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Wipro: Slow start to the year
Jul 26, 2013

Wipro has announced its results for the first quarter of the financial year 2013-2014 (1QFY14). The company has reported a 1.3% QoQ growth in sales and 6.1% QoQ decline in net profit. Here is our analysis of the results. It is important to note that since the results of the current quarter do not include the performance of the consumer care & lighting (non–IT) business that was demerged, the results are not exactly comparable.

Performance summary
  • Consolidated net sales grew by 1.3% QoQ during the quarter.
  • The IT Services revenues (92% of total revenue in rupee terms) witnessed a growth of 4.5% QoQ during the quarter. In US dollar terms, the growth was muted at 0.2% QoQ.
  • Operating (EBITDA) margin of continuing business improved marginally by 0.4% YoY to 20.7% during the quarter as compared to 20.3% seen during 4QFY13.
  • Net profits declined by 6.1% QoQ. The decline in net profits was a result of higher finance expenses as well as higher tax expenses during the quarter. At the same time the exchange gains also declined by 16.1% QoQ during the quarter.
  • Employee strength of the IT services business stood at 147,281 at the end of June 2013. The headcount in IT services business increased by 1,469 (on a net basis) during 1QFY14 compared to 4QFY13.Attrition declined to 13.2% as compared to 13.7% for the previous quarter (4QFY13).
  • IT services segment adds 28 new clients during the quarter, thereby taking the total count of active clients to 946 as compared to 978 seen at the end of 4QFY13.
  • Gross employee utilization rate was lower at 64.7% during the quarter as compared to 66.2% seen in the previous quarter (4QFY13). Net employee utilization (excluding trainees) declined to 73.3% from 76.2% seen during the quarter, 4QFY13.

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