Wipro 2016-17 net declines 4.7%; projects flat revenue for Q1 (Roundup)

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Bengaluru, April 25 (IANS) Global software major Wipro on Tuesday reported Rs 8,490 crore net profit for 2016-17, registering 4.7 per cent decline over the previous year (2015-16).

The company has projected a flat sequential revenue growth from IT services for the first quarter of 2017-18.

“Revenue from IT services will be in the range of $1,915-1,955 million for the first quarter (Q1) ending June 30,” it said in a statement here.

The city-based firm posted $1,955 million revenue from IT services for the fourth quarter of 2016-17, registering 3.9 per cent growth over last year and 2.7 per cent over last quarter.

Unlike rival Infosys, Wipro does not give revenue guidance for the fiscal.

Net profit for the fourth quarter was almost flat at Rs 2,260 crore, registering only one per cent growth over last year but up 6.9 per cent from Rs 2,115 crore in the third quarter.

The Board of Directors have recommended a bonus issue of 1:1. It also will consider a proposal for buyback of equity shares around July 2017. The interim dividend of Rs 2 per share declare in January has been made final.

Azim Premji was reappointed as company Chairman.

Under capital allocation, the Board of Directors has recommended adoption of the interim dividend of Rs 2 per share of Re 1 face value as the final dividend and total dividend for the fiscal 2016-17.

The interim dividend was recommended on January 25.

In a regulatory filing on the BSE earlier, the IT major said revenue for the fiscal under review grew 7.4 per cent over last year to Rs 55,040 crore.

Revenue from IT services grew 8.4 per cent to Rs 52,840 crore.

Under the International Financial Reporting Standards (IFRS), net income was $1.3 billion and revenue $8.5 billion.

Revenue from IT services grew 4.9 per cent over last year to $7,705 million. Operating margin from IT services was 18 per cent for the fiscal.

Gross revenue for the quarter (Q4) under review grew 2.6 per cent over last year to Rs 13,990 crore.

Revenue from IT services business grew 4.7 per cent over last year to Rs 13,400 crore for Q4.

Under the IFRS, net income was $349 million and gross income $2.2 billion for the same quarter.

Revenue from IT services under IFRS was $1,955 million, a growth of 3.9 per cent over last year and 2.7 per cent sequentially.

CEO and board member, Abidali Z. Neemuchwala said the company had delivered revenues within the guidance range in the fourth quarter.

“We are confident that the recovery in energy and utilities and our demonstrated strength in digital will help us improve our growth trajectory during the course of the current financial year,” he added.

Giving his views on Q4, Kotak Securities Ltd Senior Vice-President Dipen Shah (PCG Research) said Wipro results were a mixed bag, with revenues coming marginally higher and margins slightly lower against the expectations.

“The guidance of (-)2 per cent-0 per cent growth in the first quarter (Q1 of FY2018) is a negative surprise and is due to cancellation of projects in the healthcare business as well as structural challenges in retail vertical. This, once again, reflects the need for better account management at Wipro,” said Shah in a statement.

Neemuchwala however said: “We are confident that the recovery in Energy & Utilities and our strength in Digital will help us improve our growth trajectory in the new fiscal.”

The IT services division added 51 clients inQ4 as against 108 last quarter and 119 last year ago and 256 for the fiscal as against 261 last year.

For the fiscal, the total number of active clients was flat sequentially at 1,323 in Q4 and Q3 but up 100 from 1,223 in Q4 of 2015-16).

“We continue to maintain our focus on operational improvements and productivity enhancements,” said Chief Financial Officer Jatin Dalal in the statement.

Though the company added 8,570 people for the fiscal, exit of 8,650 techies during the fiscal, led to the total headcount decline to 165,481 (net addition) from 181,482 (gross addition).

The net addition in the previous fiscal (2015-16) was 156,831 and gross addition 172,912.

–IANS

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