Wipro profit margins continue to slide in Q3

Information Technology services provider Wipro Ltd reported a year-on-year decline in its quarter three revenue to Rs 13,669 cr from Rs 13,688 cr in the year-ago period. In the preceding September quarter, revenue was at Rs 13,468 cr.

Total IT services revenue was at Rs 13,682 cr versus Rs 13,469 cr in the preceding quarter and Rs 13,765 cr.

“IT Services Segment Revenue in Non-GAAP constant currency increased by 0.9% sequentially, in line with our Guidance,” the company said.

The outlook for the final quarter of the year is for a growth of 1-3% on the top line on a quarter-on-quarter basis.

IT Services Segment Revenue in dollar terms was $2,013.0 million, remaining flat sequentially and
increasing by 5.8% YoY.

Net profit fell to Rs 1,937 cr from Rs 2,192 cr in the immediately preceding quarter and Rs 2,109 cr in the year-ago period. This was due to the “insolvency of a customer post the balance sheet date,” it said.

“Adjusted for the customer insolvency event, net profit for the quarter increased by 4.0% YoY,” it said.

IT services EBIT margin was at 14.8% compared to 17.3% in the immediate preceding quarter and 18.3% in the year-ago quarter.

It said this was impacted by a provision of ₹317.5 cr ($49.7 million ) made with respect to insolvency of a customer post the balance sheet date. Adjusted for this event, it said, IT Services Margin for the quarter was 17.2%.

The company said over 25% of its revenues came from digital technologies.

“We have made strong progress in our client mining with number of clients contributing revenues over $50 million increasing from 33 to 41 in the last 1 year,” said Jatin Dalal, Chief Financial Officer.

“In the first 9 months of the current fiscal year, we generated robust Operating Cash Flows of ₹77 billion, 14.2% more than the same period last year. We also completed the Share Buyback in December and saw strong participation from our investors.”

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