Wipro beats expectations with 41 per cent Q3 net growth

Rex Mathew
17 January 2007

After the standout performance by TCS and HCL Technologies, Wipro has also managed to exceed market expectations with its results for the Oct-Dec quarter. Though margins remained under pressure, the company has managed to achieve very commendable growth rates in both top line and bottom line.

For the quarter ended 31st December 2006, consolidated net profit has increased 40.83 per cent to Rs765.4 crore, or Rs5.28 per share, from Rs543.5 crore, or Rs3.8 per share, for the previous year quarter. On a sequential basis, net profit has increased 9.31 per cent from Rs700.2 crore for the quarter ended September 2006

Consolidated revenues for the quarter at Rs3,979 crore were higher by 45.01 per cent as compared to Rs2,743.9 crore reported for the previous year quarter. Sequentially, revenues have increased 12.21 per cent from Rs3,546.2 crore for the previous quarter.

Consolidated operating profits increased 33.07 per cent over the previous year quarter. Operating margins as a percentage of consolidated revenues declined to 19.8 per cent from 21.58 per cent for the previous year quarter. Operating margins were 20.99 per cent for the previous quarter.

The decline in operating margins was mostly on account of a 50.43 per cent jump in staff costs and cost of sales. Selling expenses went up by 31.35 per cent while general expenses were higher by 41.81 per cent

Other income for the quarter was much higher at Rs82.45 crore as compared to Rs17.65 crore for the previous year quarter. Income from mutual fund investments went up to Rs59.23 crore from Rs36.68 crore. Other income, including foreign exchange gains, were at Rs23.23 crore as compared to a loss of Rs19.03 crore for the previous year quarter Global IT revenues and products revenues increased 35 per cent year-on-year. In Dollar terms, global IT revenues were $640.5 million for the quarter — higher than the company's earlier guidance of $633 million. The IT services business achieved a revenue growth of 30 per cent while top line growth in BPO services was 24 per cent. Recently acquired business reported revenues of Rs143.5 crore as compared to Rs5.9 crore for the previous year quarter.