Wipro logs modest Q3 net profit of 2% at Rs 2,234 cr

Wipro logs modest Q3 net profit of 2% at Rs 2,234 cr

Forecasts dollar revenue growth of 2 % to 4% in Q4

Wipro logs modest Q3 net profit of 2% at Rs 2,234 cr

India’s third largest IT company Wipro on Monday announced its Q3 results for FY 2016 on expected lines. Its net profit grew just 1.88 per cent on year-on-year (YoY) basis to Rs 2,234 crore.

Besides seasonal furloughs and Chennai rains, the company’s fortunes were dented because of slide in oil prices hitting its energy and utility space and its failure to pick up the banking, financial service and insurance front (BFSI).

On the quarter-on-quarter basis, net profit fell 0.06 per cent, compared with the Q2 of FY 2015. Earnings before interest and tax (EBIT) declined half a per cent quarter-on-quarter to Rs 2,482 crore and margin contracted 50 basis points to 20.2 per cent in Q3.

Wipro expects dollar revenues in the range of $1,875-1,912 million in the January-March quarter, a growth of 2-4 per cent over the third quarter.

The company’s total Income from operations increased 7.17 per cent to Rs 12,951.60 crore for the quarter ended December 2015, compared with Rs 12,085.10 crore in the corresponding quarter, a year ago. It registered 3.06 per cent growth at Rs 12,566.80 crore in the sequential quarter ended September 2015.

Wipro CEO and Member of the Board T K Kurien said the company delivered revenues in line with our guidance.

“We saw a pick-up in large deal closures led by global infrastructure services (GIS). It is becoming increasingly clear that customers want to simplify operations and optimise their IT spend while investing in digital to transform their business.”

The company’s flagship IT services profit stood at around Rs 2,482 crore, while the IT services revenue was Rs 12, 314 crore. The IT services margin for the quarter was 20.2 per cent. In dollar terms the company’s net profit stood at $338 million, up 2 per cent. The IT Services segment’s revenues were $1,838.3 million, a sequential increase of 0.3 per cent.

Abidali Z Neemuchwala, CEO-designate, said the company is focused on driving market share growth in our core businesses through integrated domain and technology services, while investing for the future in building differentiated Digital capabilities.

Wipro also announced an interim dividend of Rs 5 per equity share of par value Rs 2. The payment date for interim dividend will be made on, or before, February 2, 2016.

On the headcount front, the company added 2,268 employees taking the total strength to 1,70,664. Employee utilisation levels dropped sharply to 66.4 per cent from 69.5 per cent in the September quarter and 71.3 per cent in the June quarter.