The quarter was mainly impacted by two factors - bankruptcies of two clients, and an additional impact on the healthcare and life sciences business as more clients exit the exchange market.
Shares of Wipro declined 4.8 percent in the early trade on Thursday on the back of poor March quarter (Q4FY18) numbers.
The company posted a consolidated net profit of Rs 1,800 crore for the fourth quarter of FY18, down 6.7 sequentially from Rs 1,930.1 crore.
The quarter was mainly impacted by two factors - bankruptcies of two clients, and an additional impact on the healthcare and life sciences business as more clients exit the exchange market.
Meanwhile, revenue from operations grew 0.7 percent for the quarter to Rs 13,669 crore. Rupee revenue from IT services was Rs 13,412 crore, up 1.3 percent sequentially from Rs 13,235 crore in the last quarter.
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IT services revenue in dollar terms was USD 2,062.0 million, up 2.4 percent sequentially. Constant currency revenue grew 1.1 percent sequentially. It had expected revenue of between USD 2,030 to 2.070 million implying sequential growth of nearly 1-3 percent.
IT services EBIT margin was 14.4 percent, a 40 basis points contraction on quarter. Excluding the impact of insolvency of a customer and the impairment loss in one of its acquisitions, IT services margin for the quarter was 16.0 percent.
IT services EBIT for the quarter stood at Rs 1,932 crore compared to Rs 1,959 cr, down 1.36 percent QoQ.
The board has approved amalgamation of its two subsidiaries with the company.
Brokerage: CLSA | Rating: Sell | Target: 260
CLSA has maintained sell rating on Wipro with target of Rs 260 from previous target of Rs 275. It cut FY19-20 revenue estimates by 4% and margin by 80-110 bps.
The broking firm don't see recovery to peer growth rates in foreseeable future.
Brokerage: Nomura | Rating: Reduce | Target: 270
Nomura has maintained reduce rating on Wipro with a price target of Rs 270.
The company missed estimates on revenue margins and current quarter guidance front, said Nomura.
The company's growth dragged by India and APAC geographies. However, BFSI/Manufacturing led growth, while communications and consumer declined, it added.
Brokerage: Investec| Rating: Hold | Target: 290
Investec has maintained hold rating on Wipro and cut price target to Rs 290 from Rs 304. Disappointing March quarter with IT services revenues lower than expectations. Revenue growth guidance for current quarter was also weak.
The valuations are likely to subdued versus peers and client specific issues continue to haunt, while margins are likely to improve in the current financial year.
At 09:16 hrs Wipro was quoting at Rs 275.75, down Rs 11.45, or 3.99 percent on the BSE.
Posted by Rakesh Patil