An unforgiving market dragged down India's third largest IT outsourcer Wipro's stocks over 7 per cent after the company forecast sales that lagged analysts' estimates.
Wipro's IT Services Chief Executive Officer, Mr T. K. Kurien, told newspersons on Wednesday that IT segment's revenue for the first quarter is expected to be $1.52-1.55 billion compared with $1.54 billion in the previous quarter. He said for the quarter ending June, the company expects slowdown in Indian operations. India accounts for 10 per cent of Wipro's IT services revenue.
The guidance implies no growth to marginal growth which led to the Wipro stock tanking 7.3 per cent to close at Rs 410.15, the lowest in the last eight months. Mr Kurien, who is also the company's Executive Director, admitted that it is taking longer to close outsourcing deals.
But the company had some cheer for its employees after it declared that it will hike salaries starting June. About 13,535 employees were hired during the year for the technology services business with the total number of employees at the end of the year standing at 1.36 lakh. The company also declared a dividend of Rs 4 per share taking the total dividend for the year to Rs 6 per share.
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Wipro's net profit on a sequential basis grew 7.7 per cent to Rs 1,480.9 crore for the fourth quarter ending March 31, 2012 while revenues dropped 1.6 per cent to Rs 9,836.3 crore. On a year-on-year basis, Wipro Ltd's net profit increased 8 per cent while total revenues rose 19 per cent.
IT services' revenue, which contributes 76 per cent of the total, on a sequential basis grew 2 per cent and YoY by 9.7 per cent. “In an uncertain environment, we have delivered revenues in line with our guidance,” said Mr Kurien. “Slowdown in India is a one quarter phenomenon, we see growth in the second quarter,” he pointed out.