Wipro Q4 profit crashes by 20% to Rs 1,800 crore
Bengaluru: Faring below market expectations, India's third largest software services firm Wipro on Wednesday posted over 20 per cent decline in its consolidated profit at Rs 1,800.8 crore for the quarter ended March 2018.
Wipro had registered a profit of Rs 2,267 crore in the year-ago period, as per Indian accounting norms.
"The total income stood at Rs 14,304.6 crore compared to Rs 15,045.5 crore in the January-March period of 2016-17, down by 4.9 per cent.
For the year ended March 2018, Wipro's profit fell six per cent to Rs 8,003.1 crore, while total income dipped 1.7 per cent to Rs 57,035.8 crore compared to the previous financial year, the company said.
Addressing reporters, Wipro Chief Executive Officer Abidali Neemuchwala said the company entered Q4 with a confidence driven by the improvements it saw in "our deal win trajectory, uptick in client mining, our performance in digital and reduced headwinds in some of our businesses.
"However, we are disappointed at the loss of momentum in Q1 due to surprises arising out of bankruptsies faced by two of our clients with a revenue run rate of over $50 million, addition impact in the HPS business as more clients exit the exchange market and weakness in our communication BU."
HPS run rate revenues have gone down by about $150 million annualized.
"That is the quarterly impact of low $30 million. Client exit impact in both Q4 and we see a further impact in Q1 in the HPS business," said Neemuchwala.
"He was confident that the company would return to growth trajectory starting Q2 due to its strong deal wins and order booking coupled with the continued strength in digital.
The company claimed that its digital revenue grew 9% sequentially and 27.6% on a year on year basis in Q4 constituting 26.7% of its revenue.
"In terms of client mining, Wipro's top 10 account grew 5.5% sequentially and 14.8% year on year in Q4.
Two of its accounts crossed the $250 million mark on a run rate basis in Q4.
"In terms of non-linearity, the company has been witnessing traction in its homegrown IP like HOLMES, AssureNXT and Delta Verge with IP revenue crossing $100 million this year.
The company said it has filed 2,000 patents so far.
Giving insight into the performance for the quarter and year ended March 31, 2018, the chief financial officer Jatin Dalal said the IT service revenue stood at $8,060.2 million, which was 4.6% year on year growth in dollar terms and 2.9% year on year growth in constant currency terms.
Dalal said the adjusted margins and reported margins were 16.8% and 15.8% respectively with regard to the IT services margin for the year.