Wipro rose 0.6% to Rs 286.30 at 15:03 IST on BSE, with the stock reversing initial losses triggered after the company said that its profitability may be impacted in Q4 March 2018 as one of its clients is undergoing insolvency proceedings.
The announcement was made after market hours yesterday, 9 April 2018.Meanwhile, the S&P BSE Sensex was up 78.09 points, or 0.23% to 33,866.63
On the BSE, 1.42 lakh shares were traded in the counter so far compared with average daily volumes of 4.76 lakh shares in the past two weeks. The stock had hit a high of Rs 287.55 and a low of Rs 278.70 so far during the day. The stock hit a 52-week high of Rs 334.75 on 16 January 2018. The stock hit a 52-week low of Rs 242.38 on 24 April 2017.
Wipro said that in 2008, the company had signed a multi-year outsourcing services agreement with a telecom services provider (client) in India, which was subsequently renewed in the year 2013. On 28 February 2018, the client filed a petition to initiate its Corporate Insolvency Resolution Process (CIRP) with the National Company Law Tribunal (NCLT).
Wipro subsequently submitted its claim on 28 March 2018. Since then, the company has been engaged with the Insolvency Resolution Professional (IRP) to discuss the potential outcome of the process. It is estimated that this development will have an impact on both revenue and profitability.
The company is likely to see an impact on profitability at the net income level in the range of 65-75 basis points of the consolidated revenues for the quarter ended 31 March 2018, Wipro said. The impact of this client insolvency petition will reflect in the financial results of the company for the quarter and year ended 31 March 2018, it added.
Wipro's consolidated net profit fell 11.85% to Rs 1930.10 crore on 1.82% growth in net sales to Rs 13669 crore in Q3 December 2017 over Q2 September 2017.
Wipro is a leading global information technology, consulting and business process services company.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
