Wipro net rises 11% on pickup in US economy

It sees increase in large deal closures strengthening the order book

Wipro net rises 11% on pickup in US economy

On the backdrop of higher confidence among its US clients, Wipro Ltd on Friday reported 11 per cent year-on-year (YoY) increase in consolidated net profit of Rs 1,623 crore for the quarter ended June 30, 2013.

The IT services revenue of the company stood at Rs 8,936 crore for the quarter under review, a year-on-year (YoY) increase of 7 per cent.

However, the company said it expects revenues from IT Services business to be in the range of $1,620 million to $1,650 million for the quarter ending September 30, 2013, which is an expected increase of 2-4 per cent compared to Q1 this fiscal, which clearly shows that it sees better demand going ahead into the next quarter. The pricing environment, Wipro said, was largely stable during the quarter and the growth was largely volume-led.

Wipro Chairman Azim Premji, who was not present at the press briefing, said in a release, “We are seeing higher confidence among our clients on the backdrop of positive macroeconomic developments, particularly in the US.” Wipro’s consolidated revenue in Q1 stood at Rs 9,735 crore, which is an increase of 5 per cent YoY.

Wipro Executive Director & Chief Executive Officer T K Kurien said, “We are seeing a pickup in large deal closures which has reflected in strong order book in the current quarter. Our clients look to technology to pursue growth and profitability and increase organizational agility.”

The impact of cross currency movement was $15.8 million sequentially during the quarter which is 1 per cent of the revenues. In terms of attrition, though the voluntary attrition dropped 50 basis points to 13.2 per cent, the involuntary quarterly annualised attrition zoomed 170 basis points to 4.9 per cent in Q1.

“Our investments in client mining have shown benefits with strong growth in our top clients. We have given wage hikes for both onsite and offshore employees effective June 2013, which has impacted our operating margins in the quarter,” Wipro Executive Director & Chief Financial Officer Suresh Senapaty said.

From an industry vertical perspective, the company said it saw strong traction in retail banking, energy & utilities and the international business of healthcare and life sciences.

Immigration law
Wipro said it expects that the final version of the proposed US Immigration Reform law will not have "harmful" provisions that have been passed by the Senate.
"There are certain provisions in the Senate bill that in some form are harmful and not necessarily in the nature which encourages international trade and commerce," Wipro CFO Suresh Senapaty told reporters after announcing the first quarter results (April-June) here.
"Our expectation is that some of those provisions will not find a place in the final bill," he added.

Wipro sees deal closures hastening

Bangalore, dhns: Though Wipro Q1 results were more or less flat, the company said that it sees demand environment picking up post Q1 of fiscal 2014.

“We are seeing positive traction in the demand environment with discretionary expenses returning in specific pockets. The US economy continues to show signs of strong macroeconomic recovery,” Wipro CEO T K Kurien said.

Kurien added that the company has seen a pickup in deal closures in Q1 and was hopeful that the momentum would continue in the coming quarters.

The company which saw 7 per cent rise in Q1 IT Services revenues in rupee terms said that on the customer front, the focus on account management has borne results with top 10 accounts growing at 2.8 per cent sequentially.

“We had indicated in the previous quarter about deepening our focus on the top 125 strategic clients – they have delivered 1.5 per cent sequential growth,” Kurien said.

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