Wipro Q3 Results Review - Inline Growth, Better Operational Show: HDFC Securities
Wipro delivered an in-line revenue but its operating performance was better than expected.
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HDFC Securities Institutional Equities
Wipro Ltd. delivered an in-line revenue but its operating performance was better than expected. While Wipro’s growth lagged tier-I IT peers (10.4% YoY constant currency as compared to Tata Consultancy Services Ltd., Infosys Ltd. and HCL Technologies Ltd. posting more than 13% YoY CC), its operating performance was better than peers (sequentially) in Q3.
Deal bookings have been trending well, but that’s not adequately translated into revenue growth due to volatility in discretionary spending and longer time to ramp up deals.
In the same vein, strong bookings in Q3 are not resulting in any acceleration in Q4 as the company guided 11.5-12.0% CC for FY23, implying down 0.5% to 1% QoQ for Q4 FY23E, partially impacted by the consulting business.
Within verticals, Q3 outperformance was driven by energy and utility and healthcare verticals while banking, financial services and insurance exhibited divergent trends across geographies.
The biggest positive was management commentary of strong bookings expected in Q4 which, along with Q3 bookings of $4.3 billion (including large deal bookings of $1 billion), provide visibility for FY24E.
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