Wipro Q2 net up 17.5%, outlook bullish

Wipro today reported a 17.5% increase in net profit at Rs 823 crore for the second quarter of the current fiscal when compared with the same period of the last fiscal. The top line has grown 35% to Rs 4,784 crore in Q2FY08.

Wipro, India's third largest software exporter, has been acquiring companies during the past two years, and has so far paid out close to $900 million to acquire businesses of all sizes.

The flagship global software services business under Wipro Technologies met its sequential growth guidance, and grew 10% to cross the targeted $777 million top line to $796.5 million. On a year-on-year (y-o-y) basis, the growth has been 35%.

Profit before interest & tax (PBIT) for Global IT services and products segment stood at Rs 726 crore - a sequential increase of 14%. At 22.4%, PBIT as percentage of revenues expanded 80 basis points when compared with the previous quarter.

Suresh Senapaty, chief financial officer, Wipro, said: "Our performance on profitability demonstrates the resilience of our business model. Improved realisations and superior management of key operating parameters like offshore mix and utilisation helped us not only fully mitigate the adverse impact on account of offshore salary increases but also deliver an operating margin expansion of 80 basis points."

Azim Premji, who controls 80% of the company, has given a bullish outlook going forward. "We saw broad-based growth across verticals, services and geographies. During the quarter, we won some large multi -million dollar deals, and the deal pipeline continues to be robust. Looking ahead, for the quarter ending December 2007, we expect our revenue from global IT services business to be approximately $905 million, including revenues of around $60 million from acquisitions, a sequential growth of around 13%."

The other business of Wipro growing at a good pace is the India, Middle East & Asia Pac business under Wipro Infotech. The business recorded 72% growth in revenues y-o-y, and PBIT grew 48% y-o-y. Revenues have grown at three times market growth rate in the first half year.

Wipro Consumer Care and Lighting clocked revenue growth of 84% and PBIT growth of 79% y-o-y.

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