Wipro Q3 net profit rises 27% to Rs2,010 crore

Wipro Ltd, India's third largest IT services provider, on Friday reported a 27-per cent increase in its fiscal third quarter net profit at Rs2,010 crore ($325 million) despite a one-time expense incurred on the cessation of manufacturing Wipro branded desktop, laptops and servers.

Excluding the non-recurring expense, net income from continuing operations was Rs2,030 crore ($328 million), an increase of 28 per cent year-on-year, the company said in a regulatory filing.

Although net profit was marginally impacted by the discontinuation of the company's hardware manufacturing business in the quarter, Wipro said reorganisation and portfolio realignment have started yielding results with investments in automation helping operating margin expand by 54 basis points.

Year-on-year, revenues from IT services touched Rs10,330 crore, an increase of 20 per cent, while net profit touched Rs2,380 crore, up 33 per cent year-on-year.

Wipro declared an interim dividend of Rs3 ($0.051) per share /ADS.

Commenting on the results, Wipro chairman Azim Premji said, ''As the global economy is progressing towards stability, we see optimism amongst clients, especially in the West. Corporations are leveraging technology to reduce operational costs and investing resources in differentiating themselves in the marketplace.''

Wipro forecast revenues from its main IT services business growing 2-4 per cent to $1.71-1.75 billion for the quarter ending 31 March.

''We give only quarterly guidance but from our conversations with clients, this year looks better than the last one,'' said T K Kurien, CEO of Wipro. He, however, struck a note of caution. ''We are still a work in progress''.

Wipro's IT services segment had 146,402 employees as of 31 December 2013.

The company added 42 new customers for the quarter, including a leading integrated construction and support services company, which selected Wipro as its sole preferred global strategic partner to provide integrated IT and BPO services.

Also, Wipro said, one of the world's largest consumer goods companies has renewed its infrastructure services contract with Wipro, under which the company will provide network, datacentre, global service desk and security services in a managed services model to the company.

One of the largest banks in Africa has extended its existing relationship with Wipro for an additional three years, the company disclosed.

Wipro provides comprehensive IT solutions and services, including systems integration, information outsourcing, IT enabled services, package implementation, software application development and maintenance, and research and development services to corporations globally.

Wipro said the conversion of rupees into dollars has been done at the noon buying rate in New York City on 31 December 2013, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was Rs61.92 per dollar.

However, the realised exchange rate in its IT services business segment for the quarter ended 31 December 2013 was higher at Rs61.53, it added.