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View Promises →Wipro Limited — Q2 FY24
Wipro's Q2 FY24 results reflect a challenging demand environment with IT services revenue declining 2% QoQ in constant currency, at the lower end of guidance.
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Wipro's Q2 FY24 results reflect a challenging demand environment with IT services revenue declining 2% QoQ in constant currency, at the lower end of guidance. Despite strong large deal bookings of $1.3 billion (up 79% YoY), conversion to revenue is slower due to reduced discretionary spending. Operating margin held steady at 16.1%, expanding 100bps YoY, driven by operational efficiencies and utilization improvement to 84.5%. The company guided Q3 revenue sequentially down 1.5%-3.5% in constant currency, citing furloughs and continued macro uncertainty. Management expressed confidence in a rebound as deal backlog builds, but near-term visibility remains low. Key risk: slower-than-expected conversion of record deal wins into revenue amid persistent client caution.
विप्रो की दूसरी तिमाही के नतीजे बताते हैं कि बाजार में मांग कमजोर है। आईटी सेवाओं से होने वाली कमाई पिछली तिमाही के मुकाबले 2% घट गई, जो कंपनी के अनुमान के निचले स्तर पर है। हालांकि, कंपनी को 1.3 अरब डॉलर के बड़े ऑर्डर मिले (पिछले साल से 79% ज्यादा), लेकिन ग्राहकों के खर्च में कमी के कारण इन ऑर्डर को कमाई में बदलने में समय लग रहा है। कंपनी का मुनाफा मार्जिन 16.1% पर स्थिर रहा, जो पिछले साल से 1% ज्यादा है। यह कर्मचारियों के बेहतर उपयोग (84.5%) से संभव हुआ। अगली तिमाही में कमाई 1.5% से 3.5% तक घट सकती है, क्योंकि छुट्टियां और बाजार में अनिश्चितता है। कंपनी को उम्मीद है कि ऑर्डर बढ़ने से सुधार होगा, लेकिन फिलहाल स्थिति साफ नहीं है।
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Slower conversion of large deals to revenue
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Read Transcript →Quarter Snapshot
Large Deal TCV
$1.3B
+79% YoY
Highest in nine quarters; 14 deals >$30M TCV.
Total Bookings TCV
$3.8B
+6% YoY
Reflects strong pipeline and win rate improvement.
Utilization Rate
84.5%
+470bps YoY
Improved through bench reduction and pyramid optimization.
NPS Score
840bps expansion
+840bps YoY
Customer satisfaction improvement from delivery-led sales.
What Changed vs Last Quarter
NEW
Margins expected to remain range-bound
Despite wage hikes from December and softer revenue, management aims to keep margins within recent quarters' band.
NEW
Expect rebound in coming quarters after Q3
Management sees strong deal backlog and pipeline, expecting growth improvement as market stabilizes.
UPDATED
Q3 FY24 revenue guidance: -3.5% to -1.5% QoQ in constant currency
IT services revenue expected between $2.617B and $2.672B, reflecting furloughs and weak discretionary spend.
DROPPED
Q2 FY24 margins expected to be in similar range as recent quarters
Operating margins are expected to remain around 16% in Q2, similar to Q1, with no salary increases planned until Q3.
DROPPED
$1 billion investment in AI over three years
Wipro announced a $1B investment in AI, primarily organic, covering solutions, training, research, and M&A, funded through operational efficiencies.
DROPPED
Train all 250,000 employees in AI over next 12 months
Wipro plans to train its entire workforce in AI fundamentals and advanced topics, leveraging its DICE ID platform for credentialing.
NEW RISK
Slower conversion of large deals to revenue
Despite record TCV, revenue growth lags due to extended deal conversion timelines and lower discretionary spend.
NEW RISK
Revenue decline in Europe and Americas Two
Europe declined 5% QoQ and Americas Two declined 2.3% QoQ, driven by financial services and manufacturing slowdown.
NEW RISK
Margin pressure from wage hikes and furloughs in Q3
Wage hikes effective December and seasonal furloughs will pressure margins; management only expects range-bound performance.
NEW RISK
Growth lagging peers despite strong deal wins
Analyst noted Wipro's organic growth is among the lowest in the industry; management attributes to portfolio mix and transformation focus.
RISK GONE
Sustained discretionary spending weakness
Clients continue to cut discretionary spends, impacting short-term revenue conversion of large deal wins.
RISK GONE
Revenue growth divergence vs peers
Despite strong deal wins, Wipro's revenue growth lags some peers, raising questions about portfolio mix and execution.
RISK GONE
AI investment may pressure margins if revenue growth disappoints
The $1B AI investment, though funded by efficiencies, could weigh on margins if expected revenue uplift is delayed.
RISK GONE
Consulting business (Capco, Rizing) facing headwinds
Consulting revenues are under pressure due to discretionary spend cuts, though management remains confident in strategic value.
Fast read
Guidance and risk preview
IT services revenue expected between $2.617B and $2.672B, reflecting furloughs and weak discretionary spend.
Despite record TCV, revenue growth lags due to extended deal conversion timelines and lower discretionary spend.
View Risks →