Wipro lags behind TCS, Infosys in revenue growth.
By R. Chandrasekaran
CHENNAI: India’s third biggest software service exporter Wipro has delivered its first quarter results in line with the analysts’ expectations. The company’s results come after a better than expected results from industry leaders Tata Consultancy Services and Infosys.
However, Wipro lagged behind both the companies in revenue growth. Both TCS and Infosys reported year-over-year growth of 16 percent and 13.6 percent, respectively on USD terms. However, Wipro could manage only 5 percent increase in June quarter revenues to $1.64 billion, while net income from operations grew 11 percent to $273 million. Wipro’s revenue growth is way behind the industry expectations of 12 – 14 percent upside.
While releasing its fourth quarter numbers, the company guided first quarter revenue between $1.57 and $1.61 billion. But analysts were expecting $1.68 billion revenues and a profit of $274.87 million. The company’s results have topped its own estimations and fell modestly short of analysts’ projections.
But what is more important is that Wipro has guided September numbers slightly above the analysts’ expectations. The company expects revenues of $1.62 – $1.65 billion.
Another positive aspect from the results and the comments are that the company is witnessing more confidence among its clients on the back of some favorable macro-economic conditions, especially in the largest economy of the world.
Wipro’s CEO and executive director TK Kurien, who is engaged in revamping the organization in the face of significant market share loss to its peers, commented, “we are seeing a pick-up in large deal closures, which has reflected in strong order book in the current quarter. Our clients look to technology to pursue growth and profitability and increase organizational agility.”
The results come on the back of the quarterly numbers from Oracle and Accenture and their reduced forecast for the remainder of the year.
Higher discretionary spending from overseas clients should be a big boost to IT companies from Indian origin, which is trying to infuse some life into IT stocks.
To contact the author, email to rchandrasekaran@americanbazaaronline.com