Wipro Employees’ Unexpected Salary Hike Will Impact Overall Profits?

Wipro, one of the leading Indian IT organizations, will be reporting a flat sequential growth in profit for the March quarter. 

Apparently, this is directly related to the pay hikes that were offered to the employees.

Wipro To Report Flat Sequential Growth In Profit For March Quarter

The company’s growth was observed to be quite high, as much as 26-32 per cent on a year-on-year (YoY) basis. The company has seen an increase in sales too; 3 per cent both on quarter-on-quarter and year-on-year basis. 

However, the company will report flat sequential growth in profit for the quarter of March. As per reports, the salary hikes in the three month period will affect the margins of the company. But there is also is the possibility that a favourable currency tailwind will help Wipro to offset these to some extent.

For the June quarter, Wipro might guide for 1-3 per cent revenue growth in constant currency (CC) terms for June quarter. For the March quarter, the guidance was 1.5-3.5 per cent QoQ.

Wipro Might Report 25.8 % Year On Year Growth?

As per Emkay Global, Wipro is expected to report 25.8 per cent YoY growth in profit to Rs 2,925.60 crore. Additionally, the decline in profit is 1.4 per cent, whereas the sales are recording a growth of 3.1 per cent YoY, and 2.8 per cent QoQ, to Rs 16,151 crore.

The company has said, “We expect the IT services EBIT margin to decline by 70 basis points sequentially to 21 per cent due to a salary hike to 80 per cent of employees with effect from January, partly offset by offshore shift and operating efficiencies.”

In 2020, we reported to you that the Thierry Delaporte-led IT firm is rolling out pay hikes for nearly 80 per cent of its employees effective January 1. As per the report, Wipro is giving hikes to eligible employees mostly belonging to the junior band which is B3 and below grades. 

In case of Wipro, the B3 band employees comprise 80% of its 1.8 lakh employees. 

All the other eligible employees belonging to the mid-level, which is C1 band and above will be considered for salary increments effective June 1 next year, according to the TOI report.

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