Software major Wipro on Friday reported revenues of Rs.7,829 crore in the third quarter of 2010-11, an increase of 13.8 per cent over the previous year. The company made a net profit of Rs.1,326 crore, an increase of 10 per cent.
Presenting the results, Wipro Chairman Azim Premji said, “We have underperformed in the third quarter relative to the competition and in relation to our potential.” He also announced significant changes in the leadership of the IT business of the company.
Commenting on the reasons for the sluggish performance, Mr. Premji said; “Our competitors have performed better in the fast-growing sectors of healthcare and financial services. They had the advantage of growing faster.”
While 27 per cent of the Wipro's revenues in the IT business came from financial services, competitors such as Cognizant Technologies garnered as much as 50-55 per cent from this space, Mr. Premji pointed out. Other companies such as Tata Consultancy Services (TCS) and Infosys earned about 30 per cent of their revenues from addressing the market for financial services, Mr. Premji added. “The revenue from healthcare for Wipro is relatively very small, which has affected our growth,” he remarked.
Asked whether Wipro foresaw an exodus following the exit of the joint CEOs, the Executive Vice-president (Human Resources) Pratik Kumar said: “No, we do not anticipate an exodus.”
While IT services contributed to 76 per cent of Wipro's overall revenues. IT products contributed 11 per cent. Consumer care and lighting made up for 9 per cent of revenues. Revenues from consumer care and lighting grew 21 per cent over the previous year.
The company has declared an interim dividend of Rs.2 a share During the third quarter, the company added 36 clients and made a net addition of 3,591 employees, taking the company's employee strength to 1.19 lakh. For the fourth quarter, the company expects revenue from the IT services business in the range of $ 1,384 million to $ 1,411 million.