The Hindu Business Line : Wipro Q1 net grows 25% at Rs 908 cr

Satisfying show: Mr Azim Premji (right), Chairman, Wipro, and Mr Girish Paranjape, Joint CEO, addressing a press conference in Bangalore on Friday. —

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Bangalore, July 18Wipro Ltd, the country’s third largest IT services provider, reported first quarter revenue marginally higher than what it had estimated.

It also forecast a muted growth for the second quarter saying it remains cautious in the near-term given the business environment.

For the latest quarter, revenue from IT services was $1,067 million. The company had forecast revenue of $1,060 million for the period in April.

For the second quarter, Wipro said it expects revenue of $1,089 million, which is an increase of about 2 per cent.

In rupee terms, revenue for IT services was Rs 4,405 crore, which is a growth of 39 per cent compared with the year-ago quarter, Wipro said. IT product revenue grew 44 per cent to Rs 746 crore, the company added. It accounted for 12.5 per cent of total revenue for the quarter.

Total revenue for the quarter comprising IT services, IT products, consumer care & lighting, and others was Rs 5,967 crore, an increase of 43 per cent over the year-ago quarter (Rs 4,203 crore). Profit after tax (PAT) grew 25 per cent to Rs 908 crore against Rs 726 crore.

Sequentially, total revenue grew 5 per cent, and PAT increased 3 per cent. Wipro said it added 108 people (net) during the latest quarter, compared with 3,811 in the year-ago quarter.

Shares of the company fell 3.75 per cent or Rs 14.25 to Rs 365.55 on Friday at the Bombay Stock Exchange.

“Given the headwinds of the macroeconomic uncertainty, our results for Q1 08-09 have been satisfying,” said Mr Azim Premji, Chairman.

Consumer care & lighting business, which accounted for 9 per cent of total revenue, had revenue of Rs 513 crore, an increase of 119 per cent compared with the year-ago period.

The IT budget for most of Wipro’s clients have either been flat or marginally down, and only some have gone up, said Mr Suresh Senapaty, Chief Financial Officer.

He said the current situation has not improved compared to the fourth quarter. The uncertainty has still not disappeared, he said.

However, the IT deployment goes up during a slowdown and the clients would offshore more to reduce costs, he added.

Projections

The company said it expects that the second half of the year (beginning October 2008) would be better than the first. Keeping in mind the contracts the company has signed and the pipeline, the second half looks better, said Mr Senapaty.

Wipro said it added 31 new clients in the IT services business in the first quarter and won seven multi-year multi-million deals. Rate realisation and utilisation improved sequentially by 300 basis points and 50 basis points respectively during the quarter, it added.

The company said it would continue with its previously announced plan of hiring 14,000 freshers this year.

Offer letters have been given and some of them have joined. Others would join in the course of the year depending on the need, it added.