BENGALURU: Wipro, India’s fourth largest IT services firm, on Wednesday said it is unable to give revenue guidance for April-June quarter of the financial year 2020-21, and also has deferred all its HR decisions including hirings and wage increases due to the uncertainty arising out of coronavirus pandemic situation.
The IT major reported 6.3 per cent decline in net profit at Rs 2,326.1 crore (YoY) for the January-March quarter of FY20. Its EBIT for the IT services segment dropped to Rs 2,692.5 crore in the March quarter, against Rs 2,773.6 crore in the December quarter. The operating margin for the quarter slipped 0.8 per cent.
Wipro said the pandemic has led to a fall in revenues from its mainstay — IT services — by 0.7-0.8 per cent ($14-16 million). It had earlier guided 2 per cent increase in IT services for March quarter.
“Due to 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. We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply side factors,” the company said. Its gross revenue grew by 4.48 per cent to Rs 15,711 crore in the March quarter as against Rs 15,006.3 crore a year ago.
“The quarters ahead seem challenging and require a tremendous response on costs. We also anticipate our working capital to increase, but our strong balance sheet provides us the confidence that will emerge stronger and better. Further, due to the volatility in the external environment, we have decided not to provide a quarterly guidance on revenues,” said CFO Jatin Dalal.
Wipro’s board has also not recommended any final dividend. It said the interim dividend of Rs 1 declared on January 14 shall be considered as the final dividend for FY20.
Techies set to start ‘work from offices’
The advisory by the Ministry of Home Affairs, directing the IT/ ITes companies to enable 50 per cent of their workforce to operate within the company premises, will help resume critical services such as BPM and engineering divisions; however, industry body Nasscom suggested that the deployment of employees should be done in a phased manner. According to Nasscom president Debjani Ghosh, though 90 per cent employees in the IT industry are working from home during the lockdown, the sector was currently working at only 70 per cent of its capacity. “We are looking at a phased approach, bringing 15-20 per cent of the workforce back to the offices initially,” Nasscom said.