Wipro is set to announce its Q3 FY24 financial results today amidst macro-economic headwinds. The IT major has been lagging its peers for the last couple of quarters. Here are five major things to watch out for.
Revenue growth
Wipro is likely to record a de-growth in the range of -3 to -0.6 per cent, on a quarter-on-quarter (q-o-q) basis, per a poll of brokerages. The growth is likely to be impacted by furloughs, slowdown in discretionary spending, and macro impact, leading to continued softness in verticals
Margin
Brokerages expect EBIT margins to decline in the 33-100 basis point range. Margin headwinds for the quarter are salary hikes effective December 1, 2023, lack of operating leverage, and muted revenue.
Guidance
The company had narrowed its sequential guidance to -3.5 to -1.5 per cent in Q2 from -2 to 1 per cent in Q1.
“We expect Wipro to guide for quarterly CC revenue growth of -1 to 1 per cent YoY for Q4 FY24,” BNP Paribas has noted.
Its revision or retention this quarter is to be watched out for.
Deal pipeline
In Q2, total bookings stood at $3.8 billion, with large deal bookings of $1.3 billion. “In terms of TCV, Wipro has been delivering over $3billion for the last four consecutive quarters and we expect TCV to not fall below $3 billion. The larger issue for Wipro is conversion of TCV to revenue, which seems to be more acute than its peers,” Nirmal Bang said in a report.
Management view
Management commentary on recent senior-level exits, conversion of TCV to revenue, margin levers, impact of lower discretionary spending on the consulting business, performance of impacted verticals, Q4-FY24 guidance and FY25 outlook is to be watched out for.
