Wipro will sell Ecoenergy Unit for $70 Mn

Wipro announced that it has agreed to sell its EcoEnergy division for US$ 70 million as it sharpens its focus on its core IT business.

Wipro EcoEnergy generates revenue of about Rs 67.6 crores in the Financial Year 2016 and has a net worth of Rs 15.6 crores, Wipro said in a regulatory filing with the Bombay Stock Exchange.

According to the filing by Wipro since the business carried out by the EcoEnergy division is not core and strategic to the overall IT business, hence the company has decided to divest the business.

The unit provides solutions for energy efficient as well as the management to enterprise clients. In the month of October, Wipro announced that EcoEnergy division won a deal with restaurant chain owner Specialty Restaurants to provide energy efficiency services.

The sale to a subsidiary of UTC Climate, Controls and also Security is subject closing conditions and regulatory approval Wipro further added.

Ross Shuster, president, International Operations, UTC Climate, Controls & Security, said in a statement following the decision that EcoEnergy’s energy management platform and services, along with the expertise of its team, will enable UTC Climate, Controls & Security to further develop its remote monitoring. It will also help in building analytics capabilities and bring enhanced services and solutions to UTC Climate, Controls & Security’s broad, global customer base.

Meanwhile Wipro share price is trading at Rs 459.00, down by 1.99 per cent or 9.30 points. A total of 7,20,328 shares of the company have been traded on the counter of NSE aggregating to a total value of Rs 3,347.22 lacs. The Lower Price Band is 421.50 and the Upper Price Band is 515.10.

Wipro is recommended as one of the top 500 shares by Dynamic Levels research team. Get the most important historical share price performance of Wipro at Wipro share price history.

Wipro in biggest automation push since Holmes AI platform

Wipro, which launched its artificial intelligence platform Holmes 18 months ago, is currently making its largest push to embrace automation by permitting more of its managers to identify work which shall not require engineers in each of the more than 20,000 projects presently underway. This bold development will mean that Wipro does not just save on costs, but fundamentally alters the conventional model of deploying armies of engineers to undertake work involving maintenance. To be sure, that could also mean that its present workforce needs to learn novel technology skills quickly to stay relevant.

Wipro is in the process of appointing individual leaders in each of the 6 industry-serving segments and 5 solution offering verticals or practices, who shall be entrusted with the job of automating everyday maintenance work.

Until now at Wipro…

K.R. Sanjiv – Wipro’s chief technology officer, in consultation with numerous segment heads utilised to decide which projects could use Holmes. Wipro’s 2 larger rivals, TCS and Infosys, too have a similar centralised division that oversees the adoption of their respective intelligent automation platforms named Ignio and Mana. This explains why these companies which employ lacs of engineers have embraced automation only in tiny pockets.

At Wipro, this shall now change…

Last month Abidali Neemuchwala, CEO of Wipro said that they announced internally in this quarter that they will have a more federated structure than running it from a centralized unit, which will further increase the pace of adoption.

Hyper-automation is among the central pillars of Neemuchwala’s vision of making Wipro a 15 billion-dollar firm by 2020 with an operating margin of 23 per cent. Wipro ended the year to March with 7.35 billion-dollar in revenue and 20.5 per cent profitability.

A spokesperson for Wipro said that the company was consolidating all its automation assets and capabilities under Holmes brand and significantly enhancing its investment in hyper-automation.

In the first 6 months of the present financial year, Wipro claims to have freed and re-deployed over 4,300 employees in novel areas of work, on account of automation. The management’s decision to decentralise decision-making means that Wipro could look to automate work of around 10,000 engineers by end of the financial year.

Experts are encouraged by the management’s decision:

An expert said that aligned with a market maturation around the broad notion of Intelligent Automation, Wipro was changing gears in the way it was engaging with stakeholders.

An executive said that each of these Holmes leaders would be evaluated on the work they would automate. All of them would have individual targets, he added.

Wipro’s aggressive push towards embracing automation comes at a time when automation platforms and cloud computing are endangering the labor arbitrage enjoyed by Indian IT vendors.

Source: www.dynamiclevels.com

Wipro, Mindtree Shares Slump Adding To IT Sector Gloom

Wipro share price slumped over 4 per cent to Rs.477 after India's third biggest outsourcer came out with a soft guidance for the December quarter (Q3). The Bengaluru-based company had announced its earnings on Friday after the market hours. The outsourcer registered in-line earnings for the 3^rd quarter but the Dalal Street was disappointed by its guidance for the December quarter. 

Wipro gave a dull revenue growth outlook for the present quarter, citing global political uncertainties and seasonal matters such as furloughs and reduction in working days.Wipro said that it expected revenue from its information technology (IT) services business for the quarter ending December 31, 2016 in a range between 1,916 million dollars, roughly flat, and 1,955 million dollars, up 2 per cent over the quarter to September 30, 2016.

Mindtree, another mid-tier outsourcer, which also announced earnings after market hours on Friday, 21^st Oct, also reported weak numbers for the September quarter. Its dollar revenue declined 3 per cent sequentially to 193 million dollars in the September quarter. Mindtree share price slumped over 5 per cent to Rs.451.

The BSE sector index for IT stocks, BSE IT, is down over 10 per cent in the past 6 months as compared with 9 per cent gain in broader Nifty50 index. India's 150 billion dollar-plus information technology sector has been hit by delays in technology spending by foreign clients who make up for the bulk of its revenue. Wipro's muted forecast echoes the cautious business outlook given by bigger rivals.

Earlier this month, top software exporter Tata Consultancy Services Limited or TCS reported lacklustre revenue growth, while 2^ndlargest rival Infosys cut its annual revenue growth guidance for the 2^nd time in 3 months.

