Wipro, India's third largest software services exporter, beat Street estimates with an 18 per cent increase in net profit in the December quarter, rounding off a strong season for India's $100 billion outsourcing industry.
However, muted forecast for the March quarter and a decline in IT business volumes, or the billable hours, weighed on the stock. Shares in Wipro fell as much as 5 per cent amid a sharp rally in broader markets.
Wipro's net profit rose to Rs 1,716 crore on consolidated sales of Rs 10,981 crore in the October to December period. Brokers polled by NDTV Profit had estimated a net profit of Rs 1,641 crore on consolidated sales of Rs 10,952 crore.
The company had reported a net profit of Rs 1,610 crore on sales of Rs 10,657 crore in the September quarter. On a year-on-year basis, its net profit jumped 18 per cent from Rs 1,456 crore a year earlier.
"We have seen broad-based growth in the quarter with all our verticals growing sequentially," T.K. Kurien, chief executive of Wipro's IT business, said in a statement on Friday.
IT services, which contributes over 90 per cent of Wipro's operating profit, rose to $1,577 million, a jump of 2.4 per cent over the previous quarter. Wipro had forecast 1.2-3.2 per cent growth in the December quarter.
For the three months ending March, Wipro said IT business revenue will be between $1.585 billion and $1.625 billion, or a sequential gain of 0.5 percent to 3 percent. That compares with analysts' expectations of a 1 percent to 3.5 percent increase.
Shares at Wipro, valued at $19 billion, have risen about 9 percent so far this year, compared with a 2 percent increase in the Nifty.
At 09.45 a.m., the stock traded 4 per cent lower at Rs 413.75 on the NSE against 0.72 per cent gain in the Nifty.
In November, Wipro said it would fold its non-IT units into a separate privately held company called Wipro Enterprises in a bid to boost profitability. The listed company would focus exclusively on the IT business. Wipro expects this process to be completed by April.
(With inputs from Reuters)
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