Date:23/04/2005 URL: http://www.thehindubusinessline.com/2005/04/23/stories/2005042301090500.htm

Back Wipro sees flat margins for June quarter

Our Bureau

Bangalore , April 22

WIPRO Ltd expects its profit margins to stay flat in the quarter ending June despite volatility in foreign currencies.

Mr Suresh Senapaty, Corporate Executive Vice-President (Finance), Wipro, said: "Margins are going to be flattish in the current quarter but for the exchange rate."

Wipro expects pricing to be stable going forward, Mr Senapaty said, adding that the company would try to improve efficiencies by having a mix of employees with more juniors to execute the work.

The company, which effected a salary hike in the October quarter last year, has no plans for any salary hikes in the first quarter of the current fiscal, Mr Senapaty said. As on March 31, 2005, Wipro had forward cover to the extent of $318 million assigned to the foreign currency assets as on the balance sheet date. The company has taken a $503-million hedge outside of existing outstanding on the balance sheet, Mr Senapaty said.

The Vice-Chairman, Mr Vivek Paul, said the company saw moderate growth ahead for research-driven services for chipmakers that rebounded on the quarter. It shifted to work based on computing platforms to boost research-oriented work, he said, adding that spending by clients in this segment continues to be constrained. Wipro's business in Europe and Japan grew by 61 per cent and 35 per cent during fiscal 2005.

Wipro said it has not faced any client-related issues over compliance unlike rival Infosys Technologies. "It is more an account-specific issue rather than industry-specific," Mr Paul said.

He added that work related to the new Sarbanes-Oxley accounting law was a service opportunity. "We have a pretty successful Sarbanes-Oxley practice. We have done pretty well," he said.