India’s third-largest software services exporter, Wipro, on Thursday beat expectations with a 41% year-on-year growth in consolidated net profit to Rs. 2,230 crore for the quarter ended March 31. 2014 aided by IT spending by customers. Analysts had forecast a net profit of Rs. 2,106 crore.
Revenue grew 22% year-on-year to Rs. 11,700 crore during the fourth quarter.
For the full year (2013-14), Wipro’s net profit grew 27% to Rs. 7,800 crore while revenue grew 16% to Rs. 43,760 crore compared to the previous fiscal year.
The Azim Premji-led company said it expects revenue from its IT services business in the first quarter of 2014-15 to be in the range of $1.715 billion to $1.755 billion against $1.72 billion in the just ended quarter. The lower end of guidance for the next quarter, however, raised concerns about its turnaround journey. Wipro does not give guidance for the full year.
“We have achieved a sequential growth of 2.5% for our IT services business in line with our guidance,” said TK Kurien, CEO, Wipro. About the tepid guidance for the current quarter he said, “First quarter performance is not a precursor to the entire year. We clearly see growth coming back in the second quarter.”
Kurien cited a drop in India business and subdued performance in retail vertical as reasons for the lower guidance.
The company, which added 241 employees in 2013-14, plans to give up to 8% wage hike.
“Wipro’s revenue growth has improved in the past few quarters. Consistent high growth will lead to a re-rating of the stock,” said Dipen Shah, head, private client group research, Kotak Securities.