IT major Wipro Ltd on Wednesday posted nearly 6 per cent decline in consolidated net profit to Rs 2,345.2 crore for January-March 2020 quarter, and suspended revenue growth guidance due to uncertainty in the external environment amid coronvirus pandemic.
Wipro, which is the first among its peers to announce financial numbers for the quarter, said it will resume providing revenue guidance after it sees “increased certainty” on demand and supply side factors.
The Bengaluru-based company’s net profit stood at Rs 2,493.9 crore in March 2019 quarter.
Wipro posted a 4.6 per cent rise in revenue at Rs 15,711 crore in January-March quarter compared to Rs 15,006.3 crore in the year-ago period.
“We estimate that the IT services revenues for the quarter ended March 31, 2020 were negatively impacted by COVID-19 by approximately USD 14-16 million (0.7-0.8 per cent of revenues),” Wipro said in a regulatory filing.
Due to the uncertainty around the course of the COVID-19 pandemic, it does not have visibility into the extent to which it will disrupt the company’s operations, it added.
“…we have decided to not provide revenue guidance for the quarter ending June 30, 2020. We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply side factors,” Wipro noted.
However, the company had previously guided for up to two cent increase (USD 2,095 million to USD 2,137 million) in its IT services revenue.
Wipro’s mainstay IT services revenue was USD 2,073.7 million, a sequential decrease of one per cent.
The Board has not recommended any final dividend and the interim dividend of Re 1 declared in January will be considered as the final dividend for the financial year 2019-20, Wipro said, adding that the total dividend for FY20 remains Re 1 per equity share.
Terming the ongoing situation as “unprecedented”, Wipro CEO and MD Abidali Z Neemuchwala said: “We are confident that our broad portfolio of services and our ability to execute to our commitments makes us well-positioned to gain market share”.
Wipro’s FY20 net profit grew 8.3 per cent to Rs 9,771.8 crore, while revenue rose 4.2 per cent to Rs 61,023.2 crore from FY19.
“The quarters ahead seem challenging and require a tremendous response on costs. We also anticipate our working capital to increase, but our strong balance sheet provides us the confidence that we will emerge stronger and better,” Wipro CFO Jatin Dalal said.
Due to the “volatility in the external environment”, the company has decided not to provide a quarterly guidance on revenues.
Operations of businesses across the world have been impacted by the coronavirus outbreak that has claimed thousands of lives. In India, 377 deaths have been reported, while there were 11,439 cases of COVID-19.
The government has now extended the nationwide lockdown till May 3 in a bid to contain the spread of coronavirus infection. The Home Ministry on Wednesday issued detailed guidelines that allows IT and IT-enabled services to operate with up to 50 per cent strength.
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