Wipro sees stronger quarters ahead on calmer oil prices | Reuters

MUMBAI/ BENGALURU Wipro Ltd (WIPR.NS), India’s third-biggest software services exporter, expects less volatile global oil prices to revive spending on IT outsourcing by its energy and utility clients.

Wipro, also listed in the United States (WIT.N), makes about 18 percent of its sales from the energy sector, compared to about 5 percent at bigger rivals Tata Consultancy Services Ltd (TCS.NS) and Infosys Ltd (INFY.NS).

A drop in crude prices had made many energy sector clients cut back on spending, prompting Wipro to give a tepid forecast in the past quarter. Volatility has calmed this week after the price of Brent fell about 12 percent in July.

“We are not expecting to see a further decline in energy in the second quarter,” Chief Executive TK Kurien told reporters at a conference. The company’s energy business sales had dropped about a third over the past year.

For the quarter ended June, Wipro’s fiscal first quarter, the company posted a net profit of 21.9 billion rupees ($343.8 million), broadly in line with forecasts and posting a growth of 4 percent over the corresponding period last year.

Analysts, on an average, expected a profit of 21.83 billion rupees, according to Thomson Reuters data.

The company posted a 10 percent rise in quarterly revenue, but that was lower than the 12.4 percent rise rival Infosys recorded in the comparable quarter.

Wipro, which makes about three quarters of its sales in the United States and Europe, said its IT services revenue would be in the range of $1.82-$1.86 billion in the current quarter, a growth of up to 3.9 percent over the preceding quarter.

Dipen Shah, head of private client group research at Kotak Securities, said the September quarter guidance was “slightly ahead” of expectations. He said the management’s comments about energy sector sales having bottomed out was also encouraging.

During the quarter ended June, IT services revenues came in at $1.79 billion, rising 1.1 percent from the January-March period and hitting the top end of its forecast.

($1 = 63.7800 rupees)

(Editing by David Goodman and Keith Weir)

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