Wipro Q4 results out today: Five key things to watch out for

Wipro, India’s third-largest information technology (IT) services firm, may surprise the streets with poor profit and organic revenue growth numbers for the fourth quarter of FY17.

The Bengaluru-based company, which is chasing a target of $15 billion revenue and 23 per cent operating margin by 2020, may see up to 15 per cent decline in net profit on year-on-year basis due to decline in other income and Rupee appreciation, say market analysts.

While its cross-town rival Infosys has guided for 6.5-8.5 growth in FY18 despite stable number in Q4, brokerage firms say Wipro is expected to guide between 1 and 2.5 per cent growth for the April-June quarter of the current financial year on the back of flattish organic revenue growth.

The company witnessed sluggish growth in second and third quarters of the last financial year as it faced a decline in traditional business with faster growth in services through digital technologies such as cloud.

Unlike its rivals like TCS and Infosys, Wipro has been aggressive in stepping up digital technology skills and strengthening talent pool through big-size acquisition like Appirio, HealthPlan Services.

While the industry will keenly watch its commentary on growth strategies set by Chief Executive Officer Abidali Neemuchwala to meet the $15 billion target, analysts expect Wipro management’s clarification on recent news of layoffs.

At least four brokerage firms have forecast a sharp decline in net profit in Q4 of last financial year. The company is, however, expected to report stable number on a quarterly basis owing to revenue realisation from Appirio. “Wipro should be helped by full-quarter revenue from Appirio acquisition,” said Gautam Duggad, head of research at Motilal Oswal brokerage firm.

Wipro Technologies (Wipro Ltd)