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Wipro shares sank to a nine-month low on Tuesday after the company forecast that its revenues from IT business will remain flat during the next quarter.
Announcing its first quarter results, the third largest outsourcer said uncertainties in two of its largest markets, the US and Europe, are expected to hit growth. The company has guided for IT services revenue growth of $1,520-1,550 million for the next quarter, a 0.3-2.3 per cent increase .
Wipro’s shares dipped 2.93 per cent to end the day at Rs 346.
Wipro said revenues from its IT business shrank 1.4 per cent to $1,515 million on a sequential basis. Year-on-year, they grew 8 per cent. The company said IT services revenue took a $25- million cross-currency hit. The operating margin for IT services was flat at 21 per cent on a sequential basis.
On a consolidated basis, Wipro Ltd’s net profit grew 6 per cent to Rs 1,580 crore while gross revenue grew nearly 7 per cent to Rs 10,483 crore quarter-on-quarter. Year-on-year, the net profit grew 18 per cent while sales rose 23.4 per cent. The EPS was Rs 6.54, an increase of 17.5 per cent over the last year.
“We have delivered revenues in line with our guidance in a volatile environment,” Wipro’s IT Business Executive Director and Chief Executive Officer, Mr T. K. Kurien, said.
“We expect FY13 dollar revenue growth to be 6.5 per cent from our earlier estimates of 9.7 per cent in the last quarter,” said Mr Rikesh Parikh, Vice-President, Markets & Equities, Motilal Oswal.
The software conglomerate said it added one $100-million client (total eight) during the quarter and also won a multi-year contract from Royal Philips Electronics.
Onsite, offshore revenues
Quarter-on-quarter, volumes grew 0.8 per cent (onsite -0.1 per cent and offshore 1.2 per cent) while pricing declined 1.7 per cent. Onsite revenue dipped marginally on a sequential basis to $618 million while that from offshore declined marginally to $531 million during the same period.
Revenues from the US, from where Wipro gets more than 70 per cent business, fell 1.4 per cent to 51.6 per cent and that from Europe dipped 0.5 per cent to 28.1 per cent on a y-o-y basis.
There was nearly a 1 per cent dip in the BPO business growth for the quarter while consulting dropped 0.6 per cent to 2.5 per cent. Its earlier mainstay, telecom, along with global media business, decreased nearly 2 per cent to 14.9 per cent.
The company said it gave pay hikes in June. Onsite employees received a hike of 3 per cent while those working out India received 7 per cent more. The IT services business added 2,632 more people during the quarter.
>giriprakash.k@thehindu.co.in ; >venkatesh.ganesh@thehindu.co.in
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