Shares of Wipro Limited surged over 7% in early trading today following its robust Q3 FY25 financial performance. The IT major exceeded expectations on multiple parameters, including constant currency (CC) revenue growth and operating margins, which hit their highest levels since Q3FY22. The company attributed its performance to efficient cost management and sustained operational improvements despite global economic challenges.
As of 9:15 the shares were trading 7.11% higher at ₹302.00 on NSE.
Key Financial Highlights (₹ in Crores):
- Revenue from Operations: ₹22,318 crore
- QoQ: Slight decline of 0.2% (₹22,363 crore in Q2 FY25)
- YoY: Increase of 0.5% (₹22,205 crore in Q3 FY24)
- Total Income: ₹23,322 crore
- QoQ: Decline of 0.3% (₹23,364 crore in Q2 FY25)
- YoY: Growth of 2.3% (₹22,803 crore in Q3 FY24)
- Net Profit: ₹3,367 crore
- QoQ: Increase of 4.3% (₹3,226 crore in Q2 FY25)
- YoY: Surge of 24.6% (₹2,700 crore in Q3 FY24)
- EBITDA: ₹4,453 crore, reflecting strong operational margin growth.
Expense Highlights:
- Total Expenses: ₹18,870 crore, a minor decrease of 0.6% from ₹18,986 crore in Q2 FY25.
- Employee Benefits: ₹13,303 crore, remaining stable as the largest cost component.
- Sub-contracting Expenses: ₹2,590 crore, showcasing continued reliance on external expertise.
Nine-Month Performance (April-December 2024):
- Revenue from Operations: ₹66,584 crore, marginally down 1.4% YoY (₹67,552 crore in the same period last year).
- Net Profit: ₹9,629 crore, up 17.2% YoY (₹8,259 crore in the same period last year).
Brokerages’ Views:
The Q3FY25 performance has elicited mixed reactions from brokerages, with targets ranging between ₹250 and ₹340.
Nomura
- Rating: Maintained ‘Buy’
- Target Price (TP): ₹340
- Key Insights: Upgraded FY25-27 EPS estimates by 2-5%. Highlighted margin recovery and Wipro’s revised capital allocation policy to return 70% of net income to shareholders, up from 45-50%. Strength in the Americas business is seen as a growth driver.
Macquarie
- Rating: Maintained ‘Outperform’
- Target Price (TP): ₹330
- Key Insights: Emphasized the margin beat and higher dividend payout. Preferred Wipro over Tech Mahindra due to its turnaround strategy, with an expected EBIT CAGR of 11.3% over FY25-27. Expressed hope for stronger BFSI performance in Q3.
Morgan Stanley (MS)
- Rating: Maintained ‘Underweight’
- Target Price (TP): ₹250
- Key Insights: Acknowledged margin strength despite wage hike impact. Highlighted that growth was driven by the healthcare vertical but maintained caution about overall growth prospects.
Citi
- Rating: Maintained ‘Sell’
- Target Price (TP): ₹280
- Key Insights: Removed its negative catalyst watch on Wipro. While revenue and margins were in line with estimates, Citi raised concerns about Wipro’s growth lagging peers in FY26.
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