Wipro Says Q4 Profit May Be Impacted By Telecom Client’s Insolvency Proceedings
Wipro says its profitability may be impacted by 65-75 basis points in the March quarter.
India’s third largest software services firm Wipro Ltd. today said its profitability may be impacted by 65-75 basis points in the March quarter as one of its telecom clients is undergoing insolvency proceedings.
Without naming the client, Wipro said it had signed a multi-year outsourcing services agreement with a telecom services provider in India in 2008, which was subsequently renewed in the year 2013.
Telecom operator Aircel on Feb. 28 had said it has filed for bankruptcy as it had been facing “troubled times” in a “highly financially stressed” industry.
“On February 28, 2018, the client filed a petition to initiate its Corporate Insolvency Resolution Process (CIRP) with the National Company Law Tribunal (NCLT),” Wipro said in a BSE filing.
Wipro said it subsequently submitted its claim on March 28, 2018 and has since then been engaged with the insolvency resolution professional to discuss the potential outcome of the process.
Wipro noted that the impact of this client insolvency petition will reflect in the financial results of the company for the quarter and year ended March 31, 2018.
It is estimated that this development will have an impact on both revenue and profitability. The company is likely to see an impact on profitability at the net income level in the range of 65-75 basis points of the consolidated revenues for the quarter ended March 31, 2018.Wipro Statement
The Bengaluru-based company is slated to announce its financial results for the fourth quarter and fiscal ended March 31, 2018 on April 25.