Wipro posts 3% fall in profit, fails to impress Street; 6 key takeaways

Mumbai: Third-largest IT firm Wipro on Tuesday reported 3.2 per cent year-on-year (YoY) drop in consolidated profit for the December quarter, and forecasted a modest revenue growth in the quarter ending March 31.

The company posted a profit of Rs 2,462.90 crore for the quarter ended December 30. Analysts in an ET NOW poll had projected a net of Rs 2,450.80 crore.

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Wipro’s total revenue increased 2.73 per cent to Rs 15,470.50 crore during the quarter compared with 15,059.50 crore in the same period last year.

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Earlier in the day, shares of Wipro closed 0.88 per cent higher at Rs 257.15 on BSE, while BSE benchmark Sensex rose 0.22 per cent to close at 41,952.63.

Here are the key takeaways from Wipro’s Q3 earnings:

Guidance: The company expects revenue from IT services business to be in the range of $2,095-$2,137 million for the quarter ended March 31. This translates into a sequential growth of 0.0-2 per cent.

Comments from management: “We have delivered a good quarter with secular growth across all business units, geographies and practices. We remain focused on deepening our customer relationships, converting our funnel and winning large deals,” said Abidali Neemuchwala, CEO and Managing Director.

The company’s CFO, Jatin Dalal said, Wipro generated strong operating cash flows led by disciplined execution at 124 per cent of its net income.

IT services segment: Revenue from IT services inched up 2.97 per cent to Rs 15,100.60 crore. IT services operating margin for the quarter was at 18.4 per cent, a sequential increase of 0.3 per cent.

IT products segment: IT products segment revenue for the quarter was Rs 260 crore ($36.1 million), while the segment resulted in a loss of Rs 14 crore ($1.96 million).

India state-run enterprises: Revenues from Indian state-run enterprises amounted to Rs 180 crore ($25.9 million), and the segment resulted in a loss of Rs 53 crore ($7.4 million).

Interim dividend: Wipro declared an interim dividend of Re 1 per share.