Wipro Q3 Net Profit Declines By 11%

Global software major Wipro Ltd on Friday reported Rs 1,940 crore net profit for the third quarter of fiscal 2017-18, registering 11.4 per cent sequential decline from Rs 2,190 crore a quarter ago and 8.3 per cent annually from Rs 2,115 crore in the same period year ago.

In a regulatory filing on the BSE, the IT major said gross revenue for the quarter under review at Rs 13,670 crore was marginally up (1.9 per cent) sequentially from Rs 13,420 crore quarter ago and flat annually from Rs 13,689 crore in the like period year ago.

Under the International Financial Reporting Standard (IFRS), net income was $303 million and gross revenue $2,141 million.

Revenue from IT services at $2,013 million was flat sequentially from $2,014 million quarter ago but 5.8 per cent up annually from $1,903 million in like period year ago.

Digital business contributed 25 per cent to IT services revenue, marginally up one per cent from 24 per cent quarter ago.

The IT services revenue is, however, less than the guidance of $2,014-2,054 million the company gave on October 17 for the quarter under review.

"The operating margin was impacted by a provision of Rs 318 crore ($50 million) for the insolvency of a customer," said the company in a statement but did not disclose the customer's name.

As a result of the bankruptcy impact, the operating margin in the declined 2.4 per cent to 14.8 per cent from 17.2 per cent due to the provision and 17.3 per cent quarter ago and 18.3 per cent year ago.

The adjustment towards the customer insolvency also impacted the net profit for the quarter.

For the fourth quarter, the company has projected revenue from IT services business in the range of $2,033-2,073 million.

"We continued to improve our growth trajectory, driven by strong momentum in BFSI (banking, financial services and insurance) and uptick in healthcare," said Wipro Chief Executive Abidali Z. Neemuchwala in a statement later.

Though the company acquired 79 new customers during the quarter as against 41 quarter ago and 108 year ago, the total number of active clients declined to 1,281 in Q3 from 1,323 year ago.

"We made a strong progress in our client mining, with the number of them contributing revenues over $50 million increasing to 41 from 33 to 41 in the last one year," said Wipro Chief Financial Officer Jatin Dalal.

The company generated robust operating cash flow of Rs 7,700 crore during the nine months (April-December) of the fiscal, an annual increase of 14.2 per cent over the same period year ago.

The IT services headcount declined to 162,553 at the end of Q3 from 163,759 quarter ago and 164,176 year ago, with the exit of 1,206 techies during the quarter and 1,623 during the last 12 months.

The company also declared 50 per cent interim dividend of Re 1 per share with a face value of Rs 2.

The company's blue-chip scrip of Rs 2 face value ended at Rs 328.45 per share on the BSE when trading ended on Friday, gaining Rs 2.40 from Thursday closing price of Rs 326.05 and after opening at Rs 327.20. The scrip touched a high of Rs 330.30 and a low of Rs 321 during the intra-day trading.

IANS