Q2 profit: Wipro sees 9.3% drop YoY, HCL Tech posts 7% increase

Wipro’s consolidated net profit for the July-September 2022 quarter registered a 9.27 per cent fall year on year (YoY), the IT giant said on Wednesday. The figure is Rs 2,659 crore this year, down from Rs 2,930 crore in this same quarter last year.

However, the consolidated net profit or profit after tax (PAT) rose 3.71 per cent from Rs 2563.6 crore in the previous quarter (April-June 2022).

Fellow IT major HCL Technologies said its consolidated PAT for the July-September 2022 quarter increased 7.05 per cent YoY. The net profit rose to Rs 3,489 crore from Rs 3,259 crore a year ago and from Rs 3283 crore in the previous quarter (6.27 per cent).

Also read: TCS profit up, but IT sector staring at tough export markets, rising attrition

Revenue from ops rises

Wipro’s consolidated revenue from operations grew 14.60 per cent to Rs 22,539.7 crore YoY. The figure was Rs 19,667.4 crore in the same quarter last year. Sequentially, revenue was up 4.69 per cent from Rs 21,528.6 crore in the previous quarter.

HCL’s revenue from operations stood at Rs 24,686 crore—a 19.5 per cent growth over Rs 20,655 crore in 2021. Revenue rose 5.2 per cent quarter on quarter (QoQ) from Rs 23,464 crore, while profit climbed 6.27 per cent compared to Rs 3283 crore in the April-June quarter.

In a release, Wipro said its IT services revenue increased by 8.4 percent YoY to $2,797.7 million. Constant currency IT services revenue increased by 4.1 per cent QoQ and 12.9 per cent YoY.

HCL’s IT services revenue rose 5.3 per cent QoQ and 18.9 per cent YoY in constant currency.

Also read: Large companies can learn a lot from startups: Wipro’s Rishad Premji

Optimistic outlook

Thierry Delaporte, the CEO and Managing Director of the Bengaluru-based company, said in a statement, “The Q2 results demonstrate that our business strategy is working well. We grew at over 4.5%…for a second quarter in a row, resulting in a 28% YoY growth in the first half of this financial year. …we surpassed the $10Bn milestone of annualized revenue run rate.”

Wipro, which was in the news recently for firing 300 employees for moonlighting, has added more than 600 employees in Q2 and promoted 10,000 employees during the same period.

Chief Financial Officer Jatin Dalal’s statement read: “We sustained our operating margins in Q2 in a narrow band even after absorbing the full impact of our recent acquisitions and investing significantly in our business across sales, capabilities, and talent. We completed a salary increase covering 80% of our colleagues, making it the second hike in this calendar year. We delivered a robust growth in EPS of 23.8% YoY.”

For the December quarter, Wipro expects revenue from IT services to be in the range of $2,811–2,853 million, meaning a sequential growth of 0.5 per cent to 2.0 per cent.

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Interim dividend

HCL Tech’s Board of Directors have declared an interim dividend of Rs 10 per equity share. The company said it added 8,359 employees during the July-September quarter, taking the total figure to 219,325, including 10,339 freshers.

“HCL Tech has delivered yet another solid performance this quarter with revenue growing at 3.8% QoQ and 15.8% YoY in constant currency and EBIT at 18% up 93 bps QoQ. Our services business grew 5.3% QoQ and 18.9% YoY in constant currency, led by strong demand for Cloud, Engineering and Digital services. This is a validation of the strategic choices we made and the effectiveness of our operational framework,” read a statement from C Vijayakumar, CEO and Managing Director, HCL Tech.