Corporate
TT Correspondent | 10 Apr 2018Wipro said its fourth-quarter revenue and profitability would be hit by the insolvency proceedings of one of its telecom clients in India, making this the second quarter in a row in which a troubled client has hurt the company’s results.
The company said it has been working with the Insolvency Resolution Professional to discuss the potential outcome of its client’s insolvency petition.
“It is estimated that this development will have an impact on both revenue and profitability. The company is likely to see an impact on profitability at the net income level in the range of 65-75 basis points of the consolidated revenues for the quarter ended March 31, 2018,” Wipro said in a statement to the Bombay Stock Exchange.
Last quarter, Wipro’s results were hit by the insolvency of a UK client. The company said it had made a $49.7 million provision relating to that insolvency.
Though the Bengaluru-headquartered IT services company did not name the telecom client, it said that it had initially signed a deal with the client in 2008 and had renewed the contract in 2013.
Wipro added that the client had filed its insolvency petition on February 28.
Telecom provider Aircel filed its insolvency petition on February 28 saying it was ‘facing troubled times in a highly financially stressed industry.’