Wipro posts small increase in profit; outlook muted
India’s third-largest software services firm Wipro Ltd reported a small rise in quarterly profit on Tuesday, driven by revenue growth from financial solutions and healthcare customers.
The company however, said it expects quarterly revenue, on a sequential basis, to fall or stay flat in the ongoing quarter.
The muted growth outlook comes as Indian software service firms brace for new visa rules in their biggest market the United States and growing protectionism in other countries such as Australia and New Zealand.
Bengaluru-headquartered Wipro said it expects revenue in its IT services business of between $1.92 billion and $1.96 billion, in the three months ending June 30. It reported revenue of $1.94 billion in the current quarter, on an equivalent basis.
India’s $150 billion information technology sector has struggled over the past few quarters as clients in the United States held back discretionary spending to gauge policy direction under US President Donald Trump’s administration.
Wipro’s consolidated net profit rose 0.43% to ₹2,267 crore ($352.8 million) in the three months to March 31, from ₹2,250 crore in the year-ago period.
Analysts had, on average, expected a consolidated profit of ₹2,119 crore, according to Thomson Reuters data.
In the past, the company has said that it is facing growth headwinds in its India and West Asian business because of an ongoing restructuring. But analysts have been underwhelmed by the company’s overall execution.
Despite its weak performance, Wipro shares have risen by around 4% year-till-date, while the Nifty IT index has fallen 3%. After the March quarter results shocker, the stock looks ripe for a sharp fall.