Wipro net profit zooms 41%

Continuing the robust performance by Indian IT majors, Wipro Ltd has reported a 41 per cent increase in net profit and a 45 per cent top-line growth for the third quarter ended December 31, 2006, over the corresponding period last year.

Riding on the back of its strong Asia-Pacific business, Wipro Ltd's third-quarter revenues mark a 9.3 per cent growth in net profit and 12.21 per cent growth in revenue over the trailing quarter.

Describing the third-quarter performance as "satisfying", Wipro Ltd Chairman Azim Premji said, "Our global IT business delivered good volume growth, absorbing the rupee appreciation and a wage hike effected for a section of our employees." He added, "Our financial services and retail businesses delivered over 50 per cent year-on-year growth."

However, the mainline global IT business, Wipro Technologies, which accounted for 72 per cent of the firm's revenues and 88 per cent of the profit before interest and tax for the third quarter, reported a lower-than-industry average top-line growth of 35 per cent (5.72 per cent sequentially). Infosys and TCS, on the other hand, had posted 40 per cent growth in their global IT businesses.

The company added 37 new clients during the quarter from 53 in the second quarter. Of these, eight were Global 500 or Fortune 1000 companies, 13 are new technology clients and 24 are new enterprise clients.

At Rs 2,875 crore, Wipro Technologies' top-line is marginally ahead of its guidance of Rs 2,835 crore. The division reported 32 per cent growth in profit before interest and tax year-on-year while operating margins declined by a percentage point to 24.2 per cent.

Wipro Technologies added 4,997 employees (net addition) during the quarter taking the total to a little over 66,000, of which around 16,863 are in the business process outsourcing arm. (The IT services segment saw the attrition rate drop by 2 percentage points to touch 16 per cent this quarter.)

The BPO's attrition rates dropped 6 percentage points to touch 24 per cent sequentially. Wipro BPO has posted a 24 per cent year-on-year growth at Rs 235 crore, improving its profit before tax by 82 per cent. Operating margins stood at 23 per cent from 16 per cent posted during the same period last year.

Meanwhile, Wipro Infotech, the company's West Asia and Asia-Pacific IT services and products business, recorded revenues of Rs 700.80 crore, a 76 per cent over the year-ago period.

Wipro's traditional consumer care and lighting business continued to chug ahead smoothly, growing by 36 per cent at Rs 211 crore, while its profit before tax was up 25 per cent at Rs 26.2 crore.