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Wipro gives higher IT revenue outlook for Q3

Wed, Oct 22, 2014, 07:40 PM
Bangalore, Oct 22 : Indian IT bellwether Wipro Ltd Wednesday projected a higher revenue outlook of $1.83 billion from its global IT services for the third quarter (Oct-Dec) of this fiscal (2014-15).

"We expect revenues from our IT services business to be in the range of $1,808-1,842 million or an average of $1,825 million ($1.83 billion) for this quarter ending Dec 31," the global software major said in a statement here.

The revenue forecast for the third quarter is sequentially higher than $1,772 million ($1.8 billion) the IT services business posted in the second quarter (July-Sep) of this fiscal (FY 2015) under the International Financial Reporting Standard (IFRS).

Earlier, the company reported net profit of Rs.2,085 crore and total revenue of Rs.11,684 crore for the second quarter (Q2), posting a modest eight percent YoY growth in bottomline and topline, as per the Indian accounting standard.

Under IFRS, net income for the quarter under review was $337 million and total income $1.9 billion.

Revenue from its global IT services grew 8.6 percent YoY to $1.8 billion (Rs.10,924 crore), which is a sequential growth of 1.8 percent. In constant currency, the sequential growth was three percent as against 0.3 percent in the first quarter.

"Business leaders in the US continue to exhibit increased confidence on growth prospects. Clients are increasingly looking to drive business value from their technology investments," Wipro chairman Azim Premji said in the statement.

Operating margin, however, declined marginally to 22 percent from 22.8 percent in the first quarter (April-June) of this fiscal and 22.5 percent a year ago (2013-14).

"We are seeing positive sentiment in India with the confidence that the government is focused on driving an agenda of growth," Premji added.

The IT services business acquired 50 new customers during the quarter (Q2) as against 35 a quarter ago and 45 a year ago, taking the total to 1,018 as against 1,022 a quarter ago and 942 a year ago.

"While the industry landscape is still undergoing change, we see multiple opportunity spaces for growth and gaining market share," Wipro chief executive T.K. Kurien said on the occasion.

During the quarter in reference, the company completed the transaction of buying I-Tek business of Atco Ltd, a Canadian logistics and utilities firm, for $195 million with a 10-year deal to provide outsourcing solutions to the parent firm (Atco) valued at $1.2 billion by 2024.

"In Q2, we continued to build on our leadership position in infrastructure services and carried the momentum of deal wins," Wipro chief financial officer Suresh Senapaty told reporters here later.

The benefit of rupee appreciation during the quarter was negated by the US dollar appreciating against other major currencies.

"We continued to drive productivity and improving operating levers even as the effect of salary hike on the operating margin (22 percent) was on expected lines," Senapaty added.

The IT services segment added (net) 6,845 software engineers in Q2, taking the total number of employees to 154,297 in the quarter from 147,452 sequentially from first quarter (Q1) and 147,216 a year ago.

Though attrition from IT services unit, excluding back-office (BPO) and India and Middle East operations marginally increased to 16.5 percent from 16.1 percent a quarter ago, it jumped 3.5 percent from 13.5 percent a year ago.
Agency: IANS
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