Wipro Q2 beats street; sees Q3 IT revenue up 2.0-4.1% QoQ

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Wipro Q2 beats street; sees Q3 IT revenue up 2.0-4.1% QoQ

Software services provider Wipro’s second quarter net profit rose a better than expected 1.2% at Rs 1300.9 crore,, helped by increased spending by clients and a depreciation in rupee.

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Software services provider Wipro 's second quarter net profit rose a better than expected 1.2% at Rs 1300.9 crore,, helped by increased spending by clients and a depreciation in rupee.

Net income from sales for the quarter was up 18% at Rs 9094.5 crore, Wipro said Monday.

"Macroeconomic sentiments continue to remain uncertain. We have seen growth momentum build up in our IT business with healthy volume growth. Our focused investment strategy will get the business to a higher growth trajectory," said Chairman Azim Premji.

In the IT services business, Wipro's rupee revenue was up 6.6% to Rs 6,829 crore in July-September. The company had earlier guided for revenue in Rs 6,447.6-6,573.4 crore range. Analysts were expecting revenue of Rs 6,650 crore according to a CNBC-TV18 poll.

In US dollar terms, Wipro's IT revenue rose 4.6% to USD 1.47 billion, compared to its earlier guidance of USD 1.44-1.46 billion for the second quarter.

Wipro is now expecting third quarter [October-December] revenue from its IT services business in the range of USD 1.50-1.53 billion.

Investors cheered the Bangalore-based company's better than expected earnings announcement. The stock was up near 2% at Rs 381.05 on NSE in morning trades. It had touched a high of Rs 385 earlier in the session.

"In the current macroeconomic environment, corporations across the globe are looking to maximize the potential of technology deployments and are increasingly relying on business models and technologies to variabilize their IT spends, enabling more differentiating investment for IT based innovation," the company said.

Wipro said it is seeing traction with clients on cloud and variabilized business model offerings.

The company added 44 new customers in the second quarter. It added 5,240 people in July-September to take its employee strength in IT services segment to 1,31,730 employees.

Among Wipro's other businesses, revenue from consumer care and lighting was up 20% year-on-year to Rs 800 crore in the second quarter. EBIT [earnings before interest, taxes] rose 6% to Rs 88.2 crore.

Revenue from Wipro's IT products segment, which accounts for 11% of total revenue, was, however, down 6% year-on-year to Rs 1,000 crore, while EBIT declined 15% to Rs 45.1 crore in July-September.

Nachiket Kelkar
nachiket.kelkar@network18online.com