Wipro’s performance continues to lag behind its industry peers, as the company reported a decline in revenue for the third consecutive quarter. In the September quarter, Wipro’s revenue declined by 4.8% compared to the same period last year and by 2% sequentially. These figures fell at the lower end of the guidance provided for the quarter. The disappointing results led to a nearly 3% drop in Wipro’s share price during early trading on the New York Stock Exchange.
Looking ahead, Wipro expects its revenue to grow between -3.5% and -1.5% in constant currency for the December quarter. This cautious forecast reflects the uncertain business environment that Wipro and other companies are currently facing. CEO Thierry Delaporte acknowledges the challenges and emphasizes the importance of making the right investments and decisions to position the company for future growth.
According to Delaporte, the current business environment is marked by high inflation and interest rates, leading clients to scrutinize their investments more rigorously. Efficiency and optimization of existing investments, as well as faster returns on new investments, have become crucial considerations for clients. Despite the revenue decline, Wipro managed to sign contracts with a total value of $3.8 billion during the quarter, representing a 6% increase compared to the previous year. Additionally, the company closed $1.3 billion in large deal bookings, the highest figure in nine quarters. Two of these large deals exceeded $500 million in size.
Lower discretionary spending has become a reality for many organizations, resulting in slower conversion of order books and the replacement of transformation programs at a slower pace. These factors have had an impact on Wipro’s topline growth. However, the company has been able to maintain steady operating margins, with a sequential operating margin of 16.1% and a year-on-year increase of 100 basis points. Wipro’s active customer base decreased from 1,444 to 1,393 sequentially, while headcount dropped by 5,051 to 240,000 employees. Notably, attrition decreased to 15.5% from 22.9% compared to the same period last year.
