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Wipro Q2FY20 results: Revenue growth in line with guidance; slowdown in BFSI continues

Wipro, the fourth largest IT company, has pegged the third quarter growth to be in the range of $2,065-2,106 million (or sequential growth of 0.8 per cent to 2.8 per cent)

Rukmini Rao        Last Updated: October 15, 2019  | 20:39 IST
Wipro Q2FY20 results: Revenue growth in line with guidance; slowdown in BFSI continues

Bengaluru-based IT services company Wipro met street estimates for the September quarter of financial year 2019/20 with the company's dollar revenues of its IT services business reaching the midpoint of the earlier guidance at $2,048.9 million. Wipro had estimated the Q2FY20 revenue growth to come in the band of $2,039-2,080 million in the last quarter. The second quarter is traditionally positive for the company.

Wipro, the fourth largest IT company, has pegged the third-quarter growth to be in the range of $2,065-2,106 million (or sequential growth of 0.8 per cent to 2.8 per cent). CEO Abdidali Neemuchwal said that the strong outlook for the next quarter is largely due to the strong pipeline. "We mentioned about a few deals in the last quarter that were getting delayed. Fortunately, we were able to close those deals. The order bookings in Q2 were relatively stronger than Q1," he said.

Even as the growth in BFSI continued to demonstrate softness for over six quarters, Neemuchwal attributed the deceleration in growth to the reduced and delayed spending by banking and capital market clients in some pockets and also the completion of large digital transformation projects with certain banking clients. The operating margins, however, took a hit of 30 bps at 18.1 per cent in Q2FY20 versus 18.4 per cent in Q1FY20. CFO Jatin Dalal said that while certain operating gains that the company saw in Q1 were absent, increments and bench expansion along with investments in creating capabilities have played a role in margin contraction.

Among macro concerns that loom large, Neemuchwal sees trade tension with China and Brexit as most worrisome.

Wipro also said that it has revamped the engineering services offering and re-launched Wipro's Engineering NXT. Engineering NXT will leverage the innovative intellectual property-driven solutions, new age crowd-source and global delivery models across connected products, software, wireless, data platforms, IoT and Industry 4.0.

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