Indian IT bellwether Wipro reported marginal rise in consolidated net profit of ₹2,969 crore for the quarter ended December 31, 2021, as compared to ₹2,968 crore in the corresponding quarter of the previous fiscal. The software giant had reported a net profit of ₹2,930.7 crore in the September quarter of this fiscal.
The revenue from operations increased substantially during the quarter under review to ₹20,313.6 crore from ₹15,670 crore in the year-ago period. It stood at ₹19,667.4 crore in the previous quarter. Total income also jumped to ₹20,791.5 crore from, higher than ₹16,324.1 crore, but slightly lower than ₹20,173.6 crore seen during the three months ended September 30, 2021.
Total expenses rose to ₹17,020.5 crore during the December quarter, as compared to ₹12,483.8 crore in the same period a year ago. In the September quarter, Wipro had registered total expenses at ₹16,416.1 crore.
The IT services remained the most profitable vertical at Wipro, with its segment results growing to ₹3,528.9 crore during the December quarter from ₹3,327.1 crore a year ago. The Americas accounted for the lion’s share of segment earnings during the quarter, while Europe was the second-largest market.
Commenting on the estimation uncertainty due to the Covid-19 pandemic, Wipro said, “In assessing the recoverability of receivables including unbilled receivables, contract assets and contract costs, goodwill, intangible assets, and certain investments, the Company has considered internal and external information up to the date of approval of these consolidated financial results including credit reports and economic forecasts. The company has performed sensitivity analysis on the assumptions used herein.”
“Based on the current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets,” it further added in a stock exchange filing.
Wipro said that its assessment shows that the probability of the occurrence of forecasted transactions is not impacted by Covid-19. The company mentioned it believes there is no impact on effectiveness of its hedges.
“The impact of COVID-19 remains uncertain and may be different from what had been estimated as of the date of approval of these consolidated financial results and the Company will continue to closely monitor any material changes to future economic conditions,” Wipro further stated.
“Wipro has delivered a fifth consecutive quarter of strong performance, both on revenues, and margins. Order bookings have been strong too, and we have added seven new customers in the more than $100 million revenue league, in the last 12 months. Our strategy and improved execution continue to serve us well, and we are confident of building on this momentum. We are also excited to have completed the acquisitions of Edgile and LeanSwift Solutions in the quarter, both of which will add to our capabilities significantly,” said CEO and MD Thierry Delaporte.
On the outlook for the March quarter of FY22, Wipro said revenue from IT services business is expected to be in the range of $2,692 million to $2,745 million, translating into a sequential growth of 2-4%.
“We delivered robust operating margins after absorbing substantial investments on salary increases, owing to continued improvement in operating metrics. We also improved our working capital, by reducing our days sales outstanding. This has resulted in strong operating cash flow conversion, of 101.3% of net income. Additionally, we have declared an interim dividend of ₹1 per equity share,” said CFO Jatin Dalal.
While approving the financial results for the December quarter, the Wipro board also approved an interim dividend of ₹1 per equity share of par value ₹2 each for the company’s stakeholders. The record date for the interim dividend has been set at January 24, 2022. The payment of interim dividend will be made on or before February 5, 2022, the IT major said.