Despite wage hikes, an appreciating rupee, and fewer working days in the quarter nibbling at its net profit margins, the soaps to IT major, Wipro recorded a consolidated net profit (Indian GAAP figures) of Rs 854 crore for the third quarter ended December 31, 2007 -- a 11.6% growth over the corresponding quarter last financial year. The company attributed the growth in profit to addition of new clients and improvement in price realisation.
The consolidated revenue for the quarter went up 33.5% to Rs 5,303 crore when compared with the same period last financial year. On a sequential basis, the net profit of the company went up 4% while consolidated revenue increased 11%.
"The results for the quarter are satisfying. We continue to see good momentum in all our businesses. Revenues from our global IT services at $910.1 million were ahead of our guidance ($905 million). Our financial services business grew nearly double digit sequentially during the quarter despite this challenging times for the sector," said Azim Premji, chairman, Wipro.
On the operational front, the company saw a 200 basis points increase sequentially in the mix of revenues from fixed price projects. "Our price realisation improved during the quarter by about 50 basis points sequentially. We had strong growth in our BPO business and testing services. Our top 10 clients grew at a healthy rate during the quarter," he added.
Chief financial officer Suresh Senapathy said improved realisation and rationalisation of bulge mix helped Wipro in fully mitigating the pressure on profitability on account of foreign exchange impact. The drop in the global IT margins by 100 basis points sequentially was attributed, primarily to the Infocrossing acquisition. The company has seen an increase in the number $50 million clients and now has its first $100 million client.
During the quarter, Wipro’s IT business won five multi-year multi-million dollar deals. The company’s India, Middle East and APAC IT business recorded 49% YoY growth in PBIT and 39% YoY growth in revenues (Rs 971.6 crore). Wipro Consumer Care and Lighting business revenue (Rs 434.7 crore) grew 107% YoY and PBIT grew 99% YoY. It crossed Rs 400 crore in revenue per quarter.
The company added 39 new clients during the quarter of which nine were technology clients with the rest 30 being enterprise clients. The number of employees as of December 31, 2007, was 79,832. It includes 59,925 employees in the IT services and product business and 19,907 in the BPO services business. The company added 2,389 employees in the IT services and products business during the quarter.
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Friday, January 18, 2008
Wipro consolidated Q3 net up 12%
Friday, January 4, 2008
IT stocks witness profit booking
IT stocks wilted ahead of third quarter results. According to analysts, top IT stocks witnessed profit booking as the latest US job data failed to provide any positive signal while the rupee moved up 0.22 per cent against the green back.
The BSE IT Index finished with a loss of 1.02 per cent on Friday while the benchmark Sensex comfortably closed the session up 2.38 per cent, after touching its all-time high.
Spending plans
According to Mr Ajay Jaiswal, an analyst with Angel Broking, the IT counters are drifting sideways in absence of clear direction. “All the top stocks are in the midway between their recent lows and tops.”
From January 11 onwards, the quarterly results are likely to come in.
Till then, a drifting price trend could reflect the market’s indecision. There is still no clarity on the US IT spending plans.
But industry insiders said in the next four weeks many of the Key US spenders would firm up their annual budgets.
Mr S. Mahalingam, CFO, TCS, feels though the US financial sector has been through a troubled times in the past quarter, no corporate has said they are reducing spending.
He said that so far the existing rates have not come under pressure.
Till the dollar touches Rs 40 or above, there will be sustained weakness in IT stocks. The market is waiting for Infosys quarterly results and guidance to provide direction," said Mr Vishwas Agarwal, independent technical analyst.
Cost Realities
The guidance by the IT companies is expected to capture the unfolding reality to an extent, according to analysts.
“But until the end of the first quarter of 2008, one may not be absolutely sure how the rupee trend (against dollar) would pan out in 2008-09 and how dollar-denominated IT market would readjust to the emerging cost realities,” said an official with a domestic IT major.
Among the top counters, the fall in Satyam was the biggest at 0.91 per cent, followed by Infosys (0.83 per cent), TCS (0.58 per cent) and Wipro (0.09 per cent).
The average delivery ratio of around 60 per cent in these stocks suggested more of profit booking trend than trading activity.
