Wipro Limited announced a marginal increase in its net profit for the fourth quarter ended March 31, 2017 to ₹2,267 crore as against ₹2,257 crore in the same period the previous year.
Net revenue for the January-March period rose 5% to ₹15,033 crore backed by other income of ₹408 crore from the sale of its EcoEnergy business.
However, the company said it expected its IT services business to contract by by 2% – 0% in Q1 of FY18 primarily due to the impact in its healthcare and retail businesses. Wipro expects revenues from its IT services business to be in the range of $1,915-1,955 million in Q1 ending June 30, 2017.
“Our guidance is based on what we see at the beginning of the quarter,” said Abidali Neemuchwala, CEO, Wipro Ltd.
“While traditionally Q1 is soft for us. Q1 of FY18 has its own challenges due to uncertainty in the U.S. healthcare industry and structural disruption in retail,” he said.Despite a slow growth in the first quarter, the company expects the growth momentum to return in second quarter and feels to be at industry growth rates by Q4 FY18.
“Our confidence of the recovery stems from expectations of India business recovering, BFSI accelerating and Energy & Utility picking-up,” added Mr. Neemuchwala.
Wipro announced plans for buyback of shares in July. It also announced a bonus issue in a 1:1 ratio.
For the fourth quarter, the company’s flagship IT services business revenue stood at ₹13,402 crore registering a growth of 4.7%. Profit for the full year ended March 2017 declined by 5% to ₹8,518 crore while total income rose 7.4% to ₹57,995 crore.
In a filing, Wipro said the board had approved the re-appointment of Azim H. Premji as chairman and managing director for two years from July 31.
“Wipro’s results were a mixed bag with revenues coming marginally higher and margins slightly lower versus expectations. The guidance of (-)2% - 0% growth in 1QFY18 is a negative surprise and is due to cancellation of projects in the healthcare business as well as structural challenges in retail vertical. This, once again, reflects the need for better account management at Wipro” said Dipen Shah, Sr. Vice President - PCG Research at Kotak Securities Limited.
During the quarter under review, Wipro made a net addition of 1,305 people taking the total headcount of the company to 181,482 people. The utilization was 73.1% while the quarterly annualized attrition has reduced to 14.8%. The net addition of the employee for the entire fiscal was about 8,514 people.
Recent layoffs
On recent layoffs, Saurabh Govil, president & chief human resources officer, said: “The total people hired in the full year has seen an increase of over 8,000 people. Hiring is going on as planned on the campuses. We are hiring for newer technologies as and when required. We do appraisals and if some people are not happy with the rating... they leave.” Wipro said in Q1 of FY18, it expected to have more than 50% of its staff in the U.S. to be locals.
As part of reskilling the employees in the digital services the company has trained 61,000 technical employees. The digital business contributes 2.1% of the company’s overall revenue in Q4.
On geographical basis Europe grew 6.4% while the major market America grew by 1.4%.
The shares of Wipro on the BSE closed at ₹ 494.55 up by 0.56%.
