drive towards a higher growth trajectory”.
Wipro’s IT services operating margins improved by another 54 basis points during the quarter to 23%, its highest operating margins in three years. The company pointed out that its investments in automation and productivity tools have driven efficiencies and helped expand margins of its IT services business.
“The margin increase was the positive surprise. Wipro’s guidance for the Q4 indicates that it has likely returned on the path of sustainable and consistent growth on the back of its account mining initiatives. Lower utilisation levers provide it with an important lever for maintaining and improving margins, going ahead,” said Dipen Shah, head, private client group research, Kotak Securities.
In rupee terms, the Azim Premji-led company reported a year-on-year growth of 27% in net profit for the third quarter. The software-services business, which the company separated from its consumer care and lighting and infra arm through a demerger effective April 2013, posted net profit of R2,014 crore during the December quarter, compared with R1,932 crore in the September quarter.
Revenue for the quarter stood at R11,331 crore, up 3% sequentially, while it was up 18% annually. The earnings before interest and taxes (EBIT) for IT services grew 33% on an annual basis to R2,380 crore. Among its various business practices, Wipro saw its global infrastructure practice growing at 5.6% sequentially and BPO practice at 4.1% while the R&D business has shown a decline of 2.4% quarter-on-quarter.
In terms of geographies, Americas grew at 3.2% sequentially for Wipro, while its larger peers TCS and Infosys had a flattish growth in the industry's largest market.
During the quarter, Wipro grew its Europe business by 5.4% and India and West Asia business grew by 5.5% sequentially whereas the Asia Pacific region has seen a decline of 5.2%.