Wipro Q2 Earnings Preview: Revenue may decline for the third consecutive quarter, all eyes on deal wins

The operating margin or earnings before interest and taxes (EBIT) for the quarter under review is likely to remain largely stable at 16% compared to 16.05% in the first quarter of the fiscal. This comes against the cost optimisation measures taken by the firm that include deferring wage hikes by a quarter to the three-month period ending December 30, 2023, analysts pointed out. In fact, the analysts say margin levers lead to the company meeting the aspirational margin level of 17%.

The Street will track the management’s commentary regarding senior member exits at Wipro including CFO Jatin Dalal, who stepped down to take up the same role at Cognizant.

Key things to watch out for include deal wins, something that peers are banking on for recovery, the reasons for the lag in growth rates compared to peers and the firm’s next steps to ensure a turnaround. Unlike peers, Wipro has not announced any significant deal wins and hence total contract value (TCV) could be muted. Analysts keenly await comments on the cause for the divergence in revenue growth and reported deal bookings.

Wipro share had hit a 52-week high of ₹ 443.75 on September 15 and then slipped to the current share price of ₹411.10. The stock has corrected 7.5% from 52-week highs and since the Q2 earnings of Tata Consultancy Services (TCS) were announced, it has slipped 2.5%. During the quarter under review, the stock witnessed an increase of 4.4%.