Wipro battles to grow in volatile marketAs India's third largest IT bellwether, Wipro Ltd. too is battling to
grow in a volatile currency market with uncertainty writ large due to
global slowdown and sovereign debt crisis in Europe.
Though
the global software major grew its topline and bottomline in double
digits on annualised basis in rupee terms, its net income and revenue
from its IT services business slipped sequentially in dollar terms in
the first quarter (April-June) of this fiscal (2012-13) from previous
quarter (January-March) of last fiscal (FY 2011-12).
As a result,
the company Tuesday projected a flat growth of $1.54 billion revenue
from its global IT services for the second quarter (July-September) of
this fiscal (FY 2013).
"Revenue from our IT services business is
expected to be $1.54 billion in second quarter (Q2) and marginally
higher (1.3 percent) from $1,496 million ($1.5 billion) posted in first
quarter (Q1) of this fiscal (FY 2013) under the International Financial
Reporting Standards (IFRS)," the company said in a statement here.
The
company posted net profit of Rs.1,580 crore (Rs.15.8 billion) in first
quarter, registering 18 percent year-on-year (YoY) growth and 6.7
percent sequentially (quarter-on-quarter) as per the Indian accounting
system.
Similarly, consolidated revenue for the quarter under
review (Q1) rose 24 percent YoY and 7.9 percent sequentially to
Rs.10,653 crore (Rs.106.53 billion), including Rs.8,314 crore (Rs.83.14
billion) from its global IT services.
Under the IFRS, net income
for first quarter is $284 million and total income $1.92 billion,
including $1.5 billion from IT services.
In dollar terms, net income, however, declined 2.4 percent sequentially from $291 million from previous quarter.
"We
have seen high levels of volatility in currencies globally," Wipro
chief financial officer Suresh Senapaty said in the statement.
Unlike its peer Infosys Ltd., Wipro does not give annual revenue guidance.
"IT services revenue in dollar terms was impacted by $25 million due to cross-currency volatility," Senapaty pointed out.
IT
services business accounts for 78 percent of the company's revenue and
93 percent of its operating income, which at 21 percent in first quarter
was one percent lower YoY but fractionally (0.3 percent) higher
sequentially from 20.7 percent in previous quarter.
"It today's
complex business environment, global corporations are increasingly
investing in transformational technology initiatives to improve
competitiveness. We see this shift as an opportunity for us to lead this
change and help customers differentiate in this fast evolving market,"
Wipro chairman Azim Premji said in the statement.
The IT services
business added 37 clients during first quarter, taking the total number
of clients to 919 as against 943 quarter ago and 937 a year ago.
"We
have delivered revenues in line with our guidance in a volatile
environment. We will continue to build differentiation and invest in
technology driven business transformations for our customers as well as
rewarding our talent," chief executive T.K. Kurien said.
The
global IT services division added 2,632 people in the quarter, taking
the total headcount to 138,552 employees as on June 30.
Wipro battles to grow in volatile market
