The Hindu : Business : Wipro net up 79 p.c. at Rs. 412 crores

Online edition of India's National Newspaper
Saturday, Oct 16, 2004

Business

Business

Wipro net up 79 p.c. at Rs. 412 crores

By Harichandan A. A.

The Chairman of Wipro, Azim Premji, with the Vice Chairman, Vivek Paul, at a press conference in Bangalore on Friday. — Photo: G. R. N. Somashekar

BANGALORE, OCT. 15. Wipro, the country's third largest software services exporter, matched rival Infosys so far as hiring went, adding some 5,546 staff during the September quarter. The firm said on Friday, it earned profit of Rs. 412 crores in the quarter, up 79 per cent year-on-year.

While its global software IT services and products business drove revenues and contributed most of the group's profits, Wipro's Chairman, Azim H. Premji said, "We have good momentum across our businesses.'' Total revenues increased by 44 per cent year on year to Rs. 1,980 crores, with the global software business, comprising sales in the U.S. and Europe, contributing some 75 per cent of that.

Earnings per share (EPS) increased by 67 per cent year-on-year to Rs. 5.52 after adjusting 2:1 stock dividend. For the six months to September, revenues increased by 49 per cent (year-on-year) to Rs. 3,750 crores ($817 million), a company release said.

Net income was Rs. 710 crores ($154 million), up 74 per cent. The EPS for the six months was Rs. 10.21 ($0.22), up 74 per cent, the release said.

Sequential growth

Mr. Premji said, "Our Global IT services business delivered strong sequential revenue growth of 13 per cent, and improved operating margins for the fifth successive quarter.'' The firm benefited from investments made over the last few years and he had `immense confidence' in its long-term prospects, he said.

Global IT services and products revenues increased 45 per cent year on year, and added 34 new clients including three in the IT enabled services (ITES) segment, the company release said. Wipro's India, West Asia and Asia Pacific IT business signed a five year Au $17 million ($12 million or Rs. 56 crores) contract with Australian insurance and financial services company, AXA, to maintain software applications.

BPO business

For the three months to December, Wipro expected revenues of $347 million (Rs. 1,596 crores) from global IT services and products, Mr. Premji said. Vivek Paul, Vice Chairman of Wipro, said, "We continue to grow in all our key verticals and service lines in our Global IT business.'' Good volume growth and a stable pricing environment resulted in revenues of $327 million (Rs. 1,500 crores), ahead of the company's guidance of $318 million (Rs. 1,463 crores) for that business, Mr. Paul said.

"Excellent execution and continuing focus on improving productivity'' helped better operating margins. "After a couple of subdued quarters,'' Wipro's business process outsourcing (BPO) business `rebounded strongly' with sequential revenue growth of nearly 20 per cent,'' he said.

Better terms for onsite projects and more business going offshore contributed to the better margins, said Suresh Senapaty, corporate executive vice president for finance. This was hurt a bit by lower utilisation of staff. The net addition of over 5,546 employees included around 3,282 in IT services and 2,264 in ITES, Mr. Senapaty said.

During the quarter, Wipro added 34 new customers comprising ten customers in research and development services, 21 in enterprise services and three in ITES.

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