Wipro Q2 net profit crashes by 7.6% to Rs 2,070 crore

Country’s third largest software services firm Wipro on Friday reported 7.6 per cent decline, year-on-year, in consolidated net profit at Rs 2,070.4 crore for the September quarter of the current financial year.

Stating that it foresees a “mixed” demand environment, Wipro said it expects its IT service revenue for the October- December quarter of 2016-17 to be in the range of $1,916 million to $1,955 million. With IT services revenue at $1,916 million in the September quarter, Wipro missed its guidance of $1,931 million to $1,950 million given at the beginning of the quarter.

“As we look forward, the demand environment is mixed in a seasonally weak quarter affected by furloughs and lower number of working days,” Wipro Chief Financial Officer Jatin Dalal said in a statement. The city-headquartered firm had posted a net profit (after tax, minority interest and share of profit of associates) of Rs 2,241 crore in the year-ago period.

Total income from operations rose by 10.5 per cent to Rs 13,897 crore in July-September quarter of this fiscal from Rs 12,567 crore in the same period a year ago, it added. The IT services segment had a headcount of 174,238 as of September 30, 2016. Wipro’s IT products segment delivered revenue of Rs 770 crore ($115 million) in the reported quarter. Earlier on Thursday has  said it will acquire cloud services company Appirio for $500 million (around Rs 3,340 crore) in a cash transaction.

“Once completed, Wipro’s acquisition of Appirio will create one of the world’s largest cloud transformation practices, a game changer in today’s as-a-service and digital economy,” Wipro said in a statement. Post acquisition, Wipro will also have access to Topcoder, a crowdsourcing marketplace connecting over a million designers, developers and data scientists around the world with customers, it added. 

Wipro will consolidate its existing cloud applications practices of Salesforce and Workday under the Appirio brand and structure.