Wipro's gloomy revenue forecast for the March'09 quarter indicates that the scenario for the Indian IT exporters may get even worse in next few months.
The country's third largest IT services provider has guided for $1045 million in IT services revenue for the fourth quarter, which also includes revenue of recently acquired Citi Technology Services.
Citi Technology is estimated to have closed 2008 with $80 million in revenue. This translates to an average quarterly revenue of $20 million.
If we exclude this from Wipro's guidance, then the resultant figure of $1025 million indicates that the company expects a drop of 9% in its core IT services revenue for the next quarter compared to the December quarter revenue of $1126 million.
This raises deep concerns over the company's ability to pull the juggernaut in testing times. The stock was 2.85% down to Rs 221.35 on BSE at 12:06 pm, while the benchmark Sensex was 1.22% down to 8978.
In rupee terms, operating margin of Wipro's IT services business came under pressure as it dropped by 80 basis points (bps) to 20.6% compared to the year-ago levels. Margin on its products business improved by 70 bps to 5.1%.
The company's activities in India also slowed down as share of revenue from this region plummeted by 400 bps to 20% by similar comparison. The proportion of the US business increased from 44% to 46%.