Wipro Q1 net profit rises 12 pc to Rs 2,870 crore; flags reduced discretionary spending, weak macro environment

New Delhi: Wipro on Thursday posted a 12 per cent year-on-year rise in consolidated net profit at Rs 2,870 crore for the June quarter but the IT company missed analysts' estimates as reduced discretionary spending by clients impacted its financial performance. The software exporter's guidance for IT services revenue for the September quarter is in the range of "-2 per cent to +1 per cent range". Wipro saw "robust deal closures" in the first quarter of this fiscal and in terms of total contract value, it closed large deal bookings at USD 1.2 billion, up by 9 per cent on year. The bookings in the June quarter were also the "highest bookings in eight quarters".

The total bookings stood at USD 3.7 billion. "All around us, in almost every industry, businesses are reducing discretionary spends in response to the weaker macro environment. That has had an impact on our revenue as well," Wipro CEO and Managing Director Thierry Delaporte said during an earnings conference. The Bengaluru-headquartered IT services company posted a 12 per cent rise in its consolidated net profit at about Rs 2,870 crore for the June quarter. Seen sequentially, however, the net profit was 6.6 per cent lower compared to the March quarter. Wipro's income from operations in the three months ended June increased 6 per cent to Rs 22,831 crore. The topline numbers came "very much within the previously guided range", Delaporte said but added that there is "some softness in revenue".

The company managed better operating margins, by improving productivity, utilisation of talent and managing fixed costs. "This quarter, we closed our largest ever buyback allowing us to return USD 1.5 billion to our shareholders," he said. The company's head count came down by 8,812 in the June quarter compared to the previous three months. Further, the Wipro chief said the IT industry like all other sectors is undergoing a "seismic shift" with advancements in Artificial Intelligence (AI). "AI can and will fundamentally change every aspect of business," he said. The company is using generative AI for multiple use cases like enterprise knowledge mining, virtual assistants, content optimisation, automation in software development and for synthetic data generation, as well.

"To accelerate innovation in this space yesterday, we announced USD 1 billion investment in AI and launched a new AI-first innovation ecosystem Wipro ai360," he said, adding that the framework will bring together Wipro's full range of capabilities. "The company is placing responsible AI operations at the heart of all our AI work," he said. At the end of June quarter, Wipro's head count stood at 2,49,758 as against 2,58,570 in the March quarter. On freshers hiring, Wipro President and CHRO Saurabh Govil said, "we will calibrate (this) based on demand. Today, we have the capacity, we have existing next gen associates (freshers).

So, we will continue to onboard them basis the demand environment". Given the "tough environment", the company continues to do things that are important for employees, he said. "Our promotion cycle continues every quarter, we did it in Q1 and we will do it in Q2 as well," he said, adding that the variable payout would be 80 per cent in the June quarter. Wipro announced its first quarter results a day after rivals TCS and HCLTech declared their earnings. India's largest IT services company TCS reported a 16.83 per cent jump in the June quarter consolidated net profit to Rs 11,074 crore. HCL Technologies posted a 7.6 per cent year-on-year rise in the June quarter net profit to Rs 3,534 crore