Wipro’s Q4 net down 6.3% to ₹2,303 cr

Our Bureau Bengaluru | Updated on April 15, 2020 Published on April 15, 2020

Guidance for the next quarter held back due to Covid-19 impact

Wipro has posted a decrease of 6.3 per cent in net profit for the fourth quarter to ₹2,303 crore on a year-on-year basis even as it suspended the declaration of the guidance for the next quarter, stating that there was poor visibility ahead.

“The situation is very fluid. Unlike most other crises that peak early and you know there is recovery from here on, this time we don’t even know for how long it will continue. Since we listed on NYSE, this is the first time we are suspending our guidance,” Wipro’s CFO Jatin Dalal told newspersons on Wednesday. 

Bigger crisis

 He said the current crisis is going to be even bigger than the global financial crisis. “We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply-side factors.” 

The IT major’s gross revenues increased by 4.7 per cent for the  quarter to ₹15,310 crore. The IT services segment revenue came in at $2. 07 billion, a decrease of 1 per cent quarter-on-quarter. The IT services’ operating margin for the quarter was down 0.8 per cent to 17.6 per cent. The EPS for the quarter was ₹4.09 ($0.051) per share, a decrease of 1.1 per cent YoY

The company’s president and chief human resources officer, Saurabh Govil, said fresh hirings, increments and promotions have been stopped for the time being though campus hirings will be honoured but not during the first quarter of this fiscal. 

 Amit Chandra, an analyst with HDFC Securities, said the higher cross-currency impact (140bps) is due to higher growth in Europe (plus 3.4 per cent quarter-on-quarter constant currency) versus -0.7 per cent QoQ constant currency drop in US revenue.

Growth slowing

The growth of the digital business, which constitutes 41 per cent of revenues, is slowing down while legacy continues to be under stress with the fall in legacy business being higher than the peers, Amit Chandra said in a note to the investors, He pointed out that the BFSI growth had slowed down further led by issues in large European banks, US Capital markets and Covid-19 impact. 

The impact of Covid-19 in Q4 was around $14-16 million, which is 0.7-0.8 per cent of revenue. Taking similar run-rate, we expect 3-4 per cent QoQ fall in Q1 revenue, he said. Attrition eased to 14.7 per cent and utilisation increased 300 bps to 82.6 per cent .

Published on April 15, 2020

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.