Wipro Meets Expectations But Gives Lower IT Revenue Guidance For June Quarter

IT companies during the fourth quarter results have come up with divergent results and guidance for the coming quarter and for the fiscal year 2013.  Infosys portrayed a weak picture for FY13 while HCL and TCS showed a stable outlook altogether. Infosys gave 8-10 per cent dollar revenue guidance and TCS, on the other hand, said that it will be able to achieve the NASSCOM revenue guidance of 11-14 per cent in FY13.

Now it’s Wipro, the third-largest IT software company in India, which has come up with a good set of numbers for the fourth quarter 2012 but has given weak guidance in line with that of Infosys. The stock on BSE has plummeted by 7.44 per cent to Rs 406.50 on the weak revenue guidance given by the company.

The dollar revenue growth of the company has grown by 1.3 per cent on QOQ which has come in line with the company’s expectations. The company has not given the revenue guidance for the June quarter.

However, the company has given muted revenue guidance for the June quarter between USD 1,520 million to USD 1,550 million - a growth of a mere 0.95 per cent on a QoQ basis at the higher level of the guidance. The Executive Director & Chief Executive Officer of IT Business, T K Kurien, said that the revenue of the company has come in line with the company guidance in an uncertain environment. The company’s restructuring of focusing on client satisfaction has resulted into a better position in the IT industry.  

For the quarter the IT service revenue of the company has grown by 2 per cent on a QOQ basis to USD 1,535.6 million. The operating margins in the IT business were sustained at 20.7 per cent vs. that of 20.8 per cent in the previous quarter of 2012. The consolidated revenues for the quarter went up by 19 per cent on a YoY basis to Rs 9,869 crore while net profit increased by 1.71 per cent on a YoY basis to Rs 1,481 crore. The company during the quarter added 41 new clients against that of 39 in the previous quarter. Commenting on the results, the company’s CFO has stated that the company’s focus on business operations helped the company to improve the revenue productivity of the company. The company added 13,535 employees in the last fiscal year and as of March 31, the IT services segment had 1,35,920 employees.

The Q4 results of Wipro have come in line with the market expectation and better than Infosys which witnessed a slowdown during the quarter. On the other hand, TCS and HCL sounded positive on the outlook scenario.  However, the lower guidance on the back of weak global economy by Wipro indicates a grim picture in the coming quarter.