Wipro Q1 results: Company books deals worth $3.7 billion, records 66.5% YoY profit growth
Wipro achieved remarkable success by securing 55 large deals with a TCV worth $3.9 billion, experiencing a remarkable YoY growth of 66.5%. The company concluded the last financial year with a 28% increase in its order book and hired 22,000 new employees in FY23. Additionally, it gained 435 new customers, primarily through acquisitions.
Furthermore, the company demonstrated strong cash conversion, with ₹110.8 billion, equivalent to 114.9% of its net income. The total value of bookings exceeded $4.1 billion, showing a 29% YoY growth for the quarter.
Wipro successfully closed 15 significant deals, amounting to over $1.1 billion in total contract value, marking a 155% YoY growth in Q4’23.
Despite Wipro’s weaker performance in the March quarter and conservative guidance for the first quarter, the company’s ability to secure deals surprised some analysts. Wipro’s valuation remains at a discount compared to its larger peers, with a 20% discount to Infosys and a 40% discount to TCS. If Wipro continues to underperform in terms of growth prospects, this valuation discount may persist or even widen. The company anticipates revenues in the range of $2,753 million to $2,811 million, indicating a sequential guidance of -3% to 1% in constant currency (CC) terms.
Nonetheless, Wipro maintains an optimistic outlook for its transformation journey, actively seeking new investment opportunities and embracing emerging technologies for future growth. The company expects revenue from its IT Services business, including the India State Run Enterprise (ISRE) segment, to range between $2,753 million and $2,811 million.
“Deal pipeline during the quarter has remained at similar levels as previous quarter. Pipeline to TCV conversion is slowing and the nature of deals has shifted to cost take out deals,” said ICICI Securities.
“Despite a gradual reduction in clients’ discretionary spending, we maintained new business momentum. We earned our clients’ trust with strong delivery, innovation, and expanded services that strengthen our long-term businesses, and help capture market share. The launch of Wipro ai360 and the USD 1 billion investment solidifies Wipro’s position as a leading transformation partner that delivers the results and innovation our clients need to future-proof their businesses.” the CEO and Managing Director said.
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Updated: 13 Jul 2023, 05:42 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.