Wipro posts two per cent growth in line with expectation

Net profit for the third quarter was Rs 2,234 crore, as compared to Rs 2,193 crore a year earlier.

 Wipro on Monday said that it posted two per cent rise in third-quarter, which is in line with its own expectations and market estimates.(Representational image)

Bengaluru: After the two top IT firms, TCS and Infosys, announced contrasting results, Wipro on Monday said that it posted two per cent rise in third-quarter, which is in line with its own expectations and market estimates.

The net profit for the third quarter was Rs 2,234 crore, as compared to Rs 2,193 crore a year earlier. “The operating margins for IT services business, however, fell to 20.2 per cent in the quarter ended December, from 21.8 per cent a year earlier,” said current CEO TK Kurien, who will become executive vice chairman next month.

Wipro earlier this month named Abidali Neemuchwala as its new chief executive, who said going forward the focus of Wipro will be “to crank up the execution engine” as he starts in his new role from February 1.

Consolidated revenue in the Q3 FY16 rose seven per cent YoY to Rs 12,861 crore.

Mr Kurien said that the market has been changing rapidly and contrary to its expectation, oil prices slumped rapidly in the recent months causing a massive hit for the energy and utility sector.

Energy, natural resources and utilities contributed 14.4 per cent of revenue for during the quarter against 14.7 per cent in the second quarter and 16.4 per cent a year ago.

Commenting on Wipro’s performance for the quarter, Dipen Shah, senior VP, Kotak Securities said: “Wipro’s Q3FY16 results were lower than our estimates with 1.4 per cent CC revenue growth and a 45bps fall QoQ.”

According to him, Wipro continues to be impacted by the lack of scale up in large accounts, apart from the continuing challenges in the energy and telecom segments.