Wipro Beats Street Estimates In Second Quarter, Says Q3 Could Be Better
Bangalore-based information technology firm Wipro Ltd. posted a marginal 0.9 percent quarter-on-quarter rise in profit for the July to September period, beating the Bloomberg consensus estimate.
Net profit for the July-September quarter increased to Rs 2,070 crore from Rs 2,052 crore in the previous quarter, the company said in a stock exchange filing. The consensus of analyst estimates tracked by Bloomberg stood at Rs 2,010 crore.
Revenue rose 1.5 percent to Rs 13,897 crore from Rs 13,698 crore in the first quarter, again beating the Bloomberg consensus estimate of Rs 13,461 crore. The company's revenue in dollar terms stood at $2.1 billion, increasing 5 percent from the last quarter and beating street estimates.
Earnings before interest and taxes grew 0.7 percent to Rs 2,300 crore from Rs 2,285 crore sequentially. EBIT margin contracted 10 basis points to 16.6 percent.
Margins for the IT services business was flat at 17.8 percent on account of headwinds from higher employee costs.
We maintained margins in Q2 despite the impact of salary increase for an incremental two months due to strong operational improvements in automation-led productivity, offshoring and utilisation.Jatin Dalal, Chief Financial Officer, Wipro
Revenue from all Wipro's verticals declined quarter-on-quarter, except for the healthcare and lifesciences segment which grew at 4.8 percent to Rs 2,088 crore during the quarter.
The company expects revenue from IT services to grow by 0-2 percent in the range of $1,916 million to $1,955 million, the company said in its press release.
As we look forward, the demand environment is mixed in a seasonally weak quarter affected by furloughs and lower number of working days.Jatin Dalal, Chief Financial Officer, Wipro
The company hopes to complete the $500-million acquisition of U.S.-based cloud services firm Appirio by the end of December and has included Appirio's revenue in its third quarter guidance.
I am very excited about Wipro’s acquisition of Appirio, a leader in cloud applications especially across Salesforce and Workday implementation services. This acquisition will establish Wipro’s dominance in cloud application services and further strengthen Wipro’s brand as a Digital Partner of choice.Abidali Z Neemuchwala, Chief Executive Officer, Wipro