Q1 earnings: Wipro net profit up 2% to Rs 2,120.8 crore
Indias third largest IT firm Wipro today posted over 2 per cent increase in consolidated net profit at Rs 2,1208 crore for June 2018 quarter
India's third largest IT firm Wipro today posted over 2 per cent increase in consolidated net profit at Rs 2,120.8 crore for June 2018 quarter.
The net profit, attributable to shareholders, in the year-ago period was at Rs 2,076.7 crore.
According to a regulatory filing by Wipro, its total profit grew marginally to Rs 2,093.8 crore for the April-June 2018 quarter, from Rs 2,082.6 crore in the year-ago period.
Its revenue from operations grew 2.5 per cent to Rs 13,977.7 crore during the period under review from Rs 13,626.1 crore in the same quarter last year.
"We entered fiscal 2019 dealing with certain externalities.
Based on the excellent execution by our team, we have seen a pickup in momentum in our global business ahead of our expectations and have delivered 0.1 per cent growth in constant currency terms, coming in at the top end of our guidance range," Wipro CEO Abidali Z Neemuchwala said.
"While we see continuing challenges in our India business and ACA related decline in Healthcare, we do see stronger momentum in the rest of our business led by BFSI and Americas.
Product Engineering Services has also shown strong YoY growth," he said.
Wipro, which gets bulk of its topline from IT services, said it expects revenues from that business to be in the range of USD 2,009 million to USD 2,049 million in the September quarter.
"This translates to a sequential growth of 0.3 per cent to 2.3 per cent, excluding the impact of the divestment of our hosted data centre services business which concluded in the quarter ended June 30, 2018," the company saidin a regulatory filing.
For the June quarter, IT services revenue was at Rs 13,700 crore, up 5.2 per cent from the year-ago period.
In dollar terms, revenue from this segment grew 2.8 per cent year-on-year to USD 2,026.5 million.
"Wipro is seeing an improved demand environment, though we have some pockets of concern. We are focused on executing our strategy.
Overall, our operating metrics are improving consistently and we are confident that we are moving in the right direction,"Neemuchwala said
The company's revenue from IT products during the quarter was Rs 350 crore (USD 51.6 million).
Wipro said it has partnered US-based Alight Solutions to take over the latter's captive operations in India - Alight HR Services India - for a consideration of USD 117 million.
The cash transaction is expected to be completed during the September quarter, subject to receipt of regulatory approvals and customary closing conditions.
The CEO said Wipro had good order booking in the quarter.
On the partnership with Alight, he said, "This strategic partnership will enable Alight to accelerate investment in consumer-facing technologies and services across its health, wealth and cloud businesses by leveraging Wipros industry-leading strengths in automation, machine learning and data analytics."
Neemuchwala said Wipro's digital revenue increased 6.2 per cent sequentially in constant currency terms and contributes 28.1 per cent of the revenues.
Over 97,000 of the company's workforce were trained in digital technologies, he said.
Wipro's client mining focus continues to yield dividends, he said.
"In Q1, our top 10 clients grew 7.8 per cent YoY, and we have added 4 new clients in the USD 50Mn+ revenue bucket and 16 new clients in the USD 5Mn+ revenue bucket in the last one year," he said.
"Our localisation drive continued in our global markets as we reached 58 per cent localization levels in US.
We continue to maintain strong localisation levels in Continental Europe, APAC and LATAM," the CEO said.
Commenting on campus hiring, Wipropresident and chief Human Resources Officer Saurabh Govil said the company's campus hiring this fiscal would be higher than the previous fiscal.
He also said there is a slight increase in attrition and cited q1 "seasonality" as one of the reasons for it.
"Right steps" are being taken to maintain it, he added.