Provides flat earnings guidance from IT services for the quarter ending June

Wipro, on Friday, announced a 16 per cent increase in consolidated revenues in 2012-13. The company, the third biggest exporter of software services, posted revenues of Rs.43,361 crore during the year, including Rs.5,673 crore from “discontinued operations” that are now part of the unlisted entity. Its consolidated net profit amounted to Rs.6,636 crore, an increase of 19 per cent over the previous year.

During the fourth quarter ended March 31, 2013, revenues were Rs.11,026 crore ($2.02 billion), including Rs.1,412 crore ($259 million) from discontinued operations. The net profit was Rs.1,729 crore, a rise of 17 per cent year-on-year.

Revenues from IT services during the year were higher by 17 per cent at Rs.37,688 crore. The net profit from IT operations was Rs.6,136 crore, up 17 per cent.

Dollar-denominated earnings in the last quarter of 2012-13 were $1,585.1 million. In rupee terms, earnings amounted to Rs.8,554 crore, an increase of 13 per cent year-on-year.

The company announced a final dividend of Rs.5 per share taking the total dividend for the year to Rs.7 per share.

Suresh Senapaty, Executive Director and CFO, said the earnings would have been higher if some of the deals during the quarter had not been delayed. He expects these deals to go through in the current quarter.

However, the company’s top management shrugged off concerns about the flat earnings guidance from IT services for the current quarter ending June 2013, which is expected to range between $1.58 billion and $1.61 billion, a decline of 0.6 per cent to a rise of 1.6 per cent compared to the last quarter of 2012-13. T. K. Kurien, CEO, IT business and Executive Director, said the first quarter was generally “our weakest” of the year, and that growth would pick up during the rest of the year. Operating margins during the fiscal were 20.7 per cent as compared to 20.8 per cent in 2011-12. Asked if the company faced pressure on margins, Mr. Kurien said while onsite pricing had improved by 4.2 per cent in 2012-13, offshore pricing had improved by 2.7 per cent. “This does not seem to suggest any pressures,” he said. While there is positive commentary from customers, particularly in the U.S., about IT spending, “some areas” of the company’s portfolio “are being impacted by delays in discretionary spending,” he said.

Referring to the headwinds affecting earnings from services provided to the financial services sector, Mr. Kurien admitted that the company had “underestimated the negative impact” of problems in the investment banking segment. “However, we have done much better with retail banking,” he said.

Referring to Wipro’s pursuit of “non-linear” growth, Mr. Kurien said, “We are delinking headcount from revenues.” He said voluntary attrition rate in the company had dropped to 13.7 per cent in 2012-13, from 17.5 per cent during the previous year. Wipro, he said, was committed to announce wage hikes in June. Wipro’s IT services segment had 1.46 lakh employees as of March 31, 2013.

Wipro Chairman Azim Premji categorically ruled out any plans to list the portions of the business, including consumer care and lighting, at a later date. Mr. Premji will function as the non-executive chairman of the company.

More In: Industry | Business