Wipro Q4 net flat at Rs2,276 cr; declares 1:1 bonus
26 April 2017
Wipro, the country's third-largest IT services exporter, posted a consolidated net profit of Rs2,267 crore for fiscal fourth quarter ended 31 March 2017, up 0.4 per cent year-on-year and up 7.5 per cent on a sequential basis.
Bengaluru-based Wipro also reported better than expected revenues for the fourth quarter (January–March 2016-17) on the back of sequential growth in BFSI, recovery in energy and utilities and growing demand for digital services.
Wipro said its IT services revenue grew 2.7 per cent over the previous quarter to $1.96 billion (Rs12,541.06 crore) against the projected revenue of $1.92-1.94 billion.
The company's operating margin, calculated as sales minus expenses, rose 0.7 percentage points to 18.3 per cent.
Wipro expects revenue of $1.92-1.96 billion in the first quarter of 2017-18, following project cancellations and a slow retail business.
The company announced the issue of bonus shares in the ratio of 1:1 and said it would consider a proposal for buyback of equity shares around July 2017 – a move that follows announcements of mega share buybacks by TCS and Infosys.
''We delivered revenues within the guidance range in the fourth quarter,'' said Abidali Z Neemuchwala, chief executive officer of Wipro, adding, ''We are confident that the recovery in energy and utilities and our demonstrated strength in digital will help us improve our growth trajectory during the course of the current financial year.''
The company also reappointed Azim Premji as its chairman for two years, indicating that son Rishad Premji, a board member, is not yet ready to take up the top job.
The company hired a net 8,570 employees during 2016-17, while also fired 600 others.
Neemuchwala said he was confident of a revival of business as Wipro executed a strategy to expand digital, hire locally and offer newer solutions to customers. ''Our confidence of the recovery stems from expectation of HPS bottoming out, the India business recovering, BFSI accelerating, and the energies and utilities vertical picking up,'' he said.
Wipro's business in the fourth quarter was in line with that of its rivals. Infosys' profits during the quarter declined 0.2 per cent to Rs 3,603 crore and its revenue grew 3.4 per cent to Rs17,120 crore. The company reported an operating margin of 24.6 per cent during the quarter.
Wipro said it was investing in development centres and would use campus hiring to offset visa restrictions in the US, UK, Australia and Singapore.
Neemuchwala has set a target of $15 billion revenue for Wipro by 2020. He said the company was working in that direction.