Wipro Q2 net profit dips marginally to ₹2,143 cr
SCORECARD Company on track to match industry growth rates in fourth quarter
BENGALURU: India’s third largest software services firm Wipro on Tuesday said its consolidated net profit has declined marginally to ₹2,143.2 crore for the quarter ended September 30, 2017.
This is against a net profit of ₹2,163.6 crore in the July-September 2016 quarter as per Indian accounting norms (Ind AS), Wipro said in a BSE filing.
Wipro’s total income slipped 1.8% to ₹14,134.8 crore in the quarter under review from ₹14,407.3 crore in the year-ago period, it added.
Revenues from IT services segment, which accounts for a significant portion of the company’s topline, stood at $2.013 billion, up 2.1% sequentially.
This was higher than the company’s revenue guidance range of $1,962 million to $2,001 million.
“We surpassed the milestone of $2 billion in quarterly revenues for IT services on the back of rigorous execution of our strategy,” Wipro CEO Abidali Z Neemuchwala said.
The company also said that second-quarter performance was impacted by slower growth in the Middle East, but it continued to see progress in India business restructuring.
However, healthcare continued to be volatile due to concerns around Affordable Care Act, the company added.
Neemuchwala said he was hopeful of revenues bottoming out in the third quarter. “We are on a trajectory to match industry growth rates in Q4.”
For the October-December 2017 quarter, the company expects revenues from the IT services business to be in the range of $2,014 million to $2,054 million. Wipro’s revenues from IT products segment was ₹300 crore ($46 million) in the reported quarter.
The company saw its headcount coming down to 1,63,759 during the second quarter from 1,66,790 in the previous sequential quarter. Attrition stood at 15.7% on trailing 12 months basis.
India’s largest IT services firm, TCS, reported a 2% fall in second-quarter profit last week, held back by sluggish growth in banking and retail services.
in March, Mint reported that Wipro Ltd expects two of its fastest growing business units— analytics and infrastructure management—to grow much slower in the next four years than the near 20% compounded annual growth rate (CAGR) needed for India’s third largest software services firm to achieve its ambitious target of $15 billion in revenue by 2020.
Together, the two units made up 36% of Bengaluru-based Wipro’s $7.08 billion revenue in the last financial year.
The management’s projection of lower CAGR of 13% for analytics and 12.5% for infrastructure management will raise questions about how Neemuchwala will guide Wipro to achieve its target of more than doubling business in four years.
After taking over as CEO on February 1, Neemuchwala, who joined the company as chief operating officer in April 2015 after spending 22 years at Tata Consultancy Services Ltd, shared his vision of making Wipro a $15 billion firm with operating margins of 23% by 2020 in an e-mail addressed to 170,664 employees.
Wipro’s analytics unit, which is projected to be a $550 million division by the end of March 2016, is expected to become a $900 million division by 2020, according to an internal presentation reviewed by Mint.
Wipro generates about 28% of its total revenues from maintaining servers and computers for its clients, which it clubs under the global infrastructure services business. Wipro’s infrastructure business will end the current fiscal year with a little over $2 billion in revenue, and is estimated to be a $3.2 billion division in the coming four years, according to an executive familiar with the development.
Wipro had declined to comment for the story at that time.