India’s Wipro expects Q1 IT services rev to drop quarter-on-quarter

Wipro Ltd (WIPR.NS), an Indian supplier of IT services, announced on Thursday that revenue from its core IT Services unit would decline sequentially in the current quarter as deal wins were offset by rising expenses in the three months ending in March.

As clients in western nations either postpone, reconsider, or cancel deals, Wipro is the most recent among major IT services exporters to issue a warning about a decline in future performance.

Since Infosys Ltd (INFY.NS), its larger rival, publishes annual estimates and has also signaled a bleak year ahead, no other major firm in the sector has provided an estimate for the quarter.

For the quarter ended in March, Wipro’s net profit decreased by 0.4% to 30.75 billion rupees, despite an 11.2% increase in revenue.

Wipro’s total costs increased 12.4% to 198.18 billion rupees, while its operating margin decreased to 16.3% from 17% a year before.

Even though Wipro secured significant deals worth $4.1 billion, up 29% from a year earlier on a constant currency basis, the company’s earnings were muted. The corporation claimed that one significant deal was worth over $1.1 billion.

The promoter group expects to take part in the share repurchase, which Wipro recently approved for up to 120 billion rupees.

Separately, smaller rival Tech Mahindra reported a 26% decline in fourth-quarter profit on Thursday due to lower expenditure by customers.

Wipro shares, which closed Thursday with a fairly unchanged price, are down 4.7% year to date after falling 45% in 2016.