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India’s Wipro reports 35% jump in second quarter net profit

WiproIndian IT services exporter Wipro Ltd reported a 35.1 per cent jump in net profit in the second quarter, helped by an uptick in revenue on the back of higher deal wins in the quarter.

The company posted a consolidated net profit of 25.53 billion rupees ($356.9 million) in the quarter ending September 30, from a profit of 18.89 billion rupees last year. Quarterly revenue inched up 4 per cent to 151.26 billion rupees, of which revenue from BFSI (Banking, financial services and insurance) accounted for nearly a third of the total.

Wipro added two new customers in the $5 million+ range, one in the $3 million+ bracket and five new clients in $1 million+ range, while number of customers in the $100 million+, $75 million+, $50 million+ and $20 million+ range remained unchanged in the quarter.

“We had a good in-quarter execution on both revenues and margins. The overall growth was broad-based with 6 out of 7 industry verticals growing on a YoY basis and we signed a large deal in India aligned to our strategy of taking global offerings to India customers,” said Abidali Z. Neemuchwala, CEO and MD.

Wipro’s IT Services operating margin inched 3.1 per cent higher at 18.1 per cent in the quarter. It posted $2.05 billion in revenue from IT services in the quarter.

“We delivered operating margins in a tight range after absorbing the impact of two months of wage hike. Growth remains our priority and we remain invested for future. We also successfully completed the Share Buyback program in September, which saw strong participation from our investors,” said Jatin Dalal, Chief Financial Officer.

The Bengaluru-headquartered company said it expects to post revenue in the range of $2.07 billion to $2.11 billion from its IT services business in the quarter ending Dec. 31, This will translate to a sequential growth of 0.8-2.8 per cent.

Further, Wipro said it also concluded a buyback of 323.1 million equity shares in the quarter, which resulted in a total cash outflow of 105 billion rupees.

Last week, rival Tata Consultancy Services witnessed a muted growth in its revenues coming from the BFSI (banking, financial services, and insurance) segment in the quarter due to weak IT spending among a few European banks. Meanwhile, Infosys posted a net profit of $563 million during the second quarter of the Indian financial year 2020 (March-April) against a net profit of $571 million in the year-ago period.

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