India's Wipro scrapes past lowered revenue expectations, prioritises growth pick-up

FILE PHOTO: Figurines with computers and smartphones are seen in front of Wipro logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

(Corrects syntax in the headline)

BENGALURU (Reuters) - India's Wipro edged past low revenue expectations in the fourth quarter on Friday, helped by a pick up in its consulting business, and its new CEO said kickstarting growth in the country's No.4 software-services exporter was a top priority.

The company's consolidated revenue fell 4.2% to 222.08 billion rupees ($2.66 billion) in the quarter, but scraped past analysts' estimate of 221.51 billion rupees, as per LSEG data.

"The numbers are largely in line with expectations as it was already low," said Centrum Broking analyst Piyush Pandey. "I think the new CEO may need two to three quarters to steady the ship."

Less than two weeks back, Wipro appointed company veteran Srinivas Pallia as its chief executive following the abrupt departure of Thierry Delaporte, whose term was filled with a string of top-level exits and a dearth of big deal wins.

That, in part, led to Wipro's full-year IT services revenue sliding 4.4%, in constant currency terms, marking the first fall since fiscal 2021.

Wipro, the only one among the top IT companies to give a quarterly forecast, said it expects IT services revenue of $2.62 billion to $2.67 billion in the current quarter, indicating a sequential decline of 1.5% to a growth of 0.5%.

India's $254 billion IT services industry has been grappling with clients tightening their purse strings due to stubbornly high inflation, geopolitical risks and economic uncertainty.

Earlier this week, Wipro's bigger rivals Infosys and Tata Consultancy Services posted lower-than-expected revenue for the fourth quarter.

"There is still a considerable amount of work ahead of us ... our immediate priority is to accelerate growth," Pallia said.

"Artificial intelligence-infused consulting will be the tip of the spear to map customer processes. This is what we want to do differently (compared to my predecessor)."

Revenue in Capco, Wipro's consulting unit, grew 6.6% sequentially, while order bookings jumped 43%. "Last quarter, we said we said we see green shoots in consulting, that continues," Pallia said.

Wipro's overall net profit fell 7.9% to 28.35 billion rupees, but beat analysts' estimate of 27.82 billion rupees.

Total order bookings fell to $3.6 billion from $3.8 billion in the previous quarter and $4.1 billion in the year-ago period. ($1 = 83.4643 Indian rupees)

(This story has been refiled to fix the syntax in the headline)

(Reporting by Sai Ishwarbharath B; Editing by Savio D'Souza and Dhanya Skariachan)

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