Software major Wipro Ltd?s annual results for 2007-08, released on Friday, were a shade below street expectations.
A muted guidance of 3% sequential growth for its IT services business and a cautious outlook on future growth too did not cheer the industry, which was brightened by the EPS guidance of Infosys earlier this week. Wipro recorded 12% growth in net profit?to Rs 3,283 crore?on revenues of Rs 19,957 crore, which grew 33% over the previous year.
The New York Stock Exchange-listed Wipro, which had given a guidance of $955 million for its global IT services & products business for the fourth quarter, delivered a figure of $959.9 million and guided for $988 million in the first quarter of 2008-09. Wipro has bet on back-end growth and admitted that the global economic worries may slow down the growth momentum in the first two quarters of the current fiscal.
?We look at fiscal 2009 with cautious optimism. The market situation is changing rapidly, which has a bearing on our immediate business dynamics. However, we remain resilient, we remain agile and confident of another good year. Considering this, we have drawn up an aggressive plan to capitalise on the likely back-ended positive momentum for a profitable volume growth. We are bullish on our India and Middle East geographies to deliver turbocharged growth, riding on the investments in these markets,? Wipro chairman Azim Premji said.
Chief financial officer Suresh Senapaty said a dipstick survey of its customers had shown that they were talking of flattish to slightly lower technology budgets for 2008. ?We are a little cautiously optimistic,? he said, pointing to slowdown expectations. Senapaty, who has been elevated to the Wipro board as executive director, also said the deal pipeline was good, and contracts would come about over 3-6 months. ?There have been sporadic project cancellations and large discretionary projects are on hold till they get some stability,? he said.
On the results, a Mumbai-based analyst with a foreign brokerage house said: ?It seems with the projections it has given and the bet it has placed on back-ended growth, Wipro will be a laggard compared to its peers. Typically, the third quarter is the weakest for Indian IT companies due to holidays in the US and to make up for its first two quarters of slow growth will be quite a task.?
