Wipro's weak first-quarter forecast overshadows record buyback
Wipro Ltd logo is seen displayed in this illustration taken, April 10, 2023. REUTERS/Dado Ruvic/Illustration
BENGALURU, April 16 : Wipro forecast a weak first quarter on Thursday, citing muted demand as its U.S. banking and financial clients curb spending in an uncertain economic environment, sending its New York-listed shares down 2.4 per cent.
The outlook came alongside a lackluster fourth-quarter report and a record share buyback of up to 150 billion rupees ($1.61 billion) from India's No.4 IT services exporter.
Jefferies said the forecast was the key disappointment, though the buyback size exceeded expectations.
Wipro's struggles reflect the strain on India's $315‑billion IT sector as its CEO, two years into the role, grapples with weak demand and client‑specific setbacks.
"Geopolitical and policy disruptions have become the new normal," CEO Srini Pallia said in the post-earnings press meet, adding that clients were increasingly tying spending to measurable outcomes.
Wipro forecast first-quarter revenue of $2.60 billion to $2.65 billion, ranging from a 2 per cent sequential decline to flat growth.
The forecast pointed to continued demand uncertainty and delayed deal ramp- ups, StoxBox analyst Sagar Shetty said.
Pallia's two years at the helm are "difficult to rate" as he took charge in a challenging environment, Centrum Broking analyst Piyush Pandey said, adding that pressures persist.
Larger rival Tata Consultancy Services last week beat quarterly revenue and profit estimates, easing concerns over the impact of AI tools on its core business.
Wipro's consolidated revenue rose 7.7 per cent to 242.36 billion rupees, missing the LSEG-compiled consensus estimate of 243.63 billion rupees, while net profit fell 1.9 per cent to 35.02 billion rupees, slightly below the estimate of 35.07 billion rupees.
Total deal wins stood at $3.5 billion, up from $3.33 billion in the previous quarter, which marked a six-quarter low, but down from $4 billion a year earlier.
($1 = 93.2740 Indian rupees)
