Moneycontrol Bureau
Wipro, one of the country's largest software services providers, matched analysts' expectations on September quarter revenue and operating profit front Wednesday. IT services revenue in rupee terms grew by 4 percent sequentially to Rs 12,042.8 crore and dollar revenue increased by 2.1 percent to USD 1,831.9 million in quarter ended September 2015.
Non-GAAP constant currency IT services dollar revenue growth was 3.1 percent quarter-on-quarter and 8.4 percent year-on-year, says the company in its filing, adding IT services profit increased 2.88 percent to Rs 2,500 crore on sequential basis.
Revenue in rupee terms was expected at Rs 12,003 crore and dollar revenue at USD 1,830 million for the quarter with operating profit margin of 20.6 percent, according to average of estimates of analysts polled by CNBC-TV18.
Consolidated net profit of the company increased 2.2 percent quarter-on-quarter to Rs 2,235.4 crore and revenue rose by 1.6 percent to Rs 12,566.8 crore in the quarter gone by.
Wipro Digital has strengthened uniquely by addition of Designit (acquired during the quarter), TK Kurien, CEO says (in its filing to exchanges), adding Wipro HOLMESTM (cognitive intelligence platform), is engaged in 12 projects.
While addressing press conference post earnings, he says digital business showed strong traction with 7 deal wins in Q2. Wipro has launched a focussed programme to train 10,000 employees in digital, he adds.
IT services operating profit margin contracted by 30 basis points to 20.7 percent in September quarter on sequential basis.
"Investments in next-gen delivery practices generated productivity to significantly mitigate impact of wage hikes and utilisation on operating margins," Jatin Dalal, CFO of Wipro says, adding impact of cross-currency on operating margins were compensated by benefits from rupee depreciation.
Wipro says it expects revenue from IT services business to be in range of USD 1,841 million to USD 1,878 million for October-December quarter, a growth of 0.5-2.5 percent over September quarter.
Guidance was lower than analysts' expectations of 1.5-3.5 percent growth. "Q3 guidance was impacted by high furloughs, less working days & slow ramp-up in deals won," says Kurien.
The software services provider has added 67 new customers during the quarter.
Revenue from America business grew by 3.1 percent during the quarter, Europe 0.7 percent, India 1.4 percent and Asia-Pacific showed 1.4 percent growth.
Among business verticals, global media & telecom reported a 3.3 percent growth, finance solutions 2.1 percent, manufacturing & hitech up 2.9 percent and retail 2.4 percent. Healthcare, life sciences & services segment showed 3.8 percent growth while energy business declined 1.4 percent.
Energy business was impacted by lower commodity prices delivered flat earnings, says Kurien, adding he sees stable demand environment going forward.Speaking to CNBC-TV18, Prakash Diwan of prakashdiwan.in says the company’s inherent stress is not getting resolved and it has benefited through dollar revenue.
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