Days after India's top two tech giants TCS and Infosys declared their quarterly results, the third largest IT services company Wipro announced its much-awaited financial results on Wednesday, posting a 20.3 per cent decline in its net profit at Rs 1800.8 crore in the quarter that ended on March 31 against Rs 2,267 crore consolidated net profit last year. The company registered a 6.7 per cent decline in its net profit of Rs 1,930.1 crore on sequential basis, which was impacted by lower revenue from the company's operations.
The company's gross revenue increased 0.7 per cent sequentially to $2.1 billion, while the IT services segment revenue in dollar terms was $2,062 million, up 2.4 per cent sequentially and 5.5 per cent YoY. "IT services margin for the quarter was 14.4 per cent. Excluding the impact of insolvency of a customer and the impairment loss in one of our acquisitions, IT services margin for the quarter was 16 per cent," the company said in a statement.
In its outlook for the Q1 of the FY 18-19, Wipro expects revenue from its IT services business to be in the range of $2,015 million to $2,065 million. "We had announced the divestiture of our hosted data centre services business to Ensono for $405 million. We expect the transaction to complete during the quarter ending June 30," said the company. However, the company said it may change the outlook after the actual date of completion of the divestment.
Wipro had signed an agreement to sell its hosted data centre services to Ensono, a leading hybrid IT services provider, for $405 million. The company will unlock value by transitioning eight data centres and over 900 employees of its data centre services business to Ensono. As part of the agreement, Wipro will invest $55 million in Ensono's combined entity.
On April 9, Wipro informed the market regulator that on February 28, one of its telecom clients in India - with which it had a multi-year outsourcing agreement - had filed for insolvency, and that it would impact both revenue and profitability. The company had said it would see an impact on net income level in the range of 65-75 basis points of the consolidated revenues for the quarter ended March 31, 2018.
India's largest IT company, TCS, had posted a net profit of 4.5 per cent on year to Rs 6,904 crore in the quarter ended March. Infosys posted a 2.4 per cent rise in its fourth-quarter net profit to Rs 3,960 crore, while the revenue increased 5.6 per cent to Rs 18,083 crore.