Wipro Q4 results on Wednesday, April 16; earnings preview

Wipro, which is scheduled to report March quarter results on Wednesday, April 16, is seen clocking 14-22 per cent year-on-year (YoY) jump in net profit on 2.2.5 per cent growth in sales. A ramp-up of deals could help Wipro achieve flattish IT services revenue in CC terms, analysts said adding that rupee depreciation and operating efficiency could help offset deal transition costs.  

HDFC Institutional Equities expects Wipro to report 18.3 per cent YoY rise at Rs 3,353 crore for the quarter ended March 30 on 2.1 per cent YoY rise in sales at Rs 22,672 crore. InCred Equities sees 22 per cent YoY rise in net profit at Rs 3,463 crore on 2.5 per cent YoY rise in sales at Rs 2,276.70 crore. This brokerage sees Wipro's Ebit margin at 17.5 per cent.

Kotak said it sees Wipro’s Q1 guidance in the range of minus 0.5 per cent to 1.5 per cent QoQ. It believes that a deterioration in demand would lead to revenue decline of 0.5 per cent in CC terms on QoQ basis, toward the  lower end of  minus 1 per cent to 1 per cent range of guidance. 

"We forecast stable EBIT margin with benefit from rupee  depreciation, offset by lack of operating leverage/revenue decline. We expect large deal TCV to be in  $1.6-1.8 billion range, taking into consideration Phoenix mega-deal," it said.

Nuvama sees Wipro's profit growing 14.1 per cent YoY to Rs 3,233 crore. It sees revenue rising 1.3 per cent to Rs 22,491. Ebit margin is seen at 17.6 per cent.

"We expect IT Services revenue growth of minus 0.4 per cent QoQ in CC and minus 1 per cent QoQ in dollar terms Margins are likely to largely remain flat QoQ. We expect Wipro to give minus 1 per cent to 1 per cent CC QoQ revenue growth guidance for Q1FY26. We will look for update on consultancy business and deal execution," Nuvama said.

Investors would keenly follow the state of discretionary  spending by clients in light of recent macro deterioration; spending in financial services accounts noting Wipro's high discretionary exposure to the vertical; rationale for realignment of  services line to a new structure; and positioning in cost take-out and vendor consolidation deals where Wipro can be vulnerable, analysts said.