Wipro posts nearly 8% drop in Q2 net profit; cuts guidance

Wipro Ltd on Friday announced a decline of 7.6% in its consolidated net profit for the quarter ended on September 30. The company reported a consolidated net profit of Rs 2070.4 crore during the quarter as against Rs 2241 crore during the same quarter last year. 

The company in a regulatory filing said that the total income during Q2FY17 increased from Rs 13198.6 crore in Q2FY16 to Rs 14407.3 crore. 

Commenting on the results, Abidali Neemuchwala, CEO and Member of the Board, Wipro, said, "We delivered Revenues in constant currency at the top end of our guidance range. I am very excited about Wipro’s acquisition of Appirio, a leader in cloud applications especially across Salesforce and Workday implementation services. This acquisition will establish Wipro’s dominance in cloud application services and further strengthen Wipro’s brand as a Digital Partner of choice.” 

Giving the guidance for the quarter ending on December 31, the company said that they expect  Revenues from our IT Services business to be in the range of $1,916 million to $1,955 million. 

"We expect to consummate the Appirio acquisition in Q3 and hence Revenues from the acquisition is included in our guidance. However, there is variability in terms of exact date of consummation and our guidance incorporates this variability in the range", the company said in the filing.

Jatin Dalal, CFO, Wipro said, "We maintained margins in Q2 despite the impact of salary increase for an incremental two months due to strong operational improvements in automation-led productivity, offshoring and utilization. As we look forward, the demand environment is mixed in a seasonally weak quarter affected by furloughs and lower number of working days".

On Friday, the shares of the company closed at Rs 499.20, up 0.75%, or Rs 3.70.