Wipro net profit up 21 percent, projects higher IT revenue (Lead)

January 20th, 2010 - 1:02 pm ICT by IANS  

Bangalore, Jan 20 (IANS) Wipro Ltd beat market expectations Wednesday by registering 21 percent year-on-year (YoY) increase in net profit at Rs.1,217 crore (Rs.12.17 billion/$265 million) for the third quarter (October-December) and projecting higher revenue from its global IT services for the fourth quarter of this fiscal (2009-10).
Sequentially too, profit after tax for quarter under review (Q3) grew by 4.7 percent from Rs.1,162 crore in the second quarter (July-September) of this fiscal, as per the Indian accounting standard.

“We have seen a positive demand environment, which has driven broad based sequential growth across all our verticals, service lines and geographies. In 2010, we expect IT budgets to be flat to marginally positive,” Wipro chairman Azim Premji said in a regulatory statement.

Accordingly, the global software major projected $1.17 billion from its IT services business for this quarter (Q4) of FY 2010.

“Revenue from IT services business will be in the range of $1.16-1.18 billion in fourth quarter despite flat IT budgets,” Premji noted.

The guidance for Q4, albeit marginal, is based on its resilient performance in third quarter at $1.13 billion compared to the projected $1.11 billion, an increase of 2.4 percent YoY and 5.8 percent sequentially (quarter-on-quarter).

In rupee terms, revenue for IT services stood at Rs.5,164 crore, a YoY growth of two percent and a sequential growth of 3.4 percent.

“Our ability to offer integrated service lines and be a transformational partner to our clients helped us secure several large deals this quarter. Our focus in driving consulting led engagements to solve business challenges is being recognised by our customers,” Premji added.

Unlike its rival Infosys Technologies Ltd, Wipro does not give revenue guidance for the entire fiscal or for its global IT services business.

The IT bellwether’s consolidated revenue for the quarter under review (Q3), however, grew only by five percent YoY to Rs.6,966 crore, as per the Indian accounting standard.

Under the International Financial Regulatory Standard (IFRS), net income for Q3 increased by 19 percent YoY to $259 million and total income to $1.5 billion, six percent up YoY.

“We reported another strong quarter driven by significant uptick in volumes,” executive director and chief financial officer Suresh Senapaty pointed out.

The IT services business added 31 clients and added 4,855 employees (net) during the quarter, taking its total number to 102,746 techies.

“We have maintained margins despite a decrease in our rate realisation and a strong appreciation of the rupee. Our order booking has been good and the banking, financial services and insurance (BFSI) has bounced back strongly,” Senapaty added.

IT services business accounted for 74 percent of the group’s revenue and 90 percent of profit before tax.

IT products business recorded 20 percent YoY growth to Rs.1,002 crore and Wipro Consumer Care & Lighting business grew 14 percent to Rs.601 crore.

“Our India & Middle East business registered some strong wins during the quarter. Wipro Arabia won a very large order from an upcoming university in Saudi Arabia for end-to-end set up of their IT and telecom infrastructure,” Senapaty added.

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