Wipro Q1 PAT soars 13% - sees IT service revenue growth at 2% in Q2FY20

A Bloomberg poll of analysts have predicted Wipro's PAT to come around Rs 2,328 crore in Q1FY20.

Overall Wipro's result was a mixed bag, with growth witnessed on yearly basis, but performance was slightly negative compared on quarter-on-quarter (QoQ) basis. Photo: Reuters

The Azim Premji helmed Wipro announced its June 2019 (Q1FY20) quarterly result and the company analysts estimate on bottom-line front. However, it missed out on top-line performance. Overall Wipro's result was a mixed bag, with growth witnessed on yearly basis, but performance was slightly negative compared on quarter-on-quarter (QoQ) basis. In the financial audit report, Wipro stated that, they bagged a net profit of Rs 2,390 crore in Q1FY20, which was above 12.67% as against a year ago same period. A Bloomberg poll of analysts had predicted Wipro's PAT to come around Rs 2,328 crore in Q1FY20.

However, Wipro's consolidated revenue saw single-digit growth of 5.3% to Rs 14,720 crore in Q1 compared to the corresponding period of previous year. The poll had estimated revenue to be at Rs 14,840 crore this latest period.

Consolidated total expense this quarter, came in at Rs 12,492.8 crore higher compared to Rs 12,141.8 crore posted in the corresponding period of previous year.

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Abidali Z. Neemuchwala, CEO and Executive Director said, “Our efforts on client mining have resulted in an addition of three customers in more than $100 Mn bucket. We will continue to build differentiated capabilities to drive business transformation for our customers by investing in our big bets.”

Wipro in its financial audit report also highlighted about their buyback plan in equity shares. The company stated that, the shareholders approved the Buyback through postal ballot (including e-voting) on June 1, 2019 and June 21, 2019 was fixed as the record date for the buyback. In accordance with the provisions of the Buyback Regulations, the Company filed the draft letter of offer for the Buyback with SEBI on June 12, 2019 and is awaiting comments on the same."

On April 16, 2019, Wipro's board approved a proposal to buyback up to 323,076,923 equity shares of Rs 2 each which represented 5.35% of total paid-up equity share capital from the shareholders of the Company. The buyback is proposed at Rs 325 per equity share for an aggregate amount not exceeding Rs 10,500 crore.

Also, this quarter in June month, Wipro even entered into a definitive agreement to acquire International TechneGroup Incorporated, a global digital engineering and manufacturing solutions company for a consideration of US$ 45 million. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in the quarter ending September 30, 2019.

For the upcoming September 2019 quarter, Wipro expect Revenue from our IT Services business to be in the range of $2,039 million to $2,080 million. This
translates to a sequential growth of 0.0% to 2.0%.

Investors traded cautiously in Wipro shares ahead of the result announcement on Wednesday's trading session. The share finished at Rs 259.70 per piece down by 0.13%. However, the company did touch an intraday high and low of Rs 262.90 per piece and Rs 258.25 per piece respectively.

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