Wipro Q3 net up 10 p.c, sees Q4 IT rev up 1-3 p.c

BANGALORE, INDIA: Wipro Ltd, India's No.3 software services exporter, flagged the uncertain global economic environment as a concern after roughly meeting expectations with a 10 per cent rise in quarterly profit, mainly helped by a weaker rupee.

The company, whose clients include Citigroup, Cisco and Credit Suisse, said however that it had received positive feedback from clients on its restructuring.

Wipro said it expects $1.52 billion to $1.55 billion revenue from its IT services unit, which contributes three-quarters of its total sales, in the March quarter, a sequential rise of nearly 1 to 3 per cent.

The forecast was lower than 2-4 per cent rise projected by analysts at brokerage CLSA.

Wipro and larger rivals Tata Consultancy Services Ltd and Infosys Ltd are part of India's $76 billion software services industry that gets more than 90 per cent of its revenue from the United States and Europe.

"We continue to execute on our strategy and propel the business towards a higher growth trajectory," said Wipro's billionaire chairman, Azim Premji, in a statement.

"The overall macroeconomic sentiments continue to be uncertain and we are monitoring it closely," he said.

Second-ranked Infosys last week cut its dollar sales forecast for the fiscal year ending in March, citing potential delays in orders by clients because of the euro zone debt crisis.

Wipro's consolidated net profit rose to 14.56 billion rupees in its fiscal third quarter ended December 31 under international accounting standards from 13.19 billion rupees a year earlier.

Sales rose 28 percent to 99.97 billion rupees as the company added 39 new clients in its IT services business. Analysts polled by Reuters expected profit of 14.81 billion rupees on net sales of 97.41 billion rupees.

IT services revenue climbed to $1.51 billion, up 2.2 per cent from July-September.

"We have seen positive feedback from customers and employees on our restructuring approach," said T.K. Kurien, chief executive of IT business.

Kurien took over last April after a management shake-up by Premji to reverse the widening gap between Wipro and its larger rivals.

Tata Consultancy, the No. 1 Indian software services exporter, met market expectations with a 23 percent rise in quarterly profit this week, and said its pipeline of orders is "very healthy".

The euro zone debt crisis is a worry for the sector that has been looking to increase its sales to the region to hedge against excessive exposure to the United States, which brings in about half of Wipro's IT services sales.

Indian software services companies also face fierce competition from bigger global rivals including IBM Corp  and Accenture Plc.

Wipro's shares, valued at about $19.55 billion, fell nearly 19 per cent in 2011, compared with a 16 per cent drop in the sector index and a roughly 25 per cent fall in BSE Sensex .BSESN.