The country’s third largest software exporter Wipro Technologies reported an almost 11 percent rise in June quarter net profit on back of an increase in large contracts and said it is upbeat about demand for its outsourcing services. The Azim Premji-controlled Wipro said the June quarter net profit at Rs 1,623.3 crore was 10.7 percent higher than Rs 1,466 crore in the same period a year ago, when it had included the earnings from its non-IT businesses, which were demerged into a privately held company late last fiscal. "We have seen an increase in deal closures in Q1 and we are hopeful the momentum will continue in the quarters to come…we are fairly confident of the future," chief executive TK Kurien said.
Wipro, which does not give annual forecasts, said it expects IT revenue to increase 2-3.9 percent to $1.62-1.65 billion in the September quarter. Larger rival Tata Consultancy Services had earlier this month reported better-than-expected profit to signal a pick-up in demand for outsourcing providers. Wipro's consolidated sales rose 5 per cent to Rs 9,733.2 crore in the quarter. Commenting on the performance, Premji said, "we are seeing higher confidence among other clients on the backdrop of positive macroeconomic developments, particularly in the US." In US dollar terms, net income from operations rose 11 percent to $273 million, while revenue rose 5 percent to $1.64 billion. "We are seeing a pick-up in large deal closures, which has reflected in strong order book in the current quarter. Our clients look to technology to pursue growth and profitability and increase organisational agility," Kurien said.
Its IT services revenue increased 4.9 percent y-o-y and 0.2 percent sequentially to Rs 8,936 crore. Wipro shares gained 1.74 per cent to Rs 382.80 on the BSE, whose benchmark Senses lost 0.30 percent. Kurien said the first quarter was soft on account of delays in discretionary spending and other factors. "We see Q1 to be soft due to delay in discretionary spending and seasonal weakness in the domestic market and West Asian business. This is playing out in line with our expectations," he said. He said the demand environment is showing signs of a revival."We are seeing positive traction in demand environment with discretionary expenses returning in specific pockets," Kurien said. "The US economy continues to show signs of strong macroeconomic recovery."
The firm announced average wage hikes of 6 to 8 percent for offshore staff and 2 to 3 percent for onsite employees. Wipro's IT services segment added 1,469 people in the quarter, taking the headcount to 147,281 employees at the end of the reporting period. The company added 28 customers in the quarter.
