Wipro reiterated its position among the IT majors by delivering financial growth higher than Infosys, but lower than that of HCL Technologies (HCL) and TCS.
But, as with Infosys, the company gave a feeble revenue outlook for the June quarter, which suggests that Wipro still has a long way to go to catch up with fast growing peers.
In the March quarter, the company's IT services division's revenues and EBIT (earnings before interest and taxes) fell marginally sequentially and stood at Rs 7,590 crore and Rs 1,573 crore, respectively. In dollar terms, revenues grew 2 per cent. This is better than Infosys, but lower than HCL and TCS.
The key positive highlights for the quarter include large deal wins in line with peers, growth in the US geography ahead of competition as well as pricing increases. But tepid volumes (person-months billed), slower growth or decline in key verticals and a lacklustre guidance came as dampeners.
Lackadaisical volumes
Wipro had just a 0.8 per cent increase in volumes on a sequential basis, which was much lower than the 2.3-2.9 per cent managed by HCL and TCS, but better than Infosys. Utilisation at 76.1 per cent was lower compared to the 80 per cent-plus levels managed by competitors. Together, these factors suggest sluggishness in projects taking off. There was some consolation though as Wipro managed a realisation improvement of 1.2 per cent, which was ahead of peers.
Deal momentum
The company scored on the key aspect of large-deal wins as it managed to add one customer in the $100 million category and two clients in the $75 million bucket. This is better than peers TCS and Infosys and in line with what HCL managed.
Also, revenues from the US (over 52 per cent of the overall pie) were up, which again was better compared to peers.
But as was with the competition, the revenues from the BFSI segment fell, though marginally (0.6 per cent sequentially) lower than the 1-3 per cent for peers. All the top IT companies have reported declines in this segment, which increases concerns on client spending in the vertical.
Though Wipro's numbers indicate a reasonably well-rounded performance, a guidance of just 0.9 per cent growth (at the upper end) in dollar terms for the June quarter has left the markets disappointed. This tepid projection means that matching peers or even industry body Nasscom's annual estimate (11-14 per cent) for IT services companies would be challenging.
With all the listed IT majors reporting their March scorecards, HCL seems to have a head start in terms of business momentum.