Wipro Q2 net up 8%, misses forecasts
Facing headwinds in business from its top clients, India’s third-largest IT services company, Wipro, narrowly missed market expectations with a 7.9% year-on-year rise in consolidated net profit to Rs. 2,080 crore during the July-September quarter.
Analysts had expected Wipro to post a profit of Rs. 2,109 crore.
The company’s overall revenue grew 8% year-on-year to Rs. 11,680 crore during the quarter. Revenue from its IT services business rose 8.6% to $1.77 billion. In July, the firm had said it expected IT services revenue to be in the range of $1.77-1.81 billion during the July-September quarter.
“Business leaders in the US continue to exhibit increased confidence on growth prospects. We are seeing positive sentiment in India with the confidence that the government is focused on driving an agenda of growth,” said Azim Premji, chairman, Wipro.
The company said it expects the revenue from the IT services business to be in the range of $1.8 billion to $1.84 billion during the third quarter. It also expects “headwinds” in some of the company’s key accounts to continue till December this year.
“The second half of the financial year will definitely be better than the first,” said TK Kurien, CEO, Wipro. “We would have slow growth on top ten accounts, primarily in Europe, for some time. We expect revenues to come back in the fourth quarter.”
Wipro won a clutch of large deals including a five-year contract from tobacco company Philip Morris International and renewal of master services agreement with oil and gas major BP.
Compared to a mere 270 in the first quarter, the software giant saw significantly increased hiring in the second quarter by adding 6,845 people, thereby taking its total workforce to 1,54,297.
“Wipro has talked about plans for some time, but it does not show on results,” Ankita Somani, analyst with MSFL Research.