Wipro posts 8% decline in Q3 net profit at Rs 1,931 crore on higher costs

India’s third largest software services firm Wipro today said its consolidated net profit has declined by 8.4 per cent to Rs 1,931.3 crore for the quarter ended December 31, 2017. The Azim Premji-led company saw its total expenses rise 2.2 per cent to Rs 11,380 crore in the quarter under consideration.

This is against net profit (attributable to shareholders) at Rs 2,109.6 crore in the year-ago period, as per Indian accounting norms (Ind AS), Wipro said in a BSE filing.

Wipro’s revenue from operations was nearly flat at Rs 13,669 crore in the quarter under review as against Rs 13,687.8 crore in the year-ago period, it added.

Revenues from IT services segment, which accounts for a significant portion of the company’s topline, stood at USD 2.013 billion, remaining flat sequentially and up by 5.8 per cent year-on-year.

Wipro missed its revenue guidance for the third quarter as it had given a forecast of USD 2.014 billion to USD 2.054 billion.

For the March 2018 quarter, it expects revenues from IT services business to be in the range of USD 2,033 million to USD 2,073 million.

The company said its IT services margin – at 14.8 per cent – was impacted by a provision of Rs 317.5 crore (USD 49.7 million) made with respect to insolvency of a customer post the balance sheet date.

“Adjusted for this event, IT services margin was higher at 17.2 per cent,” the filing said.

The company has declared an interim dividend of Re 1 per share.

“We continued to improve our growth trajectory driven by strong momentum in banking, financial services and insurance (BFSI) and uptick in healthcare,” Wipro CEO and Member of the Board Abidali Z Neemuchwala said.

This is also reflected in Wipro’s outlook for the next quarter, he added.

Wipro now gets over 25 per cent of its revenues from Digital. IT products revenue for the third quarter was Rs 450 crore (USD 70 million). The company saw its headcount at 1,62,553 at the end of the third quarter.

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