Wipro's IT services revenue growth is fuelled by a strong deal pipeline, says CFO

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• Jul 20, 2022 | Poonam Nath

 The IT Services operating margin for the quarter was 15%, compared to 18.8% a year ago.

Digital Desk: On the strength of a robust project pipeline, India's Wipro Ltd. forecasted higher IT service revenue growth on Wednesday. The company also stated that margins had likely bottomed out after higher expenses reduced the profit for the June quarter.

Wipro and its larger competitors, Tata Consultancy Services, Infosys, and HCL Technologies, are among the IT firms dealing with cost issues as they try to hold onto employees in the face of a talent churn that is occurring across the industry.

"The margins can only get better from here, and there is no more external hiring wage pressure." For a few quarters in the future, everything will be fine, "Jatin Dalal, the chief financial officer of Wipro, said.

The Bengaluru-based business projected that IT services revenue would increase by 3 percent to 5 percent in the September quarter, compared to a growth of 0.5 percent in the June quarter.

IT Services' operating margin for the quarter was 15%, down from 18.8% from the same period last year.

Total quarterly costs rose 22.9% to 186.48 billion rupees, while voluntary attrition in the IT services sector fell slightly to 23.3%.

The depreciation of the euro and pound relative to the dollar had a cross-currency impact on Europe, a key market, according to Wipro, which reported a moderately positive impact from rupee depreciation in the June quarter.

TCS and HCL Technologies missed their first-quarter profit estimates, which had a negative impact on the June quarter earnings of Indian IT services companies.

In comparison to the same quarter a year prior, Wipro's consolidated net profit decreased 20.9 percent to 25.64 billion rupees ($320.54 million). According to Refinitiv data, analysts had projected a profit of 29.5 billion rupees on average.

Operating income increased by almost 18% to 215.29 billion rupees.

1Dollar is now equivalent to 79.9900 Indian rupees.