The big disappointments for Wipro came in the form of healthcare and lifesciences division’s performance and a huge reduction in EBIT margins for the first quarter of 2017-18.

On a quarter on quarter basis, the division’s revenues fell from 15.4 per cent to 14.8 per cent that dragged down the consolidated revenues 5.4 per cent to ₹13,626 crore. Net profit too declined on a sequential basis 8.1 per cent to ₹2,083 crore. The healthcare and lifesciences vertical has been a consistent performer for the IT services major for the past several quarters and is a billion-dollar business.

Much of Wipro’s woes in healthcare stems from the fact that it has a significant exposure in the Obamacare plan, which has come under fire by US President Donald Trump who has come up with a new healthcare reform plan, which involves repealing Obamacare.

Uncertainty in healthcare

“Uncertainty primarily came from the healthcare business as there was no clarity there. On a run rate basis during the last four quarters there was a loss of $120 million. We lost a few accounts,” CEO Abidali Neemuchwala said at the press conference.

While Wipro grappled with uncertainty in healthcare, it saw other headwinds too. IT services margin for the quarter was 16.8 per cent, down from 18.3 per cent reported in the fourth quarter of 2017 fiscal.

During the June quarter, Wipro added 1,309 (gross) employees, taking its total headcount to 1,66,790.

Wipro’s utilisation was 72 per cent in the June quarter, a slight increase when compared to the 71.5 per cent it reported in the sequential basis. Attrition during the quarter stood at 16.1 per cent, marginally down when compared to 16.3 per cent in the fourth quarter of 2017 fiscal.

Client addition during the quarter was poor, with company adding only 2 clients in the $50 million+ category, said Sarabjit Kour Nangra, Vice-P Research- IT, Angel Broking,

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