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Wipro Ltd's lacklustre fourth quarter numbers and a rather flat guidance for the next quarter had an immediate impact on its share price, besides creating some flutter as to when the company would get back to its market-satisfying ways.
On Wednesday, the Wipro stock slipped 2.86 per cent to close at Rs 450.75 on the BSE, after touching a low of Rs 444.90 during the day.
Mr T. K. Kurien, Executive Director and CEO, said the macro-environment, though improved, is not as robust as in the past. The need now is to “shape demand and not react to demand,” he said. “We are seeing traction in the organisational changes we have made but one quarter is too short to understand the transformation the company is going through.”
In February, Wipro had announced a consolidation of its business units and verticals. Sales teams have been aligned with these business units for “better account management.” Prior to this, the company had announced a major leadership rejig with the joint CEOs Mr Paranjpe and Mr Vaswani making way for Mr Kurien.
For the fourth quarter ended March 31, 2011, Wipro Ltd posted a muted 4.24 per cent sequential growth in net profit at Rs 1,375 crore (14 per cent year-on-year), while revenues for the quarter rose 5.19 per cent sequentially to Rs 8,302 crore (18 per cent yoy).
IT Services revenues showed a year-on-year growth of 20 per cent to Rs 6,289 crore (in line with its guidance). The IT products business grew 2 per cent to Rs 911 crore, while the Consumer Care and Lighting business grew 19 per cent to Rs 724 crore.
For the year ended March 31, 2011, Wipro posted a 15 per cent growth in profit after tax at Rs 5,298 crore, while revenue rose 15 per cent to Rs 31,099 crore. IT Services revenue grew 16 per cent y-o-y to cross the $5-billion mark for the first time (Rs 23,485 crore). IT Products revenues slumped 3 per cent to Rs 3,691 crore (the company called this an “aberration”), while Consumer Care and Lighting grew 21 per cent to Rs 2,726 crore.
June quarter outlook
For the June quarter, Wipro expects its IT Services to clock revenues between $1394 million and $1422 million. Comparable dollar revenues for the March quarter were $1400 million. So, IT Services could end the next quarter with lower revenues than it has notched up in recent times.
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