Wipro on Wednesday said that its December quarter revenue and margins could be lower-than-expected on account of the Chennai floods that led to hundreds of deaths in India's fifth largest city. Wipro - India's third biggest outsourcer - has multiple facilities in Chennai with over 22,000 employees.
"The recent heavy rainfall and resultant flooding impacted the regular business operations of Wipro's Chennai facilities during the first week of December... The incident is expected to have a material impact on the revenues and will result in higher one-time cost incurred towards deployment of our business continuity plan. Both these factors will impact our operating margins for the quarter," Wipro said in a statement.
Wipro's statement comes days after Tata Consultancy Services - India's biggest outsourcer - warned about the likelihood of revenue hit because of Chennai floods. (Read the full story here)
Wipro said that operations at its Chennai facilities have "largely" been restored and added that it has "adequate" insurance coverage.
The Bangalore-based IT major had earlier guided for constant currency revenues of $1,841 million to $1,878 million in the December quarter.
"We expect revenues to be in the lower half of the guidance range," Wipro said.
Wipro shares closed 0.71 per cent lower at Rs 554.95 on the National Stock Exchange as compared to 0.65 per cent gain in the broader markets.
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