Wipro falls on disappointing Q2 results, flat Q3 revenue guidance

The stock dipped 4% to Rs 478 on BSE in early morning trade.

Wipro has dipped 4% to Rs 478 on BSE in early morning trade after the company reported disappointing September quarter (Q2) results and a sluggish IT revenue guidance for the third quarter ending December 2016.

“We expect revenues from our IT services business to be in the range of $ 1,916 million to $ 1,955 million for the quarter ended December 31, 2016 (Q3),” Wipro said in a press release.

The company’s IT services segment revenue for Q2 was $ 1,916.3 million, a sequential decrease of 0.8% and year-on-year (YoY) increase of 4.6%. IT services margins was remained changed at 17.8% for the quarter, as compared to previous quarter.

Wipro's Q2 quarter profit fell 8% YoY to Rs 2,070 crore; revenue grew 9.1% to Rs 14,407 crore over the previous year quarter.

“We maintained margins in Q2 despite the impact of salary increase for an incremental two months due to strong operational improvements in automation-led productivity, offshoring and utilization.” said Jatin Dalal, Chief Financial Officer.

“As we look forward, the demand environment is mixed in a seasonally weak quarter affected by furloughs and lower number of working days,” added Dalal.

At 09:58 am, the stock was down 3.7% at Rs 481, trading nears to its 52-week low of Rs 470 touched on September 29, in intra-day trade. The trading volumes on the counter jumped nearly five-fold with a combined 1.44 million shares changed hands on BSE and NSE.