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Wipro reported a 38 per cent increase in its fourth-quarter profit on the back of good performances on the banking and insurance front. It also announced a ₹10,500-crore buyback programme.
The BFSI (banking, financial services and insurance) segment contributed 30.9 per cent of overall revenues.
India’s third largest software exporter gave a guidance in the range of -1 to 1 per cent growth for the first quarter of FY20. Brokerage houses, who were expecting a guidance in the range of 0-3 per cent, were disappointed.
Also read:Wipro investigating breach of some employee accounts
Sanjeev Hota, Head of Research, Sharekhan, said the guidance was weaker than what they expected. For Q4, Wipro’s net profit rose 38 per cent to ₹2,483 crore, against ₹1,800 crore in the previous year quarter. However, sequentially, its profit dipped 1.1 per cent, against ₹2,510 crore in the December quarter. Revenues were ₹15,006 crore, marking a 9 per cent growth YoY.
Strong order book
“We have built a strong foundation for growth on the back of a healthy order book and continued investments in the big-bet areas of digital, cyber security, engineering services and cloud. Our teams have executed well on our strategy, which has resulted in consistent improvement of YoY growth each quarter,” said Wipro CEO and Executive Director Abidali Z Neemuchwala.
He added that the first quarter is seasonally a weak one, which is reflected in the guidance.
“We are confident that our growth trajectory will improve from the second quarter on the back of a strong order book,” he added.
The whole year growth for Wipro is lesser that peers TCS and Infosys, both of whom reported healthy profits and revenue growth.
Digital business
Neemuchwala insisted that the company grew consistently in the all quarters of FY19, signalling that despite some headwinds, it has stood its ground.
For example, its digital business grew 6.6 per cent sequentially, and now contributes 35 per cent of Wipro’s revenues. TCS and Infosys have a similar percentage of revenues coming from digital business.
The company also said that on the localisation front, it has 64 per cent of local employees in the US.
Full-year results
For FY19, Wipro’s profits came in at ₹9,003 crore, a 12.4 per cent growth against ₹8,008 crore in FY18.
Revenue for the whole year stood at ₹58,584 crore, up 7.5 per cent from ₹54,487 crore in FY18. Its operating margins expanded by 1.8 per cent.
In news that could cheer investors, Wipro announced a buyback worth ₹10,500 crore at ₹325 per equity share payable in cash.
However, the board has not recommended any final dividend. Wipro's shares closed down 2.4 per cent at Rs 280.9 ahead of the results.
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