Financial Daily from THE HINDU group of publications
Saturday, Oct 16, 2004
Corporate Results - Software
Info-Tech - Financial Performance
Wipro Q2 net profit rises 79 pc
Bangalore , Oct 15
A ROBUST growth across all its business divisions helped Wipro Ltd post its highest year-on-year growth in net profits in last 12 quarters.
Net profits for the quarter-ending September 2004, grew 79 per cent to Rs 412 crore, much above analysts' expectations, compared to the Rs 230.2 crore earned in the corresponding quarter last year. Revenues for the quarter were up 44 per cent to Rs 1,979 crore (Rs 1,374 crore).
"The strong results clearly demonstrate that Wipro is winning in a market where customers are seeking higher value," said the Chairman, Mr Azim Premji. "Looking ahead, the environment we see is one of strong volume growth and stable prices," he told a press conference.
Tracking Q2 results, the Wipro stock closed lower at Rs 650, over Thursday's closing price of Rs 676.95. For the quarter-ending December 2004, Wipro expects revenues from global IT business to be approximately $347 million, Mr Premji said.
Revenues from global IT business grew 46 per cent at 1,502 crore during Q2, whereas the India and Asia Pacific IT services business grew 41 per cent to Rs 300 crore. The consumer care and lighting business recorded revenue of Rs 116 crore, up 32 per cent.
The company signed up 34 clients including European travel giant TUI and a $17-million five-year deal with Australian firm AXA. "The TUI deal is between $25-50 million, spread over five years," said the Wipro Vice-Chairman, Mr Vivek Paul.
"Good volume growth and stable pricing environment resulted in revenues of $327 million for global IT business, ahead of our guidance of $318 million," Mr Paul said. "Excellent execution and continuing focus on improving productivity helped deliver operating margin expansion. The company saw good growth in BPO and technology infrastructure services," he added.
Wipro's R&D business grew by 50 per cent, while the technology infrastructure business, which drove the TUI deal, was up 55 per cent, Mr Paul said. Revenues from the package implementation practice jumped 74 per cent, whereas the software testing business, for which Wipro started reporting revenues separately, grew 84 per cent on a year-on-year basis, he added.
The European business, which accounted for 29 per cent of the overall revenues, saw a growth of 56 per cent on a year-on-year basis, Mr Paul said. The US accounted for 66 per cent of the company's software exports and Japan accounted for five per cent.
The company added a net of 5,546 employees to its rolls taking overall headcount to over 37,000. "We continue to benefit from investments made over last few years. We have good momentum across our businesses. Coupled with our compelling portfolio of services, this gives us immense confidence on our long-term prospects," Mr Premji said.
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