Wipro, the soaps to software major, riding on operational efficiencies has reported a 19 per cent increase in its net profit to Rs 978 crore (Rs 9.78 billion) for the second quarter of the current fiscal when compared to the corresponding period of last year. Revenues were up 36 per cent at Rs 6,507 crore (Rs 65.07 billion).
The flagship IT business division grew by 36 per cent to Rs 4,750 crore (Rs 47.5 billion). In dollar terms, this business grew by 29 per cent y-o-y to $1,110 million and a sequential growth of 4 per cent. The profit before tax for the IT services business grew by 30 per cent to Rs 996 crore (Rs 9.96 billion).
Suresh Senapaty, executive director & chief financial officer of Wipro, said, "The performance for the quarter is a strong reflection on our ability to deliver operational efficiencies.
"Rate realisation and fixed price projects mix improved sequentially by 200 basis points and 100 basis points respectively.
"Our continued emphasis on driving utilisation through an integrated delivery model resulted in utilisation moving up by 240 basis points. These strong gains on operational front helped us improve our margins in the IT Services business in spite of effecting salary increases."
However, the major concern for Wipro is the guidance for its IT services business. Wipro has said that it will grow this business by just under one per cent for the third quarter.
Azim Premji, chairman, Wipro said: "The global economic environment has deteriorated significantly over the past couple of months, and 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.
"Looking ahead, for the quarter ending December 31, 2008, we expect our Revenue from our IT Services business to be approximately $1,121 million."
Highlights of the results
- Wipro Limited revenue increased by 36% YoY to Rs 6,507 crores (Rs 65.07 billion)
- Profit after tax grew by 19% YoY to Rs 978 crores (Rs 9.78 billion).
- IT services revenue in dollar terms was $1,110 million, a sequential growth of 4.0% (5.6% in constant currency) and YoY growth of 29%. In rupee terms, revenue stood at Rs 4,750 rores (Rs 47.5 billion), a YoY growth of 36%.
- Profit before interest & tax for IT services segment was Rs 996 crores (Rs 9.96 billion), a growth of 30% YoY.
- IT services business added 28 new clients during the quarter.
- IT products business recorded a 50% YoY growth in revenues and 34% YoY growth in PBIT.
- Wipro consumer care and lighting business revenue grew 42% YoY and PBIT grew 46% YoY.
