Wipro sees higher revenue from IT services


wipro office

Buoyed by robust growth in first quarter from its global IT services business, software major Wipro Ltd on Thursday projected higher revenue for second quarter of this fiscal.

“We expect revenues from our IT services business to be in the range of $1,821-1,857 million ($1,839 million average) for quarter ending September 30,” the company said in a statement here.

The buoyant outlook for Q2 is based on revenue of $1,794 million clocked in Q1, which is above the higher range of $1,765-1,793 million the company projected in April from its flagship business.

Though the outsourcing major’s net profit was up only four percent year-on-year to Rs.2,190 crore for Q1, it is sequentially 3.6 percent less than Rs.2,272 crore in last quarter of 2014-15.

Similarly, under the International Financial Reporting Standard (IFRS), net income declined sequentially six percent in Q1 to $344 million from $366 million posted in Q4 of last fiscal.

On revenue front, the company posted 10 percent YoY increase to Rs.12,240 crore, which is flat (0.8 percent) sequentially from Rs.12,142 crore in fourth quarter, as per the Indian accounting standard.

Under IFRS, total revenue remained flat at $1.9 billion, including $1.8 billion from IT services.

Revenue from IT services segment in rupee terms at Rs.11,580 crore is also 10 percent up YoY and three percent sequentially from Rs.11,242 crore.

Revenue from IT products increased seven percent YoY to Rs.820 crore ($128 million) during the quarter.

Unlike its rival Infosys, Wipro does not give annual revenue guidance.

“We maintained strong cash flow generation while operating margin was modestly lower due to employee compensation measures,” Wipro chief financial officer Jatin Dalal told reporters.

The company gave a seven percent wage hike for its techies on offsite (in India) and two percent for onsite (overseas) employees.

Operating margin declined 1.8 percent YoY and 1 percent sequentially to 21 percent from 22.8 percent year ago and 22 percent quarter ago.

“We continued to drive productivity and improve operating levers even as we invested for growth in people, process and IP (intellectual property),” Dalal said.

The service segment added 36 clients in first quarter as against 65 in last quarter and 35 year ago, taking total number of active customers to 1,071 ending June 30 as against 1,054 quarter ago and 1,022 year ago.

The services segment added 3,572 people during the quarter, taking the total number of employees to 161,789 by June 30 as against 158,217 quarter ago and 147,452 ago.

The company’s sales and support staff strength increased by 888 to 12,517 in first quarter from 11,629 quarter ago and by 1,343 people from 11,174 year ago.