Soap to software services company Wipro Ltd has posted a 10.3 per cent rise in net profit year on year to Rs 1,456.4 crore for the third quarter boosted by a weaker rupee and higher price realisation.
IT services' revenue for the company grew 28 per cent to Rs 7,608 crore year on year, while total revenue for the company rose 28 per cent to Rs 9,997 crore . On a sequential basis, Wipro's net profit grew 12 per cent.
Stock price up
But the third largest software services company whose stock prices rose 2.53 per cent to Rs 413.70 following the results which beat market expectations, said that while “overall macroeconomic sentiments continue to be uncertain,” it was not affecting the IT sector in proportion to other industries. The company has reported an EPS of Rs 5.94.
The Wipro Chairman, Mr Azim Premji, told newspersons after announcing the results on Friday that while Europe continues to be a cause for concern, US was strong and companies there were investing to build capacity. He said that Wipro was increasing its focus on emerging markets, which were in better shape than the West. “We see this year as better than 2008 though the macro economy is not too different from then,” he said.
The company also said that it expects its revenues from its IT business to grow 1 per cent to 3 per cent on a sequential basis to between $1.52 billion and $1.55 billion this quarter.
Kotak Securities' analyst Mr Dipen Shah said Wipro's results were in line with estimates, both on the IT services revenues and PAT front. “The improvement in average realizations was a surprise, though it was led by better efficiency in fixed priced and not absolute increases.”
Wipro's IT Business chief executive officer, Mr T K Kurien said there was a broad based growth with five to six verticals growing upwards of 4 per cent in constant currency with revenues in constant currency exceeding the guidance range.
He said the budgets next year will be flat to marginally negative. But the company's foray into cloud computing held a lot promise. “In a market driven by disruptions, cloud analytics and mobility is an area where we will create the assets and platforms and we will significantly invest here.”
Wipro's Chief Financial Officer, Mr Suresh Senapaty, said the company's client mining strategy continues to show progress with six customers contributing more than $100 million of revenues.
Zinnov Management Consulting's analyst Mr Sidhant Rastogi said that the number of $100 million customers and revenue generated by the top five for the company clearly “indicates that the on going restructuring at Wipro aimed at aligning the business to the customer is leading to good results.”
39 new clients
In the IT services segment that contributes 76 per cent of total revenues of Wipro Ltd, 39 new customers were added while slightly over 5,000 people were hired during the quarter.
The company also declared an interim dividend of Rs 2 a share.