Shares of Wipro Ltd were down on Friday for the fifth straight day, ahead of the IT major's March quarter results. The stock fell, as Wipro is seen reporting an 4-8 per cent year-on-year (YoY) decline in net profit for the Q4FY24 on a 4-5 per cent drop in sales. The weakness on the counter was also partly due to larger peer Infosys giving a muted FY25 growth guidance.
The stock, which has fallen 6 per cent in April so far, fell marginally to Rs 444.25, taking its recent fall to the fifth straight session. "We expect Wipro to guide for dip of 1 per cent to growth of 1 per cent QoQ in IT Services US$ sales in CC terms for 1QFY25E," said Equirus Capital.
This brokerage expects investors to pay heed to IT services dollar sales growth and margin outlook, especially for the June quarter and beyond. Investors, it said, would look for any commentary on client specific issues, resulting from ongoing macro concerns, update on deal pipeline, client decision making and order book.
Also, they would wish o know if there is further sizable M&A plans post big M&A of Capco & Rizing, in addition to Wipro's plans to drive synergy benefits from Capco/Rizing.
Wipro may clock 8.4 per cent YoY drop in profit at Rs 2,816 crore in the March quarter compared with Rs 3,075 crore in the same quarter last year, Sharekhan said. This brokerage expects revenue for Wipro dropping 5 per cent YoY to Rs 22,117 crore compared with Rs 23,289 crore in the year-ago quarter. Operating profit margin is seen falling 117 basis points to 18.6 per cent from 19.8 per cent YoY. Dollar revenue is seen at $2,647 million, down 6.7 per cent YoY (down 0.3 per cent QoQ, down 0.4 per cent in constant currency terms).
"Wipro is expected to report a sequential decline of 0.4 per cent in revenue in CC terms, in line within the Q4 guided range of minus 1.5 per cent to 0.5 per cent. due to cut in discretionary spends. EBIT margin is expected decline 60 bps q-o-q largely due to impact of wage hike," it said.
In terms of deal wins, Nirmal Bang said Wipro is delivering $3 billion-plus revenue for the last five consecutive quarters with the December quarter deal wins at a healthy $3.8 billion. It expect TCV to not fall below $3 billion.
"This also comes on the back of Wipro’s efforts to let go of some small and loss-making accounts and chase larger deals. The larger issue for Wipro is conversion of TCV to revenue, which seems to be more acute than its peers," it said while expecting Q4 profit to fall 4.3 per cent YoY to Rs 2,942 crore and Q4 sales 3.9 per cent to Rs 22,286 crore.