Wipro has over 22,000 employees in its Chennai operations
India’s third largest IT services exporter Wipro on Wednesday said that its operating margins and revenue will take a hit in the third quarter of the current fiscal due to the impact of recent floods in Chennai.
Wipro, which has over 22,000 employees in its Chennai operations in an update to the stock exchanges said, “We expect revenues to be in the lower half of the guidance range.” The IT major had guided to a revenue in the range of $1,841-1,878 million for the third quarter of the fiscal.
“The incident is expected to have a material impact on the revenues and will result in one-time cost incurred towards deployment of our business continuity plan. Both these factors will impact our operating margins for the quarter,” it said.
Wipro is the second Indian IT services company to provide an update on the business impact following the floods in Chennai. Tata Consultancy Services (TCS) on Friday last warned that the floods would have a material impact on its third-quarter revenues as it employs 65,000 people in Chennai.
The unprecedented rainfall in Chennai had impacted the regular business operations of Wipro’s Chennai facilities in the first week of December. The company said business continuity plans were invoked for the work being done from its Chennai facilities and there was no disruption in the business-critical operations.
Wipro said it has largely seen the restoration of normal operations at its Chennai facilities and it has adequate insurance coverage. Chennai is a major development centre for India’s technology industry. The other IT majors like Cognizant, Infosys and HCL Technologies have also large operations in the city.
Cognizant with more than 60,000 employees in Chennai has already announced a committment of Rs 260 crore to help residents, its employees and business partners in Chennai with relief and rehabilitation in the aftermath of recent flooding. Cognizant has committed Rs 195 crore to assist its employees and business partners through direct grants and loans.