 "Wipro Q2 guidance shows signs of revival")
The company guided for US dollar revenue of $1,620 million to $1,650 million, representing a growth of 1.9% to 3.8% for the second quarter ending September 30, 2013, much ahead of street expectation.
"This is for the first time after several quarters that the company has given such a bullish guidance. The guidance of about 2-4% for the second quarter has not happened at Wipro. However, concerns on growth continue," said Ankita Somani, IT analyst at Angel Broking.
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However, analyst were disappointed with the revenue growth achieved by the company for the first quarter ending June 30, 2013 of FY14. Wipro that had guided for a revenue growth of -0.6% to 1.6%, managed to grow its US dollar revenue by a mere 0.2%. The company reported revenue of $ 1.58 billion for the quarter, up 4.9% on a year-on-year basis.
"The dollar revenue growth is a bit disappointing, though on all the other parameter the company has performed in line," said an analyst of a leading brokerage firm.
"We are seeing higher confidence among our clients on the backdrop of positive macroeconomic developments, particularly in the US," said Azim Premji, Chairman of Wipro.
Bangalore based salt to IT group Wipro reported net profit of Rs 1,623 crore for the first quarter ended June 30, 2013, up 11% compared to the same quarter last year. Revenue of the group was up 5% on a year-on-year comparison at Rs 9,735 crore.
The IT business, which contributes to about 78% of the company, reported earnings before interest and tax (EBIT) at Rs 1,785 crore up 2% on a year-on-year basis. In rupee terms the company's IT services revenue grew 7% year-on-year at Rs 8,936 crore.
"We are seeing a pickup 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 organizational agility," said T K Kurien, Executive Director & Chief Executive Officer of Wipro.
The company added 28 clients during the quarter. The IT Services segment had 147,281 employees as of June 30, 2013, an increase of 1,469 people in the quarter.
Growth during quarter was driven by analytics and information management and consulting which was up 6.5% 3.5% respectively on a sequential basis. In terms of market, India and Middle East proved top be a drag, which was down 6.7% sequentially (-1.5% on constant currency basis). However, unlike peers TCS and Infosys which continued to see strong growth in the US, Wipro reported a drop of 0.7%.
Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said – "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."