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Last Updated : Jan 14, 2020 08:23 AM IST | Source: Moneycontrol.com

Wipro likely to report 1.8-2% CC revenue growth in Q3

The IT services dollar revenue growth could be around 2.2% for the quarter (QoQ), driven by incremental revenue from ITI acquisition and ICICI deal ramp-up.

 
 
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Wipro, the country's fourth largest IT company by market capitalisation, is expected to report around 1.8-2 percent sequential growth in constant currency IT services revenue for the quarter ended December 2019.

This is within the guidance of 0.8-2.8 percent given by the company for the December quarter.

The stock gained more than 1.5 percent on January 13 ahead of earnings scheduled to be announced on January 14. It rose 2.6 percent during the quarter, which was higher than Nifty IT index (that registered 0.72 percent upside in Q3), but lower than Nifty50 that gained 6 percent.

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The IT services QoQ dollar revenue growth could be around 2.2 percent for the quarter, driven by incremental revenue from ITI acquisition and ICICI deal ramp-up.

Usually, analysts track a company's IT services revenue instead of consolidated topline, which also included its hardware business.

"We expect 1.9 percent QoQ growth on constant currency basis and cross-currency tailwinds of around 30 bps," said Sharekhan while Kotak Institutional Equities expects constant currency revenue growth of 1.8 percent.

"We expect contribution of 30 bps to the revenue growth from the ITI acquisition. Revenue growth will be led by the consumer vertical," the brokerage said.

Most brokerages expect the company's earnings before interest and tax (EBIT) to grow over 1.5 percent with margin moderately higher QoQ.

"We expect stable EBIT margin for the quarter and aided by marginal depreciation of INR against USD and cross-currency tailwind," said Kotak which sees EBIT growth of 1.8 percent QoQ.

Prabhudas Lillahder expects EBIT growth of 1.5 percent and margin expansion of 10bps QoQ.

According to brokerages, the IT company is likely to forecast 0.5-3 percent constant currency revenue growth for January-March quarter over December quarter as it is a seasonally strong quarter for the company.

Investor focus would be on the US and Europe BFSI vertical outlook, sustainability of growth, margin guidance in the absence of revenue growth, growth outlook from the top client, and commentary on BFSI, healthcare, E&U and retail segments.

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First Published on Jan 14, 2020 08:23 am
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