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Thursday 14 October 2021

Wipro powers ahead

LogoOnce again not only mirroring, but also outstripping the rapid growth performance of its Tier 1 offshore rival Infosys (see here), Wipro has delivered another eye-catching set of results. Revenue for Q222 (the three months ended 30th September) jumped by 28.8% yoy and 8.1% qoq at constant currency to $2.58bn.  Although this increase in turnover was in part supported by the impact of the recent Capco acquisition, it is likely underlying organic growth in the second quarter exceeded 20% yoy. Adjusted operating margin at 17.8% held level with the same period in the prior year, but it slipped down sequentially by 104 bps.

The standout divisional performances came, unsurprisingly, from the parts of the business to benefit proportionally more from the Capco purchase; Financial Services and Europe. These units saw their Q2 sales leap yoy by 44% and 48% respectively. Given the significant scale of Capco’s UK operations, it is probable that Wipro’s revenues in this country grew at an even faster pace. Indeed, the offshore major’s fortunes here have improved notably during H122. The £32m win at National Grid last month (see here) marked the latest in an increasingly steady flow of big deals successes for Wipro and the firm will soon open the doors on its new 20,000 sq.ft. Innovation Centre in London.

The figures did contain one piece of less good news in the shape of a sharp sequential rise from 15.5% to 20.5% in voluntary staff attrition. Wipro is, however, far from alone among the India-centric suppliers to be experiencing an acceleration in staff churn. All of the offshore players to have posted results covering the third calendar quarter have reported marked upticks in personnel turnover.

Looking ahead, Wipro expects Q3 revenue will be in the range of $2.63bn to $2.68bn. This translates to a sequential growth of 2.0% to 4.0% and would at its midpoint deliver a yoy top line improvement of more than 28%. CEO Thierry Delaporte’s first full financial year at the helm appears to be shaping up very nicely.

Posted by: Duncan Aitchison at 07:00

Tags: results   offshore   systemsintegration  

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