Wipro net zooms 42 pc, confirms IT is cruising
Wipro Ltd posts net profit of Rs 29.42 billion for 2006-07, registering a record 42 per cent over last year.business Updated: Apr 20, 2007 22:22 IST
Billionaire Azim Premji’s Wipro Ltd reported a 42 per cent jump in net profit for 2006/07 on Friday, confirming a solid trend of growth among the country’s software majors despite rising wages for programmers and a strong rupee which has eroded the value of dollar profits.
Wipro’s consolidated revenue grew 41 per cent to Rs 15,000 crore in the full year, while its net profit rose 42 per cent to Rs 2,942 crore. For the fourth quarter of January-March alone, revenue rose 39 per cent to Rs. 4,333 crore while net profit also rose 39 per cent, to Rs. 856 crore.
The results came after industry leaders Tata Consultancy Services and Infosys reported full-year profit growth of 42 per cent and 57 per cent respectively.
In the latest quarter, Wipro reported revenues of $690.7 million in its main global IT business unit, against its own guidance of $685 million and went on to forecast revenues of $711 million in the first quarter of the new fiscal year.
Premji said in a statement that he saw no sign of a slowdown in the US economy, which feeds the bulk of Wipro’s export demand in software. Wipro officials said billing rates were up 3 to 5 per cent, which helped offset rising wages and a stronger rupee.
"The volatility that we have seen has been a concern because it dilutes the certainty that we try to see in any business that we do," Reuters quoted Suresh Senapaty, chief financial officer, as saying.
Wipro added more than 14,000 employees in the latest fiscal year, most of them in the IT services unit. It now has more than 67,800 employees of which more than 50,000 are in IT services and about 17,500 in the business process outsourcing (BPO) unit which has been struggling to re-invent itself after suffering from staff attrition.
Wipro added 44 clients in the latest quarter. It also reported a strong improvement in the profitability in a clutch of acquired firms overseas, which provide valuable customers.
“During the year, we completed strategic acquisitions, expanded local sales foot-print, built deeper domain (industry) skills and sharpened our account management focus,” Premji said.
Wipro also launched technology centres during the year in Romania, Brazil and Portugal. It also manufactures soaps and bulbs and has a strong IT business in the Asia-Pacific and the Middle East, which functions as a separate unit. Its revenues grew 38 per cent year-on-year to Rs 784 crore in the latest quarter.