Wipro’s Q3 FY2024 results: Revenue surpasses expectations, margins soar

Wipro Limited, a global leader in technology services and consulting, released its financial results for the quarter ended December 31, 2024. Despite seasonal pressures, the company surpassed its revenue guidance and delivered its highest operating margin in 12 quarters, reflecting robust operational efficiency and strategic execution.

How Did Wipro Perform in Q3 FY2024?

Wipro achieved a gross revenue of ₹223.2 billion ($2.6 billion), marking a 0.1% quarter-on-quarter (QoQ) and 0.5% year-on-year (YoY) increase. Net income grew substantially by 24.5% YoY and 4.5% QoQ, reaching ₹33.5 billion ($392 million). The company’s earnings per share (EPS) also demonstrated significant growth of 24.4% YoY.

In the IT services segment, revenue stood at $2.63 billion, reflecting a 1.2% QoQ and 1.0% YoY decline. On a constant currency basis, the IT services segment revenue increased 0.1% QoQ while contracting 0.7% YoY, signaling resilience amidst currency fluctuations and global macroeconomic challenges.

Operational Highlights:

Operating Margin: The company’s operating margin for the IT services segment rose to 17.5%, a 0.7% QoQ and 1.5% YoY improvement, driven by sustained cost management and strategic investment.

Cash Flow Efficiency: Operating cash flows surged to ₹49.3 billion ($576.4 million), representing 146.5% of net income for the quarter.

Dividend Announcement: An interim dividend of ₹6 ($0.07) per equity share was declared, underscoring Wipro’s commitment to shareholder returns.

What Are Wipro’s Key Drivers of Growth?

Large Deal Wins Across Industries

Wipro reported total bookings of $3.51 billion, including large deal bookings of $961 million, a 6% YoY increase in constant currency terms. Notable deals included:

A U.S.-based health insurer engaging Wipro for an AI-powered platform transformation to enhance enrollment and billing operations.

A European utilities provider leveraging Wipro’s InspectAI solution to detect pipeline anomalies, reducing maintenance costs by up to 20%.

A global payments company modernizing its financial forecasting models, achieving 90% accuracy and 30% faster deployment cycles.

These deals reflect Wipro’s ability to deliver AI-driven solutions tailored to industry-specific needs, positioning the company as a strategic partner for digital transformation initiatives.

What Is Driving Wipro’s Record-High Margins?

Wipro’s strategic focus on cost optimization and operational efficiencies has been instrumental in achieving record-high margins. Aparna Iyer, Chief Financial Officer, emphasized the impact of disciplined execution, stating, “Our margin expansion for a fourth consecutive quarter demonstrates our ability to balance growth with profitability. Achieving a 17.5% margin target is a testament to our focused approach to delivering value for stakeholders.”

What Is Wipro’s Market Outlook for Q4 FY2024?

For the quarter ending March 31, 2025, Wipro forecasts IT services revenue to range between $2.60 billion and $2.66 billion, translating to a sequential growth of (-1%) to 1% in constant currency terms. This outlook reflects cautious optimism amid global uncertainties.

Wipro’s strategic investments in artificial intelligence, cloud computing, and automation are expected to drive long-term growth as enterprises increasingly adopt digital-first strategies.

How Is Wipro Positioning Itself in an AI-Driven Future?

Wipro’s investments in artificial intelligence are a cornerstone of its growth strategy. Srini Pallia, CEO and Managing Director, highlighted the importance of AI innovations, stating, “Our investments in AI are empowering clients to achieve unprecedented levels of efficiency and innovation. The success of our AI-powered solutions, such as Payer-in-a-Box and InspectAI, demonstrates our ability to deliver transformative value across industries.”

By integrating AI into its service offerings, Wipro is not only addressing current client needs but also positioning itself as a leader in the evolving digital landscape.

What Does Wipro’s Revised Capital Allocation Policy Mean for Investors?

Wipro has revised its capital allocation policy to increase the payout percentage from 45%-50% to 70% or above of net income over a three-year period. This move is expected to enhance shareholder confidence by providing consistent and higher returns.

In addition, the interim dividend declaration reinforces Wipro’s commitment to rewarding investors while maintaining a robust financial position.

Expert Analysis: Sentiment and Stock Performance

Wipro’s strong financial performance, combined with its focus on AI and strategic deal wins, has bolstered market sentiment. The revised capital allocation policy further strengthens its position as a stable investment choice. Analysts anticipate positive traction in stock performance as Wipro continues to navigate challenges effectively while delivering sustainable growth.