Wipro Result Analysis Q1 FY20-21

Wipro Result Analysis Q1 FY20-21

Net profit rose 2.8% over the previous quarter to Rs 2,411 crore in three months ended in June, according to its exchange filing. 

Total revenue fell 5.3% over the previous quarter to Rs 14,922 crore—higher than the estimated Rs 14,414 crore. 

Revenue from IT services fell 7.3% to $1,922 million. 

Operating profit rose 1.3% to Rs 2,573 crore. 

IT services margin expanded to 19% from 16.1% earlier.

Wipro, however, was able to improve its operational metrics despite the decline in revenue mainly on the back of lower employee costs which is its largest expense. 

Employee expenses for Wipro declined 6.1% sequentially to Rs 8,026 crore.

*Segment wise revenue performance*QoQ

BFSI - (5%)

Consumer business - (10%)

Healthcare - (4%)

Technology - 1%

Engineering - (1%)

Management commentary

Jatin Dalal, Chief Financial Officer, Wipro said, “We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation. We also continued to sustain robust cash generation with operating cash flows at 174.9 per cent of net income.”

IT Services revenue drops

IT services segment revenue for the quarter came in at $1,921.6 million, a decrease of 5.7 per cent YoY. Non-GAAP constant currency IT Services Segment Revenue decreased by 4.4 per cent YoY

Margins expand

IT Services operating margin for the quarter was at 19 per cent, logging an expansion of 0.6 per cent YoY.

Earnings per share (EPS) rises

Earnings Per Share for the quarter was at Rs 4.20 ($0.061 ), an increase of 5.7 per cent YoY.

Hiring up

The company said there was a gross hire of over 7,000 employees for the quarter.

Customer addition

On a YoY basis, the company added 5 customers in the revenue bucket of more than $20 million.

Impact: Result is overall in line with the expectation and improved from YoY despite Covid-19 outbreak. Hold for long term investor and stay with the company.

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