BENGALURU/MUMBAI (Reuters) - Indian software services exporter Wipro Ltd reported a 13% rise in first-quarter profit thanks to robust demand from financial clients and said its main information technology business could show modest growth in the current quarter.
The results come on the heels of strong earnings data from rivals Infosys Ltd and Tata Consultancy Services Ltd last week despite economic uncertainties in their biggest markets, the United States and Europe.[nL4N24D2NS]
Uncertainty over Britain’s exit from the European Union and the trade tussle between the United States and China have slowed these economies, threatening to squeeze India’s $180 billion information technology and business process management industry as well.
Still, Wipro, which posted sales of $2.04 billion from its IT services business in first quarter, said it expects the segment to show flat to 2% growth with sales of $2.04 billion-2.08 billion in the three months to end-September.
It said it had seen delays in kickstarting some new client projects as well as sluggishness in some ongoing projects, but also won three customers with contracts over $100 million.
“While we had a slower start of the year, we believe, based on the strong pipeline that we have,... that we will gain back momentum as we progress through the year,” CEO Abidali Neemuchwala told a news conference in the tech hub of Bengaluru.
Bengaluru-based Wipro posted a net profit of 23.88 billion rupees ($346.82 million) for the three months ended June 30 compared to 21.21 billion rupees last year.
Analysts on average expected the company to earn a profit of 23.24 billion rupees, according to Refinitiv data.
Total revenue rose 5.3% to 147.16 billion rupees, led by a 13.5% growth in its banking, financial services and insurance business (BFSI), its top revenue stream.
“On BFSI, our U.S. banking (business) is very strong. We continue to see uncertainty in the capital markets space” Neemuchwala said. “And European banking is seeing some softness.”
Wipro shares closed 0.15% lower at 259.60 rupees on Wednesday, while the broader market ended 0.2% higher.
($1 = 68.8550 Indian rupees)
Reporting by Derek Francis in BENGALURU and Sankalp Phartiyal in MUMBAI; additional reporting by Arnab Paul; editing by Gopakumar Warrier and Deepa Babington