By Ketaki Gokhale and Jay Shankar - Jul 19, 2011
Wipro Ltd. (WPRO), India’s third-largest software exporter, reported first-quarter profit that met analyst estimates as clients outsourced more computer services.
Net income was little changed at 13.3 billion rupees ($299 million) in the three months ended June 30, from 13.2 billion rupees a year earlier, Bangalore-based Wipro said in a statement today. The profit compared with the 13.1 billion-rupee median of 41 analysts’ estimates compiled by Bloomberg.
Wipro joins larger rivals Tata Consultancy Services Ltd. (TCS) and International Business Machines Corp. in signaling global demand for software services remains buoyant amid global economic uncertainty. T.K. Kurien, named chief executive officer of Wipro’s information-technology business in January, aims to boost sales by expanding operations through overseas acquisitions and reorganizing the business.
“Clients are getting used to the uncertain environment and in spite of macroeconomic concerns, there haven’t been cuts to their budgets or delays in IT spending,” Hardik Shah, an analyst at KR Choksey Shares & Securities Pvt. in Mumbai, said before the earnings announcement.
Wipro gained 0.4 percent to 415.20 rupees in Mumbai trading yesterday, trimming the drop this year to 15 percent. India’s benchmark Sensitive Index has declined 9 percent in the period.
Sales Forecast
The software provider forecast second-quarter revenue at its information-technology division, the company’s biggest, to range between $1.44 billion and $1.46 billion. First-quarter sales grew 18 percent to 85.6 billion rupees.
The company doesn’t give sales or profit forecast for all its businesses combined. Wipro also makes light bulbs, hydraulic equipment, soaps and other consumer products.
Wipro, which provides services such as designing and building software programs, product-engineering and back-office support to companies including BP Plc (BP), and Verizon Communications added 49 customers in the quarter.
The company’s information-technology division hired 4,105 employees last quarter and had 126,490 workers at the end of June, according to the statement.
“We are seeing early signs of positive momentum after the reorganization,” billionaire Chairman Azim Premji said in the statement.
Wipro said on Jan. 21 that T.K. Kurien would take over as chief executive officer of its information technology business after Girish Paranjpe and Suresh Vaswani resigned as joint CEOs. Kurien has worked at Wipro for more than 10 years and earlier served as president of its eco-energy business and head of the consulting and business process outsourcing businesses.
The software company in February said it would reorganize its technology business into industry-focused units, including divisions devoted to banking and financial services, healthcare, and media and telecommunications. The reorganization was a “long-term play” for Wipro, that would start to yield benefits only from the second half of the year, Kurien said at the time.
To contact the reporters on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net; Jay Shankar in Bangalore at jshankar1@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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