Wipro forecasts flat Q2 growth after in-line Apr-June

Software services exporter Wipro met street expectations on Tuesday, with a consolidated net profit of Rs 1,580.2 crore in April-June, up 18% year-on-year. Its total income rose 24% to Rs 10,619.6 crore in the quarter.

However, the company has guided for a flattish growth in the second quarter. It expects revenue from IT services in USD 1.52-1.55 billion range in July-September, compared with USD 1.515 billion revenue it reported in the first quarter. The quarterly guidance indicates 0.3-2.3% sequential growth.

Analysts on average had expected Wipro to report a net profit of Rs 1,578 crore on revenue of Rs 10,510 crore, according to a CNBC-TV18 poll.

Here are more highlights from Wipro's earnings announcement on Tuesday:

- Q1 constant currency IT services revenue was USD 1.54 billion, in its earlier guidance range of USD 1.52-1.55 billion.
- Q1 IT services revenue in dollar terms was impacted USD 25 million due to cross-currency impact.
- Q1 IT services revenue in rupee terms was Rs 8,314 crore, up 30% year-on-year.
- IT services accounted for 78% of total revenue and 93% of operating income in Q1.
- Wipro added 37 new customers in the quarter.
- Staff strength in IT services segment rose by 2,632 people to 1,38,552 employees.
- Revenue from consumer care and lighting business rose 30% year-on-year to Rs 980 crore, while EBIT (earnings before interest and taxes) rose 27% to Rs 114 crore.
- Revenue from IT products declined 5% to Rs 953 crore, while EBIT was Rs 21.1 crore.

Management Comments:

"In today's complex business environment, global corporations are increasingly investing in transformational technology initiatives to improve competitiveness. We see this shift as an opportunity for us to lead this change and help customers differentiate in this fast evolving market," said Chairman Azim Premji.

"We have seen high levels of volatility in currencies globally. We have improved profitability while continuing to invest for growth," said Suresh Senapaty, CFO.

Stock Talk:

Wipro shares fell after investors were disappointed by the flat guidance. Its shares were 3.6% at Rs 343.55 on NSE in morning trade. The stock is down 19% so far this financial year, compared with the CNX-IT index, which has slipped near 14% in the same period.