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Wipro Share Q3 Results
Last Updated: 8th August 2022 - 06:43 pm
Among the big bulge bracket IT companies, Wipro came under pressure with operating margins and net margins taking the biggest dent. This was largely on account of a sharp spike in sub-contracting costs, higher employee costs as well as higher input costs for its hardware IT products division. Overall, costs pinched operating profits in a big way. Here is a gist of the numbers for the Dec-21 quarter.
|
Rs in Crore |
Dec-21 |
Dec-20 |
YOY |
Sep-21 |
QOQ |
|
Total Income (Rs.cr) |
₹ 20,314 |
₹ 15,670 |
29.63% |
₹ 19,667 |
3.29% |
|
Operating Profit (Rs.cr) |
₹ 3,442 |
₹ 3,336 |
3.18% |
₹ 3,398 |
1.32% |
|
Net Profit (Rs.cr) |
₹ 2,969 |
₹ 2,968 |
0.03% |
₹ 2,931 |
1.31% |
|
Diluted EPS (Rs.) |
₹ 5.42 |
₹ 5.17 |
₹ 5.35 |
||
|
OPM |
16.95% |
21.29% |
17.28% |
||
|
Net Margins |
14.62% |
18.94% |
14.90% |
As can be seen in the above table, Wipro revenues were up a healthy 29.63% for the Dec-21 quarter at Rs.20,314 crore on a consolidated basis. In sequential terms, the revenues were up by 3.29% but the real story lies in the bottom line to which we will come back to later.
During the December 2021 quarter, the region of the Americas accounted for 58% of the total revenues in IT services. The European region comprising of UK and continental Europe accounted for 30% while the balance 12% was accounted for by the APMEA region; which is the Asia Pacific, Middle East and Africa region.
Operating profits grew by a measly 3.18% YoY at Rs.3,442 Cr in the Dec-21 quarter. The pinch came from the manpower costs and the sharply higher sub-contracting expenses during the quarter. The input costs in the IT products business also saw spike.
As a result, the operating margins fell very sharply from 21.29% in the Dec-20 quarter to 16.95% in Dec-21 quarter, a fall of 434 basis points This was largely on account of static operating profits amidst sharply higher sales revenues. Operating profits were up just about 1.3% on sequential basis compared to Sep-21 quarter.
Profit after tax (PAT) for the Dec-21 quarter was almost flat, up by just about 0.03% at Rs.2,969 crore due to the impact of higher operating and non-operating costs in the quarter getting transmitted to the bottom line. As a result, the PAT margins narrowed from 18.94% in the Dec-20 quarter to 14.62% in the Dec-21 quarter. The board has declared an interim dividend of Rs.1 per share, but the real story was all about operating pressures.
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