wipro share: Wipro has delivered a strong performance for the December quarter (Q3 FY25), exceeding market expectations on multiple fronts. The IT major showed growth in margins, net profit, and operational efficiency, which led to positive reactions from analysts and investors alike.
Key Highlights of Wipro’s Q3 FY25 Results
- Net Profit and Revenue Growth
Wipro reported a 24.5% year-on-year (YoY) increase in consolidated net profit, reaching ₹3,350 crore. Quarter-on-quarter (QoQ), this represents a growth of 4.5%. The company’s revenue rose marginally by 0.5% YoY to ₹22,320 crore, while remaining flat QoQ. - Margin Expansion
A notable achievement was Wipro’s EBIT margin, which rose to 17.5%, the highest in three years. This marked the fourth consecutive quarter of margin expansion, driven by operational efficiency and cost optimization. - Deal Wins and Pipeline
Wipro closed 17 large deals in Q3, with a total contract value (TCV) of $961 million. Though this was lower than the previous quarter’s $1.5 billion, it still showed a 6% YoY growth. - Sectoral Performance
Growth was particularly strong in the healthcare and manufacturing sectors, which reported increases of 6.7% and 2.5% QoQ, respectively. However, the BFSI sector saw a decline due to seasonal furloughs.
Market Reactions
Wipro’s positive performance led to an 8% surge in its share price, closing at ₹303.75 on the NSE on January 20. American Depository Receipts (ADRs) listed on the NYSE also gained over 4%, reflecting investor confidence in the company’s outlook.
Brokerage Views
Several brokerages have updated their ratings and targets for Wipro:
- Nomura: Maintained a ‘Buy’ rating with a target price of ₹340, citing strong margin performance and consistent execution.
- Nuvama Institutional Equities: Upgraded Wipro to a ‘Buy’ with a target price of ₹350, highlighting its favorable portfolio mix and operational improvements.
- Citi: Retained a ‘Sell’ rating, citing concerns about long-term growth but acknowledged the margin beat. Target price: ₹280.
Challenges and Outlook
While Wipro performed well in Q3, some challenges remain. Weak deal conversion in Europe and sectoral headwinds in manufacturing and energy could impact future growth. Additionally, Q4 revenue guidance of -1% to 1% in constant currency indicates limited near-term upside.
However, Wipro’s focus on client mining, consulting, and cost efficiencies positions it well for sustainable growth. Its revised capital allocation policy, which increases the return of income to shareholders, further boosts investor confidence.
Conclusion
Wipro’s Q3 results demonstrate resilience and operational strength in a challenging environment. With margin improvements, robust deal pipelines, and strategic focus areas, the company has set a solid foundation for future growth. However, maintaining momentum and addressing sectoral challenges will be crucial for its long-term success.
This performance reflects Wipro’s ability to adapt and deliver value, making it an attractive option for investors keeping an eye on the IT sector.