Wipro Q1 profit rises 2.8%, IT services down 5.3% but margin expands

IT services firm Wipro's June quarter consolidated profit grew by 2.8 percent sequentially to Rs 2,390.4 crore, supported by other income (up 10 percent QoQ) and good operating performance.

Consolidated revenue from operations declined 5.3 percent quarter-on-quarter to Rs 14,922.8 crore.

Investors generally track Wipro's IT services, which reported a 4.6 percent sequential decline in revenue at Rs 14,595.6 crore due to lockdown in several countries following COVID-19 crisis but showed good growth in operating income.

IT services' earnings before interest and tax (EBIT) grew by 3.3 percent to Rs 2,782.2 crore and margin rose 146 bps QoQ to 19.06 percent during the April-June period.

"We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation. We also continued to sustain robust cash generation with operating cash flows at 174.9 percent of net income," Jatin Dalal, Chief Financial Officer, said.

Wipro, in a separate BSE filing, said it signed an agreement to acquire Brazil-based IVIA Servicos de lnformatica Ltda, a specialized IT services provider in financial services, retail and manufacturing sectors in Brazil.

"We continue to make strategic investments in this region and this acquisition will help Wipro address the needs of clients across multiple verticals. Wipro's digital capabilities combined with IVIA's strengths will maximize benefits for clients," said Mukund Seetharaman, Vice President and Head of LATAM at Wipro.