Wipro revenue shows challenges in IT services market

Wipro is hiringWipro said its IT services revenue was $2.013 billion (flat sequentially and +5.8 percent year on year) with IT services margin of 14.8 percent in Q3 fiscal 2018.

Wipro said its IT services margin was impacted by a provision of $49.7 million made with respect to insolvency of a customer post the balance sheet date. Net income was $303 million (–8.2 percent) during the quarter.

Wipro said its digital revenue surpassed 25 percent of its total IT services revenue in the third quarter ended 31 December 2017. The company is yet to reveal name of its digital customers.

Strategic Business Units

Communications 6.4%
Consumer Business Unit 16%
Energy, Natural Resources and Utilities 12.4%
Banking, Financial Services and Insurance 28.5%
Healthcare and Life Sciences 14%
Manufacturing and Technology 22.7%

Geography
Americas 53.1%
APAC and Other Emerging Markets 11%
Europe 25.9%
India & Middle East 10%

The quarter on quarter growth in terms of geography was mainly driven by Europe (4.7 percent), India & Middle East (1.4 percent) business.

In terms of verticals, the quarter on quarter growth was driven by the BFSI (4.4 percent) and Healthcare (2.5 percent) segments. The key vertical of the company was Energy, Natural Resources and Utilities (6.1 percent). Manufacturing and Technology posted a flat growth during the period.

The technology outsourcing company posted an EBIT of 16.8 percent vs 16.8 percent in Q2 FY2018.

Wipro added 79 clients during the third quarter. It added one client in the $75 million+ and two clients in the $50 million.

Abidali Z Neemuchwala, CEO of Wipro, said: “We continued to improve our growth trajectory driven by strong momentum in BFSI and uptick in Healthcare. This is also reflected in our outlook for the next quarter. Our leadership in Digital continues to strengthen with over 25 percent of our revenues now coming from Digital.”

Wipro has slashed the number of workforce to 162,553 in Q3 from 163,759 in Q2 and 166,790 in Q1. The attrition rate during the quarter was 15.9 percent vs 15.7 percent in Q2 FY2018.

Wipro expects revenues from IT services business to be in the range of $2,033 million to $2,073 million, showing quarterly growth of 1-3 percent.

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