Wipro, India's third largest software services exporter, reported revenues of Rs. 7,236 crore in the first quarter ending June 30, 2010, an increase of 16 per cent on an annualised basis. The company made a net profit of Rs. 1,319 crore against Rs. 1,010 crore in the corresponding period in the previous year, an increase of 31 per cent. Operating income has risen to Rs. 1,449 crore from Rs. 1,142 crore.
Revenues from IT services during the quarter amounted to Rs. 5,500 crore against Rs. 4,827 crore, a rise of 14 per cent. The company had an operating margin of 24.5 per cent, which was 2.3 percentage points higher than a year ago. The company has projected revenues from IT services at $1.253-1.277 billion in the second quarter, an increase of between 4.1 per cent and 6.1 per cent, on a sequential basis.
Azim Premji, Chairman, said, “We had a strong quarter despite the crisis in Europe and despite significant pressures from cross currency rates.” Mr. Premji pointed out that the Indian and Middle Eastern markets had provided impetus to revenue growth during the quarter. “The uplift in margins happened despite head winds of wage increase and a decline in price realisation,” Mr. Premji observed. Growth in the financial services, media, telecom, manufacturing and technology verticals had been strong, he added.
The company added 4,854 employees (net) during the quarter and the total stood at 1.13 lakh at the end of June 30, 2010. Wipro took over Citibank's data centre in Germany during the quarter. Mr. Premji said the company's first such acquisition in Europe, would enable the company to offer “a full portfolio of infrastructure management solutions to clients” in the region. The company also entered into a “transformational” agreement with Magyar Telekom and with a multinational oil and gas major during the last quarter.
“The company also “gained good traction” in government deals in India and the Middle East, such as the one with the Ministry for Home Affairs for a crime and criminal tracking network, Mr. Premji said. “Our contract at the Delhi International Airport has given us valuable experience,” Mr. Premji said. Referring to the global economic environment, he said, “The worst is over and there is growing confidence in our business model.” He said there was no basis for fears of a “double-dip recession” in the U.S.
Suresh Senapaty, Executive Director and Chief Financial Officer, said IT services companies had told the Securities and Exchange Board of India that any move to reduce promoter holdings in companies must also take into account shares such as American Depository Receipts issued to overseas shareholders.
Girish S. Paranjpe, Joint Chief Executive Officer, IT Business, said the company had a “strong demand pipeline and a robust volume growth.”
