Wipro Q4FY18: Profit down by 21% yoy, misses estimate; IT service revenue seen at $2,065 mn in Q1FY19

Azim Premji led Wipro missed analysts estimates in terms of consolidated net income for the fourth quarter ended March 2018 results, as the company posted income of Rs 1,800.80 crore in Q4FY18 witnessing a decline of 20.56% compared to net income of Rs 2,267 crore in the corresponding period of the previous year. The current net income also plunged by 7% from Rs 1,930.1 crore of the preceding quarter. A Bloomberg poll of analysts predicted net income of Wipro to come in at Rs 2,127 crore in Q4FY18. 

Consolidated revenue came in at Rs 13,768.6 crore during the quarter which decreased by 1.56% compared to Rs 13,987.50 crore in Q4FY17 but gradually rose by 0.73% versus revenue of Rs 13,669 crore in Q3FY18. 

On segment wise revenue break-up, BFSI was the only section which saw positive growth in Q4FY18, by reporting revenue of Rs 3,901.3 crore higher by 11.75% from Rs 3,491.1 crore a year ago same period. 

Overall the IT service revenue came in at Rs 13,411.9 crore muted compared to revenue of Rs 13,402.10 crore in similar period of the previous year. 

IT Services Segment Revenue in dollar terms was $2,062.0 million, up 2.4% sequentially and 5.5% YoY.

Abidali Z. Neemuchwala, CEO and Member of the Board said - “Our investments in Digital and our efforts in client mining are paying off well. Our strong order bookings in the last two quarters provide us the right foundation to grow as we progress through the year.” 

On standalone-front, revenue grew by 1.91% year-on-year (yoy) to Rs 11,434 crore in Q4FY18 versus Rs 11,072.7 crore of Q4FY17. Whereas, net income came at Rs 1,757.2 crore sliding below by 23.72% yoy from Rs 2,303.50 crore of same period a year ago. 

Jatin Dalal, Chief Financial Officer said - “We continue to make progress in our client mining, with number of clients contributing revenues over $75 million increasing from 17 to 20 during the quarter. Our investments in Wipro HOLMESTM and our automation suite are resulting in consistent productivity improvements. We generated robust Operating Cash Flows of ₹84 billion at 105% of our Net Income in FY18.” 

Talking about outlook for Q1FY19, Wipro said, “We expect Revenue from our IT Services business to be in the range of $2,015 million to $2,065 million. We had announced the divestiture of our hosted data center services business to Ensono for a consideration of $405 million.” 

It added, “ We expect the transaction to complete during the quarter ending June 30, 2018. For the purpose of the Outlook, we have not considered the impact of the divestment on the Revenue for the quarter ending June 30, 2018. We will revise the Outlook for the quarter based on the actual date of completion of the divestment.” 

The share price of Wipro traded on a positive note on exchanges. After touching an intra-day high of Rs 293.95 per piece on BSE, the shares closed at Rs 287.20 per piece muted compared to previous day trading.