Wipro tanks almost 6% as Q3 earnings miss Street estimates

NEW DELHI – Shares of tumbled almost 6 per cent in early trade Thursday as investors were left disappointed after the IT major’s October-December earnings failed to live up to market expectations, with the company’s net profit for the quarter largely unchanged from a year ago.

The domestic IT services major posted a consolidated net profit of Rs 2,969 crore for the December 2021 quarter, while saying that the demand environment continues to be "robust".

The scrip touched a low of Rs 653.20 against Rs 691.35 at the previous close on the National Stock Exchange.

Revenue from operations increased 21.29 per cent year-on-year (YoY) to Rs 15,278 crore from Rs 12,596 crore in the same quarter last year. This is lower than analysts' expectation of around 30 per cent growth in revenues.

On a consolidated basis, revenue stood at Rs 20,313 crore ($2.7 billion), an increase of 3.3 per cent quarter-on-quarter (QoQ) and 29.6 per cent YoY, the company said. This was in line with the analyst estimates.

Net consolidated income for the quarter was Rs 2,970 crore ($399.1 million), an increase of 1.3 per cent QoQ.

The company’s IT Services segment revenue was at $2,639.7 million, an increase of 2.3 per cent QoQ and 27.5 per cent YoY. IT Services operating margin for the quarter was at 17.6 per cent, a decrease of 19 bps QoQ.

Wipro said it expects revenue from its IT Services business to be in the range of $2,692 million to $2,745 million. This translates to a sequential growth of 2 per cent to 4.0 per cent.

The company also announced an interim dividend of Re 1 per share. The record date for this will be January 24. The payment will be made on or before February 5.