Wipro Limited ((WIT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Wipro Limited painted a mixed picture, marked by notable achievements in operational efficiency and strategic advancements, yet tempered by challenges in revenue growth across certain regions and sectors. The overall sentiment reflected a balanced outlook, highlighting both optimism and areas of concern.
Record Operating Margins
Wipro Limited achieved operating margins of 17.5%, representing a significant milestone as it marked a 12-quarter high. This achievement included an expansion of 0.7% quarter-on-quarter and 1.5% year-on-year, underscoring the company’s efforts in improving operational efficiency.
Significant Deal Wins
The company successfully closed 17 large deals worth $1 billion, which included agreements with a leading American retail company and a Middle Eastern airline focused on technology modernization. These strategic deals are expected to bolster Wipro’s market position and drive future revenue.
Growth in Key Sectors
Wipro saw positive growth in the health sector, which maintained momentum with a 6.7% sequential increase and a 4.5% year-on-year growth. The BFSI sector also performed well, growing 3.4% year-on-year despite quarterly setbacks.
AI and Innovation Commitment
In its commitment to innovation, Wipro invested heavily in AI education, with 50,000 employees achieving advanced AI certification. The early adoption of Agentic AI has shown promising results, delivering impactful outcomes for clients.
EPS and Net Income Growth
The company reported a 24% year-on-year and 5% sequential increase in EPS and net income. This growth was attributed to margin expansion and improved treasury returns, reflecting Wipro’s strong financial management.
Revenue Decline in Europe and APMEA
Despite overall successes, Wipro faced revenue declines in Europe and APMEA, with sequential decreases of 2.7% and 2.1%, and year-on-year declines of 4.6% and 8%, respectively. This highlights the regional challenges the company must address moving forward.
Challenges in Technology and Communications
The Technology and Communications sector experienced a decline of 0.6% quarter-on-quarter and 5.3% year-on-year. This underscores the need for strategic innovation and adaptation in these sectors.
Flat Sequential Revenue Growth
IT Services revenue for Q3 stood at $2.63 billion, illustrating minimal sequential growth of 0.1% and a year-on-year decrease of 0.7%. This indicates a period of stabilization amidst broader challenges.
Negative Growth in Energy, Manufacturing, and Resources
The Energy, Manufacturing, and Resources sector experienced modest growth of 0.4% quarter-on-quarter but faced an 8.7% decline year-on-year, highlighting significant challenges within this segment.
Forward-Looking Guidance
Looking ahead, Wipro Limited provided guidance for the upcoming quarter, projecting a sequential growth range of -1% to +1% in constant currency, translating to $2.602 billion to $2.655 billion in US dollar terms. The CEO emphasized optimism for future growth, driven by AI investments and strategic market initiatives, despite existing challenges in certain regions.
In summary, Wipro Limited’s earnings call presented a balanced outlook, with strong operational achievements and strategic wins countered by regional and sectoral challenges. The company remains focused on leveraging its strengths in AI and strategic deals to navigate the competitive landscape and drive future growth.
