Wipro Q2 preview: Revenue may grow just 1.3% YoY; guidance for Q3 keenly eyed

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Key Points

Wipro Q2 preview: Wipros consolidated net profit may rise 10.3% on year to Rs 2,933 crore in the September quarter, according to the average of estimates given by nine brokerages, and revenue is expected to grow just 1.3% to Rs 22,828 crore..

Expect dollar services revenue decline of 1.7% QoQ (-1% QoQ in CC), in line with guidance and due to the continued impact of a slowdown related to a cut in discretionary tech spending...

Expect -0.8% cc revenue growth for IT services within the guided band of -2% to +1%Expect EBIT margins to be stable at 16% in Q2 as lower revenues to be offset by on-going efficiencyExpect Wipro to guide for a 0-2% QoQ cc growth in revenue for 3QFY24..

Expect a sequential revenue decline of 0.6% in c/c, in line with the guidance band of -2% to 1% revenue growth, due to broader weakness in financial services and high exposure to consulting services...

Expect investor focus on (1) reasons for lag in growth rates versus peers and next steps in turnaround, (2) stability in senior management team, given several senior level departures, (3) outlook for the consulting business (Capco and Rizing), which has been impacted due to pullback in discretionary spending, (4) outlook for tech spending in BFS, (5) Cause for divergence in revenue growth and reported deal bookings, (6) positioning in cost take-out and vendor consolidation deals where Wipro can be vulnerable and (7) margin levers to meet the aspirational margin level of 17%+...

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