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Q4FY21 Conference call highlights of Wipro

Q4FY21 Conference call highlights of Wipro

Published on 19 April 2021 Views 62 Comments 0
Wipro Q4FY21 Conference Call highlights
  • Q4FY21 Results
    • Management has said that this is the best Q4 results company has come up in last 10 years on the back of good volume, demand environment and healthy deal pipeline.
    • iDEAS global business line consisting of applications, data and engineering grew 2.1% QoQ in constant currency terms, while the iCORE business line consisting of digital platforms, cloud infrastructure and security practice grew by 4.3% QoQ.
    • Management also indicated that cloud services account for ~25% of its services and expects it grow at a higher speed than the company’s average growth rate.   
    • Company’s margins expanded by whooping 420 bps in this quarter to 21% on YoY basis mainly on the back of offshoring and improvement in utilisation.
  • FY22 Guidance
    • Company expects a growth to the tune of 2-4% in June’21 quarter, excluding the revenue from recent acquisitions like Capco and Ampion. This is likely to translate to the growth in early teens (11-13%).
    • Due to the acquisition of Capco, margins are expected to be at a tad lower end (by 200 bps) due to retention bonuses and higher amortisation of intangible assets of Capco.
  • Deal Wins
    • Wipro closed 12 large deals in Q4FY21 , taking the TCV to $1.4bn. Company has also reported highest TCV in H2FY21 mainly led by increase in IT spending across industries.
    • Company announced that it has won a mega deal in America and would earn revenues to the tune of  ~$1 bn over the deal duration.
    • Company has also won 5-year deal with Telefonica O2 and a deal with European mapping and location data company to help in its cloud and digital transformation.
  • Mergers and Acquisitions
    • Management said that M&A is integral to its business strategy. Over the last two quarters, company has announced acquisitions across several key markets like Asia, Europe, America, Australia and India to strengthen its local presence.
    • Company also announced its largest ever acquisition – Capco during the quarter and is confident that it will strengthen its position in global financial markets.
    • Company also acquired Ampion, cybersecurity firm based in Australia for an entire cash transaction of $117mn. 
    • Company also successfully completed the strategic digital and IT partnership with German based METRO AG.
  • Employee Metrics
    • Wipro hired ~18k employees in this quarter, however company’s attrition rate increased to ~12% as against 11% in Q3FY21.
    • Management has indicated chances of higher attrition in upcoming quarters.
    • Company is also adapting well with the immigration rules in foreign countries, especially USA, wherein ~70% of the workforce is localised.
    • Company implemented salary hike for ~80% of its staff in January’21 and is also looking forward to give skill based bonus.
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