Wipro surges 6.5% on better-than-expected Q3 earnings

Shares of India's Wipro Ltd gained 6.5 percent on Monday after the country's third-largest IT services exporter on Friday reported better-than-expected growth in December-quarter net profit.

FP Staff January 19, 2015 10:41:27 IST
Wipro surges 6.5% on better-than-expected Q3 earnings

Shares of India's Wipro Ltd gained 6.5 percent on Monday after the country's third-largest IT services exporter on Friday reported better-than-expected growth in December-quarter net profit.

There were widespread expectations that Wipro would post weak earnings after rival Tata Consultancy Services' December-quarter revenue from its energy vertical fell 2.3 percent in dollar terms.

Attractive valuations also helped Wipro shares, investors said.

Wipro surges 65 on betterthanexpected Q3 earnings

Reuters

Its third quarter profit (from IT services and products business) saw a growth of 5 percent sequentially to Rs 2,203.1 crore. IT services revenue rose 3.9 percent to Rs 11,344 crore in October-December quarter and dollar revenues increased 1.3 percent to $1.795 billion on sequential basis. Revenues beat street expectations as a CNBC-TV18 poll had estimated revenues at Rs 11,070 crore and dollar revenues at $1.785 billion for the quarter.

In an interaction with CNBC-TV18, discussing the results, outgoing CFO, Suresh Senapathy, said Q3 has been a good quarter for the company in terms of volumes and guidance. “Wipro has performed well in every space but oil & gas. The industry has been volatile due to fall in crude prices,” he said.

CEO TK Kurien said the company has factored in a decline in energy and utility business in Q3. He said the last quarter was affected by consulting but sees growth coming back this quarter.

However, brokerage BoA ML remains cautious on the growth outlook, pending improvement in the company’s client-mining efforts and also feels that near term, relatively higher exposure to the energy and telecom verticals may impact growth. It expects a flattish EBIT margin over FY15-17 as productivity improvements are likely to be offset by wage hikes and likely limited operating leverage on our forecast revenue CAGR of 10 percent.

With inputs from Agencies

Updated Date:

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