Wipro Q3FY19E Result Expectation

Revenue and margin impact post reorganizing of PSU business would be important.

Jan 18, 2019 07:01 IST India Infoline News Service

Consensus expectations for Q3FY19E:
  • Revenue – Rs15,220cr, up 4.7% qoq driven by incremental revenue contribution from the Alight deal and strength in the Financial Services vertical. Reported revenue growth for IT services is expected to be lower as PSU/Govt business will be carved out of the IT services segment.
  • EBIT – Rs2,622cr, up 35.2% qoq
  • EBIT Margin – 17.2%, up ~280bps qoq on reported basis. There were certain exceptional items in Q2FY19 adjusting for which the expansion would be ~50bps qoq. Margin expansion would be aided by operational efficiencies and favorable currency
  • PAT – Rs2,336cr, up 23.7% qoq.

Q2FY19 performance highlights:
  • Revenue –  Rs14,541cr, up 4.0% qoq, aided by sustained momentum in BFSI and growth in Energy, Natural Resources & Utilities and Communication vertical.
  • EBIT – Rs1,913cr, down 4.4% qoq.
  • EBIT Margin – 13.2%, down 130bps. This rise is on reported numbers and adjusting for the loss from settlement with a key client; the adj. EBIT margin stood at 16.7%.
  • PAT – Rs1,889cr, down 10.9% qoq. Adjusting for the loss from the abovementioned settlement, the adjusted PAT would have been Rs2,287cr.
Remarks:
  • Outlook on Energy & Utility vertical, healthcare and communications vertical would be closely watched.
  • Revenue and margin impact post reorganizing of PSU business would be important.
  • Comments on digital, margin improvement, and deal wins would be key monitarables.

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