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By Sethuraman N R and Nandan Mandayam
BENGALURU (Reuters) -India's Wipro Ltd on Wednesday forecast higher revenue growth from IT services on the back of a strong project pipeline, and said margins likely bottomed out after higher expenses dented June-quarter profit.
IT companies including Wipro and larger rivals Tata Consultancy Services, Infosys and HCL Technologies have been facing cost challenges as they seek to retain employees amid a sector-wide talent churn.
"The margins can only improve from here ... We are not seeing additional wage pressure for hiring externally. It's all good for a few quarters down the line," Wipro Chief Financial Officer Jatin Dalal said.
The Bengaluru-based company forecast revenue from IT services to grow at 3%-5% in the September quarter compared with a 0.5% growth in the June quarter.
IT Services operating margin for the quarter was at 15% compared with 18.8%, a year earlier.
Total quarterly expenses jumped 22.9% to 186.48 billion rupees, with voluntary IT services attrition moderating slightly to 23.3%.
Wipro said the positive impact from rupee depreciation was moderate in the June quarter as it saw cross-currency impact in Europe, a key market, with the euro and pound depreciating against the dollar.
Indian IT services companies' June-quarter earnings started on a weak note, with TCS and HCL Technologies missing their first-quarter profit estimates.
Wipro's consolidated net profit for the quarter ended June 30 fell 20.9% to 25.64 billion rupees ($320.54 million), compared with 32.43 billion rupees a year earlier. Analysts on average had expected a profit of 29.5 billion rupees, according to Refinitiv data.
Revenue from operations rose nearly 18% to 215.29 billion rupees.
($1 = 79.9900 Indian rupees)
(Reporting by Nallur Sethuraman and Nandan Mandayam in Bengaluru;Editing by Vinay Dwivedi)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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First Published: Wed, July 20 2022. 20:33 IST