Wipro Limited (NYSE:WIT) stock rose 1.67% (As on Oct 14, 11:46:03 AM UTC-4, Source: Google Finance) after the company has reported a 19% increase in net profit to ₹2,931 crore as revenue grew 30% annually to ₹19,667 crore on the back of volume-led growth across markets and business lines. Wipro also beat Bloomberg’s consensus net profit estimates of ₹2,857 crore and revenue of ₹19,385.20 crore. Its revenue in dollar terms grew 8.1% sequentially in constant currency to $2.58 billion, surpassing the $10-billion milestone of annualized revenue run rate. The company grew at over 4.5% organic sequential growth for a second quarter in a row, resulting in a 28% year-on-year growth in the first half of this financial year.
WIT in the second quarter of FY22, the business hired a total of 11,475 workers, a new high. In the third quarter, 8,150 new employees were hired, exceeding the company’s goal of 6,000. As the demand for technology experts grew, its attrition rate climbed as well to 20.5 percent, up from 15.5 percent in Q1 FY22. The Q2 results reflected that business strategy is working well. The company’s deal pipeline is among the highest in recent quarters.
Wipro’s operating margin for the September quarter has narrowed to 17.8% from 18.8% in the preceding three months. The company has sustained the operating margin in the second quarter in a narrow band even after absorbing the full impact of the recent acquisitions and investing significantly in the business across sales, capabilities and talent, according to Wipro. IT services operating margin during the quarter stood at 17.8 %.
Moreover, Wipro has continued momentum in winning large deals with their customers. During the quarter, the company has won a multi-year engagement with ABB Information Systems to provide digital workplace services for their 100,000+ employees spreading over 100+ countries.
Wipro expects revenue growth in the December quarter to be in the range of 2-4%, driven by an improving demand environment, especially for digital transformation-related services. Macquarie raised its EPS estimates for Wipro by 2-3 percent for FY22-FY24. The brokerage has maintained its ‘outperform’ rating on the stock. The company is in position to hire 25,000 people in the next financial year. Going ahead, the company expects revenue from IT services business to be in the range of $2,631 million to $2,683 million for the third quarter, which translates to a sequential growth of 2% to 4%.