Wipro Reports Rise In Quarterly Profits But Warns Of Winter Chill

21/10/2015 6:44 PM IST | Updated 15/07/2016 8:25 AM IST
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Employees walk past Wipro Ltd. signage as they enter the company's campus in Bangalore, India, on Tuesday, Jan. 28, 2014. Worldwide spending on information technology will grow 3.1 percent to $3.8 trillion this year, with IT services set to climb 4.5 percent, researcher Gartner Inc. forecast Jan. 6. Photographer: Vivek Prakash/Bloomberg via Getty Images

Wipro Ltd, India's third-biggest software services exporter, reported a 7.2 percent rise in quarterly profits on Wednesday but forecast a tepid quarter ahead due to fewer working days for its Western clients and smaller deals.

For the current quarter Wipro expects its IT services unit to see revenue of between $1.84 bilion to $1.9 billion, which is at the lower end of analysts' estimates.

Analysts had expected a rise of 2-4 percent, while Wipro's forecast implies a rise of 0.5 to 2.5 percent.

Chief Executive TK Kurien said the quarter would be affected by the holiday season in Europe and the United States and a slower ramp-up in deals closed.

Kurien said he expects the banking, retail and manufacturing industries to see the most cutbacks.

"Deal sizes are getting smaller and the number of multi billion-dollar deals have reduced in the market space," CEO Kurien said.

Wipro, like rivals Tata Consultancy Services and Infosys has the biggest part of its business in servicing clients in the United States and Europe.

But a rise in demand for automation and digital technology-based services have cut down the number of big-ticket deals which had long been the mainstay of IT service companies.

Also Wipro will "continue to see strong competition around large deals and there is pressure on pricing with respect to new deals," Kurien told reporters on Wednesday.

For the quarter ended Sept. 30, Wipro's fiscal second quarter, the company posted a net profit of 22.35 billion rupees ($343 million), up from 20.85 billion rupees last year.

Analysts on average has expected a profit of 22.25 billion rupees from Wipro, according to Thomson Reuters data.

Net sales came in at 125.67 billion rupees, up from 118.16 billion rupees in the same quarter last year.

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