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Wipro, a prominent IT services company, announced its financial results for the third quarter (Q3) of fiscal year 2025, revealing a significant increase in net profit. The company reported a substantial 24.4% year-on-year growth, reaching ₹3,354 crore (approximately $410 million USD). This impressive performance underscores Wipro's strong financial position and its ability to navigate the complexities of the global IT market. While the revenue from operations showed a modest 0.5% increase to ₹22,319 crore, the substantial profit jump reflects effective cost management and efficient operational strategies. The company's success in securing 17 large deals totaling $1 billion further highlights its ability to attract and retain major clients. This achievement, particularly noteworthy considering the seasonally weak nature of the quarter as pointed out by CEO and Managing Director Srini Pallia, demonstrates Wipro's resilience and ability to deliver strong results even during challenging economic conditions.
A key highlight of Wipro's Q3 announcement was the revision of its capital allocation policy. The company increased its committed payout percentage to 70% or higher over a three-year period. This reflects a significant shift in approach, marking a considerably more generous approach towards shareholder returns compared to the previous policy of 45-50%. This decision underscores Wipro's confidence in its future prospects and its commitment to rewarding its investors. The announcement of an interim dividend of ₹6 per equity share/ADS further reinforces this commitment to shareholder value. This substantial increase in payout reflects the board's confidence in the company's financial health and the expectation of continued strong performance. The revised capital allocation policy signals a strategic decision to prioritize returning profits to shareholders, a move that is likely to attract further investment and bolster investor confidence.
The financial performance of Wipro was further strengthened by the expansion of margins for a fourth consecutive quarter. The company achieved its target margin of 17.5%, a testament to its efficient cost management practices and strong operational efficiency. Chief Financial Officer Aparna Iyer highlighted this achievement, emphasizing the positive impact on the company's overall financial health. This consistent margin expansion demonstrates a commitment to sustainable profitability, even in a competitive and dynamic market environment. The company's focus on investing in its workforce, as noted by Mr. Pallia, also plays a significant role in its sustained success. By investing in its employees' skills and development, Wipro is ensuring it remains at the forefront of innovation and technological advancement, capable of meeting the ever-evolving needs of its clientele. This commitment to its human capital is a key element in the company's long-term growth strategy.
Looking ahead, Wipro's guidance for the March quarter indicates a projected revenue from IT services ranging from $2,602 million to $2,655 million. This represents a slight sequential decline of 1% or a minimal growth of 1%. While this represents a minor slowdown compared to the previous quarter's performance, it remains within the realm of expectations for a seasonally weak period and doesn't necessarily suggest a significant downturn. The company's strategic focus on AI-driven solutions, as highlighted by Mr. Pallia, positions Wipro well to capitalize on the growing demand for AI technologies. This focus on innovation and investment in emerging technologies ensures the company is prepared for the future challenges and opportunities within the IT sector. The overall outlook for Wipro remains positive, with its strong financial performance, revised capital allocation policy, and strategic focus on emerging technologies positioning the company for continued growth and success in the coming quarters.
Source: Wipro Q3 net profit zooms 24.4% to ₹3,354 crore; firm tweaks capital allocation policy