Bangalore: Country's third-largest software firm Wipro today posted 18.37 percent rise in net profit for the April-June period of this fiscal but gave a muted guidance for the second quarter, pulling down its stock to 9-month low.
The company's Q1 net profit was Rs 1,580.20 crore, as against against Rs 1,334.9 crore in the year-ago period.
However, a flat IT services revenue growth guidance of USD 1.52-1.55 billion for the July-September quarter pulled the company's stock down by over 4 percent to Rs 341 on the BSE. Later it recovered to Rs 346, but still down 3 percent.
Wipro Chairman Azim Premji said that despite significant headwinds and volatile demand, revenues grew in all key geographies, and Europe - which is facing economic trouble - was more resilient than the prevailing sentiment there.
"We continue to see extensive engagement with customers in our new geos and projects, with Brazil looking especially promising," Premji added.
Investors however were concerned with Wipro's guidance on IT services revenues -- 0.3-2.3 percent sequential growth.
"The guidance looks decent (still lower than our estimate of 1-3 percent (q-o-q) after continuous disappointments since last couple of quarters," Angel Broking Research Analyst (IT) Ankita Somani said.
Wipro's IT services revenue, which accounted for 78 percent of the total revenues, grew 30 percent year-on-year in rupee terms to Rs 8,314 crore in Q1.
However, in dollar terms it was impacted by USD 25 million of cross currency impact and was USD 1.51 billion, a year-on-year increase of eight percent.
On constant currency basis, IT services revenue in dollar terms was within the company's guidance of USD 1.54 billion. "IT services business delivered sequential growth in line with our guidance," Premji said.
Wipro's total income from operations during the quarter rose 24.37 percent to Rs 10,619.6 crore, from Rs 8,538.40 crore in the year-ago period.
The Indian IT industry is facing challenges in the US and European market given the uncertain economic climate.
Earlier this month, Infosys had slashed its revenue growth forecast for the current fiscal year, although TCS beat expectations with a 38 percent rise in quarterly net profit.
"Customers continue to be focused on driving productivity and globalisation," Premji said.
For the current quarter ending September 30, the company has maintained its revenue outlook to be in the same range, assuming that exchange rates of dollar will be at Rs 54.76.
"In today's complex business environment, global corporations are increasingly investing in transformational technology initiatives to improve competitiveness.
"We see this shift as an opportunity for us to lead this change and help customers differentiate in this fast evolving market," Premji said.
Wipro added 37 customers during the quarter. Of this one was USD 100 million client, taking the number of such clients to eight.
The company added one client in the USD 100 million plus revenue bracket which is a positive indication of company's improving client mining capabilities.
Wipro added 2,632 people in its IT services segment during the year, taking the total headcount to 1,38,552 as of June 30, 2012.
Revenues from the IT products segment recorded a five percent decline year-on-year basis to Rs 953 crore (USD 172 million) for the quarter.
Americas contributed 51.6 percent to the revenues, while Europe and Japan contributed 28.1 percent and 1.3 percent, respectively. India and Middle East accounted for 8.8 percent to the revenues.
First Published: Tuesday, July 24, 2012, 09:26