By Arathy S Nair and Sankalp Phartiyal
BENGALURU/MUMBAI Indian software company Wipro Ltd gave a gloomy revenue growth outlook for the current quarter, citing global political uncertainties and seasonal issues such as furloughs and a reduction in working days.Wipro, India's third-largest software services exporter, said it expected revenue from its information technology services business for the quarter ending Dec. 31 in a range between $1,916 million, roughly flat, and $1,955 million, up 2 percent over the quarter to Sept 30."Q3 always seasonally is a quarter where there are certain headwinds which come up and that creates a level of uncertainty," said chief executive Abidali Z. Neemuchwala."Also as you know, both the U.S. elections and Brexit have (created) a level of uncertainty."Neemuchwala also said the company was "cautiously optimistic about the next two to three quarters."
Wipro's muted forecast echoes the cautious business outlook given by larger rivals.Earlier this month, top software exporter Tata Consultancy Services Ltd reported lacklustre revenue growth, while second biggest rival Infosys cut its annual revenue growth guidance for the second time in three months.In its fiscal second quarter, Wipro reported a 7.6 percent drop in profit on higher employee costs, even though it topped analysts' expectations.
Consolidated net profit fell to 20.7 billion rupees ($310 million) for the three months ended Sept. 30, from 22.41 billion rupees a year earlier, it said in a statement. Analysts had, on average, expected a 19.72 billion rupee profit, according to Thomson Reuters data.IT services revenue rose 4.6 percent to $1.92 billion and the company added 47 new clients in the quarter.
Before the results, Wipro shares closed 0.77 percent higher in a broader Mumbai market that ended slightly lower. Wipro's smaller rival HCL Technologies painted a rosier outlook on Friday, saying it was optimistic that newer areas would drive technology spending.($1 = 66.8679 Indian rupees) (Additional reporting by Arnab Paul in Bengaluru; Editing by Amrutha Gayathri/Ruth Pitchford)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Published Date: Oct 21, 2016 10:00 pm | Updated Date: Oct 21, 2016 10:00 pm