Wipro Q1 net profit rises 30% to Rs2,103 crore

Wipro Ltd, India's third largest IT services company, has reported a 30-per cent rise in consolidated net profit at Rs2,103.2 crore ($351 million) for the April-June 2014-15 quarter, on the back of some large deals in the application and infrastructure segment.

Bangalore-headquartered Wipro had posted a net profit of Rs1,623.3 crore in the year-ago period, the company said in a BSE filing.

Total revenues increased by 14 per cent to Rs11,140 crore ($1.9 billion), year-on-year, with IT services revenue rising 9.6 per cent to $1,740.2 million, showing a sequential increase of 1.2 per cent.

Consolidated net sales rose 15.5 per cent to Rs11,245.5 crore in April-June quarter of the current fiscal from Rs9,733.2 crore in the same quarter of 2013-14.

''We see a significant rise in business confidence in developed markets as well as India. The new government at the centre has brought about hope and confidence in the minds of all stakeholders through reform pronouncements with fiscal prudence. We expect greater economic activity, including investments in India,'' Azim Premji, chairman of Wipro, said.

Revenue from IT services stood at $1.74 billion, a quarter-on-quarter increase of 1.2 per cent and year-on-year increase of 9.6 per cent. Wipro expects this to be in the range of $1.715 billion-$1.755 billion.

For the July-September quarter, the IT services revenue is forecast to be in the range of $1.77 billion-$1.81 billion.

IT services revenue in rupee terms was Rs 10,510 crore, an increase of 18 per cent year-on-year.

The IT services segment had 147,452 employees as of June 30, 2014 and the firm added 35 new customers for the quarter, Wipro said.

''We continue to win large deals particularly in the application and infrastructure space. We recently announced our largest ever total outsourcing deal. These wins demonstrate confidence of clients in our transformational capabilities and re-affirm our faith in our client engagement strategy,'' T K Kurien, executive director and chief executive officer of Wipro, said.

Wipro's IT products segment delivered revenue of Rs770 crore, registering a decline of 6 per cent over the year-ago period, after Wipro's strategy to focus on services business by engaging in selective transformational deals where products form an integral part of the solution.

"We continue to drive operational efficiency and invest in our strategy. Operating margins for the quarter was on expected lines, impacted largely due to wage hikes," Wipro CFO Suresh Senapaty said.

Wipro shares today rose by 1.31 per cent to close at Rs 576.80 apiece at the BSE.

Segment wise, BFSI contributed the most towards Wipro's revenues in the first quarter followed by manufacturing and hi-tech, energy, natural resources and utilities, global media and telecom, retail, consumer, transport and government and healthcare and life sciences.

Region-wise, the US was the main revenue generator followed by Europe, rest of the world and India.

Last week, Wipro had announced that it had entered into a multi-million dollar dual pact with ATCO through which the company will provide a complete suite of outsourcing solutions to the Canadian firm as well as acquire its IT services arm.

Wipro signed a series of master services agreements with ATCO under which it will acquire ATCO's IT subsidiary for an all-cash consideration of CAD 210 million ($195 million or over Rs 1,176 crore).

Besides, Wipro also secured a 10-year IT deal with ATCO for providing outsourcing services, that will result in annual revenues of over CAD 120 million ($112 million or over Rs 675 crore) for Wipro for the next 10-years.

The comp-any7 expects the ATCO deal to add to Wipro's overall growth, particularly in the utilities vertical.