India’s Wipro flags uncertain demand, sees muted second-quarter IT services

BENGALURU, July 13 (Reuters) – India’s Wipro (WIPR.NS) on Thursday joined some of its larger peers in flagging an uncertain demand environment as clients cut spending, and forecast revenue from IT services would remain largely flat for the current quarter.

The Bengaluru-based company said its second-quarter IT services revenue, which accounts for the majority of overall revenue, could range between $2.72 billion and $2.81 billion in constant currency terms, compared with $2.8 billion a year ago.

The muted forecast comes on the heels of similar warnings from Wipro’s larger peers Tata Consultancy Services (TCS.NS) and HCLTech (HCLT.NS), who also flagged a cut in discretionary spending by clients to save cash and uncertainty over demand.

“Companies are not necessarily very forward looking in terms of how much they are going to be spending,” Chief Executive Officer Thierry Delaporte said in a post-earnings press conference, adding that it is too early to provide an outlook for the second half of the year.

Indian IT companies are seeing delays in deal closures, order rampdowns, and cancellations prompted by recession worries in key markets in the United States and Europe.

“We are suffering from less discretionary spending from our clients … There are more large deals but reduction in smaller engagements,” Delaporte said.

Wipro’s net profit rose nearly 12% to 28.70 billion rupees ($349.66 million) in the first quarter from a year ago, helped by large order wins. However, on a sequential basis, profit dropped 6.7%.

Analysts on average had expected a profit of 29.8 billion rupees, according to Refinitiv IBES data.

Revenue from operations increased 6% to 228.31 billion rupees from a year ago, its slowest pace since quarter-ending March 2021.

Total order bookings stood at $3.7 billion for the quarter, with large deal bookings rising 9% to $1.2 billion year on year.

($1 = 82.0786 Indian rupees)

Reporting by Navamya Ganesh Acharya and Sethuraman NR in Bengaluru; editing by Eileen Soreng

Our Standards: The Thomson Reuters Trust Principles.

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