Confirming recovery for India’s IT industry, Bangalore-based Wipro posted a robust 21 per cent jump in its net profit at Rs 1,209 crore for the January-March quarter as compared to a year ago period and cheered investors with a bonus share issue of two shares for every three shares held. The revenues of the company during the quarter grew by 8 per cent at Rs 6,983 crore.
Wipro’s results that come close on the heels of Infosys, TCS and HCL Technologies confirm the recovery process for the $60-billion IT outsourcing industry of the country.
“The business environment is returning to normal,” said Azim Premji, chairman Wipro. “For the quarter ending June 30, 2010 we expect revenues from our IT services business to be in the range of $1,190 to $1,215 million.”
Premji added that the growth in the quarter has been due to broad base led by strong volumes.
Wipro’s revenues from IT services for the quarter stood at $1,180 million.
Revenues from the IT products grew by 2 per cent during the quarter as compared to same period a year ago.
“We have driven up margins by 60 basis points despite headwinds of wage increases, rupee appreciation and impact of cross currency,” said Suresh Senapaty, executive director and chief financial officer, Wipro. “We have a hedge of around $1.7 billion that should be sufficient to cover the current financial year.”
Senapaty also said that rupee appreciation remains a concern and the company generally maintains a hedge for around four to six quarters.
The company also announced a bonus issue in 2:3 ratio, or two equity shares of face value of Rs 2 each for every three held.
In addition, a dividend of Rs 6 per share on the face value of Rs 2 each to shareholders has also been announced.
Revenues from its consumer care and lighting division also grew by 27 per cent during the quarter as compared to the same period of last year. The consumer care and lighting business contributes around 8 per cent of the total revenue of the company. “Our target is to grow at a faster pace than the overall market growth,” said Vineet Agrawal, president, Wipro Consumer Care & Lighting. He said that the consumer care and lighting will be an important business for the company wherein they are exploring both organic growth and growth through acquisitions.
The company added 5,325 employees during the quarter.