Wipro Warns Results May Be Hit By Telecom Client's Bankruptcy Proceedings
IT major Wipro has said that its fourth quarter earnings could be hit as one of its telecom clients is undergoing insolvency proceedings. Without naming the client, the Bengaluru-based company said it is "likely to see an impact on profitability at the net income level in the range of 65-75 basis points of the consolidated revenues for the quarter ended March 31, 2018. The impact of this client insolvency petition will reflect in the financial results of the company for the quarter and year ended March 31, 2018."
This was stated by Wipro in a filing with stock exchanges. Wipro will announce results for the fourth quarter and year ended March 31, 2018, on April 25, 2018, after stock market trading hours in India. Wipro's shares ended 0.3 per cent higher at Rs 285 on NSE today.
Wipro said that in 2008 it had signed a multi-year outsourcing services agreement with a telecom operator in India, which was subsequently renewed in the year 2013.
But on February 28, 2018, Wipro added, the telecom operator filed a petition to initiate its Corporate Insolvency Resolution Process (CIRP) with the National Company Law Tribunal (NCLT). The telecom operator subsequently submitted its claim on March 28, 2018, Wipro added.
Since then, Wipro said, the telecom operator has been engaged with the insolvency resolution professional (IRP) to discuss the potential outcome of the process.
Telecom operator Aircel had in February said that it has filed for bankruptcy, blaming stiff competition in the sector as well as financial woes.Â
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