Wipro jumped 10% to Rs 247.55 after the IT major reported a 2.76% rise in consolidated net profit to Rs 2390.40 crore on a 5% decline in revenue from operations to Rs 14913.10 crore in Q1 June 2020 (Q1FY21) over Q4 March 2020 (Q4FY20).
Consolidated profit before tax (PBT) stood at Rs 3095 crore in Q1FY21, rising 4.3% from Rs 2965.8 crore in Q4FY20. Total tax expense rose 10.1% to Rs 683.80 crore in Q1FY21 over Q4FY20. The result was announced after market hours on Tuesday (14 July).
In dollar terms, IT services revenue stood at $1921.60 million in Q1, a decrease of 7.3% QoQ. Sequential revenue growth in constant currency terms declined 7.5% in Q1FY21. IT services operating margin improved to 19% in Q1FY21 from 17.6% in Q4FY20.
Commenting on company's performance, Jatin Dalal, chief financial officer said, "We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation. We also continued to sustain robust cash generation with operating cash flows at 174.9% of net income."
In its forward-looking statement, Wipro said that the conditions caused by the Covid-19 pandemic could decrease technology spending. This may adversely affect demand for the company's products and also affect the rate of customer spending which could adversely affect the customers' ability or willingness to purchase its offerings.
The company added 42 new customers in the quarter ending 30 June 2020. The IT major's attrition rate (on TTM basis) stood at 13% in Q1FY21 from 14.7% in Q4FY20.
Meanwhile, Wipro on Tuesday said it has signed an agreement to acquire Brazil-based IVIA Servis de Informica for about $22.4 million. IVIA's local talent and long-standing relationships, combined with Wipro's global expertise, will help expand the information technology firm's geographical footprint in Brazil, Wipro said in a statement. The acquisition will also help Wipro set up delivery centres in the northeast of Brazil leveraging IVIA's workforce, it added.
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In a regulatory filing, the IT major said the transaction is expected to be completed during the quarter ending 30 September 2020, subject to customary closing conditions.
Wipro is a global information technology, consulting and business process services company.
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