Software company Wipro on April 15 reported a 0.1 percent sequential growth in consolidated profit at Rs 2,972.3 crore for the quarter ended March 2020, with IT services business matching analysts’ expectations.
IT services business, which is widely tracked by analysts, clocked revenue at Rs 16,334 crore for the quarter, growing 3.9 percent QoQ and beating CNBC-TV18 poll estimates of Rs 15,768 crore.
Wipro said the fourth quarter was its best in the last 10 years, CNBC-TV18 reported.
The revenue growth in constant currency came in at 3 percent for the March quarter and the topline growth in dollar terms was reported at 3.9 percent. Both the numbers were largely in line with CNBC-TV18 poll estimates of 3-3.3 percent and 3.9 percent.
IT services segment revenue was at $2,152.4 million for the March quarter, an increase of 3.8 percent YoY.
“We delivered a third consistent quarter of strong revenue growth, deal wins and operating margins. We also announced our largest-ever acquisition of Capco that will bolster global financial services sector,” said Thierry Delaporte, CEO and Managing Director.
Wipro expects its IT services revenue in dollar terms in the range of $2,195-2,238 million for the June quarter 2021, a growth of 2-4 percent over the March quarter. “This does not include revenue from our recently announced acquisitions of Capco and Ampion,” said the company.
At the operating level, IT services’ earnings before interest and tax (EBIT) grew by 1.1 percent QoQ to Rs 3,417 crore and margin contracted 80 bps QoQ at 20.92 percent for Q4FY21, higher than CNBC-TV18 estimates of Rs 3,210 crore and 20.36 percent.
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The margin was hit by wage hikes. IT services operating margin for the quarter witnessed an expansion of 344 bps YoY, and for the year at 20.3 percent, an expansion of 218 bps YoY.
“We delivered a 340 bps expansion YoY in operating margins for the quarter
after absorbing the impact of the wage hike. On a full-year basis, we increased margins by 220 bps with a consistent improvement in operating metrics,” Jatin Dalal, Chief Financial Officer said.
“Led by disciplined execution, we generated strong operating cash flows at 136.7 percent of net income for the full year.”
The full-year IT services segment’s revenue in dollar terms declined 1.4 percent and in constant currency fell 2.3 percent compared to the previous year.
Wipro said it added one client in over $100-million category, three in over $75-million band and two in the over $50-million category. The company added 52 customers during the quarter, taking the total active clients count to 1,120 at the end of March 2021, a drop from 1,136 clients in December 2020.
Wipro shares have gained 8.5 percent in 2021, outpacing the benchmark Nifty IT index that has risen 6.6 percent in the same period.
