Wipro Q1 profit misses forecast

Font Size

Print

Feedback

Email

Discuss

Related Articles

LG not to reduce prices of LCD TVsAmbani gas row: Judgement likely on June 15RIL's German unit goes bankruptCobra Beer bought over by Molson Coors

Bangalore, July 18:: India's third largest information technology outsourcer, Wipro Ltd, missed forecasts with a 15 percent rise in quarterly profit, and said it was cautious in the near term, echoing its larger rivals.

Wipro, which offers system integration, software application development and back-office services, said net profit rose to 8.14 billion rupees ($190 million) in its fiscal first quarter to June from 7.10 billion a year ago under US accounting rules.

A Reuters poll had forecast a net profit of 9.02 billion rupees for Bangalore-based Wipro, which counts telecoms gear makers Cisco, Credit Suisse, Nortel and Nokia Siemens Networks among its clients.

Revenue rose 42.5 percent to 59.62 billion rupees, as it added 31 clients during the quarter.

"In the backdrop of significant economic uncertainty, our financial services and retail businesses demonstrated resilience," Chairman Azim Premji said in a statement.

"Given the environment we remain cautious in the near term."

Wipro's earnings follow results from bigger rival Tata Consultancy Services, which narrowly missed forecasts, and second-ranked Infosys Technologies, which beat estimates.

Both companies were cautious about outsourcing prospects in the near term, as their major clients battle weakening economies.

Wipro was confident of maintaining or improving margins despite an "adverse impact on margins in the September quarter", Chief Financial Officer Suresh Senapaty said.

Pricing had improved, he said, and the pipeline of orders "looked good", with much better business prospects in the second half of the year.

Comparatively cheaper wages had helped Indian outsourcers ride an outsourcing boom for years, but the growth slowed last year when Wall Street banks took a hit from the subprime crisis and as the U.S. economy lurched towards recession.

Although Indian outsourcers are rapidly expanding to Europe, Asia and the Middle East to cut their dependence on the United States, the country still accounts for roughly half their sales.

India's software and back-office services export growth will slow to 21-24 percent in 2008/09 from 29 percent a year ago, lobby group National Association of Software and Service Companies said this month.