Wipro Limited has reported first quarter results in line with market expectations. Like other IT majors, revenue growth in IT services was strong during the quarter and the company managed to keep operating margins steady.

For the quarter ended 30th June 2006, consolidated net profits has increased 44.94 per cent to Rs620.39 crore from Rs428.02 crore for the previous year's quarter. When compared to the March 2006 quarter, net profits have increased very marginally from Rs617.89 crore.

Consolidated revenues have increased 39.8 per cent to Rs3,193.39 crore from Rs2,284.02 crore for the previous year's quarter. On a sequential basis, consolidated revenues have increased marginally by 1.25 per cent from Rs3,154.06 crore for the March 2006 quarter.

Global IT revenues have increased 42 per cent to Rs2,450.5 crore from Rs1,731.8 crore for the previous year quarter. On a sequential basis, global IT revenues have increased 5.76 per cent from Rs2.317.1 crore for the March 2006 quarter.

Operating profits from the IT business have increased by 45 per cent over the previous year quarter and 3.61 per cent sequentially. IT operating margins, as a percentage of IT revenues, has improved to 24.57 per cent from 24.01 per cent for the previous year quarter, but has declined from 25.07 per cent for the March 2006 quarter.

The improvement in operating margins was mostly on account of BPO services, where margins jumped to 20 per cent from 9 per cent for the previous year quarter and 18 per cent for March 2006 quarter. IT services margins remained stable at 26 per cent, both on a year-on-year and sequential basis.

Newly acquired businesses like mPower, New Logic, cMango, Enabler and Saraware reported negative operating margins of 17 per cent for the quarter. Wipro management said overall operating margins were impacted by around 50 basis points because of the losses incurred by newly acquired businesses.

Wipro had foreign exchange forward contracts worth a total of $335 million, as of 30 June 2006, as compared to $438 million as on 31 March 2006.

Among other businesses, IT hardware and products reported a revenue growth 35 per cent, year-on-year, and consumer care and lighting managed a revenue growth of 30 per cent. Operating profit growth of IT hardware and products was very impressive at 62 per cent from the previous year quarter. Consumer care and lighting managed a growth of 24 per cent in operating profits.