Wipro Q4 Results: Profit Falls As Covid-19 Disrupts Business
Wipro Ltd.’s quarterly profit declined as the Covid-19 pandemic stalled economic activities worldwide and disrupted trade.
Net profit fell 4.5 percent sequentially to Rs 2,345 crore in the quarter ended March, according to its exchange filing. That compares with the Rs 2,469-crore consensus estimate of analysts tracked by Bloomberg.
- Revenue rose 1.8 percent over the previous quarter to Rs 15,750 crore—in line with the estimated Rs 15,640 crore.
- Revenue from IT Services declined 1.1 percent to $2,073 million.
- Operating profit fell 4.2 percent to Rs 2,539 crore.
- Margin narrowed 100 basis points to 16.1 percent.
Wipro did not give a revenue growth forecast for the ongoing quarter, citing disruptions from the pandemic. “Due to the uncertainty around the course of the Covid-19 pandemic, we do not have visibility into the extent to which it will disrupt our operations, and we have decided to not provide revenue guidance for the quarter ending June 30, 2020,” it said in the filing.
Lockdowns in India and other developed markets to contain the spread of the novel coronavirus have led to the loss of billings for IT firms. Disruption in work in India, some European countries and the U.S. also impacted revenue. For the Indian IT sector, the outlook for 2020-21 is “hazy” as Covid-19 may cause a decline in global spending, Kotak Institutional Equities said in a pre-earnings report.
“The quarters ahead seem challenging and require a tremendous response on costs,” Jatin Dalal, Chief Financial Officer, said in the media statement. “We also anticipate our working capital to increase, but our strong balance sheet provides us the confidence that we will emerge stronger and better.”
According to Bank of America Merrill Lynch, things are likely to be worse in the quarter ending June when the effect of the lockdowns will be the most pronounced. Travel and hospitality are expected to be severely impacted because of the virus, it said.
- Wipro added 65 new customers during the quarter.
- Only one new customer was added in the $100 million-plus bracket.
- The company had over 1.82 lakh employees as of March-end, lower than 1.87 lakh employees in the preceding quarter.
- Geographically, the Americas region saw a 1.2 percent decline revenue. Europe grew 0.7 percent while the rest of the world declined 2.8 percent.
Shares of Wipro closed 1.53 percent lower before the results were announced, compared with a 1.01 percent drop in the benchmark Sensex.