Wipro is the second information technology (IT) services company after TCS to come out with a guidance on the impact of Chennai floods on its operations and third quarter revenues.
The Bengaluru-based company said in a press statement on 16 December that the heavy downpour in Chennai in the first week of this month forced the company to invoke business continuity plans, entailing higher one-time costs besides impacting revenues and operating margins for the quarter ended December 2015.
"Both these factors will impact our Operating Margins for the quarter. Revenues from our IT Services business are expected to be in the previously communicated range of $1,841 million to $1,878 million; However, we expect revenues to be in the lower half of the guidance range," the company said in the statement.
The guidance was based on exchange rates of GBP/USD at 1.55, Euro/USD at 1.12, AUD/USD at 0.72, USD/INR at 65.34 and USD/CAD at 1.33, the company said.
The company employs about 22,000 people in its facilities in Chennai.
Brokerage firm Angel Broking said it has reduced its 2015-16 sales forecast and EPS by 3.1% and 2.7% respectively.
On 11 December, TCS had given an update on the impact of Chennai floods on its revenues for the third quarter ending December 2015. The Mumbai-based company has about 65,000 employees at its offices in Chennai.
"While majority of facilities in Chennai opened for normal business functioning on Monday, December 7, 2015, attendance rates were lower than normal as employees were still recovering from the flood's aftermath.This is expected to have a material impact on the company's revenues in the seasonally weak third quarter ending December 31, 2015," it had said.
Wipro was trading at Rs 555.75 on the BSE on Wednesday at 11.50 am, down 0.51%. TCS was up 1.07% and trading at Rs 2,400.55.
The S&P BSE Sensex was trading higher at 25,508, a gain of 190 points, or 0.74%.
Infosys, another IT services whose operations in Chennai were affected, is yet to come out with an upate on the impact of the massive floods on its third quarter revenues. The company will be announcing its Q3 results on 14 January, 2016.
The Infosys stock was trading at Rs 1,090.65, up 1.28%.
