Wipro Declines Most in Nine Months as Staff Use Falls
Wipro used 74.8 percent of available man-hours in the quarter ended December, down from 77.9 percent a year earlier, as it failed to win enough contracts to keep its expanding workforce busy. The share decline also followed gains over the past week that were triggered by better-than-expected earnings at competitors Infosys Ltd. (INFO) and Tata Consultancy Services Ltd. (TCS)
“Volume growth is negative, making the trajectory of the business appear a little weak,” said Ankur Rudra, an analyst with Mumbai-Based Ambit Capital Ltd. “There’s also been a bit of a correction.”
Wipro had gained 9 percent through yesterday since Jan. 10. Infosys, India’s No. 2 software exporter, raised its sales forecast on Jan. 11 before the start of trading.
The drop in Bangalore-based Wipro’s staff use overshadowed better-than-expected profit in the quarter through December. Net income climbed to 17.2 billion rupees ($320 million) in the period, beating the 16.3 billion-rupee average of 39 analyst estimates compiled by Bloomberg.
’’As more and more deal wins happen, we expect volume growth to catch up,’’ Wipro Chief Financial Officer Suresh Senapaty told reporters today in Bangalore. “It will be a combination of volume and price.”
The company forecast information-technology services revenue in the range of $1.59 billion and $1.63 billion in the quarter through March. Wipro’s guidance has factored uncertainty stemming from the U.S. debt ceiling and fiscal deficit concerns, Senapaty said.
“Both have to be dealt with between February and March,” said Senapaty. “So that has somewhat of an overhang on sentiment not being strongly positive.”
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