Business Daily from THE HINDU group of publications
Thursday, Oct 19, 2006
Corporate Results - Software
Info-Tech - Financial Performance
Bangalore , Oct 18
All-round growth across all business divisions helped Wipro Ltd to report 46 per cent growth in second quarter net profit, exceeding street expectations.
The company reported net profit of Rs 700 crore on revenues of Rs 3,546 crore, which were up 41 per cent, for the quarter ended September 2006, compared to net of Rs 478 crore on revenues of Rs 2,506 crore in the corresponding previous period.
For the first half of the current fiscal, net profit grew by 46 per cent to Rs 1,320.6 crore (Rs 906 crore).
Revenues were up 40 per cent to Rs 6,688.7 crore (Rs 4,768.7 crore).
In the third quarter, Wipro expects its global IT business revenues to touch $663 million, clocking 7.5 per cent growth over the quarter under review.
Tracking the guidance, Wipro shares closed three per cent lower on the BSE on Wednesday at Rs 557.25.
Mr Azim Premji, Chairman, said that the company saw great momentum in all the businesses.
"Overall, we believe that the demand environment is strong, and there are no signs of slowdown in the market. The investments we made in past 12 months are beginning to deliver. As we move into second half of the year, we see good prospects ahead."
Wipro added 54 clients and 5,328 employees, while the operating margin for its global IT services stood at 24 per cent, similar to that of last year.
Revenues from global IT business, which grew by 44 per cent to Rs 2,720 crore, was ahead of the company's guidance.
It accounted for 77 per cent of the company's revenues, while Wipro Infotech, whose revenue growth rose 36 per cent to Rs 542.6 crore, accounted for 15 per cent. The Consumer Care and Lighting business grew 41 per cent to Rs 202.5 crore.
Mr Suresh Senapaty, CFO, said that the company was able to maintain the margins despite effecting a wage hike for a section of its offshore employees.
"Operational improvement and superior BPO services profitability helped us in significantly offsetting the pressure of profitability arising out of wage increases and non-cash charge of restricted stock units issued during the quarter."
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