Wipro net down 14 percent in second quarter

Last Updated: Thu, Oct 25, 2018 09:56 hrs
FILE PHOTO: People walk in the Wipro campus in Bangalore

Bengaluru: Global Software major Wipro on Wednesday reported Rs 1,886 crore consolidated net profit for the second quarter of the fiscal 2018-19, registering 14 per cent annual decline from Rs 2,190 crore in the same period a year ago.

Sequentially too, net profit declined 10 per cent from Rs 2,094 crore a quarter ago.

In a regulatory filing on the BSE, the city-based IT major said consolidated revenue for the quarter (Q2) under review, however, grew 8 per cent year-on-year (YoY) to Rs 14,540 crore from Rs 13,423 crore in the like period year ago and 4 per cent sequentially from Rs 13,978 crore a quarter ago.

Revenue from IT services for Q2 at Rs 14,380 crore is 9.1 per cent up YoY from Rs 13,172 crore a year ago and 5 per cent up sequentially from Rs 13,700 crore a quarter ago.

Under the International Financial Reporting Standard (IFRS), net income is $260 million and gross revenue $2,005 million.

Revenue from IT Services is $2,041 million, which is marginal up (1.3 per cent) annually from $2,014 million a year ago and flat (0.7 per cent) sequentially from $2,026.5 million a quarter ago.

Though the company in July projected IT services revenue in the $2,009-2,049-million range for Q2, it restated (lowered) the guidance on actual currency realised at Rs 70.44 per $ to $1,900-2,030-million range.

For the third quarter (October-December), the company has projected revenue from IT services in the range of $2,028-2,068 million.

"Comparable revenue, excluding India PSU (public sector undertakings) and India government business for the quarter (Q2) was $2,007 million, which translates to a sequential growth outlook of 1-3 per cent," said the outsourcing firm in a statement here later.

The IT services margin for the quarter includes a loss of Rs 514 crore from the settlement with one of its unspecified key customers.

As a result, operating margin declined to 14.6 per cent in Q2 from 17.2 per cent a quarter ago and 17.3 per cent a year ago.

IT products segment revenue for the quarter was Rs 290 crore ($39.6 million).

The IT services business added 76 customers in Q2 as against 75 a quarter ago and 41 a year ago.

"The total number of active clients, however, declined to 1,193 in Q2 from 1,254 a quarter ago and 1,274 a year ago," admitted the company in a fact sheet.

Company's Chief Executive Abidali Neemuchwala, however, claimed that the company had delivered a strong quarter on both revenue and margin growth.

"We won our largest deal to date and four of our business units grew over 4 per cent sequentially in constant currency terms," Neemuchwala asserted in the statement.

He also pointed out that the demand environment was robust, especially for digital transformation and enterprise scale modernisation services.

The company made a net addition of 11,687 people during the quarter, taking the total headcount to 176,346 from 164,659 a quarter ago and 163,759 a year ago.

"Improvement in our operating metrics reflects our execution, which has resulted in our adjusted IT services margin reaching 18.1 per cent in the quarter. We see automation as a key lever to drive margins going forward," said Chief Financial Officer Jatin Dalal on the occasion.

The company's blue-chip scrip of Rs 2 face value closed flat at Rs 309.15 per share at the end of Wednesday's trading as against Tuesday's closing price of Rs 309.30 and after opening at Rs 310.20. The scrip also traded at a high of Rs 311.80 and a low of Rs 299.95 during the intra-day session.



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