Wipro net up 11 per cent, margin under squeeze
Wipro reports an 11 pc increase in net profit in the third quarter of 2007-08 to Rs 854 cr from Rs 765 crore in the same period a year ago, reports Venkatesh Ganesh.business Updated: Jan 18, 2008 22:14 IST
Helped by an increase in large outsourcing contracts, India's third largest software exporter Wipro has reported an 11 per cent increase in net profit in the third quarter of 2007-08 to Rs 854 crore from Rs 765 crore in the same period a year ago. Wipro's numbers did not beat market expectations, much in line with Tata Consultancy Services (TCS) and Infosys Technologies.
The company posted revenues of Rs 5,303 crore during the quarter, up 33.98 per cent from the same period in the previous year.
During the quarter, Wipro bagged five multi-million dollar outsourcing contracts that include those with a US-based retail giant and an European bank. Wipro shares fell more than 3 per cent, but rallied later to stand 0.9 per cent lower at Rs 456.20 on the Bombay Stock Exchange.
"Revenues from our global IT services at $910.1 million (Rs 3,549 crore) during the third quarter were ahead of our guidance of $905 million (Rs 3,529 crore)," said Wipro Chairman Azim Premji. Talking about the outlook for the upcoming quarter, Wipro executives said operating margins were likely to be impacted by 1 per cent as a result of high wages.
Indian information technology majors are under pressure to maintain profit margins amid a strengthening rupee, rising wages and a slowdown in the US economy. The rupee has appreciated 12 per cent against the dollar since May 2007.