Wipro net rises 2.1% to ₹2,121 cr. as BFSI buoys

Seeing a pickup in spending in North America, says CEO

IT services provider Wipro reported consolidated net profit in the three months ended June 30 rose 2.1% year-on-year to ₹2,120.6 crore, helped by more orders from clients in the financial services sector.

“We have seen a pickup in spending in the developed markets, particularly in North America and banking, financial services and insurance [BFSI],” said Abidali Z. Neemuchwala, CEO and member of the board. “Our investments in digital continue to help us build differentiation in key industry segments, which is resulting in a consistent improvement in our client metrics.”

‘Good order bookings’

While gross revenue grew 2.6% to ₹13,977.7 crore, revenue from the BFSI segment climbed 17.5%.

“We have had a good quarter of order bookings and I am confident we are moving in the right direction,” Mr. Neemuchwala said in a statement.

Wipro joined other IT majors in painting an optimistic future. TCS, India’s most-valued listed company, last week reported a 23.5% rise in net profit to ₹7,340 crore, while Infosys’s net rose 3.7% to ₹3,612 crore during the same period, driven mainly by digital services.

Wipro, India’s third-largest software services exporter, forecast second-quarter revenue from IT services to be range between $2,009 million and $2,049 million. “This translates to a sequential growth of 0.3% to 2.3%, excluding the impact of the divestment of our hosted data centre services business which concluded in the quarter ended June 30,” the company said.

IT services margin, at 17.2%, included a gain of ₹2,529 million from the sale of Wipro’s hosted data centre business.

“We continue to improve our operating metrics and generated strong operating cash flows at 136% of our net income during the quarter,” said Jatin Dalal, CFO.

Deal wins

Wipro won an applications cloud migration contract from a European investment bank for their repository of applications. A major U.S. airline also renewed a multi-year contract for its global contact centre support and other business process services, the IT company said.

Wipro also won a multi-year business process operations transformation contract from an Australian construction and property management company. The engagement will leverage Wipro’s AI, ‘cognitive-driven automation and platforms to standardise and transform the client’s finance and HR operations into a global shared services model,’ according to the statement.

Wipro was awarded a multi-year cargo management contract by Latam Cargo S.A., an air cargo transport firm. Wipro will deploy its end-to-end cargo management system, CROAMIS, for the client.

“While we see continuing challenges in our India business and ACA related decline in healthcare, we do see stronger momentum in the rest of our business led by BFSI and Americas,” Mr. Neemuchwala said. “Product engineering has also shown strong year-on-year growth,” he added.

On Wipro’s mining of clients, he said: “Our top 10 clients grew 7.8%. Also, we have added four new clients in the $50 million plus revenue bucket and 16 new clients in the $5 million bucket in the last one year.”

Wipro also said it had entered into a ‘strategic partnership’ with Alight Solutions to enable the U.S.-based firm to accelerate investment in consumer-facing technologies and services across its health, wealth and cloud businesses.

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