The country?s third-largest software firm, Wipro, beat its own guidance and outperformed market forecasts to post a 12% rise in net profit at Rs 1,016 crore for the quarter ended June 30, compared with the same quarter last fiscal. This is in line with its two bigger rivals, TCS and Infosys, whose quarterly numbers also surpassed market expectations.
The company?s revenue stood at Rs 6,274 crore, up 5% year-on-year, but down 2.7% sequentially, according to Indian GAAP. However, net profit was marginally up sequentially at 0.6%. Revenues from IT services, which accounted for over two-thirds, were at Rs 4,825 crore, an increase of 10% y-o-y, but down 2.2% sequentially. In dollar terms, Wipro?s IT revenues stood at $1,033 million.
The company attributed growth in the quarter to deals won in India and the Middle East. It added 26 new clients during the period. Two of its large deals came from Indian telecom players.
While the company maintained that the market situation continues to remain challenging, it has guided for a flat to 2% increase in IT services revenues for the quarter ending September. Wipro expects IT revenues to be in the range of $1,035-$1,053 million in the same period.
?We are starting to see the first signs of stability in the business as ramp-down starts to taper off and volumes start to stabilise,? said Wipro chairman Azim Premji. He added that the company is adapting to the new reality with continued investments in value creation, go-to-market and driving significant operational productivity.
After rising in early trades, Wipro?s shares closed 1.52% down at Rs 451 on the BSE. Dipen Shah, IT analyst & vice president of the private client group (research) at Kotak Securities said the company?s guidance and management commentary suggest likely relative comfort with respect to demand and early signs of a pick-up in certain verticals.
Wipro said while it expects slow growth in the next one or two quarters, better movement of IT spends is expected in the early part of 2010. Joint CEO Girish S Paranjpe said while there are some signs of the banking, financial services & insurance vertical stabilising, the technology and telecom verticals continue to remain challenging.