Last updated: 13 Oct, 2020 | 12:48 pm
Profit rises: Wipro, India's fourth-largest software services exporter, has reported a 3.15% on-quarter rise in net profit to ₹2,465.7 crore in Q2FY21. IT services segment earnings were ahead of analysts estimates on all fronts. Wirpo’s quarterly profit was hurt by a deferred tax impact of Rs 1,600 crore and a fall in other income.
Revenue beats estimates: Total revenue rose 1.17% QoQ to Rs 15,096.7 crore, beating analyst estimates of ₹15,084 crore. Revenue from IT services rose 3.66% to $1,992.4 million. In terms of segments, the mainstay BFSI and Consumer businesses have delivered robust growth on-quarter. Engineering and Technology verticals saw a decline. The table below shows the revenues across verticals for Wipro.
Operational margins improve: Wipro’s operational margins showed an improvement in the quarter, led by a favourable exchange rate movements and cost cutting measures. Operating profit rose 8% on-quarter to Rs 2,780 crore. IT services margin expanded to 19.2% from 19% earlier.
Robust guidance: Wipro has announced a robust revenue guidance for the next quarter. Wipro expects revenue from IT services business to be in the range of $2,022 million to $2,062 million, which translates to a QoQ growth of 1.5-3.5%. This is much higher than the expected range of 0-2%, predicted by analysts earlier.
Buyback: Wipro has also announced a share buyback to purchase up to 23.75 crore equity shares (representing 4.16% of total paid-up equity) from the shareholders of the company on a proportionate basis by way of a tender offer. The buyback price has been fixed at Rs 400, at about 6.5% premium to today’s close price.
Wipro has seen four chief executives in the last decade and has lagged its peers in growth. It lost its third position to HCL Technologies in the previous fiscal year. The New CEO Theirry Delaporte took charge from July 6th. This is the first quarter under the new CEO.
Wipro has reported better-than-anticipated numbers. Wipro has seen an excellent quarter with growth in revenues, expansion of margins and robust cash generation. While the ongoing pandemic has affected various businesses, has forced a tectonic shift in businesses processes to move towards greater digitization providing a good opportunity for IT industry. Going forward, Wipro is confident of delivering long-term sustainable growth.