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Wipro Ltd, the country’s third-largest software services exporter, failed to meet market estimates, reporting an 8 per cent increase in net profit to ₹2,084.8 crore year-on-year for the second quarter of the current fiscal year. Analysts expected Wipro to post a net profit of over ₹2,100 crore.
Revenue grew 8 per cent to ₹11,683.8 crore, compared with the same period of the previous fiscal year, meeting the lower-end of the company’s guidance.
In a traditionally strong quarter for most IT service firms, Wipro’s dollar revenue grew at just 1.8 per cent sequentially, which is much lower than revenue growth reported by its peers Infosys, TCS and HCL earlier this month at 3.1 per cent, 6.4 per cent and 1.9 per cent, respectively. The operating margin was flat at 22 per cent.
“The demand environment continues to be steady and we see discretionary spends returning in North America,” TK Kurien, Executive Director and CEO of Wipro, told newspersons here.
“We also expect headwinds in some of our key accounts until December,” he said. Stating that there will be no change in strategy and the focus was now on execution, Kurien said he expects the second half of the year to be much better than the first.
Revenue outlook The company’s revenue outlook for the third quarter ending December 31 is in the range of $1808-1,842 million, a growth band of between 2.1 per cent and 4 per cent.
Wipro added a net of 6,845 employees in the second quarter taking the total headcount to 154,297. Its attrition rate remained flat at 16.9 per cent during the quarter compared with 17 per cent in the previous quarter, unlike Infosys which hit a high of 20.1 per cent. The company added 50 new customers during the quarter.
“Wipro’s growth in the second quarter is okay given that they are focused on automation and building a sustainable non-linear practice. By opting to do less of the same kind of linear projects, they are on the right track for growth over the next few quarters,” said Sundararaman Viswanathan, Management Consultant, Zinnov.
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