Wipro expects April-June quarter revenue to drop

Bengaluru: Wipro’s has provided a weak revenue guidance of -3% to -1% for the June quarter, as uncertainties outweigh newer business opportunities. It also sets the company up for a lacklustre start to the fiscal year. Wipro’s revenue in the March quarter was $2.8 billion, a drop of 0.6% in constant currency compared to the preceding quarter. The numbers were similar to that of some of its peers, reflecting the challenging macroeconomic environment. Operating margin was flat at 16.3%. The company expects operating margin to be at similar levels in FY24.For the 2022-23 financial year, revenue was $11.2 billion, a 11.5% growth in constant currency, which was towards the lower end of its guidance for the quarter. Wipro CEO Thierry Delaporte said the sequential decline in revenue was mainly due to the uncertainty in the market, and the resulting slowdown in discretionary spending. "We are seeing some softness in the banking and financial services space, and in consulting. Looking ahead, we believe the macro environment will remain challenging,” he said. The banking and financial services business fell by 2.4% in constant currency in the March quarter. Wipro’s total deal bookings was $4.1 billion, up 29% year-on-year in constant currency. “Against a weakening macro environment, our results underscore the efficiency – and effectiveness – of our transformation and growth strategy, and how far we’ve come in just under three years. We are not only winning at a higher rate in the market, but the nature of the deals we are winning is changing. Today we have nineteen $100 million accounts, compared to 11 in fiscal year 2021. We are winning large transformation deals, benefitting from the consolidation in the marketplace, and expanding our relationships with existing clients,” Delaporte said. Wipro's Board has approved a share buyback of Rs 12,000 crore at a price of Rs 445 a share. About 269.9 million shares would be bought back. That's 4.9% of outstanding equity. The buyback price is at nearly 19% premium to the last traded price. The IT firm had done a Rs 9,500 crore share buyback in January 2021. Delaporte said Wipro hired over 22,000 next-gen associates or freshers in the 2022-23 financial year, the highest ever in the company's history. But this was short of its initial hiring target of 30,000.For the full year, including other hires and attrition, the company added nearly 14,000 people, taking the headcount to 2.5 lakh employees. "Next-gen associates – formerly called ‘freshers’ – continue to be a critical part of our talent strategy. The renaming of this group of colleagues is a reflection of their value to our business, and of our commitment to their success," Delaporte said. The company did not call out a full-year fresher hiring projection for the 2024 fiscal. Employee attrition dropped to 19.2% in the 2023 fiscal, compared to 23.8% in the previous year.