Wipro steady despite strong Re, US slump

BANGALORE, INDIA: Wipro Limited, which reported its third quarter results today, has been able to beat the guidance despite the slowdown in the US economy and a strong run of Indian rupee.

“Organically, our margins remained flat despite an appreciating rupee and increased costs on account of wage hikes effected. We continue to win large deals and have a healthy pipeline of these deals as we move into a new calendar year,” said Azim Premji, chairman of Wipro. “In terms of business environment, the US economy in general and the financial services sector worldwide in particular are facing challenges. However, we have not seen any impact on our business so far. We continue to see good demand for our services and believe that the value that global delivery model offers is enduring.

Responding to a query on the possibility of a cut down on IT spending in the US, Premji said that except for a few segments, global IT outsourcing is minimal. “Customers use IT in terms of showing off the profit results. This will continue in spite of the toughness. IT budget has not reduced. We are not seeing any signs of slowdown. Majority of us (IT industry) have been able to retain the margin of two per cent in spite of rupee appreciation. Going forward, we don’t see any slowdown.”

“Long duration projects is likely to get affected but not the day to day IT expenditure,” added Girish S Paranjpe, president, Finance Solutions, Wipro.

Wipro reported a profit of Rs 854 crore in Q3 and posted revenues of Rs 5303 crore up by 33 per cent Year-on-Year.

Global IT services contributed Rs 3616 crore, India, middle East and Asia Pac IT business posted Rs 972 crore and consumer care and lightening posted Rs 435 crore.

However, as Wipro is expanding its presence in other geographies like Europe, APAC and the Indian market, its dependency on US has comedown by two per cent to 62 per cent, informed Premji.

Going ahead it might further come down by two per cent this year, he added.

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