India’s Information Technology Giant Wipro Exceeds Third-Quarter Projections
On a promising note, Wipro Ltd., the fourth largest IT service provider in India, surpassed expectations for revenue and profit in the third quarter. The company seems set for brighter prospects in 2025, overcoming macroeconomic hurdles it faced previously. CEO Srinivas Pallia shared with the press that clients are gradually regaining confidence, indicated by a cautious uptick in discretionary spending.
Reflecting this optimism, Wipro’s U.S.-listed shares saw a 0.9% increase, trading at $3.33 during pre-market sessions. The broader IT sector in India, valued at $254 billion, has been stagnant for some quarters, grappling with global economic uncertainties and inflationary concerns that have made clients wary of spending freely.
Market Dynamics and Expectations on the Horizon
Wipro’s larger competitors, such as Tata Consultancy Services, anticipate a similar recovery in demand. The impending inauguration of Donald Trump as the U.S. President is perceived positively by key Indian IT firms, who rely heavily on the U.S. market for revenue. Wipro’s Chief Financial Officer Aparna Iyer expressed a favorable outlook, expecting the new political landscape to be business-conducive, enhancing growth momentum.
Financial Performance Overview
Supported by robust performance in the banking, financial services, and insurance sectors, particularly in the Americas, Wipro’s consolidated revenue increased by 0.5%, reaching 223.19 billion rupees, equivalent to $2.58 billion for the quarter ending December. This marks a significant leap in net profit by 24.5%, amounting to 33.54 billion rupees. These figures surpassed analysts’ forecasts, which pegged revenue at 222.28 billion rupees and profit at 30.71 billion rupees.
| Metrics | Actual | Analysts’ Forecast |
|---|---|---|
| Revenue | 223.19 billion rupees | 222.28 billion rupees |
| Net Profit | 33.54 billion rupees | 30.71 billion rupees |
Outlook for Upcoming Quarters
Despite the positive results, analyst Ambrish Shah from Systematix characterized the outcome as a “mixed bag,” highlighting concerns over declining workforce numbers and fewer large-scale deals. Like its peers HCLTech and Infosys, Wipro’s guidance for the January-March quarter anticipates a modest revenue growth range of -1% to 1% quarter-on-quarter.
The firm’s order intake for the December quarter stood at $3.5 billion, showing a drop from the previous year’s $3.79 billion. However, its operational efficiency has seen significant improvement; the operating margin has widened by 150 basis points compared to last year, reaching 17.5%—a peak not seen in three years.
Regional and Sectoral Insights
While Wipro enjoyed positive traction in certain sectors, revenue from the European, Asia Pacific, Middle East, and African markets experienced a downturn in the third quarter. Additionally, the energy, technology, and communication sectors showed declining income.
As the industry navigates through global challenges, Wipro remains cautiously optimistic about harnessing future opportunities with its strategic efforts in key growth segments.
