Wipro reports muted Q4 net profit, announces share buyback

IT company Wipro on Wednesday reported a muted net profit for Q4 of FY23 and offered a lower revenue growth projection for the April to June quarter of the current fiscal.

India's fourth-largest IT services exporter reported a net profit of Rs 3,074.5 crore for the fourth quarter of FY23, a negligible rise compared to the same period a year ago. It had reported Rs 3,092.5 crore in Q4 of FY22.

Wipro's revenue for the fourth quarter of FY23 grew by 11% on a year-on-year (YoY) basis to touch Rs 23,190 crore.

Meanwhile, the business environment has dramatically changed for the Indian IT industry, with its key markets, North America and Western Europe, witnessing an economic slowdown leading to a phase of lower demand, impacting the fortunes of the Indian IT industry.

Given this backdrop, Wipro, for the first quarter of FY24, has projected its revenues would shrink by 1-3%.

Further, its IT services segment revenue increased to $2,823 million, an increase of 0.7% quarterly.

Wipro CEO Thierry Delaporte remained confident about the future business opportunity going by deal flow activity and remarked that there was a dip in the area of discretionary spending by customers.

“We are seeing more large deals in our pipeline. There are ramp downs by the clients but no cancellations,” Delaporte said.

According to Wipro, it closed FY23 with the strongest-ever bookings recorded in a year and had two consecutive quarters of total bookings of over $1.4 billion. It noted that large deal booking grew by 155% annually for the fourth quarter.

For the financial year 2023, Wipro reported a revenue of Rs 90,488 crore, a yearly growth of 14.4%. The net profit for the year stood at Rs 11,350 crore.

However, the worrying element in Wipro's financial performance has been its operating profit margins (OPM), which ended at 15.7% for FY23, compared to 17.7% in FY22—a decline of 2.2%

On the headcount front, Wipro's total number of employees at the end of Q4 stood at 256,921—a decline of 1,823 compared to Q3 of FY23.

The company also announced a share buyback programme to the tune of Rs 12,000 crore, keeping the price at Rs 445. Wipro's share price closed at Rs 374.90 on Thursday on NSE.