India`s Wipro beats Q3 revenue estimates; sees growth in consulting
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Wipro, India's No.4 software-services exporter, reported better-than-expected revenue in the seasonally weak third quarter and highlighted early signs of a return to growth in client demand for its consulting services.
The results led Wipro's ADRs up 3.5% in pre-market trading, following signals from larger rivals Tata Consultancy Services and Infosys that demand had not worsened in the quarter, as feared by most industry watchers.
There is "some stabilitization now from revenue deceleration," CEO Thierry Delaporte said in a post-earnings media conference.
The company's consulting business is seeing "early signs of a return to growth" led by double-digit growth at Capco, a firm it acquired in 2021, Delaporte added.
The Bengaluru, India-based firm's revenue of 222.05 billion rupees ($2.68 billion) beat analysts' average estimate of 221.04 billion rupees, helped by improved deal momentum.
"The commentary is slightly better than previous quarters. If macro improves, businesses like consulting will start to show results as it involves discretionary spending," said Devang Bhatt, analyst at IDBI Capital Markets.
The company expects its March-quarter IT services revenue to range between $2.62 billion and $2.67 billion in constant currency terms. This follows a 1.7% sequential decline to $2.66 billion in October-December, marking the fourth straight quarter of falling revenue.
Its third-quarter profit of 26.94 billion rupees came slightly ahead of the expected 26.49 billion rupees.
India's IT services companies have been facing challenges in a difficult macroeconomic environment, especially in the United States and conflict-affected Europe, where clients have reduced discretionary tech spending.
Market leaders Tata Consultancy Services and Infosys posted better-than-feared quarterly reports and gave optimistic forecasts that eased concerns about a sector grappling with sluggish demand, driving their shares higher by 4% and 8%, respectively.
"The street has already foreseen that the worst is over and that is why IT stocks advanced" on Friday, IDBI's Bhatt said.
($1 = 82.9081 Indian rupees)
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