Wipro Ltd Q4 net rises 21 per cent

Wipro Ltd Q4 net rises 21 per cent

Company to issue 2:3 bonus shares

Wipro Ltd Q4 net rises 21 per cent

Wipro Chairman Azim Premji briefing reporters in Bangalore on Friday. DH Photo

The net profit after tax in Q4 stood at Rs 1,209 crore registering a YoY growth of 21 per cent compared to the same period last year. IT services revenue was at Rs 5,260 crore registering a YoY growth of 7 per cent. The earnings before interest and tax for the IT services at Rs 1,272 crore was 20 per cent higher YoY in Q4.

On a standalone basis the consolidated revenue of Wipro Limited for financial year 2009-10 was at Rs 27,124 crore registering a 6 per cent growth over the previous year.
Wipro also announced a dividend of Rs 6 per share and bonus in the ratio 2:3 (two shares for every three held). In the financial year 2009-10 revenue from IT services business, the major cash generating arm of Wipro stood at Rs 20,249 crore recording 6 per cent growth.

Briefing reporters, Wipro Chairman Azim Premji said “the business environment is becoming normal, European market is witnessing a slow recovery. We have seen a strong quarter with a volume led growth and clients slowly have started allotting IT budgets. We also witnessed good recovery in our verticals like technology and telecom.”

The IT product business of the company recorded Q4 revenue of Rs 890 crore witnessing a YoY growth of 2 per cent. “Our margins expanded 60 bps sequentially to 24.2 per cent and revenues from fixed price projects improved 1.8 per cent to 44.3 per cent,” said Wipro Chief Financial officer Suresh Senapathy.

Though the western markets are witnessing a slow recovery North America accounted for the major share of the revenue. European business also witnessed a significant YoY growth of 15 per cent in the quarter. The company also added 8 new clients into its kitty during the fourth quarter including The Main Street America Group and Best Buy Co.

Wipro joint Chief Executive Girish Paranajpe said the global IT services business had signed four-five large multi-year deals in the Q4 with a cumulative amount to nearly $1 billion. “The deals are in the range of $250-300 million. They are from Europe, the US and other countries,” Paranjape said.

Hiring on cards

Wipro added 5,325 employees in the quarter taking the overall headcount to 108,071 as on March 3, 2010.  The company which witnessed an attrition of 17 per cent in the financial year 2009-10 said it has hiked the salary of the employees in February and also has plans to initiate the promotion process of the employees in the month of June. When quizzed about Premji selling his stake in Wipro, he said “according to new suggestion by Sebi promoter holding in companies has to be 75 percent, however the law has not been enforced and it is all speculations”

About the plan of Premji university, he said. “the university will be a not-for-profit organisation. The main purpose of the university will be to train teachers and it will offer masters degree, bachelor degree and phd.” He also mentioned that Premji University has partnered with five foreign universities and identified professors from universities.

Wipro expects a higher revenue growth from its global IT services business Q1 of 2010. It expects revenue of $1.2 billion from its IT service business at a YoY growth of 2.1-4.2 per cent.