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Wipro Q1 net rises 11 per cent to Rs 1,623 crore, matches forecast

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Bangalore:

Wipro, India's third-largest software services exporter, sounded upbeat about demand for its outsourcing services, after posting an 11 per cent rise in quarterly net profit helped by an increase in large contracts.

The company expects revenues from IT services business for the current quarter that ends September 30 will range between $1.62 billion and $1.65 billion, a sequential increase of 2 per cent to 3.9 per cent.

Most analysts were expecting the company to say sales in the current quarter would rise 1-3 per cent. Wipro does not give an annual forecast.

Wipro joins bigger rivals Tata Consultancy Services and Infosys, who signalled a pick-up in demand for the Indian IT outsourcing providers' services with their better-than expected forecasts earlier this month.

Indian IT providers are expected to get a boost next year from what analysts forecast to be the strongest demand for technology services among US businesses and institutions since the aftermath of the 2008 financial crisis.

"We've seen an increase in deal closures in Q1 and we're hopeful that the momentum will continue in the quarters to come...we're fairly confident of the future going forward," CEO T K Kurien told reporters.

Consolidated net profit for the fiscal first quarter ended June 30 rose to Rs 1,623 crore from Rs 1,466 crore a year earlier, Bangalore-based Wipro said after market close on Friday.

That compares with the Rs 1,630 crore average of 21 analyst estimates according to Thomson Reuters for the company, whose customers include Citigroup, Apple and Cisco Systems.

IT services revenue rose 0.2 per cent from the January-March quarter to $1.59 billion. It added 28 new clients during the quarter.

"Strong pickup in large deal closures and strong order book bodes well for growth in Q3 and Q4," Kuldeep Koul, an analyst with Mumbai-based brokerage ICICI Securities said.

Earlier this month, Infosys retained its annual forecast of 6-10 per cent growth for the year that ends March 2014, while TCS said it would beat the upper end of the 12-14 per cent export growth estimate by the local industry lobby.

India's export-driven $108 billion outsourcing sector, however, faces cut-throat competition and possible visa rules changes in the United States, its biggest market, that will make it more costly and difficult to send workers there.

Copyright @ Thomson Reuters 2013

Story first published on: July 26, 2013 17:15 (IST)

Tags: Wipro, Quarterly earnings, Infosys, Citigroup, ICICI Securities, Cisco Systems, Tata Consultancy Services, Apple, TCS, Azim Premji


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