Wipro drops after issuing Q3 revenue warning over Chennai floods

Wipro dropped 0.38% to Rs 556.50 at 10:10 IST on BSE after the company in its business update on its Chennai operations said that recent floods in Chennai is expected to have a material impact on its Q3 revenue.

The company announced before market hours today, 16 December 2015.

Meanwhile, the S&P BSE Sensex was up 79.26 points or 0.31% at 25,399.70.

On BSE, so far 15,611 shares were traded in the counter as against average daily volume of 74,847 shares in the past two weeks.

The stock hit high of Rs 559.15 and low of Rs 553 so far during the day. The stock had hit a 52-week high of Rs 676.90 on 11 March 2015. The stock had hit a 52-week low of Rs 512.55 on 24 April 2015.

The stock had outperformed the market over the past one month till 15 December 2015, advancing 1.29% compared with Sensex's 1.13% fall. The scrip had, however, underperformed the market in past one quarter, dropping 1.97% as against Sensex's 1.5% fall.

The large-cap company has equity capital of Rs 494.05 crore. Face value per share is Rs 2.

Wipro in its business update on its Chennai operations post recent floods in Chennai said that the incident is expected to have a material impact on the revenue in Q3 December 2015 and will result in higher one-time cost incurred towards deployment of business continuity plan. Both the factors - impact on revenue and one-time cost will impact operating margins in Q3 December 2015. The revenue from IT services business is expected to be in the previously communicated range of $1,841 million to $1,878 million. However, the company expects revenue to be in the lower half of the guidance range.

Wipro has largely seen the restoration of normal operations in Chennai facilities. The recent heavy rainfall and resultant flooding impacted the regular business operations of Wipro's Chennai facilities during the first week of December. The business continuity plans were invoked for the work being done from facilities to ensure there was no disruption in the business-critical operations of customers. Wipro has multiple facilities in Chennai with over 22,000 employees. Wipro has been focused on ensuring the safety of its employees and their families and has rolled out multiple employee support initiatives to mitigate their hardship during this period. Wipro has adequate insurance coverage and is in touch with the insurance companies to assess the damage and the claim will be subject to policy terms.

Wipro's consolidated net profit rose 2.18% to Rs 2235.40 crore on 1.58% growth in net sales to Rs 12566.80 crore in Q2 September 2015 over Q1 June 2015.

Wipro is one of the leading IT services provider.

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