Expect improvements much more strongly from Q3: Wipro

Bengaluru, Jul 19 () Wipro expects improvement in itsperformance to be reflected "much more strongly" in the laterhalf of 2016-17 even as it issued a muted outlook for theJuly-September quarter.The city-based firm, which posted 2.6 per cent sequentialrise in IT services revenues at USD 1,930.8 million in theApril-June quarter, expects an almost flat growth in thecoming quarter.It has guided for a revenue of USD 1,931 million toUSD 1,950 million for the July-September quarter, translatinginto less than one per cent sequential growth."We expect the trajectory of growth to build graduallyover the course of the year. We will drive operationalimprovements in Q2, but we may not see the full benefitsbecause there are two additional months of merit salaryincreases that will come into effect," Wipro CEO and Member ofthe Board, Abidali Z Neemuchwala said.He added that he expects "improvements will be reflectedmuch more strongly in Q3 and beyond".Wipro's peer Infosys shared a similar sentiment when itlowered its dollar guidance for 2016-17 to 10-11.5 per centfrom 11.8-13.8 per cent (projected in April) due to currencyvolatility and headwinds.Infosys does not give quarterly guidance.On the impact of Britain's exit from the European Union, Neemuchwala said while Brexit hasn't had any immediate impact, it is "on the top of the mind". "Brexit's immediate impact is on the currency. In themedium term, we believe Brexit could delay some of thedecision making, but we have not seen any immediate impact ofit," he added.Wipro's peers have also indicated that they are in a"watch mode" even as analysts indicate that technologyspending could be impacted, especially in the banking,financial services and insurance segment on account of theUK's exit from the EU.The Azim Premji-led firm attributed the fall in marginsand effectively net profit to wage hikes and headwinds in itsIndia and Middle-East business.Neemuchwala said the company has given "healthy salaryincrease" to its employees."We are focussed on building a sustainable business model.We have completed the restructuring of our consulting businessand we are working on restructuring our India and Middle-Eastbusiness model," he added. SR MBIARD