*WIPRO Q4 Results first cut: Results below our/street estimates
*Actual vs. expectations*
Wipro’s IT Services revenues in CC terms were up 1.1% QoQ against our expectation of 2.0%. 1QFY19 growth only met the lower end of its revenue guidance of 1%-3% in CC terms for Q4FY18. However, 130bps of cross-currency tailwinds helped it to deliver a USD growth of 2.4% in Q1FY19. IT services OPM at 14.4% is down 40bps, much below our estimate of 16.8% as it recognized costs related insolvency of two more clients in Q4FY18. Excluding the insolvency impact, the margins were 16.0%.
*Result summary*
For Q4FY18, IT services revenues in reported terms grew by 1.3% QoQ to Rs134.1bn (below our estimate of Rs138.7bn) and consolidated revenues grew 0.7% QoQ in Q4FY18. IT services EBIT Margins were down 40bps QoQ at 14.4%, much below our estimate of 16.8%, driven by recognition of insolvency of two more clients in Q4FY18. Excluding the insolvency impact, the margins were 16.0%
PAT declined 6.7% QoQ at Rs18bn as against estimate of Rs20.3bn
Wipro provides disappointing revenue guidance as it expects Q1FY19 revenue from IT Services business to be in the range of US$2,015mn to US$2,065mn which represents a CC growth in the range of -2.3% to 0.1%. Actual growth may be lower depending upon the divestiture of its hosted data center services business to Ensono.