Beating market expectation, country’s third largest IT services company Wipro reported a 1.2% increase in its net profit at ₹2,077 crore for the first quarter of fiscal 2018 ended on June 30, 2017 fuelled by higher revenue from its energy and utilities business and banking, financial services and insurance segment.
TheTotal revenue of Billionaire Azim Premji promoted company rosewitnessed a marginal growth of 0.2% toand stood at ₹13,626 crore for the April-June quarter compared with the year-earlier period. when compared to the same period last year.
“We delivered revenues above the upper end of the guidance range,” said Abidali Z. Neemuchwala, chief executive officer and board member commenting on the results. “Our focus on digital combined with our investments in client mining have resulted in strong growth in top accounts,” he said.
Member of the Board said:
Commenting on the performance of the company for the quarter
Share buyback
The company’s board also approved a buyback proposal worth ₹11,000 crore.
The company intends to buy 34.3 crore shares at ₹320 a piece.per sharewill pay ₹320 per share and intends to buyback over 34.3 crore equity shares. Recently, Wipro had come out with a 1:1 bonus. issuehad issued bonus shares in ratio 1:1 which was effective from July 13
In 2016, the IT majorWipro had announced a buyback 40 million shares at ₹625 per share.
“The announcement to buyback equity shares is part of our philosophy to deliver efficient returns to shareholders.” Jatin Dalal, chief financial officer.
Profit from the company’s flagship IT services revenue segment declined by 5.8% to ₹2,190 crores compared with the year-earlier period. The IT services margin for the quarter was 16.8%.
The company’s flagship IT services revenue segment’s profit for the period witnessed a decline of about 5.8% when compared to the same period last year and stood at ₹2,190 crore. The IT services margins for the quarter was 16.8%.
During the April-June period Wipro made a net addition of 1,309 people taking the total headcount to 166,790 people at the end of June 30, 2017. The company also said that it had trained about 15,000 people on digital skills and have more than 75,000 people now trained in the new digital skills.
Going forward, The company expects its IT service business revenue to be in the range of $1962 million to $2001 million for the second quarter ending September 30, 2017.
“We have incorporated uncertainties primarily coming from the healthcare vertical for us. While the core business continues to improve, regulatory uncertainties in the healthcare payer market are causing headwinds. There is no clarity over there. In the last four quarters on a run rate basis we have lost revenue of about $120 million in that particular business,” added Mr. Neemuchwala.
Wipro also said that it has improved its client mining and the momentum of top 10 accounts growth has accelerated from 2.9% in Q4 to 4.4% I the current quarter. In the first quarter the company’s corporate venture funding arm Wipro Ventures closed an investment in Tricentis taking the total investment to 12.
Wipro Ventures is a $ 100 million fund that invests in early- to mid-stage start-ups.
On a vertical basis the energy, natural resources and utilities business in which Wipro is a leading player grew 3.2% sequentially while financial services grew 4.1% sequentially. The company’s India and Middle East business grew 6.7% while the major market Americas witnessed a growth of 0.1%.
