By Haripriya Suresh and Sai Ishwarbharath B
BENGALURU/MUMBAI (Reuters) -India’s No. 4 IT services provider Wipro beat third-quarter estimates for revenue and profit on Friday, and its CEO hoped for a better year after facing macroeconomic challenges in 2024.
“Our clients are cautiously optimistic and we see discretionary spending slowly coming back,” CEO Srinivas Pallia told reporters.
Its U.S.-listed shares rose 0.9% at $3.33 in premarket trading.
India’s $254 billion IT services sector has faced sluggish growth for several quarters due to global macroeconomic uncertainties and inflationary pressures, which have pushed clients to rein in spending.
Donald Trump’s inauguration as the U.S. president on Jan. 20 is expected to benefit top Indian IT firms, which depend on the world’s largest economy for a large chunk of their revenues.
Wipro’s larger rivals Tata Consultancy Services, Infosys and HCLTech have also said they expect demand to improve.
“As far as the new regime is concerned, we believe it will be business-friendly, and (are) hoping the momentum picks up,” Wipro Chief Financial Officer Aparna Iyer said.
Positive momentum in the banking, financial services, and insurance segment and the Americas geography helped Wipro’s consolidated revenue rise 0.5% to 223.19 billion rupees ($2.58 billion) for the three months to December-end, while its net profit jumped 24.5% to 33.54 billion rupees.
Analysts predicted a revenue of 222.28 billion rupees and a profit of 30.71 billion rupees, according to data compiled by LSEG.
The results were a “mixed bag”, Ambrish Shah, an analyst at Systematix, said, citing a decline in headcount and large deals.
“Similar to HCLTech and Infosys, guidance reflects weak Q4 forecast,” he said.
For January-March, Wipro forecasts its revenue growth would be -1% to 1% quarter-on-quarter.
The company’s order wins stood at $3.5 billion in the December quarter, as opposed to $3.79 billion a year earlier.
Its operating margin expanded 150 basis points from a year ago to 17.5%, the highest in three years.
Revenue from the Europe and Asia Pacific, Middle East and Africa markets declined during the third quarter, as did income from energy, and the technology and communications segments.
($1 = 86.5770 Indian rupees)
(Reporting by Haripriya Suresh in Mumbai and Sai Ishwarbharath B in Bengaluru; Editing by Mrigank Dhaniwala)
