Wipro Q1FY22 earnings preview: Dollar revenue growth likely to be at 9.9%; margin to get hit

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IT major Wipro is set to announce its earnings for the quarter ended June 2021 later today. An analysts’ poll by CNBC-TV18 estimates the company to report decent revenue growth, but margins are likely to take a hit.

IT major Wipro is set to announce its earnings for the quarter ended June 2021 later today. An analysts’ poll by CNBC-TV18 estimates the company to report decent revenue growth, but margins are likely to take a hit.
During Q1FY22, Wipro is expected to post a dollar revenue growth of 9.9 percent at $2,365 million as against Rs $2,152.5 million, QoQ. Constant currency revenue growth is estimated to be 9.5 percent within a guided band of 8-10 percent, on a sequential basis.
The acquisition of Capco is likely to boost the company’s revenue. Organic constant currency growth seen at 3-3.5 percent, sequentially, led by contribution from Metro AG & Telefonica Germany deals.
However, Wipro’s margin during Q1FY21 is likely to be under pressure on account of wage hikes and Capco acquisition. According to CNBC-TV18’s poll, EBIT margin is expected to decline by 240 basis points (bps) to 18.5 percent from 20.9 percent, QoQ.
Wipro is expected to give a revenue growth guidance for Q2FY22 at 5-7 percent driven by contribution from Capco and Ampion acquisition. Organic revenue growth guidance is seen at 1-3 percent.
Among the large-caps, Wipro has seen the biggest rerating in the last three months. The stock is up more than 49 percent YTD and in the last one year, the stock has risen nearly 120 percent and expectations are high.
Watch the accompanying video of CNBC-TV18’s Reema Tendulkar for more details.

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