Wipro Q1 Results Review - Muted Quarter, But The Uptick In Consulting A Positive: Motilal Oswal

Motilal Oswal Report

Wipro Ltd. reported Q1 FY25 IT Services revenue of $2.6 billion (-1.0% QoQ) in constant currency, 50 basis points below our estimate. It posted an order intake of $3.2 billion (-9.0% QoQ), with a large deal total contract value of $1.1 billion (-3.0% QoQ). The Ebit margin of IT Services was 16.5% versus our estimate of 17.3%. Ebitda rose 1.5% QoQ/6.0% YoY to Rs 44 billion (in line).

Profit after tax stood at Rs 30 billion (+6.0% QoQ/+4.6% YoY), slightly above our estimate of Rs 29 billion. Wipro’s guidance was muted, with Q2 FY25 USD CC revenue growth guidance in the range of -1.0% to +1.0% QoQ. 

While the commentary on the overall demand environment was noncommittal, the uptick in the Capco business across the U.S. and Europe reaffirms the recovery trends witnessed in the recent results.

We see Wipro’s Q2 FY25 revenue growth guidance as subdued. While we expect the company to rebound to growth in FY26, in line with the industry, it should continue to lag its peers.

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