Wipro, a leading Indian information technology company, recently reported its financial results for the second quarter of fiscal year 2025. The company’s share price surged over 5% in early trade on Friday following the announcement of decent earnings and a bonus share issue. Wipro shares reached a high of ₹557.05 on the National Stock Exchange.
As India’s fourth-largest software services exporter, Wipro plays a significant role in the country’s IT sector. The company’s performance in Q2FY25 showed modest growth, with IT services revenue increasing to ₹22,196 crore, up 1.4% from the previous quarter. In U.S. dollar terms, Wipro’s revenue rose 1.3% sequentially to $2,660 million, while large deal bookings saw a substantial increase of 28.8% quarter-over-quarter, reaching $1.5 billion.
Performance Overview
Income:
Wipro’s IT services revenue for Q2FY25 reached ₹22,196 crore, marking a 1.4% increase from the previous quarter’s ₹21,896.3 crore. In U.S. dollar terms, the company’s revenue grew to $2,660 million, up 1.3% from $2,625.9 million in the preceding quarter. This modest growth indicates a steady performance in a challenging market environment.
Profit:
The company’s profit has grown on a sequential basis from ₹3,037 crore to ₹3,277. This represents a 7.9% increase.
Margin:
Wipro’s IT services EBIT increased by 3.5% to ₹3,732 crore from ₹3,605.7 crore, while EBIT margin improved by 30 bps to 16.8% from 16.5%, QoQ.
Bonus Stock
The company also mentioned the record date for the bonus issue will be announced later. The bonus shares will be credited within two months from the date of board approval, i.e., December 15, 2024. Under this, the ratio specified is 1:1 of ₹2/- each (Face Value).
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Future Outlook and Projections
Wipro’s guidance for the third quarter of FY25 suggests a cautious outlook. The company expects IT services revenue to be in the range of $2,607 million to $2,660 million, translating to sequential guidance of -2.0% to 0.0% in constant currency terms. This projection indicates a potential slowdown in growth for the upcoming quarter.
Analysts at Antique Stock Broking have noted that Wipro’s revenue growth over the past 5-6 quarters has underperformed compared to its large peers. This underperformance is attributed
to a higher-than-expected decline in consulting and discretionary services. Despite these challenges, Wipro has suggested that its overall business is gradually improving.
In response to the weak Q3 guidance, Antique Stock Broking has adjusted its forecasts. The brokerage firm reduced its revenue forecast for FY26 and FY27 by 1%-2% and lowered EPS estimates by 2%-3%. Despite these reductions, the firm maintained a ‘Hold’ rating on Wipro shares and kept the target price unchanged at ₹575 per share.
The company’s performance and future projections reflect the current uncertainties in the global IT services market. While Wipro continues to secure large deals and maintain modest growth, the guidance for the next quarter suggests caution.
The bonus share issue may provide some positive momentum, but the company faces challenges in matching the growth rates of its larger competitors. As the IT services landscape evolves, Wipro’s ability to adapt to changing market conditions and capitalize on emerging opportunities will be crucial for its future success.
Written By: Dipangshu Kundu
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