On a year-to-date (YTD) basis, the stock has slipped 9.5 per cent and has underperformed the Nifty IT index that gained over 24.43 per cent during this period. In comparison, the Nifty50 index is up 4 per cent YTD, ACE Equity data showed.
Here is a quick compilation of what leading brokerages expect from Q1FY19 of Wipro:
Wipro’s revenue growth guidance for Q1FY19 (-2 to 0 per cent q-o-q CC) was impacted by a decline in revenue from HealthPlan Services (HPS) and by the insolvency of two its customers. Cross-currency headwinds of 130 bps are likely to result in 2.3 per cent q-o-q decline in dollar revenue.
We expect EBIT margin in IT services to decline by 30 bps to 15.7 per cent despite rupee depreciation, because of revenue pressures and part- impact of wage hikes. Our profit after tax (PAT) estimate is Rs 20.6 billion (+9.3 per cent q-o-q). Adjusted for the exclusion of one-off expenses in 4QFY18, PAT growth is likely to be 1.7 per cent q-o-q.
We expect dollar revenue in the combined IT services business to decline by 1.6 per cent q-o-q (down 0.6 per cent q-o-q in CC terms). EBIT margin is expected to expand on favourable currency movement. Revenue for the quarter is expected to come in at Rs 141.1 billion, up 2.5 per cent (q-o-q) and 3.6 per cent (y-o-y). Key factors to watch out for: Revenue growth guidance for 2QFY19 and signs of growth up-tick.
Expect dollar revenue de-growth of 2.5 per cent q-o-q, constant currency (CC) revenue growth is likely to dip 1.4 per cent q-o-q (in line with management guidance of +0.3 to -2.3 per cent CC growth). EBITDA margin to expand 102 bps to 18.8 per cent due to benefits of currency and reversal of exceptional IT services. EBIT margin to be at 15.1 per cent vs 14.4 per cent last quarter. Net profit is expected to increase 5.4 per cent q-o-q to Rs 9 billion.
For the second quarter of the current financial year (Q2FY19), guidance is expected to be in the range of 0-2 per cent. Commentary on energy vertical and outlook for healthcare and HPS performance, signals of recovery in communication vertical, strategy to grow top-10 accounts and margin outlook are key monitorables for the company.
Wipro to post dollar revenue and CC revenue decline of 2 per cent and 1 per cent (q-o-q) respectively on account of seasonally weaker quarter for the company and client specific issues. Adjusted margins expected to remain flat (q-o-q) as rupee depreciation benefits will be offset by partial wage hike, visa costs and weak quarter
Peg net profit at Rs 197 billion, down 5 per cent y-o-y and up 9 per cent q-o-q. Sales may rise 3 per cent y-o-y and 2 per cent q-o-q at Rs 140.45 billion.