Wipro net profit up 18%, but Q4 guidance lowered
Wipro Ltd posted net profit of Rs 10.04 bn for the third quarter (October-December) of this fiscal as against Rs 8.54 bn in the same period last fiscal.business Updated: Jan 21, 2009 14:06 IST
Wipro Ltd posted net profit of Rs 10.04 billion (Rs 1,004 crore/$204 million) for the third quarter (October-December) of this fiscal (2008-09) as against Rs 8.54 billion (Rs 8,540 crore) in the same period last fiscal, registering 18 per cent year-on-year (YoY) growth under the Indian accounting system. The firm however lowered its fourth quarter guidance.
According to the IT bellwether's financial statement for the quarter under review (Q3), consolidated revenue grew by 25 per cent YoY to Rs 66.18 billion (Rs 6,618 crore) from Rs 53.03 billion (Rs 5,303 crore) under the Indian accounting system (Indian GAAP).
Under the American accounting system (US GAAP), net income grew only by nine per cent YoY to $185 million and total revenue by 25 per cent to $1.35 billion for the third quarter.
Revenue from its global IT services is marginally higher at $1.126 billion at constant currency as against the guidance of $1.121 billion given at the beginning of the quarter in October 2008.
For the fourth quarter (January-March) of this fiscal (FY 2009), the company has, however, projected guidance of $1.045 billion from global IT services, which is lower by $81 million from the revenue of $1.126 billion generated in the second quarter.
"We are living in tough times; the macro-economic challenges are significant and impacting businesses across segments. Recessions, however, do not last; resilient companies do," Wipro chairman Azim Premji said in a statement in Bangalore.
The lower guidance in dollar terms is also in view of the rupee depreciating from 46.03 to 48.58 during the third quarter.
In reported currency, revenue from IT services for the third quarter is $1.1 billion as against the guidance of $1.121 billion.
"Our price realisation improved sequentially in constant currency through higher productivity, while absorbing impact of lower working days during the quarter," Chief Financial Officer (CFO) Suresh Senapaty said.
The company also made a one-time provision in respect of receivables from a large customer (Nortel), which impacted margins by 60 per cent.
"Excluding this one-time impact, we were able to expand margins by 10 basic points. The impact of salary increase and drop in utilisation were made up by benefits from currency and other operational parameters," Senapaty added.
The global software major added 31 new clients during the quarter (Q3).
The company's IT services business division had 96,965 employees at the end of third quarter (December 31, 2008). It includes 75,387 in IT services and 21,578 in business process outsourcing (BPO) services.