Wipro Q4 net profit up 17%

Wipro Q4 net profit up 17%

Wipro Q4 net profit up 17%

India’s third largest software exporter Wipro on Friday reported net profit of Rs 1,729 crore for the quarter ended March 31, 2013, an increase of 17 per cent from Rs 1,480.9 crore in the same quarter in 2011-12.

Total revenues were Rs 11,026 crore, up 12 per cent from Rs 9,869 crore in the same quarter in fiscal 2012.

For the year ended March 31, 2013, Wipro’s net profit rose 19 per cent year-on-year at Rs 6,636 crore and revenues were Rs 43,361 crore.

Wipro Chairman Azim Premji said, “We have completed the demerger of the ‘Diversified Business’ effective March 31, 2013 to make Wipro Limited a pure play IT company. We are confident that being a technology-focused company will provide a fresh momentum for growth.”

In Q4, Wipro's IT Services posted earnings before interest and tax (EBIT) of Rs 1,727 crore, an increase of 10 per cent YoY, while revenues from the segment were Rs 8,554 crore showing an increase of 13 per cent YoY. The company added 52 new customers during the quarter.

Cross currencies

“The cross currencies have been volatile and impacted our financial performance in the quarter. Excluding the impact of foreign exchange, we have been able to maintain margins on a sequential basis. We have shown significant improvements in cash flow generation for the year,” Wipro Executive Director & Chief Financial Officer Suresh Senapaty said.

Wipro said it expects its IT Services revenues to be in the range of $1,575 million to $1,610 million for the quarter ending June 30, 2013.

Kotak Securities Head of Private Client Group Research, Dipen Shah said, “Wipro’s results were below estimates. The fall in average realisations was higher than estimates. The management has made several changes to the structure to align it more with the demand generation process and increasing efficiency. We believe that, these initiatives have not yet started showing the expected results and will start reflecting in the financials in due course.”

The IT Services segment had 145,812 employees as of March 31, 2013, an increase of 2,907 people in the quarter.

“We continue to see improvement in our customer satisfaction and employee engagement. Our continued investments in the go-to-market organization positions us well for the future,” Wipro (IT Business) Executive Director & Chief Executive Officer T K Kurien said.

In fiscal 2013, Wipro IT Product division recorded revenues of Rs 3,924 core, an increase of 2 per cent YoY. Its Consumer Care and Lighting segment posted revenue of Rs 4,059 crore, an increase of 22 per cent YoY.

Wipro’s attrition in fiscal 2013 fell to a new low of 13.7 per cent from 17.5 per cent in the fiscal 2012.

Visa concerns

Wipro also said that the company is concerned about the procedural delays that would arise out of the new immigration act called Border Security, Economic Opportunity and Immigration Modernisation Act, 2013.

Kurien said that their concern is not so much about cost; the procedure itself has a way of, kind of slowing one down and that's what is worrying.

The new immigration reform bill being backed by President Obama proposes to curb H-1B visas for companies that have use it more than the rest.

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