Wipro Q3 Profit Falls 2.2 Percent To Rs. 2456 Crore

A buyback programme and a slowdown in the financial sector have pulled down the third-quarter net profit of the country’s third-largest IT services company, Wipro, by 3.8 percent to Rs. 2,456 crore on a sequential basis.

The company’s CFO Jatin Dalal said the depletion of cash following the buyback programme and a slowdown in capital markets impacted the net profit. Revenues rose 2.3 percent sequentially in Q3 FY20 to Rs. 15,470.5 crore while the operating margin grew 0.3 percent to 18.4 percent on a quarter-on-quarter basis.

Wipro also guided for the next quarter ending March 31, 2020. It expects revenues from its services business to be in the range of $2.09 billion to $2.13 billion ($2,095 million to $2,137 million).

This translates into a sequential growth of 0-2 percent, with the upper end of the guidance slightly below Street estimates.

Wipro ended the day at Rs. 256 on the BSE, nearly flat compared with the previous day’s closing price.

On a year-on-year (YoY) basis, the net profit declined 2.2 percent while revenues expanded 2.7 percent for the same period. The IT services segment revenue was at $2.09 billion, a sequential growth of 2.2 percent. EPS for the quarter was Rs. 4.3 per share, up 3.2 percent YoY. Wipro has declared an interim dividend of Rs. 1 per share.

‘Secular growth’

“We have delivered a good quarter with secular growth across all business units, geographies and practices. We remain focussed on deepening our customer relationships, converting our funnel and winning large deals,” said Abidali Z Neemuchwala, MD and CEO.

Wipro’s revenues also received a boost with the acquisition of International TechneGroup Inc, a digital engineering company based out of the US, for $45 million last October.

Operating margin

“We expanded operating margins by 0.3 percent, aided by a favourable movement in the currency.

“Further, we generated strong operating cash flows led by disciplined execution at 124 percent of our net income,” said Wipro CFO Jatin Dalal.

Wipro also said its campus hiring has been doubled from the previous year.

On an annualised basis, attrition fell to 12.5 percent in Q3 from 16 percent in Q2, which a Wipro executive attributed to a higher number of fresh hires.―The Hindu Business Line