Wipro Declines On Subdued Guidance, Weak Q3 Earnings
Wipro shares declined as much as 1.7 per cent to Rs 465 in an otherwise strong market after the India's third largest software exporter issued a muted guidance for the March quarter. Wipro's net profit came in at Rs 2,109.6 crore on sales of Rs 13,764 crore, compared with net profit of Rs 2,070 crore on sales of Rs 13,896.8 crore in the previous quarter. Wipro announced its earnings after market hours on Wednesday. Markets were closed on Thursday on account of Republic Day.
However, a muted revenue growth forecast for the quarter ending March 31, as India's outsourcing industry braces for a protectionist regime in the United States, its largest market weighed upon the stock in trade today.
Wipro's revenue from IT services came in at Rs 13,196 crore compared with Rs 13,136 crore in the previous quarter. Wipro's EBIT or operating profit came in at Rs 2,415 crore as against Rs 2,337 crore in the previous quarter.
Wipro expects revenues from its IT services business to be in the range of $1.92 billion to $1.94 billion, the company said in a statement on Wednesday.
Domestic brokerage Edelweiss in a note said, "Wipro's Q3FY17 IT services revenue, at $1,903 million, came below Street's 0.8 per cent growth estimate, partly due to 130 basis points cross-currency impact. However, IT services EBIT margin jumped 50 basis points QoQ to 18.3 per cent on improvement in core operations."Â
"Valuation comfort limits downside and we maintain 'buy' with revised target price of Rs 558," added Edelweiss.
Wipro's bigger rivals Infosys Ltd and Tata Consultancy Services Ltd, which reported earnings earlier this month, said they were preparing for a more restrictive US visa regime under President Donald Trump.
Indian IT companies depend on H1-B work visas to send their developers and engineers to the United States to service clients.
As of 10:40 am, shares of Wipro traded 1.56 per cent lower at Rs 466.30, underperforming the Nifty which was up 0.6 per cent. (With inputs from Reuters)
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