Wipro, India's third largest IT outsourcer will report December quarter earnings on Friday. Investors expect the Bangalore-based firm to beat profit estimates just as HCL Tech, Infosys and Tata Consultancy have done through the week.
A strong show by Wipro, which has failed to please the Street for the last few quarters, would send a definite signal that the worst is over for India's $100 billion outsourcing industry.
Consolidated sales for the October to December quarter are likely to rise 2.9 per cent sequentially to Rs 10,952 crore against Rs 10,657 crore while net profit is estimates at Rs 1,641 crore, a 2 per cent gain over Rs1,610 crore in the September quarter.
Sales from IT services are expected to rise 1.8 per cent sequentially to Rs 8,519 crore against Rs 8,373 crore. In terms of U.S. dollars, sales are seen to rise 2.4 per cent sequentially at $1578 million against $1541 million. Wipro had forecast 1.2-3.2 per cent growth in the December quarter.
Wipro had announced the demerger of its consumer care and allied businesses from the IT business in November. The IT business contributes 86 per cent to overall revenue and 94 per cent to the operating profit of Wipro.
Wipro may guide for 2-3.5 per cent growth in the January to March quarter on the assumptions of ramp ups from recent deal wins.
Operating margins are expected to dip marginally to 20.6 per cent from 20.7 per cent in the previous quarter, mainly on account of promotions in the December quarter. A combination of furloughs and lower working days are likely to impact margins further.
Wipro shares gained 2.6 per cent to Rs 431.10 on the BSE against 1.4 per cent rise in the broader BSE IT index. Stocks gained after global brokerage UBS raised its ratings to 'buy' from 'sell', saying revenue momentum will start picking up from the October-December quarter.
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