Wipro Shares Soar After June Quarter Profit Beats Analysts’ Estimate: 10 Things To Know

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Wipro Shares Soar After June Quarter Profit Beats Analysts' Estimate: 10 Things To Know

On Tuesday, Wipro reported a net profit of Rs2,390.20 crore for the quarter ended June 30

Wipro shares gained as much as 15 per cent in early trade on Wednesday, a day after the Bengaluru-based IT major reported an increase of 2.76 per cent in net profit for the April-June period compared to the previous quarter. At 10:01 am, the Wipro stock was stuck in the upper circuit at Rs 258.80 apiece – up 15.00 per cent from its previous close – on the BSE, as was the top gainer in the Nifty basket of 50 shares.

Here are 10 things to know:

  1. After market hours on Tuesday, the company had reported a net profit of Rs 2,390.20 crore for the quarter ended June 30, beating analysts’ expectations.

  2. Wipro’s revenue came in at Rs 14,913.10 crore in the first quarter of current financial year, marking a fall of 5.08 per cent compared to the previous quarter.

  3. The company said its IT services revenue stood at Rs 14,595.60 crore in the quarter ended June 30, down 4.58 per cent from the previous quarter. 

  4. In constant currency terms, Wipro said its IT services segment revenue declined 4.4 per cent on a year-on-year basis.

  5. Wipro said the conditions caused by the coronavirus pandemic could adversely affect its future sales, operating results and overall financial performance.

  6. “Our operations may also be negatively affected by a range of external factors related to the COVID-19 pandemic that are not within our control,” Wipro said in a statement.

  7. The Nifty IT index – comprising technology stocks – gained as much as 4.10 per cent. 

  8. Operating margin – a key measure of profitability – in the IT services segment improved to 19.0 per cent in the June quarter, compared to 17.6 per cent in the January-March period.

  9. “We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation,” said chief financial officer  Jatin Dalal.

  10. At the end of June, the rupee was down 5.78 per cent against the greenback on a year-to-date basis. Any depreciation in the rupee boosts the profitability of IT companies, which earn the lion’s share of their revenue in dollars.

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