Wipro September quarter net profit jumps 35% to Rs 2,552 cr, beats estimates; revenue up 4%

Wipro reported a better-than-expected September-quarter profit on Tuesday, as the Indian software exporter managed to withstand a global spending squeeze among its financial clients that has hurt the sector overall.

It posted 35 percent rise in consolidated net profit to Rs 2,552.7 crore for the second quarter ended 30 September. Analysts on an average were expecting the company to earn Rs 2,273 crore, according to the Reuters report.

The company had registered a net profit of Rs 1,889 crore in the year-ago period.

Its total income for September quarter stood at 15,875.4 crore compared to 15,203.2 crore a year ago.

The Bengaluru-based company's revenue came in 4 percent higher year-on-year at Rs 1,51,25.6 crore.

File photo of Abidali Neemuchwala, CEO, Wipro. Reuters

Wipro has guided for 0.8-2.8 percent sequential growth in IT service revenue for December quarter, saying revenue from that business is expected to be $2,065-2,106 million, PTI reported.

For the just concluded quarter, the company's IT services segment revenue was at $2,048.9 million, an increase of 2.5 percent year-on-year, a Wipro statement said.

The operating margin for IT services in the just-ended quarter improved year-on-year to 18.1 percent. The net income at Rs 2,552.7 crore, translated into 35.1 percent increase.

Commenting on the earning scorecard, Abidali Z Neemuchwala, Wipro's CEO and Managing Director said: "We had a good in-quarter execution on both revenues and margins. The overall growth was broad based with 6 out of 7 industry verticals growing on a year on year basis..."

He said that the company signed a large deal in India aligned to its strategy of taking global offerings to India customers.

Jatin Dalal, Chief Financial Officer of Wipro, said that the company delivered operating margins in a tight range after absorbing the impact of two months of wage hike.

"Growth remains our priority and we remain invested for future. We also successfully completed the share buyback programme in September, which saw strong participation from our investors," Dalal said.

Wipro statement said during the quarter ended September 30, 2019, the company concluded buyback of 323.1 million equity shares as approved earlier by the Board of Directors at their meeting on 16 April, 2019. "This has resulted in a total cash outflow of Rs 10,500 crore ($1.49 billion).

Wipro’s quarterly numbers came in days after larger rival Tata Consultancy Services Ltd’s quarterly profit missed expectations.

Infosys Ltd only managed to meet estimates, underscoring the growth woes of the $180-billion Indian IT services sector heavily dependent of Western clients for revenue.

(With inputs from agencies)