— PHOTO: G. R. N. SOMASHEKAR

STRATEGY PAYS: Azim Premji (left), Chairman, Wipro, and Bill Owens, Director, addressing a press conference in Bangalore on Wednesday.

BANGALORE: The net profit of Wipro for the second quarter (July-September) rose by 46 per cent to Rs. 700.20 crore from Rs. 478 crore in the same period a year earlier in a booming global outsourcing market. The consolidated revenues of Wipro for the second quarter went up by 41 per cent to Rs. 3,546.20 crore from Rs. 2,506.80 crore a year ago, as it added 54 new clients that included Global 500 or Fortune 1000 clients.

The third largest software exporter, thus, earned $589 million from global IT services and products during the second quarter, surpassing its own guidance of $577 million.

Wipro Technologies contributed higher to the volume growth in the second quarter by garnering revenues of Rs. 2,720.50 crore, 44 per cent more than a year ago period.

Revenues of Wipro Infotech grew by 36 per cent to Rs. 542.60 crore, while that of Wipro Consumer Care and Lighting rose by 41 per cent to Rs. 202.50 crore.

"Our IT services and products business witnessed a strong volume growth and operational improvements during the quarter. Further, our BPO services business also posted a strong revenue growth and operating margin improvement, reinforcing our confidence that it is moving in the right direction of delivering industry-leading growth rates. Looking ahead, for the quarter ending December 2006, we expect revenue from our global IT services and products business to be about $633 million,'' Azim Premji, Chairman, Wipro, told reporters here on Wednesday while announcing the results.

Suresh Senapathy, Chief Financial Officer, Wipro, said operational improvements and superior BPO services profitability helped in significantly off-setting the pressure on profitability arising out of wage increases and non-cash charge of restricted stock units issued during the quarter.

During the quarter, Wipro hired 4,744 professionals (net), taking its total headcount to 61,179 employees. It hiked salaries for off-shore staff from September that covered two-thirds of the workforce.

A wage hike for the rest of the employees will take effect from November. "This is expected to have a much more sobering impact on the attrition we have been seeing so far,'' Mr. Senapathy said.

The U.S. continued to be the major market for Wipro, contributing 63 per cent of its total revenues, followed by Europe (32 per cent) and Japan (four per cent).

Mr. Premji said he did not anticipate any slowdown in the U.S. market for global sourcing despite forecasts of a possible slowdown in the world's largest economy. "We are not seeing an environment which is negative going forward in terms of global sourcing not in the third quarter,'' he stated.

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