Wipro Q3 beats estimates; stock down 4% on profit booking

Moneycontrol Bureau

IT services major Wipro reported better-than-expected revenues and net profit for the December quarter, but revenue guidance for the March quarter was muted, prompting investors to book profits. The stock was down around 4 percent to Rs 414.

Consolidated third quarter net profit was Rs 1,716 crore, up 6.5 percent sequentially, surpassing a CNBC-TV18 poll estimate of Rs 1,633 crore. The bottomline got a boost from a lower tax rate of 21.9 percent for the quarter, compared to 23.9 percent in the preceding quarter.

Quarterly revenues rose 3.3 percent sequentially to Rs 10,989.1 crore, against a poll estimate of Rs 10,930 crore.

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The company has guided for USD 1.585-1.625 billion of IT services revenues for the March quarter, translating into a flattish to 3 percent sequential growth.

"We have seen broad based growth in the (December)quarter with all our verticals growing sequentially," Wipro Chief Executive TK Kurien said in the release.

"Our improvement in customer and employee engagement is reflected in client mining with 10 customers contributing more than USD 100 million and lower attrition," he said.

Operating profit margin for the IT services business inched up 0.1 percentage point to 20.8 percent, with Chief Financial Officer Suresh Senapathy attributing it to "improvements in revenue productivity and improved cash flow generation through efficient working capital management."

The company added 50 new customers for the quarter and added 2,336 employees during the quarter.