Wipro Q2 net declines 7.6% to Rs.2,070 crore

India’s third largest software services company Wipro on Friday reported a 7.6% decline in its consolidated net profit at Rs 2,070.4 crore during Q2 of FY 2017, compared with Rs 2,241 crore in the same period last year. 

Commenting on the decline in net profit, Wipro CEO Abidali Z Neemuchwala said, “The current demand for traditional services is driven by focus on cost-saving on the run side, even as the change side has not picked up at the same pace as expected. It may be perhaps due to caution in the context of US elections and Brexit,” he said.

He said the company has delivered revenues in constant currency at the top of its guidance range. “I am excited about Wipro’s acquisition of Appirio, a leader in cloud applications. This acquisition will establish Wipro’s dominance in cloud application services and further strengthen brand as a digital partner of choice,” he said.

 Net profit on a sequential basis registered a muted 0.9% growth compared with Rs 2,051.9 crore in the previous quarter. Total income for the quarter registered 10% growth at Rs 13,896.8 crore



compared with Rs 12,566.8 crore in the same period in the FY 2016. On a sequential basis, it registered 1.45% at Rs 13,697.6 crore.

The company disappointed with a topline growth guidance for Q3 FY17 in the band of 0-2%. While its peers are managing to grow at a better pace, Wipro has been growing in a single digit band for the past four quarters.

Wipro’s IT services revenues, which account for a substantial chunk of its business, saw a sequential growth of 0.2% to Rs 13,136 crore for the quarter compared with Rs 13,109 crore reported for the previous quarter and registered a growth of 9% on a year-on-year basis at Rs 12,042.70 crore.  In dollar terms, IT services revenue reached $1,916 million in the second quarter of FY2017, a sequential decrease of 0.8% and y-o-y increase of 4.6%. Wipro missed its guidance of $1,931 million to $1,950 million given at the beginning of the quarter.

 According to Wipro CFO Jatin Dalal, as the company looks forward, the demand environment is mixed in a seasonally weak quarter affected by furloughs and lower number of working days.