Looming slowdown may hit Wipro harder than peers

ET Intelligence Group: WiproNSE -0.29 %’s March 2020 quarter performance, marred marginally by the Covid-19 pandemic, was on expected lines. In its quarterly commentary, the country’s fourth-largest software exporter hinted at a significant cost control initiative amid an expectation of higher working capital requirements in the coming quarters.

While the company chose not to provide revenue guidance for the June quarter, contrary to its practice so far, investors may anticipate a far sharper impact on its financials due to the disruption in business activities in the major markets of the US and Europe. The two contributed 83 per cent to the FY20 IT services revenue of $ 8,256.2 million.

The impact of the Covid-19 pandemic was limited to around 0.8 per cent of the March quarter revenue of $2,073.7 million for the IT services division. The operating margin contracted 80 basis points to 17.6 per cent compared with an expectation of a wider impact of over 200 basis points by some analysts.