Information Technology services firm Wipro’s fourth-quarter earnings were in line with street estimates but elevated attrition levels hurt the Bengaluru-based company’s margins quarter-on-quarter (QoQ).
It reported a revenue of Rs 20,860 crore, up 2.7 per cent sequentially in the quarter ended March 31, 2022 (Q4 FY22). The consensus estimate of Bloomberg analysts was Rs 20,821 crore.
Net profit came in at Rs 3,087.3 crore for the quarter, this compared to analyst estimates of Rs 3,005 crore. In the corresponding quarter of last year, it posted a net profit of Rs 2,972.3 crore. However, operating margin disappointed, contracting to 17 per cent in Q4 FY22 from 21 per cent in the year-ago period.
Divam Sharma, founder of Green Portfolio, a SEBI-registered portfolio management service provider, said that revenue growth for the quarter was in line with expectations, however, “operating margins witnessed pressure, which is in line with the industry”.
On the attrition front, Wipro saw 23.8 per cent of its employees leaving in Q4 compared to 22.7 per cent in the previous quarter.
“Fresher intake for FY22 has been doubled as compared to the previous year and there are plans to double this figure again in FY23,” said Thierry Delaporte, MD and CEO of Wipro. Seeing industry-wide record levels of attrition, the IT services company decided to increase the frequency of the promotion cycle for 70 per cent of the employees in junior bands to quarterly basis.
Vijay Sivaram, CEO of Quess IT staffing believes that as the need for digital ecosystems increased, it led to talent supply-chain bottlenecks, thereby, boosting job creation for those freshers with a technical background. “The ongoing talent war has resulted in unremitting attrition rates and pressures on margins, thereby increasing focus on hiring and skilling activities.”
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