Wipro Q1 net up 1.1% to Rs 2,082 crore

Wipro Q1 net up 1.1% to Rs 2,082 crore

Q1 results: Delivers revenues above the upper end of guidance

Wipro Q1 net up 1.1% to Rs 2,082 crore

Wipro, India's third largest IT services firm, on Thursday reported a 1.1% increase in net profit at Rs 2,082.4 crore for the first quarter ended June 30, 2017 compared with Rs 2,058.9 crore in the same quarter last year.

Announcing the results, here, the company said it has delivered revenues above the upper end of the guidance range for the quarter. Revenues during the quarter were flat at Rs 13,626.1 crore, compared with Rs 13,599.2 crore in the first quarter of FY17.

Wipro Chief Executive Officer Abidali Z Neemuchwala said, “We delivered revenues above the upper end of the guidance range. Our focus on digital combined with our investments in client mining have resulted in strong growth in top accounts.”

Net income for the quarter increased 1.2% to touch Rs 2,080 crore. Revenues from the IT services segment ($1,971.7 million) increased 0.9% on a sequential basis, and 2.1% year-on-year. Wipro said it expects revenues from its IT services business to be in the range of $1,962-2,001 million in the September quarter.

Commenting on the guidance for the September quarter, Neemuchwala said, “The guidance incorporates regulatory uncertainties from the healthcare sector, in the lack of clarity regarding Obamacare. Several healthcare clients that has to be on-boarded have been put on pause.”

Wipro CFO Jatin Dalal added that the impact on operating margins on account of rupee appreciation and salary increases was partially offset by strong business efficiencies.

"We continue to sustain robust cash generation. Further, restructuring of the India business will help us catch up in the forthcoming quarters,” he added. The company aims to build momentum to achieve industry-level growth rates by Q4 FY2018.

On the operating margin, declined to 16.8% compared with 18.3% in the previous quarter, he said, “It is effective reductions of 150 basis points, of which 130 basis points may be attributed to the appreciating rupee. It is the first time we are seeing such an impact from foreign exchange, The remaining 20 basis points can be attributed to salary hikes, training, etc, which we have been able to correct better.”

Wipro asserted that it has not made any lay-offs, and has marked a net increase in its workforce during the quarter.

The company's shares closed at Rs 269 per share on BSE on Thursday, showing a decline of 0.83% over the previous close.

Wipro also announced a Rs 11,000-crore share buyback, where the IT major would buy 34.3 crore shares for Rs 320 apiece.

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