Wipro has posted third quarter numbers in line with its expectations but failed to meet analysts’ projections due to Chennai floods as well as continued stress in its energy and utilities business.

India’s third largest software exporter posted profits of ₹2,234 crore, a 1.8 per cent growth when compared to the same period last year. Further, revenues were ₹12,951 crore, a 7 per cent increase when compared to the year ago period.

For the March 2016 quarter, Wipro forecast revenue in the range of $1.875-1.912 billion, a sequential growth of 2-4 per cent, in line with analyst expectations. The company also declared an interim dividend of ₹5 per share.

Commenting on the company’s performance T K Kurien, Member of the Board & Chief Executive Officer of Wipro, said: “We saw a pick-up in large deal closures led by Global Infrastructure Services and customers want to simplify operations and optimise their IT spend while investing in Digital to transform their business.”

However, it is the performance in the third quarter, which included a dip in margins that did not impress some analysts. To put it in context, Wipro at the end of the second quarter ended September had given a guidance of $1.84-1.87 billion for the December ended quarter.

According to Sarabjit Kour Nangra, Vice-President - Research, IT, Angel Broking, numbers were lower than expected on all fronts. “The IT services posted a 0.3 per cent sequential growth in USD revenues, on the constant currency terms (CC), it posted a 1.4 per cent QoQ growth and revenues came in at the middle band, all of which we had higher expectations,” she said. Margins in the IT services business came in at 20.2 per cent, slightly lower than 20.7 per cent in the second quarter.

According to Dipen Shah, Senior Vice-President & Head of Private Client Group Research, Kotak Securities, Wipro continues to be impacted by the lack of scale up in large accounts, apart from the continuing challenges in the energy and telecom businesses. The energy natural resources and utilities contributed 14.4 per cent of revenue ($1.84 billion) in the quarter under compared with 16.4 per cent in the same period last year.

The company’s IT services profit came in at ₹2,482 crore while the revenue was ₹12,314 crore. Wipro’s stocks closed at ₹547, about 0.72 per cent higher when compared to the previous day’s close.

Related Topics