Wipro posts 0.2% growth in revenue as client additions dropped

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IT services company Wipro has posted revenue of $2.1 billion (+0.2 percent) and net income of $321 million (+1.2 percent) in the first quarter of fiscal 2017.

IT services revenue of Wipro was $1,971.7 million (+2.1 percent) with margins of 16.8 percent.

Business client addition during the second quarter was very poor, with Indian software company adding only 2 clients in the $50 million + category and major of rest added in the US$1 million+ category.

Infosys revenue, under the IFRS, was up 6 percent to $2,651 million from $2,501 million and up 3.2 percent sequentially from $2,569 million quarter ago in dollar value.

Infosys revenue, in rupee value, for the April-June quarter was up 1.8 percent to Rs 17,078 crore from Rs 16,782 crore in the same period year ago and 0.2 percent sequentially from Rs 17,120 crore quarter ago.

“Our focus on Digital combined with our investments in client mining have resulted in strong growth in top accounts,” said Abidali Z Neemuchwala, chief executive officer of Wipro.

Wipro expects revenue from IT services business to be in the range of $1,962 million to $2,001 million.

Infosys earlier said its revenue for fiscal 2018 will grow 7.1 – 9.1 percent in dollars and 3-5 per cent in rupees while it would be 6.5-8.5 percent in constant currency.

Sarabjit Kour Nangra, VP Research – IT, Angel Broking, said unless the company’s client addition becomes strong the company is unlikely to witness sustained growth which most of the large cap IT companies deliver.

BFSI drove the growth during the quarter, posting a QoQ growth 3.2 percent, while Energy, Natural Resources and utilizes posted a QoQ growth of 2.2 percent. APAC and other emerging markets posted a QoQ 2.6 percent, while India and Middle East market posted a QoQ growth of 5.1 percent.

On operating front, the EBIT margins came in at 16.2 percent V/s 14.3 percent in 4QFY2017, mainly driven by the better than expected growth and internal efficiencies. This was against the expectations of 13.0 percent. The utilizations levels of the company were 72.0 percent in 1QFY2018 V/s 71.5 percent in 4QFY2017.

Wipro’s attrition during the second quarter was around 16.1 percent Vs 16.3 percent in 4Q FY2017. The net profit during the quarter was INR 2,082 crore vs INR 1,659 crore expected a dip of 8.1 percent.

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