Wipro Q3 Performance and Positive Outlook
Wipro , the fourth-largest software-services exporter in India, has pleasantly surprised analysts with robust Q3 revenue, signaling positive trends in client demand for consulting services. This positive development aligns with similar sentiments expressed by industry leaders Tata Consultancy Services (TCS.NS) and Infosys (INFY.NS), alleviating concerns about a deteriorating market.
During a post-earnings media conference, CEO Thierry Delaporte indicated a “stabilization” in revenue deceleration and emphasized “early signs of a return to growth” in the consulting sector. Notably, double-digit growth at Capco, a firm acquired in 2021, has contributed to this optimistic outlook.
Wipro’s Q3 revenue reached an impressive 222.05 billion rupees ($2.68 billion), surpassing the average analyst projection of 221.04 billion rupees. The company attributes this success to improved deal momentum, marking a positive shift in securing business agreements.
Analyst Positive Assessment and Future Projections
Analyst Devang Bhatt from IDBI Capital Markets offered an optimistic assessment, noting that the company’s commentary exhibited a more positive tone compared to previous quarters. Bhatt suggests that as macroeconomic conditions improve, sectors involving discretionary spending, such as consulting, are likely to witness positive outcomes.
Looking ahead, Wipro anticipates its March-quarter IT services revenue to fall within the range of $2.62 billion and $2.67 billion in constant currency terms. This projection follows a 1.7% sequential decline to $2.66 billion in October-December, marking the fourth consecutive quarter of diminishing revenue.
Wipro’s third-quarter profit of 26.94 billion rupees slightly exceeded the anticipated 26.49 billion rupees. The challenging macroeconomic climate, especially in the United States and conflict-affected Europe, has compelled India’s IT services companies to grapple with reduced discretionary tech spending by clients.
Despite these challenges, industry leaders Tata Consultancy Services and Infosys reported quarterly results that surpassed expectations and provided sanguine forecasts. This optimistic outlook has assuaged concerns about the sector’s sluggish demand, reflected in a respective 4% and 8% surge in their share prices.
In reflecting on the market movement, analyst Devang Bhatt from IDBI commented, “The street has already perceived that the worst is behind us, and that’s why IT stocks advanced” on Friday. This positive sentiment indicates a growing confidence in the sector’s recovery and future prospects.
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