Date:19/01/2006 URL: http://www.thehindubusinessline.com/2006/01/19/stories/2006011902720100.htm

Back Wipro Q3 net up 27 pc, revenues rise 30 pc

Our Bureau

Bangalore , Jan. 18

ROBUST volumes and better offshore leverage helped Wipro Ltd to beat its own estimates and street expectations to post a year-on-year growth of 27 per cent in net profit and 30 per cent in revenues for the December quarter.

Wipro's net profit for the third quarter of this fiscal stood at Rs 543 crore on revenues of Rs 2,744 crore, against a net of Rs 426 crore on revenues of Rs 2,110 crore in the same period of last year.

On a sequential basis, the revenue growth was 9.5 per cent while the profit growth was about 14 per cent.

"The quarterly results signal the next phase in Wipro's growth," said the Chairman, Mr Azim Premji. Wipro crossed two significant milestones during the third quarter as its IT business crossed the annual run rate of Rs 10,000 crore and its global IT headcount crossed 50,000. Following the results, Wipro shares closed higher by 2.4 per cent on Wednesday at Rs 460 on the Bombay Stock Exchange, while the Sensex was down 77 points.

For the quarter-ending March 31, 2006, Wipro expects revenues from its Global IT Services business to be $510 million, a sequential growth of about eight per cent.

The two acquisitions that Wipro concluded during this quarter — NewLogic and mPower — are expected to contribute about $10 million to the topline in the fourth quarter.

Acquisitions for growth: Commenting on growth plans Mr Premji said the company was looking to build new skills and enter new markets through acquisitions, seeking bargains among smaller firms forced into consolidation.

"We would progressively make larger acquisitions, but not significantly larger ones. We are looking at increasing our footprint in Europe," Mr Premji said.

Europe: Revenues from Europe grew by about 51 per cent accounting for 33 per cent of the overall revenues. The revenues from the Global IT Services and Products business, driven by volume growth of 13 per cent, grew 34 per cent year-on-year and 12 per cent sequentially to Rs 2,122 crore during the third quarter.

Infotech: Revenues of Wipro Infotech, the domestic IT business grew by 17 per cent to Rs 399 crore, while the Consumer Care and Lighting grew 20 per cent to Rs 155 crore. BPO revenues grew by 12 per cent to Rs 189 crore.

The Wipro Chief Financial Officer, Mr Suresh Senapaty, said the company improved its operating margins to 22 per cent despite absorbing the impact of wage hike for its offshore team and lower price realisation and utilisation.

Rupee volatility had no impact: The rupee volatility during the quarter did not have any impact on the company's earnings as hedging costs offset gains from its depreciation, Mr Senapaty said adding that the company had $600 million worth of hedging contracts.

Wipro signed up 61 new clients during the quarter the highest ever in its history and added 5,189 people.