Wipro is forecasting 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 per cent-5 per cent in the September quarter compared with a 0.5 per cent growth in the June quarter.
IT Services operating margin for the quarter was at 15 per cent compared with 18.8 per cent, a year earlier.
Total quarterly expenses jumped 22.9 per cent to 186.48 billion rupees, with voluntary IT services attrition moderating slightly to 23.3 per cent.
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 per cent 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 per cent to 215.29 billion rupees.