Wipro results fail to inspire market

22 January 2009

Despite the fact that its net profit for the last quarter crossed the Rs1,000-crore mark for the first time, information technology major Wipro Ltd has predicted its lowest ever growth outlook for the IT industry in the March quarter.

The third ranking Indian IT major attributed delayed contracts in 2009 as the main reason for this.

Nonetheless, quarterly net profits rose18 per cent - well ahead of market estimates - on the back of a weak rupee and improved operational efficiencies. Wipro's net stood at Rs 1,004 crore for the December quarter, compared to Rs 854 crore in the corresponding period last year. Revenues grew 25 per cent to Rs 6,618.3 crore, compared to Rs 5,302 crore in the previous period.

However, IT services revenues, at $1,100 million, missed the forecast of $1121 million by a whisker. This was mainly due to cross currency fluctuations.

''We are living in tough times; the macro-economic challenges are significant and impacting businesses across segments,'' said Wipro chairman Azim Premji at a press conference in Bangalore. ''The biggest challenge is the inability to judge what is going to happen over next few quarters.'' Customers will decide quarter-by-quarter till they get certainty on the macro environment,'' he added.

Wipro added 31 new customers, including Origin Energy in Australia and Corporation Bank. Total contracts signed during the quarter exceeded $600 million. ''Our price realisation improved sequentially in constant currency through higher productivity, while absorbing the impact of lower working days,'' Suresh Senapaty, the company's chief financial officer, told the gathering..