1. Wipro Q3 net profit falls to Rs 1,930 crore; revenue at Rs 13,669 crore; misses street estimates

Wipro Q3 net profit falls to Rs 1,930 crore; revenue at Rs 13,669 crore; misses street estimates

India’s IT bellwether Wipro Ltd reported a slight fall in consolidated net profit to Rs 1,930 crore as against Rs 2,115 crore in the same period previous fiscal. India’s major software exporter reported a marginal fall in revenue to Rs 13,669 crore as compared to Rs 13,688 crore in December-17.

By: | Updated: January 19, 2018 7:26 PM
Wipro Technologies reported lower than estimated net profit Kotak Institutional Equities had said the management is confident of catching up with industry peers on growth by the next quarter. (Image: Reuters)

India’s IT bellwether Wipro Ltd reported a slight fall in consolidated net profit to Rs 1,930 crore as against Rs 2,115 crore in the same period previous fiscal. India’s major software exporter reported a marginal fall in revenue to Rs 13,669 crore as compared to Rs 13,688 crore in December-17. Operating margin, calculated as sales minus expenses, stood at 14.8%. Wipro expects IT services revenue to be in the range of USD 2,033-2,073 million in March 2018 quarter.

Earlier, analysts had expected the rupee revenue to climb by 2.9 percent for the quarter ended December 2017 to Rs 13,553 crore, aided by acquisitions compared to Rs 13,169 crore reported in the previous quarter, according to CNBC-TV18 estimates. 

The company said that it has concluded the buyback of 343.75 million equity shares. “This has resulted in a total cash outflow of 110,000 million. In line with the requirement of the Companies Act 2013, an amount of 1,656 and 108,344 has been utilized from the share premium account and retained earnings respectively. Further, capital redemption reserves (included in other reserves) of 687 (representing the nominal value of the shares bought back) has been created as an apportionment from retained earnings. Consequent to such buy back, share capital has reduced by 687,” said the firm in a stock exchange filing.

Edelweiss said that it expects Wipro to post 1.4 percent QoQ revenue growth in USD as well as in constant currency (cc) terms. The absence of 2-month wage hike impact (present in Q2FY18) and marginal appreciation of INR are expected to lead to mere 20bps QoQ margin expansion, as the quarter will be impacted due to seasonal furloughs, the firm said. “The management commentary on matching industry-level growth from Q4FY18, update on India & Middle East markets post restructuring, traction in Energy & Utilities and BPM verticals will be keenly analysed,” the firm noted in its report.

Kotak Institutional Equities had said the management is confident of catching up with industry peers on growth by the next quarter. EBIT margins were expected to remain steady and possibly have an upward bias in the next two years, it feels. Kotak had in December said  pressure on market share especially in vendor consolidation decision is a concern.

Sharekhan had said that it expects revenue growth of 0.8 percent on a QoQ basis on CC basis which is well below the mid-point of revenue growth guidance band of 0-2 percent QoQ. The had said that it expects cross-currency tailwind of 20 bps on dollar revenue growth. It had also indicated that revenue growth would be impacted due to seasonal furloughs and weakness in healthcare (regulatory issues in the U.S.) and communication vertical (client-specific issues).

Sharekhan expects EBIT margin in IT services would remain flat on a QoQ basis, led by operational efficiencies and absence of two-month wage hike impact, offset by lower revenue growth during the quarter.

Earlier, Wipro had reported more than 5 per cent quarter-on-quarter rise in consolidated net profit at Rs 2,190 crore for quarter ended September 30, 2017 against Rs 2,083 crore in the previous quarter ended June 30, 2017.

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