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Wipro Q2 profit grows 19%

Wipro Ltd said its second quarter profits grew almost by a fifth aided by a weak currency and operational efficiencies, but forecast a muted outlook for its IT business in the December quarter reflecting the challenging market conditions.

Wipro beat street estimates to report a net profit of Rs 978 crore on a revenue of Rs 6,507 crore for the July-September quarter as compared to a net of Rs 823 crore on a revenue of Rs 4,776 crore in the quarter a year ago.

IT services revenues that accounted for three-fourth of total earnings grew ahead of company’s forecast to Rs 4,750 crore ($1,110 million) aided by strong growth in verticals such as retail, transportation, manufacturing, healthcare and financial services. IT products revenues grew by half to Rs 1,002 crore and accounted for 15.4 per cent of total revenues. Consumer care business grew by 42 per cent to Rs 527 crore.

“Credit is the lifeline of any economy and that lifeline seems to have got impaired. The overall sentiment is cautious,” said the Chairman, Mr Azim Premji.



“Our outlook is cautious in the near term given the extent of strain on the global economy. However, we are confident on the resilience of our business model to tide over these challenging times,” Mr Premji said.

For the December quarter, Wipro expects its IT business to grow by a per cent to $1,121 million.

The Wipro stock shed six per cent to end at Rs 279.25 per cent in a weak market on the BSE.

“Based on the Q2 performance, things look a bit on the positive side, but there could be downturns in the next quarter,” an analyst said. Revenues from BFSI (banking, financial services and insurance) grew 7.8 per cent and utilisation increased by 2.4 per cent, while attrition fell to 11 per cent.

“Improved realisations and operational efficiencies helped us improve margins in IT services business by 10 basis points to 21 per cent in spite of salary hikes to offshore employees,” said Mr Suresh Senapaty, Chief Financial Officer.

Wipro signed 28 new clients that included six multi-million dollar deals.
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