Mindtree and Wipro are among the top 500 Shares identified by Dynamic Levels research team for the current quarter out of 1700 Shares listed on the NSE. They have strong fundamentals and are safe to invest in, as per Dynamic Levels analysts.

Wipro’s Strategy will pay off by Mar 2018: Neemuchwala

Abidali Neemuchwala, the chief executive of Wipro Ltd expects the currently pursued strategy to pay off and to help India’s third-largest software services company of the country end the next fiscal year with industry-matching growth.

Bengaluru-based Wipro does not give any annual forecast (it provides quarterly guidance) and for this very reason, it has clarified that this should not be interpreted as a target.

However, Wipro, which over the last few years has shown signs of struggles to keep pace with its peers, believes that measures taken since the month of February this year to generate more business for the firm from the existing clients, investments in building capabilities in new technologies, like cloud computing platforms and Internet of things, and an aggressive mergers and acquisitions (M&A) strategy should help it get to industry-matching growth.

The Company under Neemuchwala, who joined the company in April last year as chief operating officer and was elevated to his current role as the CEO in February 2016, posted a 0.8 per cent decline in dollar revenue growth in the second quarter, mirroring the growth pangs faced by country’s US$ 150 billion outsourcing sector. Wipro’s large rivals such as, Tata Consultancy Services Ltd (TCS) and Infosys Ltd, run the risk of slower growth this year than the 7.1 per cent and 9.1 per cent growth recorded last year.

To be sure, some of the early signs of the measures taken have started reflecting quite well, with the company improving its ability to generate more business from existing clients, and arresting declining profitability.

Wipro has managed to improve its average revenue per client to about US$ 6.6 million at the end of September from US$ 6 million at the start of the financial year in the month April.

The firm managed to hold on to a 17.8 per cent operating margin, same as during the April-June period, despite giving salary raises to close to 174,000 employees during the July to September period. The company’s margins had narrowed sharply after it reported 19.7 per cent profitability in the March quarter.

Significantly, Neemuchwala also said Wipro’s aggressive M&A strategy will boost its chances of becoming a US$ 15 billion firm by 2020. Wipro, which ended with US$ 7.35 billion in yearly revenue at the end of March 2016, declined to disclose what percentage of revenue will come from buyouts.

Meanwhile Wipro share price is trading at Rs 480.50, down by 3.75 per cent. Get the most important support and resistance levels of the share at Wipro share price forecast.

Wipro’s posts weak Q2, Anticipates slow Q3

Wipro, the leading Software services provider of the Country has reported a 0.9 per cent growth in consolidated profit at Rs 2,070.4 crores for the second quarter (July to September) on sequential basis. Consolidated revenue during the quarter increased 1.5 per cent to Rs 13,896.8 crores compared with Rs 13,697.6 crores in preceding period. Dollar revenue from IT services segment, that the street closely tracks, declined 0.8 per cent quarter-on-quarter to US$ 1,916.3 million in September quarter but grew by 0.9 per cent in constant currency.

“We delivered revenues in constant currency at the top end of guidance range,” commented Abidali Z Neemuchwala the chief executive officer in the filing to the regulatory bodies. The company had expected dollar revenue growth of 0 to 1 per cent in constant currency for second quarter of FY17. Dollar revenue missed analysts’ estimates but the same in constant currency was slightly above expectations. According to an analysts’ poll, dollar revenue growth estimated at 0.4 per cent and constant currency at 0.5 to 0.7 per cent for the quarter while the rupee revenue growth expected at negative 1.5 per cent.

IT services revenue in rupee terms grew by 0.2 per cent quarter-on-quarter to Rs 13,136 crores in the second quarter. Wipro expects its revenues from IT services business to be in the range of US$ 1,916-1,955 million for October-December quarter, a growth of 0-2 per cent for the quarter ended 30^th September 2016. The above mentioned guidance was lower than analysts’ expectations of 1 to 3 per cent growth for the quarter. Neemuchwala expects to see more uncertainty in US after the presidential elections. IT services EBIT (earnings before interest and tax) increased 0.4 per cent quarter-on-quarter to Rs 2,337.2 crores during the quarter.

EBIT margin remained unchanged at 17.8 per cent on sequential basis, which was ahead of estimates of 17.04 per cent, due to operational efficiency. Headwinds in salary increases were offset by strong operational improvements in automation-led productivity, offshoring and utilization improvements.

Jatin Dalal the chief financial officer said demand environment is mixed in a kind of seasonally weak quarter affected by furloughs and lower number of working days. Business units – Healthcare, life sciences & services grew 4.3 per cent and energy, natural resources & utilities 1.3 per cent on a constant currency basis sequentially. America business during the quarter under review registered a 1.8 per cent growth and Europe 0.3 per cent on a constant currency basis sequentially while Asia-Pacific and other emerging markets along with India & Middle East business declined 0.1 per cent and 1.1 per cent, respectively.

The company announced during the quarter digital ecosystem revenue contribution was 19.6 per cent and consulting ecosystem 5 per cent to total revenue. Gross utilization in Q2 improved to 71.2 per cent from 69.9 per cent and net utilization (ex-trainees) to 82.8 per cent from 79.7 per cent on sequential basis. Wipro has signed a definitive agreement on Thursday to acquire Appirio, which is a global cloud services firm, for a purchase consideration of US$ 500 million. The acquisition is expected to be closed by the month of December 2016. “This acquisition will establish Wipro’s dominance in cloud application services and further strengthen Wipro’s brand as a digital partner of choice,” Neemuchwala said.

This result was declared after the market hours on Friday when Wipro share price already closed at Rs 499.20 apiece on NSE, up by 0.73 per cent.