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Wipro: Another Flat Quarter - Views on News from Equitymaster
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Wipro: Another Flat Quarter
Feb 9, 2017

Wipro has announced its results for the third quarter of FY17. The company has reported a 1% QoQ decrease in sales while the net profit was up 1.9% QoQ.

Performance summary
  • Consolidated sales decreased by 1% QoQ during the quarter. IT services revenues were up 0.5 % QoQ in rupee terms, up 0.6% QoQ in constant currency terms but down 0.7% QoQ in US dollar terms.
  • The operating margin was up sequentially to 20.8%. On an absolute basis, the operating profit increased by 2.9% QoQ.
  • The net profit was up sequentially by 1.9% QoQ. The net margin came in at 15.3%.
  • The company declared an interim dividend of Rs 2 per share.

    Consolidated financial performance
    (Rs m) 2QFY17 3QFY17 Change 9MFY16 9MHFY17 Change
    Gross revenues 138,968 137,645 -1.0% 378,890 413,589 9.2%
    Expenditure 111,117 108,999 -1.9% 296,164 329,581 11.3%
    Operating profit 27,851 28,646 2.9% 82,726 84,008 1.5%
    Operating profit margin (%) 20.0% 20.8% 21.8% 20.3%
    Other income 5,105 5,719 12.0% 17,945 16,024 -10.7%
    Finance expenses 1,428 1,366 -4.3% 4,298 4,130 -3.9%
    Depreciation 4,847 5,410 11.6% 10,656 14,921 40.0%
    Profit before tax 26,681 27,589 3.4% 85,717 80,981 -5.5%
    Tax 5,910 6,441 9.0% 18,719 18,472 -1.3%
    Profit after tax 20,771 21,148 1.8% 66,998 62,509 -6.7%
    Minority interest 67 52 -22.4% 299 190 -36.5%
    Net profit 20,704 21,096 1.9% 66,699 62,319 -6.6%
    Net profit margin (%) 14.9% 15.3% 17.6% 15.1%
    No. of shares (m) 2,430.9
    Diluted earnings per share (Rs)* 34.8
    P/E ratio (x)* 13.2
    *On a trailing 12-months basis

    Business mix
    2QFY17 3QFY17 Change
    Based on geography
    Americas 76,154 76,393 0.3%
    Europe 33,352 32,484 -2.6%
    India and Middle East 14,453 13,765 -4.8%
    RoW 15,009 15,003 0.0%
    Based on service offerings
    Analytics 10,145 9,635 -5.0%
    Global Infrastructure Services 39,189 38,678 -1.3%
    Application Services 60,868 61,114 0.4%
    Product Engineering 10,145 9,910 -2.3%
    BPO 18,622 18,307 -1.7%
    Based on verticals
    Communications 10,423 10,186 -2.3%
    Finance Solutions 35,437 35,099 -1.0%
    Manufacturing & Technology 31,129 30,695 -1.4%
    Healthcare, Life Sciences & Services 22,235 22,023 -1.0%
    Consumer 21,818 21,748 -0.3%
    Energy and Utilities 17,927 17,894 -0.2%
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