January 17, 2025 | Dhan Manage
Wipro Ltd., a trailblazer in India’s IT services sector, has delivered an impressive performance in the third quarter of FY25, reporting a net profit of ₹3,354 crore. This marks a 4.5% quarter-on-quarter (QoQ) increase and an astounding 24.5% growth compared to the same period last year. The results not only exceeded market expectations but also highlighted Wipro’s ability to navigate a challenging business environment.
While the company’s revenue remained largely steady at ₹22,319 crore, reflecting flat growth year-on-year (YoY), Wipro demonstrated its strength in improving profitability through efficient cost management. Additionally, the board announced an interim dividend of ₹6 per share, to be disbursed by February 15, 2025, reinforcing its commitment to delivering shareholder value.
Key Highlights from Wipro’s Q3 FY25 Performance
- Net Profit: ₹3,354 crore, up 4.5% QoQ and 24.5% YoY
- Revenue: ₹22,319 crore, flat YoY
- EBIT Margin: Improved to 17.5%, up from 16.8% in Q2 FY25
- Interim Dividend: ₹6 per share
These results underscore Wipro’s resilience in a fiercely competitive market, even as it tackles headwinds such as seasonal challenges and currency fluctuations.
Market Dynamics and Challenges
The global IT services industry continues to grapple with shifting demand patterns, economic uncertainties, and seasonal factors. Despite these hurdles, Wipro has managed to outpace analyst projections, thanks to its operational agility and strategic focus.
Analysts had anticipated revenue pressures during the quarter due to client-specific slowdowns and furloughs. However, Wipro’s robust performance in profitability metrics—driven by improved operational efficiency—reiterates its strong foundation in weathering industry challenges.
Strategic Moves and Future Outlook
Wipro’s leadership is optimistic about the future, citing early signs of recovery in client spending. CEO Srini Pallia remarked on a budding increase in discretionary technology investments, which could pave the way for stronger growth in the coming quarters.
Order Book and Deal Wins:
- Total order book: Approximately $3.5 billion
- Large deal wins: $961 million in Q3 FY25
Looking ahead to Q4 FY25, Wipro has offered a cautious revenue growth outlook, projecting a range of -1% to +1% in constant currency terms. This conservative guidance reflects the company’s focus on adapting to evolving market conditions while positioning itself for a sustained recovery.
Enhancing Shareholder Value: New Capital Allocation Policy
In a significant strategic shift, Wipro has revised its capital allocation policy to distribute at least 70% of its net income cumulatively over three years, up from the previous 45%-50% threshold. This move underscores the company’s commitment to maximizing shareholder returns while continuing to invest in growth initiatives.
Conclusion
Wipro’s Q3 FY25 results are a testament to its ability to deliver value amid a challenging landscape. With a robust profit increase, a steady order pipeline, and a renewed focus on shareholder returns, Wipro is well-positioned to capitalize on emerging opportunities in the IT services sector. As the company eyes a cautious yet optimistic future, investors and stakeholders can expect a balanced approach to growth and value creation.