Wipro Q4 profit falls 6.3% YoY, company avoids giving guidance; 5 key takeaways

Software services provider, Wipro, has reported a 6.3 percent year-on-year (YoY) fall in its consolidated profit at Rs 2,326.1 crore for the quarter ended March 2020.

The company's IT Services EBIT declined 2.9 percent at Rs 2,692.5 crore versus Rs 2,773.6 crore, while EBIT margin was down at 17.6 percent versus 18.4 percent, QoQ.

The IT services dollar revenue fell 1 percent at USD 2,073.7 million against USD 2,094.8 million.

Here are five key takeaways from Wipro's Q4FY20 scorecard:

Tepid growth in revenue: The company's gross revenue stood at Rs 15,710 crore, which was up 4.7 percent year-on-year (YoY). For the entire financial year, gross revenue came at Rs 61,020 crore, up 4.2 percent YoY.

Net income for the quarter was Rs 2,330 crore, down 6.3 percent YoY. For the year, net income stood at Rs 9,720 crore, up 8 percent YoY.

IT services revenue almost flat: IT services segment revenue for the quarter was at $2,073.7 million, down 1 percent QoQ. For the year, it stood at $8,256.2 million, up 1.7 percent YoY.

Dividend: The company said its board had not recommended any final dividend.

"The interim dividend of Rs 1 declared by the board at its meeting held on January 14, 2020, shall be considered as the final dividend for the financial year 2019-20. Thus, the total dividend for the financial year 2019-20 remains Rs 1 per equity share," said the company.

No guidance as of now: The company underscored that due to the uncertainty around the course of the COVID-19 pandemic, it does not have visibility into the extent to which it will disrupt the company's operations.

The company decided to not provide revenue guidance for the quarter ending June 30, 2020.

"We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply-side factors," the company said.

Management underscores challenges, but remains optimistic: “The quarters ahead seem challenging and require a tremendous response on costs. We also anticipate our working capital to increase, but our strong balance sheet provides us the confidence that we will emerge stronger and better," said Jatin Dalal, Chief Financial Officer.

“In these unprecedented times, I am extremely proud of how the Wipro team has come together and worked 24/7 to ensure the safety and well-being of each other while continuing to serve our clients," said Abidali Z. Neemuchwala, CEO and Managing Director.