Analysts do not seem to expect major surprises in the Wipro Q4 results, though everyone seems keen to see its outlook for the next quarter and the commentary for the year ahead.
The Wipro stock on the Bombay Stock Exchange gained in early trade on Wednesday. In the forenoon, after opening at 289, it touched a high of 293.95 and a low of 288.70 and was trading around 292, up 1.8 per cent.
"Since the oil and gas sector has started recovering, the outlook should be positive," says Sandip Agarwal at Edelweiss. The energy segment is important for Wipro, considering that about a good 13 per cent of its revenues are from this space.
Expecting the company to surprise positively on revenue growth for Q4, Sudheer Guntupalli from Ambit Capital, says, "On constant currency terms I am expecting it to report a sequential revenue growth of around 2 per cent and an overall all dollar revenue growth of 3.2 to 3.8 per cent."
But then, he adds a caveat that these expectations were put out before the company issued a revenue warning relating to filing of insolvency in February last by a key telecom client in India. In fact, in the previous quarter, it took a $50 million one-time provision on costs for this. However, Guntupalli feels, this may hit their revenues and receivables to a small extent. On the margins, he expects them to be largely stable.
The key thing to watch out for, he says, is commentary on FY19 and the revenue growth guidance that it gives for the immediate next quarter, the quantitative number and also the qualitative commentary for the full year ahead, in terms of various verticals and geographies.
On April 9th, Wipro informed the bourses that on February 28, 2018, its telecom client in India, with which it had signed a multi-year outsourcing agreement, had filed for insolvency and that the development was likely to impact both revenue and profitability.
Wipro had said the company is likely to see an impact on profitability at the net income level in the range of 65-75 basis points of the consolidated revenues for the quarter ended March 31, 2018.
The Wipro results are being eagerly awaited, after the Infosys and Tata Consultancy Services numbers. The share prices in early trade for TCS was up and by forenoon was up by 1.8 per cent and Infosys was also up by 0.6 per cent.