Our Bureau Wipro surprised market watchers with an increase in net profits on the back of improved performance in the BFSI sector. But it continued to face challenge as it restructures its India/Middle East business and Obamacare-related issues in the US, which was reflected in an uninspiring guidance.

India’s third largest software exporter reported profits of ₹2,093.6 crore in the first quarter of FY19, a 0.53 per cent rise against the ₹2,082.4 crore posted in the previous year period. Analysts had expected Q1 profit of around ₹1,968 crore.

Revenues came in at ₹13,977.7 crore, up 2.58 per cent (₹13,626.1 crore). The company has given a revenue guidance for its IT services business in the range of $2,009-2,049 million, or a sequential growth of 0.3- 2.3 per cent, excluding the impact of the divestment of its hosted data centre services business, which concluded in the quarter ended June 30, the company said.

“We continue to see challenges in India business and Obamacare-related issues in the US, which has impacted the healthcare business,” said Abidali Z Neemuchwala, CEO and board member. However, he added that based on the excellent execution by the team, Wipro has seen a pick-up in momentum in its global business ahead of its expectations and delivered a 0.1 per cent growth in constant currency terms, coming in at the top end of its guidance.

Also, the company which has had some client losses in its energy and utilities business, is seeing some traction in the energy business but continues to see the utilities part under stress, due to regulatory changes and companies embracing technology. But Wipro saw growth in its BFSI vertical, which was the case with TCS too but not in the case with cross-town rival Infosys.

IT services segment revenue in dollar terms came in at $2,026.5 million, up 1.7 per cent sequentially and 2.8 per cent on a yearly basis. In rupee terms, IT services segment revenue ₹13,700 crore, up 2.2 per cent on a sequential basis and 2.8 per cent on a yearly basis.

In the March-ended quarter, Wipro had guided revenues in the range of minus 2 -0 per cent. The company declared its results after market hours. Further, IT services margin for the quarter was 17.2 per cent.

CFO Jatin Dalal said the company had a good order booking for the quarter but did not disclose the total contract value. Growth which was driven by digital, went up 6.2 per cent sequentially and now contributes 28.1 per cent of its revenues.

Wipro also said that its client mining initiatives has resulted top 10 clients growing 7.8 per cent on a year-on-year basis, added 4 clients in the $50 million revenue bucket.

Deal with Alight

Wipro has partnered US-based Alight Solutions to take over the latter’s captive operations in India, Alight HR Services India, for $117 million, said PTI. The cash deal is expected to be completed during the September quarter.

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