Wipro ups guidance on robust growth in second quarter
Wednesday, 18 October 2006, 07:00 Hrs
Bangalore: Global software major Wipro Ltd projected a higher guidance from its IT services and products business for the third quarter (October-December) following robust topline and bottomline growth in the second quarter (July-September) of the current fiscal 2006-07.
According to the company's statement here on its performance during the second quarter (Q2), net profit grew by 46 percent year-on-year (YoY) to 7 billion ($154 million) and total revenue by 41 percent YoY to 35.5 billion under the Indian GAAP (generally accepted accounting principles).
Under the US GAAP, the net income shot up by 48 percent YoY to $152 million and total revenue by 41 percent YoY to $765 million.
As a result, revenue from its global IT business is projected to be $633 million (29.12 billion) for the third quarter (Q3) of this fiscal.
"Our IT services and products business witnessed strong volume growth and operational improvements during the second quarter. We believe our focus on strategy and execution has continued to deliver robust results.
"Looking ahead, revenue from our global IT services and products business is expected to about $633 million," Wipro chairperson Azim H. Premji said in the statement.
Accounting for 77 percent of the company's total revenue and 89 percent of the PBIT (profit before income tax) in Q2, the global IT business posted 27 billion ($591 million), registering 44 percent YoY growth and beating the guidance of $577 million, given at the beginning of the quarter under review.
"On the margin front, operational improvements and superior BPO services helped us in offsetting the pressure on profitability arising out of wage increases and non-cash charge of restricted stock units issued to some employees during the quarter," said the company's chief financial officer Suresh Senapaty.
The operating margin, however, remained flat at 24.4 percent, similar to the corresponding quarter of last fiscal (2005-06).
"We have added 54 customers during the quarter under review, including 11 from Global 500 or Fortune 1000 clients. Our differentiated services -- technology infrastructure, testing and enterprise application have grown double digits sequentially," Premji pointed out.
With a net addition of 5,328 people in the global IT business during the second quarter, the company's total number of employees has increased to 61,179 from 56,435 people at the end of the first quarter ending June 30.
As on September 30, the global IT company had 45,824 software engineers and 15,355 employees in its BPO operations. About 605 employees joined the company on account of the acquisitions made during the quarter under review.
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