Indias third largest software exporter Wipro on Wednesday reported lower-than-expected profit for the March quarter, as it made additional provisions for two of its clients.
The IT major posted 6.64 per cent quarter-on-quarter fall in net profit at Rs 1,803 crore in Q4FY18 over Rs 1,931.30 crore in Q3FY18. Bottomline figures slipped 20.60 per cent on a yearly basis for the quarter under review.
Consolidated total income of Wipro slipped marginally 0.05 per cent on a sequential basis to Rs 14,304.60 crore, whereas the figures fell 4.92 per cent on a year-on-year basis. Shares of the company settled almost flat at Rs 287.20.
Earlier, the company on April 9 informed bourses that its profit may take a hit of 65-75 basis points in the March quarter as one of its telecom clients is undergoing insolvency proceedings. However, the companys hadn't named the client.
Here are top five takeaways from Wipros fourth quarter earnings:
Guidance for June quarter
Wipro expects topline from IT services business to be in the range of $2,015 million to $2,065 million.
“We had announced the divestiture of our hosted data center services business to Ensono for a consideration of $405 million. We expect the transaction to complete during the quarter ending June 30, 2018. For the purpose of the outlook, we have not considered the impact of the divestment on the revenue for the quarter ending June 30. We will revise the outlook for the quarter based on the actual date of completion of the divestment,” Wipro said in a release.
Abidali Z Neemuchwala, CEO of the company said: “We are confident that the company will return to growth trajectory starting Q2.”
Revenue from IT services
Revenue from IT services segment increased 2.4 per cent on QoQ in dollar terms to $2,062 million. In rupee terms, the figures witnessed an increase of 1.30 per cent to Rs 13,410 crore.
The company made provisions of Rs 208 crore for January-March with respect to insolvency of a customer and the impairment loss in one of their acquisitions.
The figure had stood at Rs 525.50 crore last year.
Without naming the telecom client, Wipro had earlier said that it had initially signed a deal with this firm in 2008 and had renewed the contract in 2013. The IT firm added that the client had filed its insolvency petition on February 28. Read more
Updates on client mining
“We continue to make progress in our client mining, with number of clients contributing revenues over $75 million increasing from 17 to 20 during the quarter,” said Jatin Dalal, Chief Financial Officer.
The company has generated operating cash flow of Rs 8,400 crore at 105 per cent of their net income in FY18.
Annual report card
For the year ended March 31, 2018, Wipro posted a net profit of Rs 8,002.80 crore, down 5.77 per cent, against Rs 8,493.10 crore a year ago. Revenue from operations declined 1 per cent year-on-year to Rs 54,487.10 crore in FY18.