Wipro Q3 net up higher-than-expected 10% YoY; stock up 3%

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Wipro Q3 net up higher-than-expected 10% YoY; stock up 3%

Wipro reported a little-higher-than expected results for the third quarter, helped by the rupee depreciation and outsourcing demand, sending its shares up 3% in opening trade. The software services exporter's consolidated net profit for October-December rose 10% year-on-year to Rs 1,456 crore.

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Wipro reported a little-higher-than expected results for the third quarter, helped by the rupee depreciation and outsourcing demand, sending its shares up 3% in opening trade. The software services exporter's consolidated net profit for October-December rose 10% year-on-year to Rs 1,456 crore. But it too warned that the uncertainties in the global economic environment remained a concern.

The Bangalore-based company's revenue in the third quarter was up 28% from a year ago to Rs 9,997 crore. 

Analysts on average had expected Wipro to report a net profit of Rs 1,450 crore on revenue of Rs 9,765 crore, according to a CNBC-TV18 poll.

"We continue to execute on our strategy and propel the business towards a higher growth trajectory. The overall macro economic sentiments continue to be uncertain and we are monitoring it closely," Chairman Azim Premji said on Friday.

The company's revenue from IT services, which accounts for 72% of its total topline, rose 28% year-on-year to Rs 7,608 crore. In US dollar terms, IT services revenue rose 12% from a year ago and 2.2% sequentially to USD 1.51 billion.

Wipro now expects IT services revenue in USD 1.52-1.55 billion range in the fourth quarter, up 1-3% quarter-on-quarter. The guidance is based on dollar-rupee exchange rate of 51.75.

Rival Infosys last week had guided for a flat growth in the fourth quarter.

"We saw broad based growth with 5 of the 6 verticals growing upwards of 4% in constant currency. Revenues in constant currency exceeded the guidance range. We have seen positive feedback from customers and employees on our restructuring approach," said TK Kurien, ED & CEO.

To gain operational flexibility in the current uncertain environment, enterprises continue to variabilize their IT and operations, Wipro said. It said it continues to see growth in the cloud enablement business, outcome based and service based pricing models.

Wipro added 39 customers in the third quarter. It added 5,004 employees in the quarter in the IT services segment and had 136,734 employees as of Dec 31.

Among its other segments, Wipro's consumer care and lighting business saw revenue rise 26% year-on-year in Oct-Dec to Rs 879 crore, while EBIT (earnings before interest, taxes) was up 22% at Rs 104 crore.

Revenue from Wipro's IT products division was up just 2% from a year ago at Rs 900 crore, while EBIT was up 16% at Rs 47.5 crore.

At 9:45 hrs Wipro shares were up 4.2% at Rs 421.10 on NSE.

"We expect uptick in the stock as we/consensus expectation finally met Wipro's performance. We believe better than peers guidance indicates restructuring working well for Wipro," said Shashi Bhusan, analyst at Prabhudas Lilladher.

Nachiket Kelkar
nachiket.kelkar@network18online.com