Wipro, the third largest IT services company in the country, said its profitability may be impacted by 65-75 basis points during the fourth quarter as one of its telecom clients is undergoing insolvency proceedings.
In a regulatory filing on Monday, the company said it had signed a multi-year outsourcing service agreement with an Indian telecom services provider in 2008 and it was subsequently renewed in the year of 2013.
"On February 28, 2018, the client filed a petition to initiate its Corporate Insolvency Resolution Process (CIRP) with the National Company Law Tribunal (NCLT). The Company subsequently submitted its claim on March 28, 2018," Wipro stated.
The company did not clarify if it is a one-time provision related to its investments and billed work done for Aircel and if the company will book more losses in subsequent quarters.
Wipro said it subsequently submitted its claim on March 28, 2018 and has since then been engaged with the Insolvency Resolution Professional (IRP) to discuss the potential outcome of the process.
Wipro noted that the impact of this client insolvency petition will reflect in the financial results of the company for the quarter and year ended March 31, 2018.
The company is slated to announce its financial results for the fourth quarter and fiscal ended March 31, 2018 on April 25.
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