India's Wipro lags IT peers as Q1 revenue misses estimates
Technology
India's Wipro lags IT peers as Q1 revenue misses estimates
BENGALURU (Reuters) - Wipro missed quarterly revenue estimates on Friday due to weak demand in Europe and Asia-Pacific, highlighting the tough task its new boss faces as he tries to turn around the fortunes of India's No.4 software services exporter.
Veteran insider CEO Srinivas Pallia took over in April after the abrupt departure of Thierry Delaporte, whose term was filled with a string of top-level exits and a lack of big-deal wins.
Revenue fell 3.8% to 219.64 billion rupees ($2.63 billion) for the quarter ended June, below analysts' estimates of 225.9 billion rupees, per LSEG data.
"The initial climb is both challenging and exciting, and as a hiker, I’m pleased with the momentum we’ve built in quarter one," Pallia said in a post-results call.
The company's clients remain cautious as global demand for IT services continues to be sluggish, he added.
"Wipro's performance has been weak for quite some time due to weak demand and company-specific issues. It will take time to rebound," Centrum Broking analyst Piyush Pandey said.
In the previous fiscal year, Wipro was the only IT firm among India's top 4 to report a decline in revenue for the full year.
Revenue fell 11.6% in Europe and 13.2% in Asia Pacific, India, Middle East and Africa. All its business segments, except health, also reported lower revenue.
Wipro won orders worth $3.3 billion, down from $3.7 billion a year earlier.
The company, the only one among the top IT companies to provide a quarterly forecast, said it expects IT services revenue of $2.6 billion to $2.65 billion in the second quarter, indicating a sequential decline of 1% to a growth of 1%.
Clients have been spending less on discretionary projects in recent quarters due to economic uncertainties and higher interest rates. This is likely to change after the Federal Reserve cuts interest rates.
Wipro's net profit rose 4.6% to 30.03 billion rupees, beating analysts' estimates of 29.48 billion rupees.
It said it plans to hire up to 12,000 freshers this fiscal year.
