Wipro net profit grows robust; offers bonus shares

Bengaluru: Reviving its fortunes, global software major Wipro on Friday reported Rs 2,544 crore net profit for the third quarter of fiscal 2018-19, registering 29.6 per cent yearly and 34.9 per cent quarterly growth.

The city-based company's net profit in the same period a year ago was Rs 1,936 crore and Rs 1,886 crore a quarter ago.

The robust net profit growth in the quarter under review (Q3) is in contrast to 14 per cent annual and 10 per cent quarterly decline in the net income for the second quarter (July-September) of this fiscal as reported in October.

The outsourcing firm also announced bonus issue in 1:3 ratio (one share for three shares) to its Indian and overseas investors.

The IT behemoth, in which Premji, his family and his trusts hold around 74 per cent of equity stake, has also declared an interim divided of Re 1 or 50 per cent per share of Rs 2 face value.

In a regulatory filing on the BSE earlier, the company said total revenue for the quarter grew 10.2 per cent Year-on-Year (YoY) to Rs 15,060 crore from Rs 13,669 crore in the like period a year ago.

Sequentially, revenue rose 3.6 per cent from Rs 14,540 crore a quarter ago.

Under the International Financial Reporting Standards (IFRS), net income was $366 million and gross income $2,200 million for the quarter.

Revenue from the global IT services business was $ 2,047 million for the quarter, up 3.8 per cent YoY from $1,973 million a year ago and 1.8 per cent sequentially from $2,010 million a quarter ago.

The revenue from IT services ($2,047 million) was in the guidance range of $2,028-$2,688 million the company gave on October 24, 2018.

For the fourth quarter (January-March) of this fiscal (FY 2019), the company has projected revenue from IT services in $2,047-$2,088 million range.

"We expect revenue from our IT services business to be in the range of $2,047- $2,088 million. This translates to a sequential growth of 0.0-2.0 per cent," said the company in a statement later.

The revised operating margin at 19.8 per cent for the quarter is up 4.9 per cent from 14.9 per cent a year ago and 4.8 per cent from 15 per cent a quarter ago.

Client acquisition for the quarter, however, declined to 57 from 76 a quarter ago and 79 a year ago, taking their total number to 1,132 for the quarter as against 1,131 a quarter ago and 1,201 a year ago.

"Our strategic investments, backed by strong client relationships and client spends towards enterprise modernisation and digital transformation have enabled us to deliver a very satisfying quarter, said Wipro Chief Executive Abidali Z Neemuchwala in the statement.

Chief Financial Officer Jatin Dalal said focus on the quality of revenues and operational improvements have led to the expansion of IT services operating margins to 19.8 per cent.

"Our operating cash flows grew 19.5 per cent YoY and was at 142 per cent of the net income.,a added Dalal on the occasion.

The IT products revenue for the quarter was Rs 310 crore ($45 million) and its operating margin 6.7 per cent.

"Revenue from India state-run enterprises (SRE) for the quarter was Rs 170 crore ($24.6 million) and operating margin was minus 40 per cent," added the statement.

The company has carved out the India SRE and the government business from its IT services segment from the third quarter of this fiscal.

The IT services business added 13,514 techies during the quarter, taking its headcount to 172,379 from 158,865 a year ago and 171,451 a quarter ago.