IT major Wipro’s profit for March 2021 quarter jumps 27.7% to Rs 2,972 crore

New Delhi: IT major Wipro on Thursday posted a 27.7 percent jump in consolidated net profit at Rs 2,972 crore for the March 2021 quarter, and exuded confidence of sustaining strong growth momentum in the coming quarters.

Wipro had registered a net profit (attributable to equity holders) of Rs 2,326.1 crore in the year-ago period, as per Indian Accounting Standards (Ind-AS).

Its revenue from operations rose by 3.4 percent to Rs 16,245.4 crore in the reported quarter from Rs 15,711 crore in the same period last fiscal.

Wipro— which gets a bulk of its topline from IT services — said it expects revenues from that unit to be in the range of $2,195 to $2,238 million in the June 2021 quarter. This translates into a sequential growth of 2-4 percent.

Wipro’s IT services segment revenue was at  $2,152.4 million in the March quarter, a sequential growth of 3.9 percent.

“Our Q4 performance was built on top of our momentum that we saw in the last quarter. We have reported a solid growth in revenue, healthy order booking and great execution, resulting in robust margins. This truly sets the stage for the next quarter and the next financial year,” Wipro CEO and Managing Director Thierry Delaporte told reporters.

He added that revenue of 3.9 percent in reported terms and 3 percent in constant currency terms is at the top quartile of its guidance range.

“This is the best fourth-quarter results we have reported in the last 10 years. This was truly led by a very good volume growth. Despite the steep decline in the first quarter of the fiscal year because of the pandemic, we now bounced back to finish the year with only a marginal decline of 1.4 percent y-o-y,” Delaporte said.

He added that the robust demand environment is robust and the overall pipeline is healthy.

IT services segment revenue for FY21 was at $8,136.5 million, down 1.4 percent y-o-y.

“We have guided for revenue growth of 2-4 percent outside of Capco and Ampion. This would translate into a year-on-year double-digit growth of 11-13 percent. This guidance reflects the environment we are operating in, our increased focus on the market and our improved execution rigour,” he said.

Delaporte added that the total contract value (TCV) in the second half of FY21 grew by 33 percent y-o-y —the highest TCV Wipro has recorded.

Delaporte further said contributors to this strong performance include the increased activity in the market that the company leveraged very well, and the large deals it was able to close.

The company closed 12 large deals, resulting in a TCV of $1.4 billion.

For the year which ended 31 March, 2021, the company’s consolidated net profit grew by 11 percent to Rs 10,796.4 crore, while revenue from operations rose by 1.5 percent to Rs 61,943 crore over the previous fiscal.

Wipro CFO Jatin Dalal said the company delivered a 340 basis points expansion y-o-y in operating margins for the quarter after absorbing the impact of its wage hike. “We successfully completed the share buyback program returning $1.3 billion to our shareholders,” he added.

Delaporte said the company had announced salary increments and promotions, covering about 80 percent of the employees effective 1 January, 2021, and it will increase the wages of the remaining senior executives in June.

The company’s headcount was at 1,97,712 people at the end of March 2021, while voluntary attrition was at 12.1 percent.

“We recognise that we are competing for quality talent and we are fully prepared to lead the war for good talent. We are investing in building talent at scale, we have implemented several interventions to retain diverse talent. In parallel, measures are in place to ensure the supply chain does not slow down our pace of growth,” he said.

This includes, but is not limited to promotion cycles across bands, skill-based differentiated bonus, and finally, the rollout of salary increases for senior Wipro employees in June 2021, he added.

The interim dividend of Re 1 in January this year will be considered as the final dividend for the financial year 2020-21.

The results were announced after the closure of trading hours on Thursday. Shares of Wipro closed at Rs 431, up 2.95 percent from the previous close on the BSE.

Wipro’s revenue from the IT products segment for the quarter was at about Rs 210 crore, while that for the year was around Rs 770 crore.

The revenue from India business from State Run Enterprises (ISRE) for the quarter was at about Rs 230 crore, while that for the year was around Rs 890 crore.