% revenue and EPS CAGR,” Jefferies said in a note.
The brokerage maintains its underperform rating on the shares of Wipro with a revised target price of 620 on weak earnings growth and prosperous valuations.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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