Wipro sees signs of upturn next quarter

Written by Corporate Bureau | Bangalore | Updated: Apr 23 2009, 05:49am hrs
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The countrys third largest technology firm, Wipro Limited, reported a 19% rise in net profit for 2008-09 and gave a lower but fairly optimistic guidance about the current financial year.

The companys score card shows its profit after tax went up to Rs 3,900 crore last year from Rs 3,300 crore a year ago. Its revenue rose to Rs 25,544 crore, a 28% jump over Rs 19,957 crore in 2007-08.

Like TCS and Infosys, Wipro gave a lower revenue guidance for the first quarter, in the $1 billion-1.03-billion range. But Azim Premji, chairman of Wipro, expressed cautious optimism about the current financial year. Infosys CEO S Gopalakrishnan last week described the environment as challenging while TCS CEO Ramadorai talked of price competition on margins.

Sounding more positive than the rest, Premji said he believed the worst was over for the sector. He also expected to see some signs of recovery in the second quarter.

But Wipro will no longer make campus recruitment offers to students a year in advance, as it used to do. The company claimed this will stop students from getting complacent. Suresh Vaswani, co-CEO of Wipro, said, In this way they will get enough time to think about their careers without being committed to a particular company too early.

The company had 97,810 employees in March 2009, which includes 74,986 employees in the IT business unit and 22, 824 in the BPO business.

Wipro has added 110 new clients in the year.

CFO Suresh Senapaty felt short-term weaknesses in the sector will continue. In anticipation, Wipro re-organised its IT business in 2008-09 to prepare for a year of solid execution, in a subdued environment, resulting in industry leading growth.

The Wipro stock went up 2.39% on NSE, closing at Rs 281.05 on Tuesday.

For the fourth quarter ended March 2009, the company reported a 15% increase in net profit to Rs 1,010 crore and a revenue growth of 13% to Rs 6,452 crore.

For the year ended March 2009, Wipros revenue from IT services business was $4.3 billion, a year-on-year growth of 18.5% on a reported basis and 22.3% on constant currency. In rupee terms, revenue stood at Rs 19,166 crore, a growth of 31%.