Wipro's Q1FY17 consolidated net profit declines 8% qoq to Rs.2,051.90 crore : In line with estimates

India Infoline News Service | Mumbai |

IT bellwether and software exporter

Wipro, IT bellwether and software exporter, reported consolidated net profit of Rs.2,051.90 crore for the quarter ended March 31, 2016, registering decline of 8.32% qoq and 6.38% yoy. The company’s revenue stood at Rs. 13,697.60 crore, declining 0.32% qoq but grew by 10.73% yoy.

It's consolidated operating profit of Rs. 2,751.10 crore for the quarter, declined 5.46% qoq but grew 0.59% yoy. Operating profit margin for the current quarter at 20.08% contracted by 110 bps qoq and 203 bps yoy.

On standalone basis, the company reported net profit of Rs.2,007.70 crore for the quarter ended March 31, 2016, registering growth of 1.74% qoq, but decline of 2.68% yoy. It’s revenue stood at Rs. 11,587.50 crore, declining 0.63% qoq but grew by 7.54% yoy.

Wipro Ltd's operating profit of Rs. 2,322.40 crore for the quarter, declined 0.96% qoq and 0.1% yoy. Operating profit margin for the current quarter at 20.04% contracted by 7 bps qoq and 153 bps yoy.

Wipro Q1FY17: Inline with estimates; Guidance disappoints:

Wipro's current quarter earnings were in line with IIFL estimates. The consolidated profit fell 8.3% to Rs. 2051.9 cr, impacted due to lower revenue which stood at Rs. 13,697.6 cr, declining 0.30 qoq. Meanwhile operational performance was impacted mainly due to other expense of Rs. 1667.1 cr, which escalated 9.5% qoq and employee benefit costs of Rs. 6597.9 cr that grew 3.4%qoq. Revenue from the IT services at Rs. 13,109 cr grew 2.4% sequentially, inline with expectations.

But the guidance for July-September period was far below estimates as Wipro expects revenue from IT services business to be in the range of USD 1931-1950 million, a growth of 0.01-1% over Q1. However, attrition rate improved with voluntary TTM at 16.5%. IT services growth in Healthcare, Life Sciences & Services grew 18% qoq, where as IT services revenue growth from Americas in CC terms grew 4.2% sequentially whereas growth in India & Middle East IT services business declined 2.6% (CC) sequentially.   

Result Highlights: (Rs. in crore)

Reported Results IIFL Estimates Variance (%)
Consolidated Revenue 13697.60 13771.3 [0.54]
Consolidated Net Profit 2051.90 2065.2 [0.64]

Consolidated EPS for the quarter stood at Rs. 8.35.

Management comments:
Abidali Z. Neemuchwala, Chief Executive Officer and Member of the Board, said, “We have delivered Revenues in line with our guidance. Our early investments in areas such as our Digital practice and cognitive intelligence, notably Wipro HOLMES is positioning as the partner of choice for customers in the CHANGE side of their business. We expect the trajectory of growth to build gradually over the course of the year as we drive execution on our strategic themes and make progress towards achieving a sustainable growth trajectory” Jatin Dalal, Chief Financial Officer, said – “IT Services margins reflect the investments in rewarding our employees as well as the impact of consolidation of our acquisitions for the full quarter. We continue to expand the reach of our automation programs to harness efficiency gains.”

Jatin Dalal, Chief Financial Officer, said – “IT Services margins reflect the investments in rewarding our employees as well as the impact of consolidation of our acquisitions for the full quarter. We continue to expand the reach of our automation programs to harness efficiency gains.”

Stock Commentary:

Wipro Ltd ended at Rs. 549.4, down by 2.6 points or 0.47% from its previous closing of Rs. 552 on the BSE.

The scrip opened at Rs. 548 and touched a high and low of Rs. 553.35 and Rs. 545 respectively. A total of 2912669(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 136384.16 crore.

The BSE group 'A' stock of face value Rs. 2 touched a 52 week high of Rs. 613 on 01-Oct-2015 and a 52 week low of Rs. 508.9 on 29-Feb-2016. Last one week high and low of the scrip stood at Rs. 577.5 and Rs. 545.25 respectively.

The promoters holding in the company stood at 73.34 % while Institutions and Non-Institutions held 16.18 % and 9.87 % respectively.

The stock traded above its 200 DMA.


BSE 458.70 [0.15] ([0.03]%)

***Note: This is a NSE Chart

 

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