Wipro Flags Uncertain Demand Environment, Expects Flat IT Services Revenue in Q2

Indian IT services company Wipro has joined its larger peers in expressing concerns about an uncertain demand environment, as clients reduce spending and cutbacks on discretionary expenses. The company has forecasted that its second-quarter IT services revenue, which accounts for the majority of its overall revenue, is expected to range between $2.72 billion and $2.81 billion in constant currency terms, compared to $2.8 billion in the same period last year.The muted forecast follows similar warnings from other major Indian IT companies such as Tata Consultancy Services (TCS) and HCLTech, which have also highlighted a reduction in discretionary spending by clients to preserve cash and uncertainties surrounding demand.According to Wipro’s CEO, Thierry Delaporte, companies are currently cautious about future spending plans, making it difficult to provide a clear outlook for the second half of the year. Indian IT firms are experiencing delays in deal closures, order rampdowns, and cancellations due to concerns about recessions in key markets like the United States and Europe.Wipro’s net profit for the first quarter rose by nearly 12% to 28.70 billion rupees ($349.66 million) compared to the same period last year, primarily driven by significant order wins. However, on a sequential basis, profit dropped by 6.7%. Analysts had expected a slightly higher profit of 29.8 billion rupees, according to Refinitiv IBES data.The company reported a 6% increase in revenue from operations, reaching 228.31 billion rupees year-on-year, marking the slowest growth rate since the quarter ending in March 2021. Wipro’s total order bookings for the quarter amounted to $3.7 billion, with large deal bookings rising 9% to $1.2 billion compared to the previous year.

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