Wipro net dips 8 per cent quarterly, flat yearly
BENGALURU: Global software major Wipro Ltd on Thursday reported Rs 2,080 crore net profit for the first quarter of fiscal 2017-18, registering 8 per cent sequential decline from Rs 2,260 crore a quarter ago but 1.2 per cent up annually from (Rs 2,059 crore) in the like period a year ago.
In a regulatory filing on the BSE, the IT major said revenue for the quarter (Q1) under review at Rs 13,630 crore was 2.5 per cent lower sequentially from Rs 13,990 crore a quarter ago and flat (0.2 per cent) annually from Rs 13,599 crore in the same period year ago.
Under the International Financial Reporting Standard (IFRS), net income for Q1 was up 1.2 per cent yearly to $321 million and gross revenue flat (0.2 per cent) yearly at $2.1 billion.
Revenue from IT services business at $1,972 million was flat (0.9 per cent) quarterly but up 2.1 per cent annually under IFRS.
Profit from IT services business declined 5.8 per cent year-on-year (YoY) to Rs 2,190 crore or $339 million. Operating margin from IT services was 16.8 per cent for Q1.
Having exceeded the guidance figure of $1,915-1,955 million given for Q1 by posting $1,972 million, the outsourcing firm has projected revenue from IT services in the range of $1,962-2,001 million for the second quarter (July-September or Q2) of this fiscal (FY 2018) in dollar terms under IFRS.
“We delivered revenue above the upper end of the guidance range. Our focus on digital combined with investments in client mining have resulted in growth in top accounts,” Wipro Chief Executive Abidali Z. Neemuchwala told reporters here.
Unlike its rival Infosys, Wipro does not give annual revenue guidance.
Operating margin for IT services, however, declined 1.5 per cent sequentially to 16.8 per cent in Q1 from 18.3 per cent quarter ago and 1 per cent yearly from 17.8 per cent in the same period year ago.
“The impact on operating margins by rupee appreciation and salary increases was, however, partially offset by business efficiencies. We continue to sustain robust cash generation,” said Chief Financial Officer Jatin Dalal.
The company added 45 new clients for Q1, as against 51 quarter ago and 50 year ago. The total number of active clients, however, slumped by 79 to 1,244 by June 30 from 1,323 a quarter ago by March 31, but was up 36 from 1,208 in same period year ago.
Revenue from repeat business was 99.6 per cent in Q1 as against 96 per cent quarter ago and 99.7 per cent a year ago.
Revenue from software products increased 7 per cent annually to Rs 630 crore ($98 million) in the quarter under review.
“On the back of a quarter of good execution, we expect the momentum to continue. While the core business will improve, regulatory uncertainties in the healthcare payer market are causing headwinds,” said Neemuchwala.
The company aims to be at industry level growth rates in the fourth quarter.
On the hiring front, the IT services division added 1,309 techies during the quarter, taking the headcount to 166,790 from 165,480 a quarter ago and 158,272 a year ago.
“Employee attrition climbed to 16.1 per cent in Q1 from 14.8 per cent quarter ago but declined from 17.9 per cent a year ago.
“Locals now form over half of our US workforce, with 1,000 employees each in Florida, California, Georgia and Texas where we have local delivery centres,” said Neemuchwala.
In Q2, the company will launch an innovation centre on the west coast at Mountain View in California.
“During Q1, we opened a global centre of excellence at Guadalajara in Mexico with 700 seats. We continue our localization efforts in Britain, Singapore and Saudi Arabia,” Neemuchwala said.