Wipro Q2 profits up 4.4%

With Bureau inputs

BANGALORE: Wipro Ltd said that its quarterly profit rose 4.4 percent, in line with expectations, as India's third-largest software services exporter benefited from stable billing rates amid robust demand from overseas clients.

The Bangalore-based firm reported a net profit of 2.3 billion rupees in the fiscal second quarter ended September 30. That compared with a profit of 2.20 billion rupees in the year-ago period and a 2.06 billion rupees profit reported in the first quarter.

A Reuters poll of 17 analysts had estimated the New York Stock Exchange-listed firm to report a median net profit of 2.32 billion rupees on revenue of 13.13 billion rupees.

Azim Premji, Chairman of Wipro commenting on the results said, "Strong volume growth and declining pricing pressures resulted in Revenues of $222 million in our Global IT Services business ahead of our guidance of $210 million. During the quarter, we saw robust sequential growth across all business segments in our Global IT business. Business prospects continue to be promising, with healthy volume growth and prices moving in a narrow band. Looking ahead, for the quarter ending December 2003, we expect Revenue from our Global IT Services business to be approximately $241 million."

Vivek Paul, Vice Chairman, said, "This quarter we saw customers demonstrating both growing confidence in our end-to-end service model as well as an increased willingness to increase spending. Our Technology businesses continued to recover, with sequential growth of 16%, including Telecom, which grew sequentially by 14%. Our IT businesses continued to demonstrate steady growth, with sequential growth of 12%. Highlights in IT business were a 36% sequential growth in our Technology Infrastructure Services, 22% sequential growth in BPO and 19% sequential growth in Package Implementation. Account openings for the quarter continued at an encouraging rate with 35 new accounts opened, 6 of which were Fortune 1000 companies."

Suresh Senapaty, Corporate Executive Vice President -- Finance said, "During the quarter, our combined IT Products and Services businesses showed strong growth, achieving a significant landmark by crossing the annualized Revenue run rate of $1 billion. On the profitability front, we were able to contain the losses of Wipro NerveWire within projected levels, and saw improvements in virtually all operating parameters, including realizations, helping us maintain our Operating Margins from the prior quarter, despite a significant appreciation in the Rupee exchange rate."

The results came a week after the No. 2 industry exporter Infosys Technologies Ltd, raised its full-year profit forecast and surprised markets with strong margins, triggering a rally in software stocks.

Wipro has stolen a march over its Indian rivals in sealing acquisitions with cash, as it aims to become a one-stop shop for software and back-office services, but acquisition costs and reliance on telecom clients have hurt its growth.

Shares of Wipro, which has about 300 clients for software services, including Nortel Networks Corp and General Motors and a 21,000 workforce, have surged 45 percent since end-June outperforming a 41 percent rally in Bombay's infotech index.

© Reuters