IT major Wipro is likely to report a 12.2% decline in its December quarter net profit to Rs 2,680.90 crore amid a drop in quarterly revenue and one-month wage hike impact, according to estimates by Nuvama. Sequentially, the profit after tax (PAT) is seen to grow 1.3%.

India’s fourth largest IT company by way of market capitalisation had reported a PAT of Rs 3,052.90 crore in Q3FY23 and Rs 2,646.30 crore in Q2FY24.

The revenue from operations is expected to decline both on a year-on-year and quarter-on-quarter basis, the note said. The revenue for the October-December quarter is likely to be Rs 22,010.70 crore, down 5.2% from Rs 23,229 crore in Q3FY23. It will be lower by 2.2% from Rs 22,515.90 crore in Q2FY24.

In dollar terms, the revenue is seen at $2,642 million, down by 7% from $2,841 in Q3FY23 and by 3.2% from $2,731 million in Q2FY24.

In constant currency (CC) terms Nuvama expects the IT services revenue to decline 2.9%.

Earnings before interest and taxes (EBIT), which is a measure of the company’s profitability, will likely go down by 13.6% YoY and 2.5% on QoQ basis at Rs 3,251.40 crore for the said quarter, Nuvama said in the note. In Q3FY23, the company had reported EBIT at Rs 3,763.60 crore and the same stood at Rs 33,345 crore in Q2FY24.

Wipro’s EBIT margin is expected at 14.8% for the December 2023 quarter, down by 143 bps from 16.2% reported by the company in Q3FY23. It is expected to be marginally lower by 4 bps from 14.8% reported in the previous quarter.

On Friday, Wipro shares jumped 2.3% to hit the day’s high of Rs 463. The stock scaled its 52-week high of Rs 483.50 on the NSE on Monday.

UBS downgraded Wipro to ‘sell’ from ‘neutral’ earlier but has raised the target to Rs 435 from Rs 430 earlier.