Wipro Q3 Review - Results Miss; Organic Guidance Not Encouraging: Dolat Capital
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Dolat Capital Report
Wipro Ltd. reported 3.0% QoQ constant currency growth, (our estimate: 3.4% QoQ), led by broad-based growth across verticals. IT services Ebit margin declined by 19 basis points QoQ to 17.6% (our estimate: 17.5%) due to partial impact (two months) of wage hike which was done in September 2021 (covering 80% of employees).
Quarterly guidance for Q4 is at 2%-4% implying limited acceleration in growth rate as it includes two acquisition impact. Organic guidance would be lower by nearly 50 bps. Wipro seeing strong and continued demand and seems comfortable with 2%-4% QoQ growth performance going forward as well (as has been the case in near past as well).
Large deal total contract value is lackluster at $600 million (11 deals). The TCV performance has softened in recent quarters (partially due to lack of mega deals).
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