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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
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 .
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