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Wipro Q1 net up 97%

Our Bureau

BANGALORE, July 20

WIPRO Ltd's net profits grew by 97 per cent over the corresponding quarter last year to Rs 214 crore. Revenues grew to Rs 798 crore, an increase of 28 per cent year-on-year, a performance backed by cost cutting, and strategies that seem to have paid off.

#However, results showed a negative growth vis-a-vis the previous quarter. Total revenues in Q4 last year was Rs 938 crore and PAT was Rs 217 crore.

``Dont look at quarter to quarter results,'' Mr Premji told press persons.``We still stand by our commitment to shareholders and our revenue forecast of 40-45 per cent, ahead of industry growth,'' he said. The company is also firm about its famous 4 x 4 target of 4 billion by 2004.

The company has been following a three-pronged strategy -- of going after the large $ 100-billion systems integration and technology infrastructure market competing with global players; entering the APAC and Middle East regions through Wipro Infotech and following the Six Sigma processes and eprocurement as strategies to cut costs, said the Chairman, Mr Azim H Premji.

#Wipro Technologies, which contributed a major chunk of revenues at 65 per cent, has shown a growth in offshore realisations of 3.4 per cent and onsite realisations of 2.6 per cent. Wipro Technologies also contributed 93 per cent of the PBIT.

Revenues from the Global IT arm were Rs 521 crore for the quarter and PBIT was Rs 190 crore. Operating margins went up to 36 per cent for the first quarter this year as against from 31 per cent in Q1 ended June 2000, and 35 per cent in Q4 last year.

The increase was primarily due to increase in offshore realisation by 15 per cent and onsite realisation by 16 per cent

year-on-year.

Utilisation rates came down 2 points, but the Vice-Chairman, Mr Vivek Paul, put that down to the strategy the company has adopted of not compromising on rates.

According to Mr Premji, the company had the "option of using price plays for getting volumes versus the tougher and long term beneficial approach of focusing on value, leveraging our technology skill sets and Six Sigma Quality approach to delivery. We chose to pursue big deals."

In the quarter, Wipro's R&D Services contributed 52 per cent of the Global IT services revenue, Enterprise Solutions contributed 42 per cent and the remaining 6 per cent, was contributed by Technology Infrastructure Services.

Continuing its derisking strategy, the company has brought down the percentage of its revenues from the US from 65 per cent to 60 per cent compared to the corresponding quarter last year. Europe has moved up to 33 per cent from 27 per cent and Japan is 6 per cent.

Wipro Infotech, accounted for 20 per cent of the revenues and 4 per cent of the PBIT. PBIT grew by 26 per cent

to Rs 8 crore. Operating margin expanded from 3.8 per cent for the quarter ended June 2000 to 5 per cent for the three-month period ended June 2001, driven by growth in services and solutions business by 24 per cent year-on-year. In its first quarter of operations in Asia Pacific and the Middle East, the business won two marquee customers and generated good interest among prospect base.

The Consumer Care and Lighting business recorded revenues of Rs 75.9 crore with PBIT at Rs 9.7 crore, contributing 10 per cent of total revenue and 5 per cent of the PBIT for the quarter. Growth in the toilet soaps business was 10 per cent over the quart er ended June 2000, ``significantly higher than the industry average'', according to the company.

Pic.:Mr Azim H. Premji, Wipro Chairman, at a press meet in Bangalore on Friday.

Picture by G.R.N. Somashekar