WPRO reported a strong (8.1% QoQ CC) revenue growth in IT Services in 2QFY22, ahead of our estimate of 6.9%. Organic growth (excluding Capco) of 4.5% QoQ also came in ahead of our estimate. The management highlighted that the growth was broad based in 2QFY22, including at Capco, which it is delivering ahead of plan. Despite a M&A impact and wage hike, EBIT margin in IT Services was flat QoQ (excluding a one-off in 1QFY22) at 17.8%, 170bp ahead of our estimate. It reported a TCV of USD580m in 2QFY22, down 19% QoQ. Deal TCV is up 19% YoY in 1HFY22. WPRO’s operational metrics remain impacted by supply tightness, with attrition increasing by 500bp QoQ to 20.5% and utilization (excluding trainees) of 89.2% (+240bp QoQ), despite adding 11.5k employees (5.5% of its 1QFY22 strength). The management expects attrition to further inch up in 3QFY22 and said it will take a few quarters to normalize. 3QFY22 revenue growth guidance of 2-4% QoQ (including impact of Ampion acquisition) was in line with our estimate. We see the guidance as positive, given the supply constraints and seasonality, but remain watchful on margin as the company continues to operate ahead of its guidance of 17-17.5%. We now expect FY22 IT Services’ revenue growth at 28% (19.5% YoY organic growth). With better than expected margin performance, we have raised our FY22E/FY23E EBIT margin estimate by 100bp/30bp, which will result in a FY21-23E PAT growth of 13%.