Wipro says Chennai floods to hit December quarter earnings
Country\'s third largest software services firm Wipro on December 16, said recent floods in Chennai will have a \"material impact\" on its December quarter revenues and hurt its operating margins.
Country's third largest software services firm Wipro on December 16, said recent floods in Chennai will have a "material impact" on its December quarter revenues and hurt its operating margins.
"The recent heavy rainfall and resultant flooding impacted the regular business operations of Wipro's Chennai facilities during the first week of December. For the quarter ending December 31, 2015, the incident is expected to have a material impact on the revenues and will result in higher one-time cost incurred towards deployment of our business continuity plan," Wipro said in a BSE filing.
It further said: "Both these factors will impact our operating margins for the quarter. Revenues from our IT Services business are expected to be in the previously communicated range of USD 1,841 million to USD 1,878 million. However, we expect revenues to be in the lower half of the guidance range."
The October-December quarter is usually a weak quarter for the Indian IT players as business is impacted by low volume growth amid Christmas and New Year holidays and furloughs in the US and Europe. Wipro has multiple facilities in Chennai with over 22,000 employees.
The company said it has largely seen the restoration of normal operations in Chennai facilities.
"Wipro has adequate insurance coverage and is in touch with the insurance companies to assess the damage and the claim will be subject to policy terms," it added. Shares of Wipro were trading at Rs 555.70, down 0.52 per cent, from previous close on BSE.