Wipro Q3 net profit flat but revenue jumps almost 30%

Wipro Ltd, the third-largest software services firm in the country, reported on Wednesday consolidated net profit for the third quarter that was little changed from a year earlier as well as the preceding quarter.

Net profit came in at Rs 2,969 crore, compared with Rs 2,930.7 crore for the July-September period and Rs 2,967 crore in the corresponding quarter a year earlier.

The company recorded consolidated revenue of Rs 20,313 crore for the quarter ended Dec. 31, an increase of 3.3% from the second quarter and a jump of 29.6% from a year earlier.

Ahead of the results, the company’s shares ended 0.4% down on the BSE where the benchmark Sensex rose 0.88%.

In its outlook for the quarter ending March 31, Wipro said it expects revenue from its IT services business to be in the range of $2,692 million to $2,745 million. This translates to a sequential growth of 2% to 4%.

Other key details:

1) IT services segment revenue was at $2.64 billion, an increase of 2.3% QoQ and 27.5% YoY.

2) Non-GAAP constant currency IT services revenue increased by 3% QoQ and 28.5% YoY.

3) IT services operating margin for the quarter was at 17.6%, a decrease of 19 bps QoQ.

4) Earnings Per Share for the quarter was Rs 5.43, an increase of 4.2% from a year earlier.

5) Wipro had 231,671 IT services employees, an increase of 41,363 employees on a net basis year on year. It added 10,306 employees during the quarter.

Management commentary:

Thierry Delaporte, CEO and managing director of the IT company, said: “Wipro has delivered a fifth consecutive quarter of strong performance, both on revenues, and margins. Order bookings have been strong too, and we have added seven new customers in the more than $100 Mn revenue league, in the last 12 months.”

Delaporte said Wipro’s strategy and improved execution continue to serve it well. “We are also excited to have completed the acquisitions of Edgile and LeanSwift Solutions in the quarter, both of which will add to our capabilities significantly.”

Jatin Dalal, chief financial officer at Wipro, said: “We delivered robust operating margins after absorbing substantial investments on salary increases, owing to continued improvement in operating metrics.”

“We also improved our working capital, by reducing our Days Sales Outstanding. This has resulted in strong operating cash flow conversion, of 101.3% of net income,” he added.

Also read: Post disappointing Q3 results, Wipro shares tumble by 6%