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Wipro disappoints with flat QoQ revenue growth

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Wipro first-quarter IT Services revenue disappointed with a sequential growth of just 0.2% in constant currency. YoY, constant currency growth was 8.1%.

In dollar terms, IT Services Segment Revenue was $1,794.1 million, a sequential increase of 1.1%.

The performance is all the more jarring due to a spectacular performance by Infosys just days ago. Infosys reported constant currency growth of 4.4% for the same quarter.

However, Sarabjit Kour Nangra of Angel Broking pointed out that the results are not really so bad if you keep in the mind what the company had said last quarter.

“The guidance for the 1QFY2016 was US$1,765-1,793mn, a (0.5)-1% qoq growth. Thus results have come, at the upper end of the guidance,” she said.

For the ongoing quarter, Wipro expects revenue of $ 1,821 million to $ 1,857 million, implying growth of 1.5%-3.5% QoQ.

The company blamed a downturn in the energy vertical for the poor revenue performance.

Total revenues were Rs 12,240 cr ($1.9 billion1), an increase of 10% YoY.

Net Income rose 4% year on year to Rs 2,190 cr ($344 million1), an increase of 4% YoY.

T K Kurien, Member of the Board & Chief Executive Officer of Wipro, said – “On the Run side, deals are getting increasingly competitive and we are focused on increasing the levels of automation, while on the Change side, new stakeholders are influencing buying decisions in the Digital space. On the Run side, we continued to win deals which deploy Wipro HOLMESTM, our Artificial Intelligence platform to drive down costs for our customers. On the Change side, we have announced the acquisition of Designit, one of the largest independent global strategic design firms. Designit’s design capabilities in synergy with Wipro’s scale in technology services will position Wipro uniquely in Digital, as an integrated design & technology player.”

Jatin Dalal, Chief Financial Officer of Wipro, said – “We continued to drive productivity and improve operating levers even as we invested for growth in people, process and IP. In the quarter, we maintained strong cash flow generation while operating margins were, on predictable lines, modestly lower due to employee compensation measures.”

IT Services The IT Services segment had a headcount of 161,789 as of June 30, 2015. We added 36 new customers during the quarter.

See full details here – Wipro_Data Sheet Q1 FY16
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