Wipro sees demand for IT services picking up
Global software major Wipro Ltd. Friday projected higher revenue from IT services in second quarter (July-September) of 2013-14 on demand picking up over positive macroeconomic developments.
"We see demand environment picking up in line with our expectations. We are seeing positive traction with discretionary expenses returning in specific pockets," Wipro chief executive T.K. Kurien told reporters here.
Though revenue from IT services in first quarter (April-June) at USD 1.59 billion is flat sequentially, Wipro expects USD 1.63 billion in the second quarter (Q2).
"We expect revenues from its IT services business to be in the range of USD 1,620-1,650 million in second quarter as against USD 1,588 million posted in first quarter," the IT bellwether said in a regulatory filing to the stock exchanges after the markets closed.
Noting that the US economy was showing signs of strong macroeconomic recovery, Kurien said the company had seen a pick-up in large deal closures in first quarter, reflecting a strong order book and hoped the momentum would continue.
"We are also seeing disruptive technologies transform from the traditional landscape. Hence, we are working with our customers to leverage capabilities and for optimising on their investments," he said.
In a departure from a long-standing convention, Wipro chairman Azim Premji stayed away from the customary press conference on the financial results.
In a statement, however, Premji said he was seeing higher confidence among clients, particularly in the US.
Chief financial officer Suresh Senapaty said: "Our investments in client mining have shown benefits with strong growth in our top clients. We have given wage hikes for both onsite and offshore employees from June, which has impacted our operating margins (20 percent) in the quarter (Q1)."
Earlier, the company reported net profit of Rs.1,623 crore (Rs.16 billion) for the quarter under review (Q1), registering 11 percent growth year-on-year (YoY) and total revenue of Rs.9,735 crore (Rs.97.4 billion), an increase of five percent YoY as per the Indian accounting standard.
Under the International Financial Reporting Standard (IFRS), net income increased to USD 273 million and total revenue to USD 1.64 billion.
Revenue from IT services business in rupee terms grew seven percent YoY to Rs.8,936 crore (Rs.89.4 billion) and 4.9 percent YoY in dollar terms to USD 1.59 billion.
The flagship (IT services) business added 28 clients in the quarter as against 52 in previous quarter and 37 year ago.
With the addition of 1,469 techies, headcount of IT services increased to 147,281 as against 145,812 in previous quarter and 138,552 year ago.
(Posted on 26-07-2013)