Wipro Reports 7.8% Decline in Q4 Net Profit; CEO Highlights Economic Challenges

Wipro, an IT service company, reported a 7.8% YoY decline in its consolidated net profit for the March quarter to about Rs 2,834.6 crore and warned that the macroeconomic environment remains uncertain. The Bengaluru-based company has given IT Services revenue growth guidance in the -1.5% to +0.5% band for the June quarter on a constant currency basis. The numbers were in line with analysts' estimates, but the company's guidance was below industry expectations.Wipro recorded one of the highest declines of 24,516 in headcount YoY to 2,34,054 during the just-ended fiscal year, attributing it to a weak demand environment and push for operational efficiency. Srinivas Pallia, the new CEO, stated that the immediate priority for the company is to accelerate growth and outlined focus areas such as accelerating large deal momentum and strengthening relationships with large clients and partners.For Q4FY24, Wipro's revenue from operations slipped 4.2% YoY to Rs 22,208.3 crore. The company expects revenue from its IT Services business segment to be in the range of USD 2,617 million to USD 2,670 million for Q1FY25. For FY24, revenue from operations was Rs 89,760.3 crore, almost 0.8% lower than the previous fiscal. The net profit fell to Rs 11,045.2 crore, down 2.6% over the previous fiscal.The Board approved the re-appointment of Rishad A. Premji as Executive Chairman for a period of five years with effect from July 31, 2024, to July 30, 2029. It also green signalled re-appointment of Azim H. Premji as Non-Executive, Non-Independent Director for a period of five years with effect from July 31, 2024, to July 30, 2029.Pallia acknowledged that FY24 proved to be a challenging year for the industry and added that the macroeconomic environment remains uncertain. He cautioned that there may be more challenges in the short term but expressed optimism about the opportunities ahead.Wipro saw a 4% decline in revenue in America's Banking, Financial Services and Insurance, Manufacturing, Hi-tech, Energy and Utilities industry sectors during FY24. Its revenue in Europe fell by 9.2%. However, Pallia mentioned seeing some green shoots and pipelines and deals in Europe.Wipro's total order bookings were at USD 3.6 billion during the reported quarter. The large deal bookings increased by 9.5% YoY to USD 1.2 billion. For FY24, total bookings declined by 5.5% YoY to USD 14.9 billion.Aparna Iyer, Chief Financial Officer, said that despite a challenging macro-environment their IT services margin expanded by 50 basis points for FY24. Wipro generated its highest operating cash flow in recent years at 183% of net income in Q4 and 159% on a full-year basis.Wipro's headcount fell to 2,34,054 as of March 2024, which is a decrease of 9.1% compared to the previous year. Saurabh Govil, Chief Human Resources Officer at Wipro said that this reduction was primarily driven by market demand environment and operational efficiency.Pallia stated that Wipro will hire freshers this year but will first honour offers made during campus hiring at the time of the pandemic

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