Wipro braves rupee woes, profitability inches up
Wipro Ltd announces that its net profit for the second quarter rose to Rs 824 crore, a growth of 18 per cent year-on-year, report BR Srikanth and Venkatesh Ganesh.business Updated: Oct 20, 2007 00:23 IST
Wipro Ltd announces that its net profit for the second quarter rose to Rs 824 crore, a growth of 18 per cent year-on-year, report BR Srikanth and Venkatesh Ganesh.
Riding on a slew of new contracts and support from Nasdaq-listed firm Infocrossing acquired in the United States recently, billionaire Azim Premji’s Wipro Ltd on Friday announced that its net profit for the second quarter of 2007-08 that ended in September rose to Rs 824 crore, a growth of 18 per cent year-on-year (Rs 700 crore).
The performance came in the backdrop of a strong rupee that has eroded the profitability of software exporters who mainly earn in US dollars. More efficient use of staff, and a higher share of work done in India, where it is cheaper, helped Wipro. The operating profit margin improved by 0.8 percentage points as a result.
Its revenues increased by 35 per cent year- on-year to Rs 4, 785 crore, crossing the one-billion US-dollar mark.
Wipro attributed its robust performance to several large multi-year deals signed during the quarter. It added 59 clients and hired 5,341 new employees in the latest quarter, increasing its total staff strength to 77,478. Its $600 million purchase of Infocrossing is India’s most expensive overseas IT buyout so far.
“We saw broad-based growth across verticals, services and geographies,” Premji told a news conference.
The rupee has appreciated more than 12 per cent against the U.S. dollar this year. "We have taken a hit of Rs 1500 crore on an annualised basis during the first half of this fiscal due to the appreciation of the rupee against the US dollar," Chief Financial Officer Suresh Senapaty said.
Wipro Infotech, the division that sells hardware and services in Asia and the Middle East, also showed robust growth, with revenues up 72 per cent at Rs 931 crore for the second quarter.
ITC is among the division’s new customers in the domestic market where Wipro competes with giants like IBM.
Suresh Vaswani, president, Wipro Infotech told Hindustan Times said, “We are bullish about the Indian domestic market, with sectors such as retail, manufacturing and financial services increasingly looking at adopting technology to compete on a global scale.”
Wipro also has a consumer goods division that makes light bulbs and Santoor and other soaps.
It posted revenues of Rs. 372 crore, up 84 per cent year-on-year, in the second quarter. That included Rs. 120 crore from Unza, a Singapore-based personal care firm acquired in July.