Wipro profit drops more than expected as margins fall

MUMBAI (Reuters) - Wipro Ltd, India's third-largest software services exporter, reported a larger-than-expected decline in fourth-quarter profit on weakness in its financial and healthcare services business and declining margins.

The Bengaluru-based company has lagged larger rivals Infosys and Tata Consultancy Services in switching to high-margin digital services at a time when growing pressure on fees for routine IT services has hurt prices in the industry.

Tata and Infosys both produced forecast-beating fourth-quarter earnings earlier this month.

Wipro's IT services margins fell by 10 basis points to 20.1 percent compared to the prior quarter. On a year-on-year basis Wipro's margins fell by 2 percentage points.

For the current quarter, Wipro said it expected revenue at its IT services business to be between $1.90 billion to $1.94 billion.

For the Jan-March fourth quarter, Wipro reported a consolidated net profit of 22.35 billion rupees ($337.6 million), compared to 22.72 billion rupees a year earlier.

Analysts on average were expecting the company to report profit of 23.43 billion rupees for the three-month period, according to Thomson Reuters data.

Gross revenue rose 12 percent to 136.3 billion rupees.

The company separately approved a share buyback for 25 billion rupees.

($1 = 66.2100 Indian rupees)

(Reporting by Anya George Tharakan and Rishika Sadam; writing by Himank Sharma; Editing by Keith Weir and Jane Merriman)