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After Infy revises down revenue expectations, all eyes on Wipro
BENGALURU: When Wipro announced its full year results for 2015-16 it had said that it expects to grow within a 1-3% range for the first quarter of the current fiscal,
BENGALURU: When Wipro announced its full year results for 2015-16 it had said that it expects to grow within a 1-3% range for the first quarter of the current fiscal, translating to $1.90-1.94 billion (₹12,730-13,000 crore) in dollar revenue terms.
This will be figure that investors and analysts would be looking at when the India’ s third largest IT exporter announces its results for the April-June 2016 on Tuesday.
Some indication that Wipro’s first quarter performance may not meet market expectation came late Monday evening from company chairman Azim Premji. “US has been sluggish in January-June 2016 after posting growth of 2.4% in 2015. Grow this expected to pick up in the second half of the year,” he said.
A little over half of Wipro’ s revenues comes from the Americas (around 53% in 2015).
Commenting on Britain’s recent exit from European Union Premji said, “As of the now, it appears to be a regional problem in UK. Eurozone continues to grapple with challenges around growth, low inflation coupled with geo-political concerns. From an IT perspective, it continues to be a very strategic market for us .” European markets contribute around 25% of Wipro’s revenues.
Last week, India’ s second largest software exporter Infosys disappointed markets by reporting a revenue growth 50% lower than expected. It also revised its full year revenue growth guidance down to10.5-12% from11.5-13.5% forecast earlier.
Unlike Infosys, Wipro does not provide a full year revenue guidance, but expected revenue to grow between 1-3% in the first quarter of this fiscal.
Rajiv Mehta, an analyst with IIFL, expects Wipro see a revenue growth of 1.5-2%. A report by Kotak Institutional Equities (KIE) pegged the growth at 2.2%.
Higher US visa costs, marginal appreciation of rupee and salary revision are also expected to impact margins. According to Mehta, the first two factors could see margins for the first quarter drop by 150-200 basis points.
