Software major Wipro on Wednesday projected higher revenue from its IT services business for the first quarter (April-June) of this fiscal (2016-17), while net profit dipped 2 percent in the fourth quarter (January-March) of last fiscal 2015-16.
“We expect revenue from our IT services to be $1,901-1,939 million ($1,920 average) for first quarter (Q1), as we had 2.4 percent strong sequential growth ($1,882 million) in fourth quarter (Q4) of fiscal (FY 2016),” the company said in a statement.
The company’s net profit for quarter Q4, however, declined 2 percent annually and was flat (0.3 percent) sequentially at Rs 2,240 crore.
For fiscal 2015-16, the net profit marginally increased 3 percent YoY to Rs 8,890 crore.
Total revenue for the quarter under reference (Q4) increased 12 percent YoY and 5.9 percent quarterly to Rs 13,630 crore and 9 percent YoY for fiscal 2016 to Rs 51,240 crore.
In dollar terms, the net income was $337 million for the fourth quarter and $1.3 billion for FY 2016, while the total revenue was $2.1 billion for Q4 and $7.7 billion for FY 2016.
Revenue from the flagship global IT services business grew 6 percent yearly and 2.4 percent sequentially to $1,882 million ($1.9 billion) for the fourth quarter and 3.7 percent YoY to $7,346 million ($7.4 billion) for FY 2016 in dollar terms.
In rupee terms, the revenue from IT services grew 14 percent YoY to Rs.12,800 crore for Q4 and 11 percent YoY to Rs.48,730 crore for fiscal 2016.
“Our focus is to drive growth in our run business through integrated services and hyper-automation while gaining leadership in the change business through investments in digital and consulting capabilities, IP-based platforms and products,” Wipro chief executive Abidali Z. Neemuchwala said in the statement.
Operating margin was 20.1 percent for Q4 and 20.5 percent for fiscal 2016.
“We have maintained our margins in the quarter, with benefits from utilization and operational efficiencies, off-setting the margin impact from our inorganic investments,” chief financial officer Jatil Dalal said.
The company and its subsidiaries added 119 customers in Q4 and 261 for the fiscal, taking the total number of active clients to 1,223 by the fiscal-end.
The IT services business added 2,248 people in Q4, taking the total headcount to 172,219 by fiscal-end as against 158,217.
Wipro declared final dividend of Rs 1 or 50 percent per share on Rs.2 face value for the fiscal, taking total dividend to Rs 6 or 300 percent, including Rs 5 or 250 percent interim dividend.
Gross cash was Rs 30,143 crore or $4.55 billion for fiscal under review.
The company also announced buyback of 40 million equity shares of Rs.2 face value at a price of Rs.625 per equity share from its investors on a proportionate basis through a tender offer.
“The move to buyback equity shares is part of the company’s policy to provide regular, stable and consistent return to investors while striving to enhance long-term value for all stakeholders,” Dalal said.
The buyback price of Rs 625 per share is the average price of the scrip over the last 60 days of trading on bourses.
The buyback payable in cash will cost the company Rs 2,500 crore. The quantum of shares (40 million) for buyback, however, represents only 1.62 percent of total equity capital, said Wipro.