Wipro’s IT outlook remains flat on marginal growth (Lead)

January 20th, 2012 - 2:05 pm ICT by IANS  

Bangalore, Jan 20 (IANS) Wipro Ltd Friday projected a flat revenue growth from its global IT services business in the fourth quarter (January-March) as sequential growth in the third quarter was marginal at 2.2 percent over the second quarter of this fiscal (2011-12).

Though revenue from IT services at $1,505 million ($.1.51 billion) for the quarter under review (Q3 - October to December) was 12 percent higher year-on-year (YoY) and in line with its forecast, the company said revenue for the fourth quarter (Q4) would be in the range of $1,520-1550 million ($1.5 billion).

“We expect revenues from our IT services business to be around $1,525 million ($1.53 billion) in the fourth quarter, which will be a sequential growth of 1-3 percent on constant currency,” Wipro chief financial officer Suresh Senapaty said in a statement here.

The company reported net profit of Rs.1,456 crore (Rs.14.56 billion) for the third quarter, registering 10 percent YoY growth and 12 percent sequentially from the second quarter (Q2), according to the Indian accounting standard.

Consolidated revenue for the quarter under review, however, shot up 28 percent YoY to Rs.9,997 crore (Rs.99.97 billion) — 8.6 percent up sequentially.

Under the International Financial Regulatory System (IFRS), net income for the quarter is $275 million and total revenue $1.89 billion.

“We saw broad-based growth with five of the six verticals growing upwards of four percent in constant currency (Rs.53) during the quarter under review, exceeding the guidance range,” Wipro chief executive T.K. Kurien said in the statement.

IT revenue in rupee terms also increased 28 percent YoY to Rs.7,608 crore (Rs.76.08 billion) but operating margin at 20.8 percent was 2.2 percent lower YoY and 0.8 percent sequentially.

“Our client mining strategy continues to show progress with six customers contributing more than $100 million,” Senapaty said.

As flagship business, IT services accounted for 76 percent of the company’s total revenue and 92 percent of its operating income.

IT services business division added 39 customers during the quarter, taking the total number of clients to 953 from 930 quarter ago and 880 year ago.

The company added 5,004 people for IT services business, taking the total number of IT employees (techies) to 136,734 from 131,730 quarter ago and 119,491 year ago.

Attrition of IT employees declined marginally 19 percent as against 21.1 percent quarter ago and 21.6 percent year ago.

“Voluntary attrition declined steeply to 14.2 percent from 18.5 percent quarter ago and 21.7 percent year ago,” Senapaty added.

The company has also seen positive feedback from its customers and employees on restructuring its business and top management.

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