Wipro Q1 net profit dips 8 per cent quarterly to Rs 2,082 crore, flat yearly

India's third biggest IT services exporter Wipro on Thursday reported better-than-expected revenues and profit for the first quarter of fiscal 2018 ending June 30, helped by higher revenues from the banking, financial services and insurance segments.

Wipro consolidated net profit of Rs 2,082 crore in the April-June quarter, down 8.1 per cent sequentially from Rs 2,267 crore in the January-March quarter.

NDTV reported Abidali Z Neemuchwala, chief executive officer of Wipro, as saying, "We delivered revenues above the upper end of the guidance range. Our focus on Digital combined with our investments in client mining have resulted in strong growth in top accounts." Wipro had earlier guided for a dollar revenue growth of negative 2 per cent to zero per cent for the June quarter.

Revenues fell 2.6 per cent quarter-on-quarter to Rs 13,626 crore from Rs 13,987.50 crore in the March quarter. Morgan Stanley had estimated Wipro's net profit at Rs 1,992 crore on revenues of Rs 13,459 crore for the June quarter. IT services EBIT margins dropped to 16.8 per cent in June quarter from 18.8 per cent in March quarter.

The IT major said it sees IT services revenues at $1,962-$2,001 million in the second quarter, implying minus 0.5 per cent to 1.4 per cent growth.

Profit from the key IT services business declined 5.8 per cent year-on-year to Rs 2,190 crore or $339 million. Operating margin from IT services was 16.8 per cent for Q1.

The Bangalore-based IT outsourcer also announced a share buyback to the tune of Rs 11,000 crore at a price of Rs 320 per share. In the previous financial year, it had announce buying back of 40 million shares or 1.62 per cent of the shares, amounting to Rs 2,500 crore at Rs 625 a share.

On new order wins, Wipro said, it won a multi-year engagement with a large utility company in the United States to deliver data center, disaster recovery, service desk and end user services. "This program will drive greater automation and improve services to end customers through the use of analytics and the Wipro HOLMES Artificial Intelligence Platform," the company said.

Wipro also bagged a multi-year contract from a Europe-based oil and gas major to transform their IT infrastructure and security platform.

On Wednesday, Wipro Chairman Azim Premji had said at the company's AGM that IT companies will find more business opportunities at a time when technology is a differentiator.

Premji said that there is a drastic change in expectations and experiences of consumers and business models. "Digital is the central element driving this change. We believe that IT Services companies are key to deliver Digital to enterprises," Premji said.

He pointed out that this transition will depend on Wipro's ability to redefine and align with this new global paradigm and disruptive development in the industry. "In this context, we have made significant investments, organic and inorganic, in transforming our business offerings to serve the new demand from clients," he said.