IT services major Wipro on Friday reported a 14.8% sequential rise in net profit to Rs 3,053 crore for the December quarter, above the consensus Bloomberg estimates of Rs 2,980.80 crore.

The revenue for the December quarter grew 14.4% annually and 3.1% on a sequential basis to Rs 23,229 crore on the back of strong large deal wins. Revenues were in line with consensus Bloomberg estimates of Rs 23,320.10 crore.

The Bengaluru-based company expects a revenue growth of -0.6-1.0% sequentially for the fourth quarter ended March as deal ramp-ups and client decision-making are slowing down.

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The IT services revenue in dollar terms grew 0.6% sequentially and 10.4% on a year-on-year basis in constant currency terms to $2.80 billion on the back of 11 large deal wins of over $1 billion in total contract value (TCV), its highest ever.

“Tech spending remains robust with higher focus on returns…We are continuing to gain market share as a result of deepening client relationships and higher win rates. Clients are turning to us to help them manage an evolving macro environment and balance their transformation goals with cost optimisation. Our ability to deliver on client objectives regardless of where they are in their cloud journeys is positioning us favourably in a consolidating market,” said Thierry Delaporte, CEO and managing director, Wipro.

The operating margin narrowed to 16.3% from 17.6% a year ago, but showed improvement on a sequential basis from 15.1% in the preceding three months.

“This expansion of margins was after absorbing the investments we made in our people by way of salary increases, promotions and long-term incentives for our senior leadership. Margin growth was led by strong operational improvements and automation-led efficiencies. We generated strong operating cash flows at 143% of our net income for the quarter and our EPS increased by 14.6% quarter-over-quarter,” said Jatin Dalal, chief financial officer, Wipro.

The voluntary attrition rate on the last 12-month basis for the December quarter declined to 21.2% from 23% in the September quarter, indicating that it is gradually coming down.

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As part of his efforts to turn around the company, Delaporte has been executing a five-point strategy that he laid out soon after joining the company. The strategy involves accelerating growth through prioritisation of sectors and markets, strengthening relationships with strategic clients and partners, enhancing the company’s portfolio of business solutions, building talent at scale, and simplifying the operating model.

Effective January 2021, Wipro reorganised its IT services segment into four strategic market units, all of which projected strong growth. On an annual basis, while Americas 1 and Americas 2 grew 11% and 9.4% y-o-y, respectively, in constant currency, Europe grew 12%, and the Asia Pacific Middle East Africa (APMEA) region grew 7% y-o-y.

Two global business lines —iDEAS (Integrated Digital, Engineering & Application Services) grew 11.8%, while iCORE (Cloud Infrastructure, Digital Operations, Risk & Enterprise Cyber Security Services) grew 8% y-o-y in constant currency.

“Wipro’s recent growth was expected to be fuelled by increasing customer reliability and a healthy pipeline of business opportunities. They hold good satisfaction scores among the majority of their clients. In addition, they have significantly invested in improving their consulting and industry domain skills to provide a better customer experience. While attrition is an issue across industries, Wipro has to pay attention to its attrition rate which could hinder its growth,” said Biswajit Maity, principal analyst at Gartner.

Wipro announced its earnings after markets hours on Friday. Ahead of its earnings, Wipro shares closed down 0.2% at Rs 393.65 on the BSE.