Wipro posts 17% decline in profit during April-June quarter

The company said all its strategic market units and global business lines grew in double digits year-on-year in constant currency terms. It closed 18 large deals, resulting in a TCV of $1.1 billion during the quarter.

Wipro posts 17% decline in profit during April-June quarter
At Rs 21,528.60 crore, revenue during the period was up 3.2% sequentially and a tad below estimates of Rs 21,545.3 crore.

IT services major Wipro on Wednesday missed analyst estimates, reporting a 17% quarter-on-quarter fall in consolidated net profit to Rs 2,563.6 crore during the April-June quarter, on the back of rising employee-related expenses.

The Bloomberg consensus estimate had pegged the net profit at Rs 2,996.6 crore.

At Rs 21,528.60 crore, revenue during the period was up 3.2% sequentially and a tad below estimates of Rs 21,545.3 crore.

In its outlook for the July-September quarter, the company said it expects revenue from its IT services business to be in the range of $2,817 million to $2,872 million, which translates to a sequential growth of 3-5%.

Operating margin in the IT services segment during the quarter, at 15%, declined 200 basis points. In constant currency terms, the IT services revenue increased 2.1% on a sequential basis.

Wipro CFO Jatin Dalal said operating margins have bottomed out at 15%.

Thierry Delaporte, CEO and managing director, said, “We have made significant investments in Wipro’s growth engine and are very pleased with the outcomes. Our order bookings grew 32% year-on-year in total contract value (TCV) terms, powered by large transformational deals, and our pipeline today is at an all-time high.”

The company said all its strategic market units and global business lines grew in double digits year-on-year in constant currency terms. It closed 18 large deals, resulting in a TCV of $1.1 billion during the quarter.

Wipro said its attrition rate was at 23.3%, marginally lower than 23.8% in the preceding quarter but 15.5% higher than the same quarter last year. Net headcount addition during the quarter was 15,446, which included more than 10,000 freshers.

In terms of sector mix, the company earns 35.4% from banking, financial services and insurance. This is followed by 18% in consumer and 11.5% in health.

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