Wipro profit up 20.8% in Q3 with marginal revenue growth

Bengaluru based Wipro on Wednesday reported a 20.8% increase in quarterly profit in a period preceding a major rejig of service lines and markets at the information technology (IT) services firm.

The company said its profit attributable to shareholders rose to Rs 2,966.7 crore, or Rs 5.17 per share in the third quarter ended December 2020, from Rs 2,455.8 crore, or Rs 4.30 per share, a year earlier.

Revenue rose marginally, 1.3% to Rs 15,670 crore.

“The demand environment is steadily improving, especially for digital transformation, digital operations, and cloud services. I am also pleased to share with you that we have moved into our new organisation structure and are stabilizing quickly,” Thierry Delaporte, CEO and managing director said.

Operating margin for the reported quarter at the company’s IT services stood at 21.7%.

“Our margins are now at a 22-quarter high,” said Jatin Dalal, chief financial officer of Wipro. “The expansion was led by improved revenue growth trajectory and excellence in operations with several metrics at an all-time high. Our operating cash flows grew by 45% year on year with a significant improvement in outstanding receivables.” 

Banking and finance industries (BFSI), Wipro’s top revenue contributor, jumped only 0.5% to Rs 4,661.2 crore, year over year.

The company said it expects revenue from its IT services business to grow in the range of 1.5% to 3.5%, sequentially. In the third quarter, Wipro closed 12 deals, and the total contract value booked in the period was more than $1.2 billion.

Wipro also won its largest deal ever in Continental Europe with Metronom. “Europe has grown faster on a y-o-y basis,” Delaporte noted, attributing the acceleration to adoption of cloud, digital transformation, and driving efficiencies in the core business leading to optimised costs.