Wipro posts Rs 2,969-cr profit, misses estimates

Wipro missed estimates, posting a net profit of 2,969 crore during Q3, up 1.3% quarter-on-quarter. Revenues rose 3.28% to20,313.6 crore. The company’s operating margin declined 32.9 basis points sequentially to 16.95%. On a constant currency basis, IT services saw a sequential growth of 3.0% at $2.64 billion. The company announced a dividend of Rs 1 per share.

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On the outlook for the fourth quarter ending March 31, Wipro expects revenue from its IT services business to be in the range of $2,692-2,745 million.

Wipro missed estimates, posting a net profit of 2,969 crore during Q3, up 1.3% quarter-on-quarter. Revenues rose 3.28% to20,313.6 crore. The company’s operating margin declined 32.9 basis points sequentially to 16.95%. On a constant currency basis, IT services saw a sequential growth of 3.0% at $2.64 billion. The company announced a dividend of Rs 1 per share.

On the outlook for the fourth quarter ending March 31, Wipro expects revenue from its IT services business to be in the range of $2,692-2,745 million. This would be a growth of 2-4% on a sequential basis.

The demand environment continues to be robust and the company expects to sustain the growth momentum going forward. “We had the fifth consecutive quarter of excellence performance, strong growth in revenues, acceleration in bookings, sustained margins and cash flows. Our revenue growth during the quarter was at 3% in constant currency terms and 27.5% year-on-year,” Wipro CEO and managing director Thierry Delaporte said at a press briefing.

“Our rupee growth of 28.5% on a year-on-year basis is very strong by any standards while operating margins have remained stable. We have done an excellent job on Days Sales Outstanding and working capital management, our operating cash flow is 101% of our net income and we have $4.6 billion of gross hedge,” Wipro CFO Jatin Dalal said. “Our growth continues to be broad-based across all our key markets, service offerings and most of our sectors. We have added over 34,000 new employees on a net basis in the past nine months,” he added.

Wipro added seven new customers in the more than $100-million revenue league in the last 12 months.“The company’s revenue growth was led by strong performance in BFSI and consumer verticals. The Ebit margin was impacted mainly by higher employee cost (cost of revenue) that rose 4.2% sequentially,” Piyush Pandey, lead analyst–institutional equities at Yes Securities, said.Wipro’s employee strength for IT services was at 2,31,671, a net increase of 41,363 employees on a year-on-year basis.

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