Wipro, the country’s third largest IT services company, followed cross-town rival Infosys in issuing a largely disappointing guidance as it expects Brexit and changes in its business model to impact near-term growth.

Wipro estimates IT services revenue to range between $1,931 million to $1,950 million in the second quarter.

IT services revenue saw sequential growth of 2.6 per cent to $1,931 million in the first quarter, meeting the revenue guidance given in the fourth quarter last year.

Overall revenue dipped 0.3 per cent to ₹13,698 crore in the first quarter against ₹13,742 crore in the quarter that ended in March. On an annual basis, revenue rose 11 per cent.

Net profit came in at ₹2,059 crore for the quarter that ended in June, 6.7 per cent lower than a year ago, when it posted a ₹2,207 crore profit. The results were announced after market hours but the stock was down 0.47 per cent and closed at ₹549.

“We have delivered revenues in line with our guidance and expect the trajectory of growth to build gradually over the year,” said Wipro CEO Abidali Z Neemuchwala at a press conference.

Margins fell 190 basis points to 17.8 per cent. Wipro took a hit in pricing, paid out wage hikes, and undertook restructuring in the India and Middle East business.

The company gained 1 per cent from HealthPlan Services, an acquisition made this February. But it backed out of acquiring Viteos, citing inordinate delays in completing the deal.

However, Wipro Ventures made an undisclosed investment in Avaamo, a California-based company.

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