Wipro misses Q3 IT revenue guidance, net profit up 2% at Rs 2,234 crore

Wipro, India's third largest software services exporter, missed its third quarter IT revenue guidance marginally, but reported an increase of 1.88% in net profit at Rs 2,234.10 crore on a year-on-year (YoY) basis.

The company's IT revenues for the December quarter stood at $1,838.3 million as against the guidance of $1,841 million to $1,878 million Wipro issued after declaring its second quarter results in October last year.

The fourth quarter IT revenue guidance is $1,875 million to $1,912 million, an increase of 2 to 4% over its third quarter IT revenues.

Wipro's sequential growth of 0.34% in IT revenues is lower than Infosys that reported a 0.6% increase at $2,407 million and 0.3% decline reported by TCS at $4.15 billion.

The company's consolidated revenues for the December quarter at Rs 12,860 crore, an increase of 7%, YoY.

The IT revenue margin for the third quarter ended December 2015 was 20.2%, down from 20.7% in the second quarter and 21.8% in the corresponding quarter ended December 2014.

The decline in operating margins was on account of Chennai floods.

"The impact on revenues from the Chennai floods were minimised significantly by strong execution of our robust Business Continuity Plans (BCP). The additional expenses incurred in deploying BCP impacted operating margins for the quarter," Jatin Dalal, Chief Financial Officer of Wipro, said in a statement.

During the quarter, the company lost one $100 million client and added 39 customers.

The utilisation rate, excluding trainees, was 78%, while the headcount stood at 1,70,664 at the end of the quarter, a net addition of 2,268 employees.

The utilisation rate was 80.9% at TCS and 80.6% at Infosys.

TK Kurien, Chief Executive Officer of Wipro, said that the company was "well-positioned" to benefit from the trend where customers are opting for simplifying operations and investing in digital to optimise their IT spend.

Abidali Z Neemuchwala, Chief Executive Officer-Designate of Wipro, said the company is focussing on growing in its core businesses through integrated domain and technology services.

The company declared an interim dividend of Rs 5 per share.

The Wipro stock was trading at Rs 543 on the BSE, a marginal loss of 0.07% from its previous close.