Wipro Q3 preview: Bengaluru-based information technology (IT) major Wipro will announce its December quarter (Q3FY25) results on January 17, 2025.
Wipro's Q3 performance is expected to reflect seasonal furlough impacts, client-specific challenges, and currency headwinds. Analysts predict a decline in dollar-denominated revenue, with CC revenue dropping up to 0.9 per cent Q-o-Q and USD revenue declining around 1.5 per cent-2.1 per cent. Margins may dip slightly due to wage hikes but benefit from higher offshoring.
Revenue is estimated at Rs 22,040-Rs 22,170 crore, while PAT growth is forecasted between 10 per cent-15.8 per cent Y-o-Y. Key focus areas include consulting business updates and deal execution.
Apart from that, Wipro shares were trading under pressure ahead of results. At 11:42 AM, Wipro shares were trading 1.83 per cent lower at Rs 287.20 per share. In comparison, BSE Sensex was trading 0.34 per cent higher at 76,984.87 levels.
Given this, here’s what top brokerages expect from Wipro in December quarter results:
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Elara Capital
Wipro’s dollar-denominated revenue growth is expected to decline sequentially (Q-o-Q), impacted by furloughs and unfavourable currency movements, analysts at Elara Capital said in a note.
The furlough effect in Q3 is anticipated to be normal this year. The company’s Q3 revenue growth guidance was in the range of -2 per cent to 0 per cent in constant currency (CC), with analysts projecting a median decline of 0.9 per cent in CC and a 1.5 per cent drop in USD revenue due to cross-currency headwinds.
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Client-specific challenges in BFS and Healthcare verticals have weighed on growth and may persist in Q3, further impacted by furloughs. Margins are expected to dip by just 10 basis points (bps) Q-o-Q, despite wage hikes effective from September 1, aided by higher offshoring.
Analysts estimate Wipro to report $2,619 million in USD revenue, down 1.4 per cent Y-o-Y, with revenue at Rs 22,079.3 crore, down 0.7 per cent Y-o-Y. Ebit margin is projected at 16.6 per cent, and adjusted PAT is expected to rise 15.8 per cent Y-o-Y to Rs 3,119.6 crore.
Prabhudas Liladher
Analysts anticipate Wipro to post a 1 per cent Q-o-Q decline in CC revenue and a 2.1 per cent Q-o-Q decline in USD revenue, with a currency headwind of 110 bps.
Q3 performance is likely to be impacted by furloughs in Capco, weakness in Manufacturing, and client-specific issues in the ENU segment.
Ebit margin is expected to drop about 50 bps Q-o-Q due to the impact of two months of wage hikes and weak topline growth.
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Analysts forecast Wipro’s USD revenue at $2,603.7 million, down 2 per cent Y-o-Y, and revenue at Rs 22,040 crore, down 0.7 per cent Y-o-Y. Ebit is projected at Rs 3,550 crore, up 8.1 per cent Y-o-Y, with Ebit margin at 16.1 per cent. Adjusted PAT is expected to increase 12.7 per cent Y-o-Y to Rs 3,040 crore.
Nuvama
Nuvama expects IT services revenue to decline 0.6 per cent Q-o-Q in CC and 1.3 per cent Q-o-Q in USD. Margins are projected to decrease about 50 bps Q-o-Q due to the two-month wage hike impact.
Wipro is expected to provide a Q4FY25 CC revenue growth guidance of -1 per cent to 1 per cent Q-o-Q. Updates on consultancy business and deal execution, analysts believe, will be closely monitored.
Thus, analysts estimate revenue to remain flat Y-o-Y at Rs 22,169.6 crore, with Ebitda at Rs 4,431 crore, up 5 per cent Y-o-Y, and core PAT at Rs 2,967.8 crore, up 10 per cent Y-o-Y.