Future growth expectations in sales/revenue/volumes?

Growth has slowed recently due to macroeconomic instability, cautious client spending, and lower discretionary spend. Europe and the US have seen some decline in revenues but pipelines remain strong, especially in Europe, with expectations of a rapid rebound. Large deal wins and total contract value (TCV) are growing, indicating stronger future revenue potential. The focus is on higher-value transformation projects, cost optimization deals, and expanding major client relationships, particularly in large accounts ($100M+). The market is currently not in a growth phase, but the company is confid

Future growth expectations in earnings/operating earnings/profits/EPS?

Wipro expects a challenging Q3 with pressure on margins due to wage hikes and slower growth but aims to keep margins range-bound (Page 15). No guidance beyond Q3 is provided; management remains cautious about near-term growth outlook (Page 14). The company anticipates a rebound in growth but did not specify timing, indicating potential improvement from Q4 or next fiscal year (Page 14). Q3 guidance expects a sequential revenue decline of -3.5% to -1.5% in constant currency (Page 8). Despite top-line softness, operating margins expanded by 100 basis points year-on-year in H1 FY24 and rem

Current/ Expected Orderbook/ Pending Orders?

Wipro reported strong deal booking with a total contract value (TCV) of $3.8 billion in Q2, up 6% year-on-year. Closed 14 large deals greater than $30 million in TCV during the quarter. Large deals reached $1.3 billion in Q2, a 79% year-on-year growth and 6% quarter-on-quarter growth. Added one new account in the $100 million+ category in Q2, bringing the total to 22 such accounts (doubled since FY21). There is a backlog of deals "in the waiting room," ready for launch, especially in financial services. Strong pipeline and increasing proportion of large, strategic deals underpin backlog growth

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Wipro LtdQ3 FY24IT - Software

Wipro Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹176P/E: 15.1Market Cap: ₹2.0L CrSector: IT - Software

Management growth scorecard

Revenue

N/A

Margin

N/A

Fundraise

N/A

Order

N/A

Capex

N/A

0 of 0 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

→Growth has slowed recently due to macroeconomic instability, cautious client spending, and lower discretionary spend.
→Europe and the US have seen some decline in revenues but pipelines remain strong, especially in Europe, with expectations of a rapid rebound.
→Large deal wins and total contract value (TCV) are growing, indicating stronger future revenue potential.
→The focus is on higher-value transformation projects, cost optimization deals, and expanding major client relationships, particularly in large accounts ($100M+).
→The market is currently not in a growth phase, but the company is confident that as market conditions improve, they will return to growth.
→Guidance beyond the current quarter is not provided, reflecting cautious optimism.
→Investments in talent, AI, cloud, and operational efficiencies position the company well for growth when demand rebounds.

Margin guidance

→Wipro expects a challenging Q3 with pressure on margins due to wage hikes and slower growth but aims to keep margins range-bound (Page 15).
→No guidance beyond Q3 is provided; management remains cautious about near-term growth outlook (Page 14).
→The company anticipates a rebound in growth but did not specify timing, indicating potential improvement from Q4 or next fiscal year (Page 14).
→Q3 guidance expects a sequential revenue decline of -3.5% to -1.5% in constant currency (Page 8).
→Despite top-line softness, operating margins expanded by 100 basis points year-on-year in H1 FY24 and remained steady around 16.1% (Page 8, 5).
→Strong deal bookings, increasing large deal wins, and strategic focus on high-value clients and efficiency drive confidence in medium-term growth recovery (Pages 9, 5, 10).
→EPS grew 4.1% YoY in Q2, supported by operational efficiencies and margin discipline (Page 8).

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Fundraise plans

The transcript does not mention any current or future fundraising through debt or equity. Key points: - No discussion or indication of plans for raising funds via debt or equity during the call. - Management focused on operational efficiency, margin stability, and strengthening client relationships. - Strong cash flow position noted with $4.1 billion gross cash and $2.2 billion net cash on the balance sheet as of Q2 FY24. - No references to capital raising activities or intentions in the Q&A or management commentary. Hence, based on the available information, Wipro has not indicated any plans for new fundraising through debt or equity at this time.

Order book

→Wipro reported strong deal booking with a total contract value (TCV) of $3.8 billion in Q2, up 6% year-on-year.
→Closed 14 large deals greater than $30 million in TCV during the quarter.
→Large deals reached $1.3 billion in Q2, a 79% year-on-year growth and 6% quarter-on-quarter growth.
→Added one new account in the $100 million+ category in Q2, bringing the total to 22 such accounts (doubled since FY21).
→There is a backlog of deals "in the waiting room," ready for launch, especially in financial services.
→Strong pipeline and increasing proportion of large, strategic deals underpin backlog growth.
→While orders are strong, conversion to revenue is cautious due to lower discretionary spend and economic cautiousness.
→Bookings through partners increased to 53% in Q2, aiding deal growth.

Capex plans

The transcript does not mention specific details about current or future capex, capital investments, or strategic investments in quantitative terms. However, key points related to investments include: - Wipro is investing in organizational transformation, focusing on talent acquisition, upskilling (especially in AI and GenAI), consulting capability, and systems enhancement. - Significant investments are being made in AI 360 strategy and GenAI integration across processes, solutions, and offerings, including collaborations (e.g., GenAI Center of Excellence with IIT Delhi). - Continued investment in people through training, leadership development, and exposure to new clients and technologies. - Strategic focus on expanding large client accounts and pursuing bigger deals to drive growth. - Investments in operational efficiency programs such as automation, delivery excellence, bench optimization, and utilization improvements. - No explicit mention of capital expenditure on infrastructure or physical assets. Overall, Wipro emphasizes strategic investments in people, technology, and client relationships to drive future growth and transformation.

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