Wipro Q4 net up 17%; sees delays in deal closure

Our Bureau Bangalore | Updated on March 12, 2018 Published on April 19, 2013

Azim Premji-led Wipro reported 16.73 per cent increase in net profit to Rs 1,728.7 crore for the fourth quarter ended March 31, 2013. File Photo   -  PTI

Azim Premji


Profit margins lower due to ‘foreign exchange volatility’

Wipro Ltd beat earnings estimate in the forth quarter of 2012-13, but projected a weak guidance for the first quarter of fiscal 2014 citing delay in closing outsourcing deals.

In its outlook for quarter ending June this fiscal, Wipro said revenues from its IT services are expected to be between $1.57 billion and $1.6 billion, indicating a decline of 0.6 per cent to a rise of 1.6 per cent over the previous quarter.

Wipro CFO Suresh C. Senapaty told Business Line that some of the discretionary spend kind of projects which got pushed out are expected to be closed in the current quarter. Therefore, the second quarter is expected to be better, he pointed out. Unlike Infosys, Wipro does not give yearly guidance.

The company reported a net profit of Rs 1,728.7 crore in the January-March quarter, a 17 per cent increase year-on-year. Total revenues were up 12 per cent (y-o-y) to Rs 11,026 crore for the quarter. IT services revenues for the quarter grew $1.58 billion, a 3.2 per cent increase year-on-year, though on a sequential basis the growth was flat.

Senapaty said the reduced profit margin was due to foreign exchange volatility especially with the British pound, which depreciated against the rupee.

“The cross currencies have been volatile and impacted our financial performance in the quarter but excluding the impact of foreign exchange, we have been able to maintain margins on a sequential basis,” Senapaty said.

According to Dipen Shah, Head of Private Client Group Research, Kotak Securities, “Wipro’s results were below estimates and the fall in average realisations was higher than estimates.” Other analysts shared similar views. A. Motilal Oswal report pointed out that volume of outsourcing work done by Wipro is uninspiring.

While market watchers are unhappy with the guidance, CEO of IT Services, T. K. Kurien, was confident that there will be a pick up in demand for outsourcing services in the second half of this year, a view expressed by TCS and HCL earlier this week. TCS on Wednesday reported profits that were roughly in line with estimates and said the company would grow faster than the industry in the current fiscal year.

Wipro declared a final dividend of Rs 5 a share, which totals to a dividend of Rs 7/share for the fiscal.

The company which has completed its de-merger that separates IT services and its other businesses such as consumer care, lighting, infrastructure, said that this focussed strategy would result in more business going forward.

“Being a pure play technology company would provide a fresh growth momentum,” said Azim Premji, Chairman, Wipro. He added that the company has no plans of listing the non-IT services businesses.

Hiring plans

On the hiring front, Wipro did not give out numbers on the number of employees it planned to hire in 2014 fiscal, but said 70 per cent of the total recruits will be from campuses. Further, for the whole year, attrition was at 13.7 per cent compared to 17.5 per cent last year, which according to company officials is a result of its in-house employee career enhancement programmes.



Published on April 19, 2013

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!


Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.