Wipro’s Q4 IT Services Revenue Up 4% Q-o-Q Driven By Stable Demand

Bengaluru-based Wipro Ltd on Wednesday (20 April) posted a net profit of Rs 2,235 crore for the fourth quarter of 2015-16 marginally up by 0.04 per cent sequentially. The company’s net sales jumped 6.1 per cent on quarter to Rs 13,741.70 crore.

Wipro's flagship IT services revenue grew by about 4 per cent to Rs 12,796.7 crore during the quarter compared to Rs 12,314.7 crore in previous quarter, driven by a stable demand environment and a change from the traditional run-side of the business to the change-side of the business. The IT services margins for the quarter stood at 20.1 per cent.

Wipro expects its revenues from IT services business to be in the range of $1,901 million to $1,939 million for the first quarter ended June 30, 2016.

Abidali Z. Neemuchwala, who has completed about two months in the organisation as the CEO said his ambition is to grow Wipro to a $15-billion revenue company by 2020 by maintaining 23 per cent operating margins.

“Our focus is to drive significant growth in our ‘run’ business through integrated services and hyper-automation while gaining leadership in the ‘change’ business through investments in digital and consulting capabilities, IP-based platforms & products and creating differentiated domain solutions for non-linear growth,” Neemuchwala said.

Wipro made four acquisitions in the last quarter and despite that, analysts say the growth is not impressive. According to analysts, Wipro needs to invest more in core business areas like automation and digitisation.

Neemuchwala said Wipro is focusing on key themes such as – digital, client mining, geography (high localisation), non-linearity, hyper automation, and building & leveraging the partner ecosystem.

“The themes are resonating well with our customers,” he added.

The Wipro board also approved a proposal to buyback up to 4 crore equity shares of the company for an aggregate amount not exceeding Rs 2,500 crore at Rs 625 per equity share.

The voluntary attrition rate (on trailing twelve months basis) in IT services business declined to 16.1 per cent from 16.3 per cent. The voluntary quarterly annualised attrition rate dropped to 14.9 per cent from 16.3 per cent on a sequential basis.

Wipro’s IT services segment had a headcount of 172,912 as of March 31, 2016 and added 119 new customers during the quarter including the customers of Cellent and HealthPlan Services, which it acquired.