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Wipro Net up 6%, Revenue Dips 2.5% in Second Quarter

Under the International Financial Reporting Standards (IFRS) or in dollar terms, net income for the quarter was $336 million and gross income $2.1 billion.


Updated:October 17, 2017, 10:27 PM IST
Wipro Net up 6%, Revenue Dips 2.5% in Second Quarter
Representative image. (Image: Reuters)
Bengaluru: Software major Wipro on Tuesday reported a Rs 2,190 crore net profit for the second quarter (Q2) of fiscal 2017-18, posting 6 per cent annual growth from Rs 2,074 crore in the like period year ago and 5.3 per cent sequential growth from Rs 2,080 crore a quarter ago.

In a regulatory filing on the BSE, the IT major said gross revenue for the quarter under review (Q2) at Rs 13,420 crore was 2.5 per cent decline from Rs 13,766 crore in the same period year ago and and 1.5 per cent lower from Rs 13,630 crore quarter ago.

Under the International Financial Reporting Standards (IFRS) or in dollar terms, net income for the quarter was $336 million and gross income $2.1 billion.

Revenue from its global IT services at $2,014 million was 5.1 per cent up annually from $1,916 million in same period year ago and 2.1 per cent up quarterly from $1,972 million quarter ago under IFRS and Rs 13,172 crore under the Indian Accounting Standard.

Revenue from IT services in dollar terms at $2,014 million was above the guidance of $1,962-2,001 million given in July.

"We surpassed the milestone of $2 billion in quarterly revenues for IT services on the back of rigorous execution of our strategy," said Wipro Chief Executive Abidali Z. Neemuchwala in a statement later.

Revenue from IT products for the quarter was Rs 300 crore ($46 million).

Operating margin for IT services increased marginally to 17.3 per cent from 16.8 per cent quarter ago but dipped 0.3 per cent from 17.8 per cent year ago.

The company has projected revenue from IT services business in the range of $2,014-2,054 million for the third quarter (October-December) of this fiscal (FY 2018).

"Our third quarter outlook has the seasonal impact of furloughs and higher leaves. Adjusted for the seasonality, we are seeing an improvement in growth trajectory in Q3 compared to Q2 and we are on a trajectory to match industry growth rates in Q4 of this fiscal," said Neemuchwala.

Though new customer acquisition declined to 41 in Q2 from 45 quarter ago and 47 year ago, the total number of active clients increased to 1,274 in Q2 from 1,244 quarter ago and 1,180 year ago, with better retention and 99.2 per cent repeat business from them.

"Our unique Digital capabilities powered growth in top clients and position us well to drive our clients' digital transformation," added Neemuchwala.

Chief Financial Officer Jatin Dalal said productivity gains generated by Holmes automation software and operational efficiencies overcame the impact of wage hikes and expanded margin to 17.3 per cent.

"Our demand commentary is unchanged, as we see strength in BFSI (Banking, Financial Services and Insurance) backed by strong digital capabilities. ENU (Energy & Utilities) is stable, with performance impacted by slower growth in the Gulf region," said the CEO.

Digital revenues in Q2 constituted 24 per cent of revenues, driven by shifts of projects from traditional areas to digital in our larger clients.

The company enhanced its design and advisory capability in North America through the acquisition of Cooper, a design and business consultancy.

"We see continued progress in India business restructuring. Healthcare continues to be volatile due to concerns around Affordable Care Act although we are hopeful of revenues bottoming out in Q3. Communications business is challenged by project completions," added Neemuchwala.

The total number of employees declined 3,031 sequentially to 163,759 at the end of Q2 from 166,790 quarter ago but was up 3,968 annually from 159,791 year ago.

Locals account for 52 per cent of the company's US workforce. An innovation centre was set up on the west coast at Mountain View in California to co-innovate with customers.
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