Wipro Q1-FY’14 net profit rises 11% to Rs1,623 crore

Wipro has reported consolidated net profit of Rs1,623 crore ($273 million), for the first quarter of the current financial year (2013-14), up 11 per cent from the Rs1,466 crore reported in the year-ago quarter.

Wipro, India's third-largest software service exporter, said its earnings were boosted by increase in orders and that quarterly profit growth was in line with analysts' estimates.

Bangalore-based Wipro, whose customers include Citigroup, Apple and Cisco Systems, said its revenues from continuing operations rose 5 per cent y-o-y to Rs9,735 crore ($1.64 billion) during the April-June 2013 quarter.

Wipro said its quarterly non-GAAP constant currency IT services revenue in dollar terms stood at $1,604.1 million, within a guidance range of $1,575 million to $1,610 million.

IT services revenue was $1,588.3 million, a sequential increase of 0.2 per cent and y-o-y increase of 4.9 per cent.

IT services revenues in rupee terms was Rs8,936 crore ($1,501 million), an increase of 7 per cent y-o-y.

IT services earnings before interest and tax (EBIT) increased by 2 per cent to Rs1,785 crore ($300 million) during the quarter ended 30 June 2013.

Operating income to revenue for IT services was 20 per cent for the quarter.

Commenting on the results, Azim Premji, chairman of Wipro, said, ''We are seeing higher confidence among our clients on the backdrop of positive macroeconomic developments, particularly in the US.''

T K Kurien, executive director and chief executive of Wipro, said, ''We are seeing a pick-up in large deal closures, which has reflected in strong order book in the current quarter. Our clients look to technology to pursue growth and profitability and increase organisational agility.''

''Our investments in client mining have shown benefits with strong growth in our top clients. We have given wage hikes for both onsite and offshore employees effective June 2013, which has impacted our operating margins in the quarter,'' Suresh Senapaty, executive director and chief financial officer of Wipro, added.

Wipro expects revenues from IT services business to be in the range of $1,620 million to $1,650 million.

The company said the guidance has been based on the exchange rates of GBP/USD at 1.54, Euro/USD at 1.31, AUD/USD at 0.97, USD/INR at 57.24.

The IT services segment had 147,281 employees as of 30 June 2013, an increase of 1,469 people in the quarter. The company added 28 new customers for the quarter. Wipro has won a multi-year, multi-million dollar contract with an APAC-based telecom service provider, to provide big data based analytics solutions to enable business transformation.

Wipro also reported a major, multi-year deal from a leading provider of analytics solutions to healthcare, CPG and retail industries. The company said it would manage these data centers across the US and Europe on a cloud-based hosted model.

(Also see: Premji sees double-digit growth for Wipro; slams government)