The Chennai flood has impacted the revenue of the Indian information technology majors such as TCS, Wipro, Cognizant and others for the third quarter.
India’s third largest IT services company Wipro said the Chennai floods will have “material impact” on the company’s financial performance for the October-December quarter.
The Bengaluru-based IT major employs around 22,000 people in Chennai and has set up got multiple facilities in the capital of Tamil Nadu state. The recent downpour has impacted the regular business operations of IT majors and these companies had to close their Chennai facility during the period. The companies also had shifted work to various other location to provide continuity of business.
“For the quarter ending December 31, 2015, the incident is expected to have a material impact on the revenues and will result in higher one-time cost incurred towards deployment of our business continuity plan. Both these factors will impact our operating margins for the quarter,” according to filing by Wipro on BSE.
For the third quarter ending December 31, 2015, the company had given a revenue guidance of $1,841 million to $1,878 million. However, with the current scenario the company expects its revenues to be in the lower half of the guidance range.
Traditionally, the third quarter of the financial year is a weak quarter for Indian IT companies as the business is impacted due to low volume growth and holidays including Christmas and New Year.
Last week, Tata Consultancy Services had also issued a similar warning citing the Chennai rains.
