Wipro net up 35% in Q4, to pay 1:1 bonus

Wipro to merge it's BPO units into one division which will be called Wipro BPO.

Wipro Ltd, India's third largest software services firm, said today its profit after tax for January-March 2004-05 had grown 35 per cent year on year to Rs 433 crore, while revenue increased 29 per cent to Rs 2,312 crore.

The Wipro stock closed 6.33 per cent higher at Rs 644.45 on the Bombay Stock Exchange, making it the biggest gainer among the Sensex stocks.

The company also announced that its board had approved the merger of its three back office subsidiaries -- Wipro BPO Solutions Ltd (formerly Wipro Spectramind Services Ltd), Spectramind Ltd (Bermuda) and Spectramind Ltd (Mauritius) -- into Wipro Ltd. The BPO business will, thus, become a division of Wipro Ltd and will be called Wipro BPO.

"Around 38 per cent of our BPO business comes from our IT clients. They want to get a single invoice. A merger will help us focus on delivering technology services," Wipro BPO CEO Raman Roy told reporters here.

The Wipro board also recommended a one-for-one bonus share issue to all shareholders, including holders of American depository shares. The issue is subject to shareholder approval at the company's annual general meeting in July, when a record date will also be decided.

Wipro's global IT services business, Wipro Technologies, managed to surpass the firm's guidance for the March quarter ($370 million), at nearly $375 million.

"The last quarter witnessed continued customer confidence in our wide portfolio of service lines," Wipro Vice-Chairman Vivek Paul said, adding: "Strong sequential volume growth of 8.5 per cent led to the highest ever addition in billed man-months in a quarter. We saw healthy growth in (business from) a number of customers as well as deepening of our presence in existing customers. This was reflected in more customers accounting for annualised revenue run rates greater $1 million, $3 million, $10 million and $20 million."

Wipro Technologies, which contributed 71 per cent of Wipro's revenues in the fourth quarter and 86 per cent of the profit before income tax, "will earn a revenue of $395 million for the quarter ending June 2005", Wipro Chairman Azim Premji said.

For the full year to March, the profit grew 58 per cent to Rs 1,628.5 crore and the revenue increased 39 per cent to Rs 8,170 crore. Wipro Technologies' revenue grew 39 per cent to Rs 6,075 crore and profits before income tax grew 68 per cent to Rs 1,604 crore.

Talking about verticals, Paul said: "Telecom original equipment makers and finance solutions sustained their momentum, while embedded systems and product engineering bounced back. Testing services continued to grow ahead of the overall growth rates."

Suresh Senapathy, corporate executive vice-president (finance), said, "We were able to significantly offset the pressure on operating margins arising from currency appreciation and decrease in price realisations through improved utilisation, increased proportion of offshore projects an continued operational improvements."