Strong top-line growth but attrition continues to impact margins, double-digit growth expected in FY23 | Wipro Q4 FY22 Conference Call Highlights

• Q4FY22: Gross Revenue was ₹20,860 Cr ($2.7 billion), an increase of 28.4% YoY. IT Services Segment Revenue was at $2,721.7 million, an increase of 3.1% QoQ and 26.4% YoY. IT Services Operating Margin for the quarter was at 17.0%, a decrease of 60 bps QoQ. Net Income for the quarter was ₹3,090 Cr ($406.9 million), an increase of 4.0% QoQ and 3.9% YoY. Operating Cash Flow was at ₹2,330 Cr ($307.3 million), which is 75.5% of Net Income.
• FY22: Gross Revenue was ₹79,090 Cr ($10.4 billion), an increase of 27.7% YoY. IT Services Segment Revenue was at $10,355.9 million, an increase of 27.3% YoY. IT Services Operating Margin for the year was at 17.7%, a decrease of 254 bps YoY. Net Income for the year was ₹12,220 Cr ($1,610.5 million1), an increase of 13.2% YoY. Operating Cash Flow was at ₹11,080 Cr ($1,460.4 million), which is 90.7% of Net Income.
• In terms of geographies, Europe led the growth (+36% YoY) as revenue from Germany grew 1.5x during the quarter, followed by America (+28% YoY). APMEA (Asia Pacific, Middle East and Africa) continued to record double-digit growth (+14% YoY) as ACV (annual contract value) grew 22%.
• Human resource: The closing strength of employees for IT Services was at 243,128, an increase of 45,416 employees on a YoY. High Attrition rate (~23.8%) as on Mar-22 as compared to (~22.7%) as on Dec-21. Amidst the ongoing supply-side constraints, hiring of fresh talent is expected to double in FY 23 and the frequency of promotion will be increased to quarterly for at least 70% of the workforce in junior band.
• Closed 37 large deals resulting in a TCV of over $2.3 billion in FY22. Added two customers to the over 100 million account category and three new customers in the over $50 million account category in Q4FY22.
• The company would continue to focus on verticals like BFSI, Retail, Energy & Utilities and would also expand its relationship with hyperscalers in order to provide better services to its clients.
• Q1FY23 Guidance: Revenue from IT Services business to be in the range of $2,748 million to $2,803million*. This translates to a sequential growth of 1% to 3%. Growth for FY23 would be in double digits. Operating margins are expected to remain in the range of 17%-17.5% in the medium term as the amortization of investments made will result in margins remaining below the above-mentioned levels in the near term (2 – 3 quarters).

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