Wipro rebounds in the first quarter, net profit rises 2% to Rs 21 billion

Wipro, the third-largest IT services company in India, announced better-than-expected financial data for the first quarter ended June 2018. The move was supported by a recovery in BFSI (banking, financial services). and insurance). vertically, apart from the strong growth in North America, which accounts for 55 percent of the company's revenue.

The company reached the peak of its revenue forecast in the first quarter of fiscal year 19 while the management commentary reflected an increase in demand. The company posted a net profit of 21.2 billion rupees in the first quarter, up 2.1 percent over the same period last year, while on a sequential basis, it grew by 17.5 percent per cent. The net profit for the period also benefited from the sale of its hosted data center business, which earned it 2.5 billion rupees. The company's revenue for the period (including revenue from products) at Rs 139 billion rose 2.6% yoy and 1.5% qoq.

Excluding revenues from product business, computer services segment grew 5.2 percent to Rs 137 billion year-on-year, while on a sequential basis, it grew 2 , 2 percent.

The IT firm was able to beat Street's estimates of revenue. Bloomberg's consensus estimates set the quarter's business figure at 134.2 billion rupees for this quarter. Although Wipro has not yet caught up with its larger counterparts, TCS and Infosys, the company has been optimistic about continuing the growth momentum for the rest of the year. TCS, headquartered in Mumbai, recorded revenue growth of 15.8% and 6.8% respectively from one year to the next and one quarter to the other. .

Infosys, based in Bengaluru, recorded a growth in its turnover of 12% and 5.8% one-quarter quarter on quarter in the same quarter. "We have seen a recovery in spending in developed markets, particularly in North America, and in the vertical BFSI sector, we have had a good quarter of orders and I am confident we are moving in the right direction," he said. said Abidali Z Neemuchwala, CEO of Wipro.

Wipro's operating margin is set at 17.2% in the quarter, up 35 basis points over the same period last year. Sequentially, the margin increased 280 basis points, the company having benefited from part of the transfer of the activity of hosted data centers. Despite better than expected numbers and optimism, Wipro has directed its IT services business revenue of $ 2 to $ 2 in the second quarter of fiscal year 19. This would result in a sequential growth of 0, 3% to 2.3% for this period.

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Meanwhile, Wipro said it has entered into a strategic alliance with Alight Solutions, based in Illinois. Wipro announced that it would invest $ 117 million in Alight and acquire its employee base in India.

Among the key verticals, while BFSI grew 1.1 percent sequentially, the consumer business unit grew 0.7 percent in the final quarter. However, the rest of the verticals such as communications, energy, natural resources and utilities, business units, manufacturing and technology saw a sequential decline.

ALSO READ: Wipro will buy $ 117 million in India operations in the United States from Alight Solutions

However, the attrition rate of the company has reached 17 % in the first quarter

"Usually, attrition levels are high, the first quarter due to seasonal factors, and attrition levels will be reduced to lower levels," said Chief Saurabh Govil. of human resources, Wipro.