Wipro’s Q3 profit dips, margins improve

IT-services major Wipro’s December quarter revenue in dollar terms rose 1.8% quarter-on-quarter, helped by outsourcing demand among clients across business verticals and geographies. However, consolidated net profit fell 2.17% year-on-year in rupee terms.

Wipro posted a profit of ₹2,455.9 crore compared to ₹2,510.4 crore a year ago. In rupee terms, Wipro’s gross revenue stood at ₹15,470.5 crore, up 2.73% year-on-year.

Wipro’s IT services revenue stood at $2,094.8 million on a constant currency basis. Software-services companies typically use the constant currency method to eliminate the effects of exchange rate fluctuations while calculating financial results.

“We have delivered a good quarter with secular growth across all business units, geographies and practices. We remain focussed on deepening our customer relationships, converting our funnel and winning large deals,” said Abidali Z. Neemuchwala, CEO and managing director, Wipro.

Wipro’s IT services operating margin for the quarter stood at 18.4%, marginally up 0.3% quarter-on-quarter.

Jatin Dalal, chief financial officer, Wipro said, “We expanded operating margins by 0.3% aided by a favourable movement in the currency. Further, we generated strong operating cash flows led by disciplined execution at 124% of our net income.”

The Bengaluru-based IT firm also announced an interim dividend of ₹1 per equity share. Wipro expects revenue from its IT services business to be in the range of $2 billion to $2.13 billion which translates to a quarter-on-quarter growth of 0.0%-2%.

Last week Wipro’s crosstown rival Infosys ended the December quarter with a 23.71% rise in profit year-on-year, while quarter-on-quarter it rose 10.62%. Infosys posted an operating margin of 21.9%. The IT firm’s profit during the quarter stood at ₹4,466 crore compared to ₹3,610 crore a year ago.

Shares of Wipro closed at ₹257.15 a piece, up 0.88% on the BSE on Tuesday, while the Sensex ended the day up by 0.22%.