IT services major Wipro Ltd has reported a fall of 6.3% in year-on-year profit for the fourth quarter ended March 31. It fell from 24.93 billion rupees (US$ 325 million) last year to 23.45 billion rupees ($306 million) this year. On a sequential basis, its profits slipped 5.28%.
The company has decided not to provide revenue guidance for the next quarter, citing uncertainty around the course of the Covid-19 pandemic. “Due to the uncertainty around the course of the Covid-19 pandemic, we do not have visibility into the extent to which it will disrupt our operations, and we have decided to not provide revenue guidance for the quarter ending June 30, 2020,” it said in the filing.
It may be recalled that last week Nasdaq-listed Cognizant Technology Solutions Corp had also withdrawn its 2020 guidance, given on February 5, citing similar reasons.
Revenue from operations stood at 157 billion rupees ($2.05 billion), up 4.69% against 150 billion rupees ($1.96 billion) in the corresponding quarter of the previous fiscal. Wipro’s IT services revenue was $2.07 billion, a decrease of 1% sequentially, while the IT services operating margin for the quarter was at 17.6%, a decrease of 0.8% sequentially. The earnings per share for the quarter declined 1.1% year on year to 4.09 rupees. The board has not recommended any final dividend.
Lockdowns in India and other developed markets, notably the US, to contain the pandemic have led to the loss of billings for IT firms. India imposed a countrywide lockdown in the last week of March and has now extended it till May 3. Hence the impact of the ongoing lockdown and curbs on travel on the performance of Indian IT firms in the coming quarter is expected to be more severe.
Industry experts expect the IT sector to face a steep fall in demand as the coronavirus has left hardly any major economy untouched. It will worsen if the current situation across the globe continues for a few more months.
Interestingly, for the first time Wipro has announced its results ahead of Infosys and Tata Consultancy Services. Infosys used to be the first to announce results in most quarters. But because of the disruption caused by the coronavirus pandemic, it has decided to postpone the announcement of results by a week. It will now announce its fourth-quarter results on April 20.