Wipro on Wednesday missed Street estimates when it reported a 21 per cent fall in consolidated net profits for the quarter ended June 30. The Bangalore-based company reported a net profit of Rs 2,563.6 crore against Rs 3,242.6 crore in the year-ago period. Analysts were expecting the firm to report net profits of around Rs 2,900 crore.
The period saw its revenues growing to Rs 21,528.6 crore from Rs 18,252.4 crore — an 18 per cent increase. Brokerages such as Sharekhan had projected the revenues at Rs 21,733 crore. Wipro added that the IT Services revenue was at $2735.5 million. In the preceding quarter, the company had projected that the IT services revenue will come in the range of $2,748-2,803 million.
For the quarter ending September 30, it expects this to come in a range of $2,817-2,872 million, which translates to a sequential growth of 3-5 per cent. IT services companies have disappointed so far with firms like Tata Consultancy Services falling short of analyst expectations on margins and dollar revenue growth. Though brokerages say that the demand environment remains strong, they are cautioning of some slowdown in demand as central banks hike interest rates to control inflation.
These companies have also witnessed a rise in attrition, leading to a bump up in employee costs, thereby affecting their margins. “We have made significant investments in Wipro’s growth engine and are very pleased with the outcomes. Our order bookings grew 32 per cent YoY in total contract value terms, powered by large transformational deals, and our pipeline today is at an alltime high. We continue to reinforce the investments that allow us to grow our business, remain agile in the market and efficient as an organisation, while staying focused on serving our clients even better,’’ Thierry Delaporte, CEO and managing director, Wipro said, while commenting on the quarterly results.
During the period, Wipro saw its margins coming in at 15 per cent which was 200 basis points lower than the 17 per cent recorded in the preceding quarter. However, its attrition rate at 23.3 per cent was lower than the 23.8 per cent on a sequential basis. But it was much higher than 15.5 per cent in the year-ago period. It added 15,446 employees and the total headcount stood at 258,574
