Wipro Q3 net up 9% at Rs 2,193 cr

Wipro Q3 net up 9% at Rs 2,193 cr

Wipro Q3 net up 9% at Rs 2,193 cr

India’s third largest software exporter Wipro on Friday reported a better-than-expected 9 per cent growth in its consolidated net profit at Rs 2,192.8 crore for the quarter ended December 31, 2014, led by growth in healthcare and infrastructure services compared with Rs 2,014.7 crore in the year-ago period. 

In dollar terms, consolidated net profit was at $348 million for the third quarter ended December 31, 2014. Consolidated total revenues of the company grew 6 per cent year-on-year to Rs 11,992.9 crore compared with Rs 11,271.3 crore. Consolidated revenues were $1.9 billion for the quarter.

Its third quarter revenues (from IT services) jumped 10 per cent year-on-year to Rs 11,344.5 crore compared with Rs 10,327.4 crore in the same quarter last year, a jump of 10 per cent. In dollar terms, IT services revenues were $1,795.4 million, a sequential increase of 1.3 per cent and year-on-year increase of 7 per cent.

Announcing the Q3 results, Wipro Chief Executive Officer T K Kurien said that the company had a very satisfying quarter in terms of sequential revenue growth. “We continue to see strong deal momentum as we are seen as the partner of choice of customers seeking to differentiate by using digital technologies as well as save costs in the traditional business,” said Kurien.

Constant currency IT services revenue in dollar terms grew 3.7 per cent sequentially (up 9.7 per cent year-on-year) to $1.84 billion, Wipro’s constant currency dollar revenue growth was much higher compared with its peers Infosys (2.6%) and TCS (2.5%).

The company expects IT services dollar revenue in the range of $1.81-1.85 billion for the March quarter of current financial year 2014-15, implying 1-3 per cent growth over third quarter.

“We saw all-round growth led by growth in healthcare and life sciences business and global infrastructure services. The share of fixed price contracts increased to over 55 per cent of engagements, a reflection of the maturity of Wipro’s customer engagement model,” said Executive Director and Chief Financial Officer Suresh Senapaty, who is retiring from the service.

“We continue to see strong deal momentum as we are seen as the partner of choice for customers seeking to differentiate by using digital technologies as well as save costs in the traditional business,” said T K Kurien.

Focusing on the digital journey to gain traction, Kurien said that Wipro won 10 deals in the digital space in Q3 and will further leverage its presence in the open source space to drive innovation and cost rationalisation. Wipro in total added 44 new customers in IT services segment in Q3 of fiscal 2015, which included companies like Levi Strauss & Co, Cairn India and IDFC, among others.

Earnings before interest and tax (EBIT) during the quarter jumped 2.8 per cent quarter-on-quarter to Rs 2,470 crore while margins declined marginally to 21.8 per cent against 22 per cent in the previous quarter. Giving primacy on the human resources, the company CEO said that the quarterly annualised attrition dropped from 16.9 per cent to 16.4 per cent with a headcount of 1,56,866 as of December 31, 2014. The Wipro stocks at BSE fell 4.40 per cent to Rs 555. 25 per share compared with the previous close of Rs 559.65. 

Kotak Securities Head- Private Client Group Research Dipen Shah said Wipro really beat expectations on revenues as well as margins.

“The 3.7 per cent constant revenue growth was better than larger peers in the technology industry and the best in the past 12 quarters,”he said. 

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