Wipro ups guidance on robust growth in Q2

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SME Times News Bureau | 23 Oct, 2013
Wipro Ltd Tuesday projected higher revenue for third quarter on posting robust revenue from its flagship IT services business in the second quarter of fiscal 2013-14.

"Revenue from IT services for this quarter (Q3) would be in the range of $1,660-1,690 million or an average of $1,675 million ($1.7 billion) in dollar terms," the IT bellwether said in a statement here.

In second quarter (Q2), revenue from IT services grew 5.9 percent year-on-year (YoY) and 2.7 percent sequentially to $1.63 billion as projected at the beginning of the quarter in dollar terms.

Unlike its rival Infosys Ltd, Wipro does not give annual revenue guidance as a policy.

"Revenue growth in Q2 was the highest over the last seven quarters, with one account each in BFSI (banking and financial services and insurance) and health services crossing the $200-million run rate," Wipro chief executive T.K.Kurien told reporters here.

For the quarter under review (Q2), the global software major posted net profit of Rs.1,932 crore (Rs.19 billion) registering 28 percent year-on-year (YoY) and 19 percent sequentially from first quarter.

Revenue grew 19 percent (YoY) to Rs.10,992 crore (Rs.110 billion) under the Indian accounting standard.

Under the International Financial Reporting Standard (IFRS), net income for the quarter is $309 million and revenue $1.76 billion, including $1.63 billion from services.

"There are positive indicators on the global economy. Client confidence is on the uptick and we see it reflected in our results," Wipro chairman Azim Premji said in a statement.

Operating margin improved marginally to 22.5 percent on sequentially basis from 20 percent in first quarter and 20.7 percent in same period year ago.

"Our sustained execution towards increasing operational efficiencies in the business coupled with currency benefits helped offset the impact of wage hikes resulting in strong improvements in operating margins," said Wipro's chief financial officer Suresh Senapaty.

The company added 45 new customers in the second quarter.

With broad-based revenue growth across verticals, the services business had seen discretionary spends picking up steadily and deal conversion rates going up during the quarter.

"Our strategy has started delivering both on the front-end and in execution and we remain focused on driving further on the strategy," Kurien said.

Another area where the company has seen increasing focus is in leveraging open source platforms, which are going mainstream.

With attrition increasing to 13.5 percent sequentially from 13.2 percent in first quarter, the total headcount dipped to 147,216 from 147, 281 a quarter ago, with the exit of 65 techies during second quarter.

"On the people front, we are driving a cultural shift towards putting customer value at the forefront and accordingly ensuring greater empowerment and quicker decision-making," Kurien added.