Wipro Q3 results on Friday; will IT firm meet its guidance?

NEW DELHI: India’s third largest IT firm Wipro will report its December quarter results on Thursday. The technology firm is expected to report 2.2-3 per cent quarter-on-quarter (QoQ) growth in revenues in constant currency (CC) terms, which would fall in line with 1-3 per cent guidance the firm had given for the seasonally weak quarter. Margins are expected to expand 20-50 basis points sequentially. Commentary on key verticals, especially healthcare and communications, and outlook on profitability, other than the Q4 growth guidance will be keenly watched. Motilal Oswal forecasts a 2.2 per cent QoQ growth in December quarter revenue in CC terms and 1.7 per cent revenue growth in dollar terms, as cross-currency headwinds are likely to cut it by 60 basis points.“Our expectation for the quarter stands at 2.2 per cent QoQ in CC terms, nearly 1 percentage points of which should coming from Alight integration. Cross-currency headwinds of 60 bps are likely to result in 1.7 per cent QoQ growth in dollar revenues,” the brokerage said.Another brokerage Jefferies expects Wipro to clock 2.5 per cent constant currency revenue growth (1.9 per cent in dollar terms). This brokerage expects 1.2 percent points contribution coming from Alight acquisition.“Reported IT services revenue will be lower by $34 million as management had indicated plans to hive off and report government revenue separately from third quarter,” the brokerage said in a note.Jefferies expects EBIT margin to come at 17.5 per cent, up 70 bps QoQ helped by depreciation in rupee and efficiency improvements.Motial Oswal expects the EBIT margins to expand by 50 bps to 18.5 per cent and PAT to grow 8 per cent QoQ to Rs 2,470 crore on account of base effect due to settlement charges in the previous quarter.Philip Capital sees adjusted EBIT margin to expand 20 bps sequentially.“EBIT margin are expected to expand 340 bps QoQ due to the absence of one-time settlement impact with National Grid in the last quarter. Adjusted EBIT margin to expand 20 bpss QoQ,” the brokerage said.Brokerages expect IT major's 4Q FY19 guidance to come in the range of 1.5-3.5 per cent.Wipro in September quarter had posted a 13.81 per cent YoY drop in profit at Rs 1,889 crore, falling short of analyst expectations. 67550878 67566374

from Economic Times http://bit.ly/2MeeiL6