Wipro outlook up for Q2; net down in Q1

IT major Wipro on Tuesday gave a higher revenue outlook for second quarter of 2016-17, even as its net profit declined 6.7 per cent annually and 8 per cent sequentially in the first quarter.

“We expect revenue from our IT services business to be in the range of $1,931-1,950 million for the quarter ending September 30,” the global software major said in a statement here.

Revenue from IT services for first quarter grew 7.6 per cent annually and 2.6 per cent sequentially to $1,931 million (dollar terms) and Rs 13,100 crore (rupee terms) for first quarter as against $1,901-1,939 million, projected in April.

Net profit of the city-based company, however declined 6.7 per cent annually and 8.1 per cent sequentially to Rs 2,059 crore for quarter under review from Rs 2,207 crore in like period year ago and Rs 2,240 crore quarter ago.

The total revenue, however, increased to Rs.13,600 crore for Q1, up 11 per cent in like period year ago from Rs 12,238 crore, but flat (0.2 per cent) sequentially from Rs 13,630 crore in the previous quarter, Q4 of 2015-16.

Under the International Financial Reporting Standard (IFRS), net income for Q1 was $304 million and total revenue $2 billion.

Revenue from IT products was Rs 590 crore ($88 million) for the quarter.

“We have delivered revenues in line with guidance. Our early investments in digital practice and cognitive intelligence are positioning as the partner of choice for customers in the change side of their business,” said Wipro Chief Executive Abidali Z. Neemuchwala in the statement.

Operating margin also declined 1.9 per cent sequentially and 2.9 per cent annually to 17.8 per cent in first quarter from 19.7 per cent quarter ago and 20.7 per cent in same period year ago.

“IT services margin (17.8 per cent) reflects the investments in rewarding employees and the impact of consolidation of acquisitions for the quarter,” said Chief Financial Officer Jatin Dalal.

The company gave a salary hike of 9.5 per cent for offshore and 2 per cent for onsite employees from June 1 as a reward for their higher performance.

Services business division added 50 new clients in the quarter as against 119 quarter ago and 36 year ago, taking the total number of active clients to 1,208 as against 1,223 quarter ago and 1,071 year ago.

“We expect the growth trajectory to build over the year as we drive execution on strategic themes and make progress towards achieving a sustainable growth,” Neemuchwala said.

The services business added 951 employees during first quarter, taking its total headcount to 173,863 by end of June 30 as against 172,912 quarter ago and 161,789 in same period year ago.

“Attrition rate, however, increased on annualised basis to 17.9 per cent in quarter under review from 14.9 per cent quarter ago and 16.4 per cent in like period year ago in IT services business, excluding business process services,” the statement said.

In all, 14,324 employees left the company in first quarter as against 13,737 quarter ago and 12,517 in same period year ago. IANS