Q1 Results: Wipro’s Profit Beats Estimates, Margin Expands
Wipro Ltd.’s quarterly profit beat estimates and India’s third-largest software services provider forecast a higher-than-expected growth.
Net profit rose 16.3 percent over the previous quarter to Rs 2,094 crore in the April-June period, according to the company’s exchange filing. That compares with Rs 1,975 crore estimated by analysts tracked by Bloomberg.
Revenue grew 3.4 percent to Rs 14,231 crore, higher than the Rs 13,981-crore estimate. Revenue in dollar terms, however, fell 1.7 percent to $2,026 million.
Wipro now expects IT services revenues to be in the range of $2,009-2,049 million for the second quarter ending September. This will lead to a 0.3-2.3 percent sequential growth, higher than the 0.5 percent decline to a 1.5 percent growth estimated by a BloombergQuint poll.
The IT giant sees a stronger momentum led by banking and financial services, Wipro’s Chief Executive Officer Abidali Neemuchwala said in the post-earnings press conference. “Operating metrics are improving and are in right direction in execution of strategy.”
Earnings and guidance were in line with the expectation, according to Reliance Securities’ Senior Research Analyst Harit Shah. “Nothing too negative in the quarter,” he told BloombergQuint. “There has been recovery in the banking and financial services vertical and that also is in tandem with the industry trend.”
- Earnings before interest and tax rose 19.7 percent quarter-on-quarter to Rs 2,254 crore.
- EBIT margin expanded to 15.8 percent from 13.7 percent sequentially.
Neemuchwala said Wipro saw good order booking during the quarter. “Digital revenue increased 6.2 percent sequentially and contributes 28.1 percent of our revenues,” he said. “The company is seeing improved demand environment, but there are some pockets of concerns.”
Shares of the company closed 1 percent lower compared with a 1.5 percent gain in the Nifty IT Index ahead of its earnings.